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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
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| Preliminary Proxy Statement |
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| Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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| Soliciting Material under §240.14a-12 |
MASTERCRAFT BOAT HOLDINGS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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MASTERCRAFT BOAT HOLDINGS, INC.
100 Cherokee Cove Drive
Vonore, Tennessee 37885
September 17, 202016, 2022
Dear Stockholder:DEAR SHAREHOLDERS,
At MasterCraft, we take pride in providing the absolute best on-water experience for consumers seeking the boating lifestyle and enjoying the outdoors. Fiscal 2022 was another record year for MasterCraft. The credit for our continuing success goes to the more than 1,750 employees that deliver the quality and innovation that underpins the strength of our MasterCraft, Aviara, and Crest brands. Attracting, developing and retaining our highly skilled and specialized workforce, and keeping them safe continues to be critically important.
POSITIONING FOR LONG-TERM VALUE
As previously announced, we recently exited the NauticStar business following a strategic review by our Board. After considering a wide range of alternatives, our Board determined that a sale of the NauticStar business would best enable us to narrow our focus and direct our resources to our high-performing, profitable businesses with market-leading potential, and maximize shareholder value. We believe that the strength and breadth of our MasterCraft, Crest and Aviara brand offerings and the investments we are making in product development, marketing, production, and operational excellence have positioned the Company better than at any time in our recent history.
PROGRESS ON OUR SUSTAINABILITY EFFORTS
As we’ve said before, we recognize the importance of social and environmental responsibility and global sustainability, and we are committed to making the best products in the best way possible. To that end, we are proud to have recently published our inaugural Sustainability Report to share our commitment to engage in operational excellence, including environmental sustainability, promoting the health and safety of our employees, and being good stewards for all our stakeholders. Highlights in this report include:
Reporting utilizing the SASB and TCFD frameworks;
Achievement of a safety milestone: over two million hours worked (and counting) without a lost time incident;
Initiation of Scope 1 and 2 emissions reporting. Additionally, in fiscal 2022, we’ve made financial and human-resources commitments to zero-emissions electric boating;
Adding a Director of Training to expand focus on our employee development at all levels.
Additionally, the transition to a declassified board is now complete, and going forward all directors will stand for election annually. In alignment with our strategic priorities and with the foundations in place to ensure we hold ourselves to high standards in all aspects of our business, we look forward to making boating better and maintaining our Company’s position at the forefront of the marine industry.
On behalf of the entire Board, I thank you for your investment in our Company and continued confidence in us as we execute our strategy. We ask for your voting support on the items contained in this proxy, and thank you for taking the time to cast your vote.
Sincerely, |
Frederick A. Brightbill CEO and Chairman of the Board |
MASTERCRAFT BOAT HOLDINGS, INC.
NOTICE OF 2022 ANNUAL MEETING OF SHAREHOLDERS
October 25, 2022 | |
TIME: | 8:00 am Eastern time |
LOCATION: | Via a live audio-only webcast at www.proxydocs.com/mcft |
2022 ITEMS OF BUSINESS
Elect seven directors nominated by the Board of Directors for a term that expires at the Company’s next Annual Meeting of Shareholders | |
2. | Ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2023 |
3. | Approve, on an advisory basis (i.e. non-binding), the compensation of the Company's named executive officers |
4. | Consider and act upon such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof |
We cordially invite you to attend the 2020 Annual Meetingjoin us for our 2022 annual meeting of Stockholdersshareholders (the “Annual Meeting”) of MasterCraft Boat Holdings, Inc. to(the “Company”), which will be heldconducted via live audio webcast on October 21, 2020, at 8:00 a.m. Eastern time.
In light of25, 2022. You may attend the coronavirus, or COVID-19, outbreak, for the safety of all of our stakeholders, and taking into account recent federal, state and local guidance, the Annual Meeting will be held in a virtual meeting format only, viaof shareholders online and submit your questions during the Internet, with no physical in-person meeting. Stockholders will be able to attend and participate onlinemeeting by visiting www.proxydocs.com/mcft. If you plan to participateWe believe the virtual format of the meeting, which we have utilized in the virtualmidst of the COVID-19 pandemic, makes it easy for shareholders across the world to attend the meeting please see “Questions Relatedand communicate with us. We look forward to your attendance and participation again this Proxy Statement.”
The formalyear. To register, you will need the control number provided on your proxy card, voting instruction form or Notice of Annual MeetingAvailability of Proxy Materials. Upon completing your registration, you will receive further instructions via email, including your unique links that will allow you access to the meeting and Proxy Statement are enclosed with this letter. The Proxy Statement describes the matterswill also permit you to be acted upon at the Annual Meeting.submit questions.
Your vote is important. To be sure your shares are voted at the Annual Meeting, please follow the instructions provided to you and vote your shares today. This will not prevent you from voting your shares during the virtual meeting if you are able to attend. You may vote over the Internet or by mailing a proxy or voting instruction card. Voting over the Internet or by written proxy will ensure your representation at the Annual Meeting, regardless of whether you attend the virtual meeting. If you hold your shares in your own name and choose to attend the Annual Meeting, you may change your vote by revoking your proxy at any time before it is exercised, which can be done by voting your shares online while virtually attending the meeting, by delivering a new proxy or by notifying the Company Secretary in writing prior to the meeting. If your shares are held for you in a brokerage, bank or other institutional account, you must contact that institution to revoke a previously authorized proxy.
On behalfA complete list of your Boardshareholders of Directors, thank yourecord entitled to vote at the meeting will be made available for your continued support of and interest in MasterCraft Boat Holdings, Inc.
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MasterCraft Boat Holdings, Inc.
100 Cherokee Cove Drive
Vonore, Tennessee 37885
NOTICE OF 2020 ANNUAL MEETING OF STOCKHOLDERS
To be held October 21, 2020
In light of the coronavirus, or COVID-19, outbreak,Company for the safety of all of our stakeholders, and taking into account recent federal, state and local guidance that has been issued, we have determined that the Annual Meeting will be held in a virtual meeting format only, via the Internet, with no physical in-person meeting. In order to attend the Annual Meeting, you must register in advance at www.proxydocs.com/mcftten days prior to the deadlinemeeting date and (ii) on the virtual shareholder meeting website on the date of October 19, 2020 at 5:00 pm Eastern Time. You will need the control number provided on your proxy card, voting instruction form or Notice of Availability of Proxy Materials. Upon completing your registration, you will receive further instructions via email, including your unique links that will allow you access to the meeting and will also permit you to submit questions.meeting.
Reminder: To be admitted to the annual meeting, see “Questions Relating to this Proxy Statement—How can I attend the Annual Meeting” on page 5.
47.
September 16, 2022
September 17, 2020
PROXY STATEMENT
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON OCTOBER 25, 2022
The Boardboard of Directorsdirectors of the Company (the “Board”) is furnishing this information in connection with the solicitation of proxies for the Annual Meeting of Stockholders to be held on October 21, 2020 (the “Annual Meeting”).Meeting. The Annual Meeting will be held in a virtual meeting format only, via the Internet. Instructions on how to participate at the Annual Meeting are posted at www.proxydocs.com/mcft. The proxy statement, the accompanying proxy card and our 20202022 Annual Report on Form 10-K will first be mailed to our stockholdersshareholders on or about September 17, 2020.16, 2022.
This Proxy Statement contains important information for you to consider when deciding how to vote. Please read this information carefully.
All properly executed written proxies and all properly completed proxies submitted by the Internet that are delivered pursuant to this solicitation will be voted at the meeting in accordance with directions given in the proxy, unless the proxy is revoked prior to completion of voting at the meeting.
Only owners of record of shares of common stock of the Company at the close of business on September 4, 2020,2, 2022, the record date, are entitled to vote electronically via the Internet at the meeting, or at any adjournments or postponements of the meeting. Each owner of record on the record date is entitled to one vote for each share of common stock held. There were 18,986,41318,151,436 shares of common stock issued and outstanding on the record date.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be Held on October 21, 202025, 2022: This Proxy Statement is first being sent to stockholdersshareholders on or about September 17, 2020.16, 2022. All stockholdersshareholders and beneficial owners may access the proxy materials at www.proxydocs.com/mcft. In addition, this Proxy Statement and our 20202022 Annual Report on Form 10-K are available at www.mastercraft.com.
MasterCraft Boat Holdings, Inc.
100 Cherokee Cove Drive
Vonore, Tennessee 37885
This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting.
Annual Meeting Information
October 21, 2020 at 8:00 a.m. Eastern time
Via a live audio-only webcast at www.proxydocs.com/mcft. There is no physical location for the 2020 Annual Meeting.
The record date is September 4, 2020
Items of BusinessANNUAL MEETING INFORMATION
Proposal |
| Board Vote Recommendation |
| Page Reference (for more information) |
| Effect of Abstentions and Broker Non-Votes |
| Votes Required for Approval | |
1. | Elect two directors named in this Proxy Statement for terms that expire at the next Annual Meeting of stockholders |
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| No effect |
| Affirmative “FOR” vote of a majority of the votes cast for or against each Director nominee |
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2. | Ratify the appointment of our independent registered public accounting firm for fiscal year 2021 |
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| Abstentions have no effect |
| Affirmative “FOR” vote of a majority of the votes cast for or against this proposal |
DATE & TIME: | LOCATION: | |
October 25, 2022 | Via a live audio-only webcast at | |
8 a.m. Eastern time | www.proxydocs.com/mcft |
Director NomineesAGENDA AND VOTING RECOMMENDATIONS
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| BOARD RECOMMENDS: | LEARN MORE ON PAGE: |
1. | Elect seven directors nominated by the Board of Directors for a term that expires at the Company’s next annual meeting of shareholders | ✓ FOR ALL
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2. | Ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2023 | ✓ FOR
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3. | Approve, on an advisory basis (i.e. non-binding), the compensation of the Company's named executive officers | ✓ FOR
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The Board of Directors (the “Board”) of MasterCraft Boat Holdings, Inc. (“we,” “our,” “us,” the “Company,” or “MasterCraft”) is asking you to elect the two nominees for director named below for terms that expire at our next Annual Meeting of Stockholders (the “2021 Annual Meeting”).
2022 PROXY STATEMENT 1
DIRECTOR NOMINEES
The following table provides summary information about the twoall director nominees. As of the Annual Meeting, we will no longer have a classified Board. Accordingly, each director is being nominated for a one-year term that will expire at our next annual meeting of shareholders. The directors will be elected by the affirmative vote of a majority of the votes cast. Pursuant to our Corporate Governance Guidelines, if an incumbent director fails to receive a majority of the votes cast, the incumbent director will promptly tender his or her irrevocable offer of resignation to the Board. The Board, upon recommendation by the Nominating and Corporate Governance Committee, can then choose to accept the resignation, reject it or take such other action that the Board deems appropriate. For more information about the director nominees, see page 9.5.
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W. PATRICK BATTLE | JACLYN BAUMGARTEN | FREDERICK A. BRIGHTBILL | DONALD C. CAMPION | ||||||||||
Age: 59 Independent Committees: •Nominating and Corporate Governance •Strategy (Chair) | Age: 44 Independent Committees: •Nominating and Corporate Governance •Strategy
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Independent Committees: •Audit (Chair) •Compensation |
JENNIFER DEASON | ROCH LAMBERT | PETER G. LEEMPUTTE | ||||||||||||
Age: 47 Independent Committees: •Audit •Strategy
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Independent Committees: •Audit •Nominating and •Strategy |
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| Independent | Committees: | •Audit •Compensation (Chair) |
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2022 PROXY STATEMENT Continuing Directors2
The following table provides summary information about the five continuing directors whose terms expire at the 2021 Annual Meeting and the
2022 Annual Meeting of Stockholders (the “2022 Annual Meeting”). For more information about the continuing directors, see page 10.HIGHLIGHTS
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2020 Performance Highlights
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NET SALES ↑ 34.6% | $121.1M ADJUSTED EBITDA(1) ↑ 30.5% | $3.12 / $4.54 GAAP EPS / ADJUSTED EPS(1) ↑ 5.4% / 37.2% |
(1) | See “Appendix A |
RECORD YEAR FOR THE COMPANY | $25.5M SPEND ON SHARE REPURCHASE PROGRAM | $36.7M REDUCTION OF OUTSTANDING DEBT |
The outbreak of a novel coronavirus (“COVID-19”) throughout the world, including the United States, during early calendar year 2020 caused widespread business and economic disruption through mandated and voluntary business closings and restrictions on the movement and activities of people. To protect the health of our employees, balance wholesale production with anticipated retail demand, and comply with governmental mandates, we reduced production in February 2020 and then suspended manufacturing operations at all of our facilities in late March 2020 (the “COVID-19 Shutdown”). The COVID-19 Shutdown significantly affected our 2020 financial performance. The COVID-19 also affected our suppliers and slowed our ability to ramp up from the COVID-19 Shutdown.
However, as governmental restrictions were lifted, demand in the U.S. retail marine market accelerated in May and through June 2020 resulting in strong retail demand for our boats through the key summer selling season. This increase in demand, coupled with our production shutdowns, pushed retail inventory levels for all our brands to record lows as of June 30, 2020. We ended fiscal year 2020 with retail inventory levels for our brands between 40 percent to 50 percent lower than at the end of fiscal year 2019. In addition, as a result of the COVID-19 pandemic, consumers have been turning to boating as a safe recreational alternative that allows for social distancing while enjoying the outdoors.
Governance EvolutionCORPORATE GOVERNANCE HIGHLIGHTS
We are committed to establishing and maintaining strong corporate governance practices that reflect high standards of ethics and integrity and promote long-term stockholdershareholder value. Over the past two years, we have made a number of changes to our governance structure that we believe align with the best interests of our Company and our stockholders. These changes are set forth below. We feel that these changes represent significant steps toward enhancing our governance practices.
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BOARD COMPOSITION | POLICIES, PROGRAMS, GUIDELINES | ||||
✓ | Transitioned to a fully declassified Board | ✓ | Active Board | ||
✓ | Diversity of | ✓ | Prohibition on short sales and transactions in derivatives and hedging of Company securities by directors, officers and employees | ||
✓ | All directors except our | ✓ | Prohibition on pledging of Company securities by directors, officers and employees subject to | ||
✓ | Strong Lead Independent Director with | ✓ | “Overboarding” limits | ||
BOARD PERFORMANCE | SHAREHOLDER RIGHTS | ||||
✓ | Focus on Board’s risk oversight role | ✓ | Majority vote standard for the election of | ||
✓ | Commitment to continuing director education | ✓ | Simple majority vote standard for | ||
✓ | Annual committee evaluations and periodic Board evaluations | ✓ | No shareholder rights plan or |
2022 PROXY STATEMENT Majority Voting Standard with Director Resignation Policy3. In July 2019, we amended our Bylaws regarding director elections to provide that our directors must be elected by the affirmative vote of a majority of the votes cast at the Annual Meeting. In connection with this change, we also amended our Corporate Governance Guidelines to provide that an incumbent director who fails to receive a majority of the votes cast must tender an irrevocable offer of resignation to the Board. The Board, upon recommendation by the Nominating and Corporate Governance Committee, will then consider a number of factors in determining whether to accept or reject the resignation, including the director’s contributions to the Company and the reasons he or she did not obtain the requisite stockholder vote.
Elimination of Supermajority Voting Standard. At last year’s Annual Meeting, our stockholders voted to approve our proposal to remove supermajority voting requirements from our Certificate of Incorporation. In addition, as part of the July 2019 amendments to our Bylaws, we made similar revisions to our Bylaws. As a result, stockholders may now amend our Bylaws and any provision of our Certificate of Incorporation by majority vote. The Board believes that implementing a majority voting standard to amend any provision of our Certificate of Incorporation and Bylaws enhances the ability of our stockholders to influence our governance structure and is consistent with principles of strong corporate governance.
2020 Compensation Program Highlights
2022 COMPENSATION PROGRAM HIGHLIGHTS
Our executive compensation program is designed to facilitate high performance and generate results that will create value for our stockholders.shareholders. We structure compensation to pay for performance, reward our executives with equity in the Company in order to align their interests with the interests of our stockholdersshareholders and allow our executives to share in our stockholders’shareholders’ success, which we believe creates a performance culture, maintains morale and attracts, motivates and retains top executive talent.
The primary elements of our fiscal year 20202022 executive compensation program are base salary, annual bonuses, equity incentive awards and certain employee benefits. Our Compensation Committee reviews and approves our executive compensation program, and maintains the discretion to adjust awards and amounts paid to our executive officers as it deems appropriate. We believe our named executive officers are compensated in a manner consistent with our strategy, compensation best practices and alignment with stockholders’shareholders’ interests.
STRUCTURE OF OUR COMPENSATION PROGRAM
Our compensation program is structured to be reasonable in magnitude of total opportunity, largely performance-based, and equity-oriented.
WHAT WE DO | ||||
✓ | Strong emphasis on performance-based compensation, with a significant portion of named executive officers’ overall compensation tied to objective Company performance measures | ✓ | Rigorous measures tied to Company Revenue, Adjusted EBITDA, | |
✓ | Aggressive annual Revenue and Adjusted EBITDA targets | ✓ | Compensation Committee composed solely of independent directors | |
✓ | Appropriate mix of short-term and long-term incentives | ✓ | Additional rigorous strategic goals considered for each executive | |
✓ | Annual limits for cash incentives for named executive officers
| ✓ | Meaningful stock ownership guidelines for certain executive officers and directors | |
✓ | Robust clawback policy for incentive cash and equity compensation paid to our named executive officers | ✓ | Compensation Committee advised by third-party advisors including independent compensation consultant
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WHAT WE DON’T DO | |||
| Provide incentives that encourage excessive executive risk-taking
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| Gross up excise taxes that may become due upon a change in control |
| Guarantee incentive awards for executives |
2021 Annual Meeting of Stockholders 2022 PROXY STATEMENT 4
Stockholder proposals submitted for inclusion in the proxy statement for our Annual Meeting of stockholders expected to be held in September or October 2021 pursuant to SEC Rule 14a-8 must be received by us by May 19, 2021. Director nominations or other business to be brought before the 2021 Annual Meeting by a stockholder, other than Rule 14a-8 proposals described above, must be received by us between June 23, 2021 and July 23, 2021. For more information, see page 39.
QUESTIONS RELATING TO THIS PROXY STATEMENT
What is a proxy?
It is your legal designation of another person to vote the stock you own. That other person is called a proxy. If you designate someone as your proxy in a written document, that document also is called a proxy or a proxy card. We have designated two of our officers as proxies for the Annual Meeting. These officers are Frederick A. Brightbill and Timothy M. Oxley.
What is a proxy statement?
It is a document that Securities and Exchange Commission (“SEC”) regulations require us to give you when we ask you to vote designating Frederick A. Brightbill and Timothy M. Oxley as proxies to vote on your behalf.
What is the difference between a stockholder of record and a stockholder who holds stock in street name?
If your shares are registered in your name with our transfer agent, American Stock Transfer & Trust Company, LLC (“AST”), you are a stockholder of record. If your shares are held in the name of your bank, broker or other nominee, your shares are held in street name.
What is the record date and what does it mean?
September 4, 2020 is the record date for the Annual Meeting to be held on October 21, 2020. The record date is established by the Board as required by the Delaware General Corporation Law (“Delaware Law”). Owners of record of our common stock at the close of business on the record date are entitled to receive notice of the meeting and vote at the meeting and any adjournments or postponements of the meeting.OUR BOARD
How can I attend the Annual Meeting?
Stockholders as of the record date may attend and vote virtually at the Annual Meeting by registering at www.proxydocs.com/mcft prior to the deadline of October 19, 2020 at 5:00 pm Eastern Time. To register, stockholders (or their authorized representatives) will need the control number provided on their proxy card, voting instruction form or Notice of Availability of Proxy Materials. Upon completing your registration, you will receive further instructions via email, including your unique links that will allow you access to the meeting and will also permit you to submit questions.
Can I ask questions at the Annual Meeting?
Stockholders as of our record date who attend and participate in our virtual Annual Meeting at www.proxydocs.com/mcft will have an opportunity to submit questions live via the Internet during a designated portion of the meeting. These stockholders may also submit a question in advance of the Annual Meeting at www.proxydocs.com/mcft. In both cases, stockholders must have available their control number provided on their proxy card, voting instruction form or Notice of Availability of Proxy Materials.
How do I vote?PROPOSAL 1 - ELECTION OF DIRECTORS
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The giving of a proxy will not affect your right to vote at the Annual Meeting should you decide to attend.
What if I sign and return a proxy card, but do not provide voting instructions?
Proxies that are properly executed and delivered, and not revoked, will be voted as specified on the proxy card. If no direction is specified on the proxy card, the proxy will be voted as follows:
for the election of the two nominees for director described in this Proxy Statement; and
for ratification of the appointment of our independent registered public accounting firm for fiscal year 2021.
What if I change my mind after I return my proxy?
You may change your vote by revoking your proxy at any time before it is exercised, which can be done by voting your shares online while virtually attending the meeting, by delivering a new proxy or by notifying the Company Secretary in writing prior to the meeting. If your shares are held for you in a brokerage, bank or other institutional account, you must contact that institution to revoke a previously authorized proxy. Participation in the Annual Meeting will not alone constitute revocation of a proxy.
What is a quorum?
The presence of the holders of a majority of the outstanding shares of common stock entitled to vote at the Annual Meeting, present in person or represented by proxy, is necessary to constitute a quorum. The inspector of elections appointed for the meeting will tabulate votes cast by proxy and in person at the meeting and determine the presence of a quorum. Virtual attendance at the Annual Meeting constitutes presence in person for purposes of quorum.
Will my shares be voted if I do not vote by the Internet, sign and return a proxy card, or vote at the virtual Annual Meeting?
If you are a stockholder of record and you do not vote by the Internet, sign and return a proxy card or attend the Annual Meeting and vote electronically, your shares will not be voted and will not count in deciding the matters presented for stockholder consideration in this proxy statement.
If your shares are held in “street name” through a bank, broker or other nominee and you do not provide voting instructions before the Annual Meeting, your broker or other nominee may vote your shares on your behalf under certain circumstances. Brokerage firms have the authority under certain rules to vote shares for which their customers do not provide voting instructions on “routine” matters.
The ratification of the appointment of our independent registered public accounting firm is considered a “routine” matter under these rules. Therefore, brokerage firms are allowed to vote their customers’ shares on this matter if the customers do not provide voting instructions. If your brokerage firm votes your shares on this matter because you do not provide voting instructions, your shares will be counted for purposes of establishing a quorum to conduct business at the meeting and in determining the number of shares voted for or against the routine matter.
When a matter is not a routine matter and the brokerage firm has not received voting instructions from the beneficial owner of the shares with respect to that matter, the brokerage firm cannot vote the shares on that matter. This is called a “broker non-vote.” Only the ratification of the appointment of our independent registered public accounting firm is considered a “routine” matter for this Proxy Statement. The election of director nominees is not considered a routine matter. Because the election of director nominees is not considered a “routine” matter for stockholder consideration, the brokers will not have discretionary authority to vote your shares with respect to such matters and if you do not instruct your bank or broker how to vote your shares, no votes will be cast on your behalf with respect to such matters.
We encourage you to provide instructions to your brokerage firm by voting your proxy. This action ensures your shares will be voted at the meeting in accordance with your wishes.
How may I vote for each proposal?
For Proposal 1—Election of Directors, for each nominee, you may vote for, against or abstain from voting.
For Proposal 2—Ratification of the Appointment of our Independent Registered Public Accountants, you may vote for, against or abstain from voting.
How are votes tabulated?
According to our Bylaws, each of the proposed items will be determined as follows:
Proposal 1—Election of Directors: To be elected, each nominee must receive an affirmative “FOR” vote of a majority of the votes cast. As set forth in our Bylaws, only votes “For” or “Against” the election of a director nominee will be counted. If you abstain from voting, it will have no effect on the outcome of the vote.
Proposal 2—Ratification of the Appointment of our Independent Registered Public Accountants: The ratification of the appointment of our independent registered public accountants will be determined by a majority of the votes cast for or against this proposal. If you abstain from voting on such proposal, it will have no effect on such proposal.
Any other matters: The voting results of any other matters are determined by a majority of votes cast affirmatively or negatively, except as may otherwise be required by law.
No cumulative voting rights are authorized, and dissenters’ rights are not applicable to the matters being voted upon.
How are proxies solicited and what is the cost?
We will bear all expenses incurred in connection with the solicitation of proxies. We will reimburse brokers, fiduciaries and custodians for their costs in forwarding proxy materials to beneficial owners of common stock. Our directors, officers and employees may solicit proxies by mail, telephone and personal contact. They will not receive any additional compensation for these activities.
Where can I find the voting results of the Annual Meeting?
We expect to announce preliminary voting results at the Annual Meeting. We will publish the final results in a current report on Form 8-K within four business days of the Annual Meeting. We will file that report with the SEC, and you can get a copy from:
our website at www.mastercraft.com by clicking on the Investors link, followed by the Financials link,
the SEC’s website at www.sec.gov,
the SEC at 1 (800) SEC-0330, or
our Corporate Secretary at 100 Cherokee Cove Drive, Vonore, Tennessee 37885.
How can I obtain a copy of the 2020 Annual Report to Stockholders and the Annual Report on Form 10-K for the year ended June 30, 2020?
Our 2020 Annual Report to Stockholders, which includes our Annual Report on Form 10-K for the year ended June 30, 2020, is available at www.proxydocs.com/mcft and at www.mastercraft.com by clicking on the Investors link, followed by the Financials link. In addition, our Annual Report on Form 10-K for the year ended June 30, 2020, is available from the SEC’s website at www.sec.gov. At the written request of any stockholder who owns common stock as of the close of business on the record date, we will provide, without charge, paper copies of our Annual Report on Form 10-K, including the financial statements and financial statement schedule, as filed with the SEC, except exhibits thereto. If requested by eligible stockholders, we will provide copies of the exhibits for a reasonable fee. You can request copies of our Annual Report on Form 10-K by mailing a written request to:
100 Cherokee Cove Drive,
Vonore, Tennessee 37885
Attention: Corporate Secretary
PROPOSAL 1—ELECTION OF DIRECTORS
Currently, our Board consists of seven directors in three classes, with three directors in Class I, two directors in Class II and two directors in Class III.
The three director classes terms expire as follows:
Class II, whose term will expire at the 2020 Annual Meeting;
Class III, whose term will expire at the 2021 Annual Meeting; and
Class I, whose term will expire at 2022 Annual Meeting.
The terms of Messrs. Donald C. Campion and Tzau-Jin (TJ) Chung, each a Class II director, expire at the Annual Meeting. Upon the recommendation of our Nominating and Corporate Governance Committee, Messrs. Campion and Chung have been nominated for election at the Annual Meeting. Because the proposal to declassify the Board (the “Declassification Proposal”) was approved at the 2019 Annual Meeting, the nominees, if elected, will serve for a one-year term, rather than a three-year term, subject to earlier resignation or removal.
In addition, the Class III and Class I directors will be elected for one-year terms expiring at the annual meeting of stockholders to be held in 2022 and 2023, respectively. This will result in a fully declassified Board by the 2022 Annual Meeting. Messrs. Frederick A. Brightbill and W. Patrick Battle are our current Class III directors and Ms. Jaclyn Baumgarten and Messrs. Roch Lambert and Peter G. Leemputte are our current Class I directors.
The persons named in the accompanying proxy, or their substitutes, will vote for the election of the two nominees listed hereafter, except to the extent authority to vote for any or all of the nominees is withheld. No proposed nominee is being elected pursuant to any arrangement or understanding between the nominee and any other person or persons. Each of the nominees have consented to stand for election at this meeting. If any of the nominees becomes unable or unwilling to serve, the persons named as proxies in the accompanying proxy, or their substitutes, shall have full discretion and authority to vote or refrain from voting for any substitute nominees in accordance with their judgment. We do not know of any nominee of the Board who would be unable to serve as a director if elected.
Directors will be elected by a majority of the votes cast at the Annual Meeting. In accordance with our Corporate Governance Guidelines, as amended in July 2019, any director nominee who fails to receive the affirmative vote of a majority of the votes cast must promptly tender an irrevocable offer of resignation to the Board, which will then consider whether to accept or reject the resignation. For more information on our director resignation policy, see the “Corporate Governance—Director Resignation Policy” section in this Proxy Statement.
Each of the director nominees listed below are currently directors of the Company. The following is a brief summary of each director nominee’s business experience and qualifications and other public company directorships held currently or in the last five years.
Donald C. Campion—Mr. Campion has served as a member of our The Board since July 2015. He has served as the Chief Financial Officer of several public and private companies, including Special Devices, Inc., Cambridge Industries, Inc., Oxford Automotive, Inc., Delco Electronics Corporation and VeriFone, Inc. Mr. Campion is a memberbelieves that each of the board of directors of Haynes International, Inc., where he serves as the Chairman of the Audit Committee and the Compensation Committee. Mr. Campion has previously served on the boards of many public and private companies. Mr. Campion graduated from the University of Michigan College of Engineering with a B.S. in applied mathematics and earned an M.B.A. from the University of Michigan School of Business Administration. We believe Mr. Campion’s substantial accounting and tax experience, his leadership positions in diverse manufacturing businesses and his board service experience, including as chair of several audit committees, enable him to play a key role in all matters involving our Board and make himseven nominees are well qualified to serve as a member of our Board.
Tzau-Jin (TJ) Chung—Mr. Chung has served as a member of our Board since December 2016. Mr. Chung is currently a senior partner at Core Industrial Partners, a private equity firm. Mr. Chung retired as CEO of Teletrac Navman, a Danaher operating company and a leading global SaaS provider of fleet management solutions in May 2016. From 2007 to 2012, Mr. Chung was CEO of Navman Wireless, a leading SaaS provider of commercial fleet telematics solutions. Before Navman Wireless, Mr. Chung served as President of New Technologies Division at Brunswick Corporation. Mr. Chung also served as VP & Chief Strategy Officer of Brunswick and Senior VP of Mercury Marine, a $1.6 billion division of Brunswick. Before joining Brunswick, Mr. Chung was an
executive at Emerson Electric. Mr. Chung currently serves on the board of Littelfuse (NASDAQ: LFUS), where he serves as the Chairman of the Compensation CommitteeBoard, and as a member of the Nominating and Governance and the Technology Committees. Mr. Chung also serves on the board of Airgain (NASDAQ: AIRG), where he serves on the audit committee. Mr. Chung holds an MBA from Duke University’s Fuqua School of Business, an MS in Computer Science from North Carolina State University, and a BS in Electrical Engineering from the University of Texas at Austin. We believe Mr. Chung’s substantial experiencehas set forth in the boating industrybiographies below each nominee’s key experiences, qualifications and other industries, his leadership and strategic skills and his expertise in technology enable himattributes that led the Board to play a key role in all matters involving our Board and makes him well qualified toconclude that they should serve as a member of our Board.
The Board recommends that you vote FOR the two director nominees.
Continuing Directors with Terms Expiring at the 2021 or 2022 Annual Meetings
The directors listed below are expected to remain in office for the duration of their terms in accordance with our Bylaws.
Frederick A. Brightbill—Mr. Brightbill was appointed as our interim Chief Executive Officer in October 2019 and as permanent Chief Executive Officer in December 2019, and has served as a member of our Board since 2009, including as Chairman since July 2015. Mr. Brightbill has served as a Principal of Brightbill Advisors, a management consulting firm, since 2009 and previously served as Principal at Vantage Development and JB Acquisitions. Prior to that he served as President of the Aluminum Boat Group at Brunswick Corporation and in various leadership roles at Mercury Marine, including President of the Outboard Business Unit and Integrated Operations Division. Mr. Brightbill has served on many private company boards and has held a variety of leadership positions, including President and CFO. Mr. Brightbill graduated with a B.S. in Finance from the University of Illinois at Urbana Champaign and received his M.B.A. from the University of Chicago. We believe Mr. Brightbill’s experience in the boating industry as well as his leadership and operational skills enable him to play a key role in all matters involving our Board and makes him well qualified to serve as a member of our Board.
W. Patrick Battle—Mr. Battle has served as a member of our Board since May 2017. Since 2010, Mr. Battle has been the Managing Partner of Stillwater Family Holdings and was instrumental in launching Experience and Fermata Partners. Mr. Battle served as Chairman of IMG College from 2007 until 2011, following the acquisition of The Collegiate Licensing Company (CLC) by IMG Worldwide. Under his leadership, IMG College became the leader in developing and managing integrated licensing, marketing, and multimedia rights programs for more than 200 U.S. universities, conferences, bowls, and the NCAA. Prior to joining IMG in 2007, Mr. Battle was the President and Chief Executive Officer of CLC, where he worked since 1984. Mr. Battle has served on the board of Acuity Brands, Inc. since 2014 and is currently a member of Acuity’s Compensation Committee and Governance Committee. Mr. Battle graduated from Georgia State University with a B.A. in Marketing. We believe Mr. Battle’s operational, strategic, and marketing expertise gained through senior leadership positions qualifies him to play a key role in all matters involving our Board and make him well qualified to serve as a member of our Board.
Jaclyn Baumgarten— Ms. Baumgarten has served as a member of our Board since October 2018. Ms. Baumgarten is currently the cofounder and Chief Executive Officer of Boatsetter, the world’s leading boat sharing platform with boats throughout the United States, Mexico, the Bahamas, the Caribbean, South America and the Mediterranean. Prior to co-founding Boatsetter, Ms. Baumgarten founded and was Chief Executive Officer of Cruzin Inc. (now merged with Boatsetter), where she led a team of marine and insurance industry leaders to create the insurance policy that paved the way for an entire boat sharing industry. Prior to this, Ms. Baumgarten served as a Partner and Chief Operating Officer at AH Global, a Director of Strategy at DaVita, a Development Manager at Westfield Group, a Consultant at IBM, and a Consultant at PricewaterhouseCoopers. Ms. Baumgarten holds a Bachelor of Arts degree from Wellesley College, cum laude, and has a Master of Business Administration from the Stanford University Graduate School of Business. We believe Ms. Baumgarten’s substantial experience in the boating industry and her strategic and marketing expertise gained through senior leadership positions enable her to play a key role in all matters involving our Board and makes her well qualified to serve as a member of our Board.
Roch Lambert—Mr. Lambert was appointed as our Lead Director in December 2019 and has served as a member of our Board since October 2016. Mr. Lambert currently serves as President of Curt Group, an aftermarket automotive manufacturer and a division of LCI. Prior to this position, Mr. Lambert served as a Chief Executive Officer of Rec Boat Holdings, an international designer, manufacturer and distributor of powerboats, from 2010 to 2016. Prior to joining Rec Boat, Mr. Lambert served as Vice President and General Manager of several divisions at Bombardier Recreation Products, an international recreational products company, including the Sea-Doo, Ski-Doo and Evinrude divisions from 2008 to 2009, the Evinrude division from 2001 to 2008 and the Sea-Doo division from 1997-2001. He also served in various leadership, engineering and production roles for Bombardier and Aquilon Technologies, a manufacturer of attachments for farm equipment OEMs. Mr. Lambert also currently serves on the boards of three private companies and has previously served on the boards of other private companies. Mr. Lambert graduated from the Ecole Polytechnique de Montreal with a B.Eng. in mechanical/aeronautical engineering and a graduate business degree from the Universite Laval. We believe Mr. Lambert’s substantial industry experience, his leadership positions in diverse manufacturing businesses and his vast knowledge of operational matters in the recreational products and powerboat industries, enable him to play a key role in all matters involving our Board and make him well qualified to serve as a member of our Board.
Peter G. Leemputte—Mr. Leemputte has served as a member of our Board since October 2016. Prior to his retirement, Mr. Leemputte was Chief Financial Officer and Treasurer at Keurig Green Mountain, Inc., a leader in specialty coffee, coffee makers, teas and other beverages, from 2015 to 2016. Prior to joining Keurig, Mr. Leemputte was Executive Vice President and Chief Financial Officer at Mead Johnson Nutrition Company, a global leader in infant and children’s nutrition, from 2008 to 2015. Mr. Leemputte also has significant experience in the marine industry, having previously served as Senior Vice President and Chief Financial Officer for Brunswick Corporation, a diversified manufacturing company. He joined Brunswick in 2001 as Vice President and Controller. Prior to joining Brunswick Corporation, Mr. Leemputte held various management positions at Chicago Title Corporation, Mercer Management Consulting, Armco Inc., FMC Corporation and BP. Mr. Leemputte holds a Bachelor of Science degree in Chemical Engineering from Washington University, St. Louis and a Master of Business Administration in Finance from the University of Chicago Booth School of Business. Mr. Leemputte currently serves on the Board of Ecogensus LLC, a privately held company. Mr. Leemputte retired as director at Beazer Homes, USA, in February 2020 where he served as a member of the Audit Committee and as a member of the Finance Committee. We believe Mr. Leemputte’s significant financial and accounting expertise gained in handling financial responsibilities for several leading corporations, his deep industry experience and his leadership skills enable him to play a key role in all matters involving our Board and make him well qualified to serve as a member of our Board.
ENVIRONMENTAL SUSTAINABILITY AND SOCIAL
As a manufacturer of recreational powerboats meant to be used and enjoyed outdoors on the water, we recognize the importance of social and environmental responsibility and global sustainability. Over the past several years, we have undertaken initiatives to reduce our environmental impact, ensure a healthy and safe workplace for our employees, and act as good corporate citizens in the communities we serve, including:director.
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Managing Partner, Stillwater Family Holdings Age: 59 Independent Director since: 2017 Committees:
•Strategy (Chair)
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EXPERIENCE / QUALIFICATIONS
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EXPERIENCE: | •Managing Partner, Stillwater Family Holdings and was instrumental in launching Experience and Fermata Partners (present) •Chairman, IMG College, following the acquisition of The Collegiate Licensing Company (CLC) by IMG Worldwide. Under his leadership, IMG College became the leader in developing and managing integrated licensing, marketing, and multimedia rights programs for more than 200 U.S. universities, conferences, bowls, and the NCAA •President and Chief Executive Officer, CLC | |||
QUALIFICATIONS: | •Operational, strategic, and marketing expertise •Senior leadership experience | |||
EDUCATION: | •B.A., Marketing, Georgia State University | |||
OTHER BOARDS: | •Acuity Brands, Inc. (NYSE: AYI), member of the Compensation Committee and Governance Committee |
Our continued commitment
2022 PROXY STATEMENT 5
JACLYN BAUMGARTEN | ||
Co-Founder and Chief Executive Officer, Boatsetter Age: 44 Independent Director since: 2018 Committees: •Nominating and Corporate Governance •Strategy | EXPERIENCE / QUALIFICATIONS •Industry •Marketing •Strategy | |
EXPERIENCE: | •Co-Founder and Chief Executive Officer, Boatsetter, the world’s leading boat sharing platform with boats throughout the United States, Mexico, the Bahamas, the Caribbean, South America and the Mediterranean (present) •Founder and Chief Executive Officer, Cruzin Inc. (now merged with Boatsetter), where she led a team of marine and insurance industry leaders to create the insurance policy that paved the way for an entire boat sharing industry. •Partner and Chief Operating Officer, AH Global •Director of Strategy, DaVita •Development Manager, Westfield Group •Consultant, IBM and PricewaterhouseCoopers | |
QUALIFICATIONS: | •Substantial experience in the boating industry •Strategic and marketing experience •Senior leadership experience | |
EDUCATION: | •B.A., cum laude, Wellesley College •M.B.A., Stanford University Graduate School of Business |
FREDERICK A. BRIGHTBILL | |||
Chief Executive Officer and Chairman, MasterCraft Boat Holdings, Inc. Age: 70 Chairman since: 2015 Director since: 2015 | EXPERIENCE / QUALIFICATIONS •Industry •Strategy •Operations •Product Development | ||
EXPERIENCE: | •Chief Executive Officer, MasterCraft (2019 – present) •Principal, Brightbill Advisors, Vantage Development and JB Acquisitions •President of the Aluminum Boat Group, Brunswick Corporation •Various leadership roles, including President of the Outboard Business Unit and Integrated Operations Division, Mercury Marine •Senior leadership positions; including, President, CFO, VP Marketing and Sales in consumer durable businesses | ||
QUALIFICATIONS: | •Boating industry experience •Leadership, strategic, product development and operational skills | ||
EDUCATION: | •B.S., Finance, University of Illinois at Urbana Champaign •M.B.A., University of Chicago | ||
OTHER BOARDS | •Previously served on many private company boards |
2022 PROXY STATEMENT 6
Former Chief Financial Officer, VeriFone, Inc. Age: 74 Independent Director since: 2015 Committees: •Audit (Chair) •Compensation | EXPERIENCE / QUALIFICATIONS •Finance •Accounting •Manufacturing •Information Technology | ||
EXPERIENCE: | •Chief Financial Officer of several public and private companies, including VeriFone, Inc., Special Devices, Inc., Cambridge Industries, Inc., Oxford Automotive, Inc., and Delco Electronics Corporation | ||
QUALIFICATIONS: | •Substantial accounting and tax experience •Leadership positions in diverse manufacturing businesses •Board service experience, including as chair of several audit committees | ||
EDUCATION: | •B.S., Applied Mathematics, University of Michigan College of Engineering •M.B.A., University of Michigan School of Business Administration | ||
OTHER BOARDS: | •Haynes International, Inc., Chairman of the Audit Committee and member of the Compensation Committee •Previously served on the boards of many public and private companies |
JENNIFER DEASON | |||
Board Chair, Belong Acquisition Corp. Age: 47 Independent Director since: 2021 Committees: •Audit •Strategy | EXPERIENCE / QUALIFICATIONS •Finance •Strategy •Marketing •Cybersecurity | ||
EXPERIENCE: | •Current Board Chair and former Chief Executive Officer, Belong Acquisition Corp., a special purpose acquisition company •Co-founder and Chief Business Officer/Chief Financial Officer, Flowcode •Executive Vice President, Head of Corporate Development and Strategy, Sotheby’s •Chief Financial Officer, The Weather Channel, where she worked to reposition the organization from a more traditional TV media company towards a data-focused, mobile-first advertising platform, prior to the sale of the digital and B2B businesses to IBM. •Served as Executive Vice President and in several interim operating roles such as President, Chief Marketing Officer and Chief Financial Officer, Bain Capital | ||
QUALIFICATIONS: | •Financial and strategic expertise •Media, entertainment, and retail industry | ||
EDUCATION: | •B.A., Yale University •M.B.A., Stanford University | ||
OTHER BOARDS: | •Belong Acquisition Corp. •Concentrix Corporation •DHI Group, Inc. |
2022 PROXY STATEMENT 7
ROCH LAMBERT | |||
Operating Partner, Core Industrial Partners Age: 59 Lead Independent Director since: 2019 Independent Director since: 2016 Committees: •Audit •Nominating and Corporate Governance (Chair) •Strategy | EXPERIENCE / QUALIFICATIONS •Industry •Operations •Strategy | ||
EXPERIENCE: | •Operating Partner at Core Industrial Partners (present) •President of Lippert Automotive, an aftermarket automotive manufacturer and a division of LCI •Chief Executive Officer, Rec Boat Holdings, an international designer, manufacturer and distributor of powerboats •Vice President and General Manager of several divisions at Bombardier Recreational Products (BRP), an international recreational products company, including the Sea-Doo, Ski-Doo and Evinrude divisions •Various leadership, engineering and production roles, Bombardier and Aquilon Technologies, a manufacturer of attachments for farm equipment OEMs | ||
QUALIFICATIONS: | •Substantial industry experience •Leadership experience in diverse manufacturing businesses •Extensive knowledge of operational matters in the recreational products and powerboat industries | ||
EDUCATION: | •B.Eng., Mechanical/Aeronautical Engineering, Ecole Polytechnique de Montreal •D.B.A., Universite Laval | ||
OTHER BOARDS: | •Two private boards |
2022 PROXY STATEMENT 8
PETER G. LEEMPUTTE | ||
Former Chief Financial Officer, Keurig Green Mountain, Inc. Age: 65 Independent Director since: 2016 Committees: •Audit •Compensation (Chair) | EXPERIENCE / QUALIFICATIONS •Industry •Finance •Accounting •Information Technology | |
EXPERIENCE: | •Chief Financial Officer and Treasurer, Keurig Green Mountain, Inc., a leader in specialty coffee, coffee makers, teas and other beverages •Executive Vice President and Chief Financial Officer, Mead Johnson Nutrition Company, a global leader in infant and children’s nutrition •Senior Vice President and Chief Financial Officer, Brunswick Corporation, a global manufacturer of marine products •Various management positions at Chicago Title Corporation, Mercer Management Consulting, Armco Inc., FMC Corporation and BP | |
QUALIFICATIONS: | •Significant financial and accounting expertise gained in handling financial responsibilities for several leading corporations •Extensive marine industry experience •Leadership skills | |
EDUCATION: | •B.S., Chemical Engineering, Washington University, St. Louis •M.B.A., Finance, University of Chicago Booth School of Business | |
OTHER BOARDS: | •Fathom Digital Manufacturing •Ecogensus LLC (private) •Previously served on the boards of other public companies |
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board recommends a vote “FOR” each of the director nominees.
2022 PROXY STATEMENT 9
HOW WE ARE SELECTED AND ELECTED
SELECTION OF DIRECTOR NOMINEES
GENERAL CRITERIA AND PROCESS
It is making the best productsNominating and Corporate Governance Committee’s responsibility to review and recommend to the Board a slate of nominees for director for election at each annual meeting of shareholders and to identify one or more candidates to fill any vacancies that may occur on the Board. In developing recommendations for new director candidates, the Nominating and Corporate Governance Committee identifies potential individuals whose qualifications and skills reflect those desired by the Board, and evaluates and recommends to the Board all nominees for board membership as specified in the best way possible, and we always strive for continuous improvement. We will continue to approach these areas of opportunity and undertake broader, organization-wide sustainability initiatives related to all boating operations, setting forth long-term goals for energy use, the environment, our products, and employee health and safety across our portfolio of brands. We will hold ourselves accountable to the highest standards, striving for reductions in energy usage at all of our facilities, minimizing our environmental footprint, developing the safest and most sustainable products in the boating marketplace, all while keeping the safety and well-being of our employees and commitment to being valued community partners at the forefront of everything we do.committee’s charter.
As part ofexpressed in our commitmentCorporate Governance Guidelines, we do not set specific criteria for directors, but the Company seeks to transparency regarding our sustainability practices, beginning this year we are elevating our sustainability disclosure reporting to follow Sustainability Accounting Standards Board (SASB) guidelines. SASB is an independent, private sector standards-setting organization dedicated to enhancingalign the efficiencycomposition of the capital markets by fostering high-quality disclosure of material sustainability informationBoard with the Company’s strategic direction so that meets investor needs. Designed to be cost-effective for companiesthe directors bring skills, experience and decision-useful for investors, SASB provides both parties the ability to compare and benchmark performance. Under SASB’s Sustainable Industry Classification System (SICS), our industry, boat manufacturing, falls in the Consumer Goods sector under the Toys & Sporting Goods industry. While not a perfect fit, we also believe the Industrial Machinery & Goods industry contains SASB metricsbackgrounds that are relevant to the boat manufacturing industry. As such,key strategic and operational issues that they will oversee and approve. Directors are selected for their integrity, ethics, seasoned judgment, breadth of experience, insight, knowledge and business acumen, among other things. Diversity of race, ethnicity, gender and age are also important factors in evaluating candidates for election to the table below providesBoard. Accordingly, pursuant to our Corporate Governance Guidelines, the SASB metricsNominating and Corporate Governance Committee will ensure that wediverse candidates are included in each pool of candidates from which Board nominees are chosen. Leadership skills and executive experience, expertise in recreational boating or vehicles, dealer network knowledge, familiarity with issues affecting global businesses, financial and accounting knowledge, prior experience in the Company’s geographic markets, expertise in operations, strategic planning and marketing expertise, may also be among the relevant selection criteria. The Nominating and Corporate Governance Committee believes that directors must be willing to devote sufficient time to carrying out their duties and responsibilities effectively and should be committed to serve on the Board for an appropriate period of time. In addition, the Company strives to maintain a Board that reflects passion and commitment to the Company. These criteria will vary over time depending on the needs of the Board.
For each of the nominees to the Board, the biographies included in this Proxy Statement highlight the experience and qualifications that were among the most important to the Nominating and Corporate Governance Committee in concluding that the nominee should serve as a director.
SHAREHOLDER RECOMMENDATION OF CANDIDATES FOR DIRECTOR
Shareholders wishing to recommend candidates to be nominated for election to the Company’s Board may do so by sending to the attention of our Corporate Secretary at the address provided in this Proxy Statement a statement setting forth the information required by the advance notice provision in our Fourth Amended and Restated Bylaws (the “Bylaws”). Shareholder recommendations provided to our Corporate Secretary will be considered and evaluated by the Nominating and Corporate Governance Committee in the same manner as candidates recommended from other sources.
For information regarding shareholder nominations of directors and shareholder proposals, please see the “Next Annual Meeting—Shareholder Proposals” section of this Proxy Statement.
DIRECTOR SKILLS, QUALIFICATIONS AND EXPERIENCE
Under the terms of its charter, the Nominating and Corporate Governance Committee is responsible for determining criteria and qualifications for director nominees to be used in reviewing and selecting director candidates, including those described in the Corporate Governance Guidelines. The Board and the Nominating and Corporate Governance Committee believe that it is important that our directors demonstrate:
a high level of personal and professional ethics, integrity and moral character;
a commitment to the long-term interests of our shareholders;
sound business judgment;
the skills, knowledge and expertise that in the aggregate are most relevant from both SICS industries.useful in overseeing and providing strategic direction to the Company’s business; and
availability to devote sufficient time for preparation and participation in board and committee meetings.
2022 PROXY STATEMENT 10
The Nominating and Corporate Governance Committee is responsible for recommending to the Board a slate of nominees for election at each annual meeting of shareholders. Nominees may be suggested by directors, members of management, shareholders or, in some cases, by a third-party search firm. The Nominating and Corporate Governance Committee considers a wide range of factors when assessing potential director nominees. This includes consideration of the current composition of the Board, any perceived need for one or more particular areas of expertise, the balance of management and independent directors, the need for committee-specific expertise, the evaluations of other prospective nominees and the qualifications of each potential nominee relative to the attributes, skills and experience described above.
Using our director skills matrix as a guide, as well as the results of our annual Board and committee self-assessment process, the Nominating and Corporate Governance Committee evaluates the composition of our Board annually and identifies for consideration by the full Board areas of expertise and other qualities that would complement and enhance our current Board. The diverse set of core competencies represented on our current Board is summarized below:
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Seven out of eight current directors, and six of our seven director nominees, are independent. The average tenure of our directors is 5.1 years. For additional information abouton each director, see the biographies in the “Proposal 1—Election of Directors” section of this Proxy Statement.
BOARD DIVERSITY
The diversity of our sustainability frameworkBoard is availablean important factor in our director recruitment process. Three of our eight current directors are either women or are racially/ethnically diverse, and we are committed to continuing to focus on diversity in determining the composition and make-up of the Board. In addition to our website at www.mastercraft.com/makingboatingbetter.
Our active investor relations efforts include regularfocus on diversity during the recruitment and ongoing engagement withevaluation of current directors and potential investors, financial analysts,director nominees, our Corporate Governance Guidelines require that diverse candidates be included in each pool of new director candidates. To achieve diversity among directors, our Nominating and the media through conference calls, face-to-face investor meetings, correspondence, conferences,Corporate Governance Committee will consider a number of demographic factors, including, but not limited to, race, gender, ethnicity, culture, nationality and other events. Since 2018, we have held an annual Investor Day at our Vonore, TN facility. These Investor Days allow investor accessage to our top managers to discusscontinue developing a board that reflects diverse backgrounds, viewpoints, experience, skills and explain our businesses, provide updates on our progress against our current long-term plan, outline our future plans, strategies, and commitments, and experience first-hand our products on the water. Our stockholder outreach and engagement program is designed to ensure that management and the Board understand, consider, and address the issues that matter most to our stockholders. Though the COVID-19 pandemic disrupted travel and investor conferences, we have had one-on-one discussions with more than half of our top twenty non-quant, non-broker-dealer accounts, who collectively own about 39% of the shares outstanding, through conference calls, virtual non-deal roadshows and virtual conferences over the past year.expertise.
Board Composition and Director Independence
Composition 2022 PROXY STATEMENT 11
BOARD COMPOSITION AND DIRECTOR INDEPENDENCE
COMPOSITION
Our amended and restated Bylaws provide that our Board shall consist of such number of directors as determined from time to time by resolution adopted by a majority of the total number of directors then in office. After the resignation of Mr. McNew in October 2019, ourOur Board currently consists of seveneight members, W. Patrick Battle, Jaclyn Baumgarten, Frederick A. Brightbill, Donald C. Campion, TJ Chung, Jennifer Deason, Roch Lambert, and Peter G. Leemputte. Mr. Chung will not stand for reelection at the Annual Meeting. We would like to take this opportunity to thank Mr. Chung for his many years of service to our Company, our Board, and our shareholders.
We expect to appoint a new diverse director following the Annual Meeting to fill the vacancy created by Mr. Chung’s departure. At the 2019 Annual Meeting, our stockholdersshareholders approved the Declassification Amendment, which will eliminate the classificationan amendment to our certificate of incorporation to declassify of our Board over a three-year period beginning with this year’s Annual Meeting. Any director to be elected afterperiod. As of the Annual Meeting, will be elected for a one-year term. As a result, our Board will be fully declassified, by the 2022 Annual Meeting.with each director elected for a one-year term.
IndependenceINDEPENDENCE
We follow the director independence standards set forth in The Nasdaq Stock Market, or NASDAQ, corporate governance standards and the federal securities laws.
The Board reviewed and analyzed the independence of each director and director nominee. The purpose of the review was to determine whether any particular relationships or transactions involving directors, or their affiliates or immediate family members were inconsistent with a determination that the director is independent for purposes of serving on the Board and its committees. During this review, the Board examined whether there were any transactions and/or relationships between directors or their affiliates or immediate family members and the Company and the substance of any such transactions or relationships.
As a result of this review, our Board has determined that Mr. Battle, Ms. Baumgarten, Mr. Campion, Mr. Chung, Ms. Deason, Mr. Lambert and Mr. Leemputte are independent, as defined under the rules of NASDAQ and meet the requirements set forth in our director independence guidelines. The members ofIn addition, our Nominating and Corporate Governance Committee are Ms. Baumgarten and Messrs Battle and Lambert. The members of our Compensation Committee are Messrs. Leemputte, Campion and Chung. The members of our Strategy Committee are Mr. Battle, Ms. Baumgarten, Mr. Chung and Mr. Lambert. The membersBoard has determined that each member of our Audit Committee, are Messrs. Campion, Lambert and Leemputte. Our Board has determined that Messrs. Campion, Lambert and Leemputte areand Ms. Deason, is independent for Audit Committee purposes, as defined under the rules of NASDAQ.
Director Skills, Qualifications
BOARD DIVERSITY MATRIX
NASDAQ requires each listed company to have, or explain why it does not have, two diverse directors on the board, including at least one diverse director who self-identifies as female and Experiences
Under the charter of the Nominating and Corporate Governance Committee, the Nominating and Corporate Governance Committee is responsible for determining criteria and qualifications forone diverse director nominees to be used in reviewing and selecting director candidates, including those described in the Corporate Governance Guidelines. The Board and the Nominating and Corporate Governance Committee believe that it is important that our directors demonstrate:
a high level of personal and professional ethics, integrity and moral character;
a commitmentwho self-identifies as an underrepresented minority or LGBTQ+ (subject to the long-term interests of our stockholders;
sound business judgment;
the skills, knowledge and expertise thatexceptions). Our current board composition is in the aggregate are useful in overseeing and providing strategic direction to the Company’s business; and
availability to devote sufficient time for preparation and participation in board and committee meetings.
compliance with this requirement. The Nominating and Corporate Governance Committee is responsible for recommending to the Board a slatetable below provides certain highlights of nominees for election at each annual meeting of stockholders. Nominees may be suggested by directors, members of management, stockholders or, in some cases, by a third-party search firm. The Nominating and Corporate Governance Committee considers a wide range of factors when assessing potential director nominees. This includes consideration of the current composition of the Board, any perceived need for one or more particular areas of expertise, the balance of management and independent directors, the need for committee-specific expertise, the evaluations of other prospective nominees and the qualifications of each potential nominee relative to the attributes, skills and experience described above.
The Board believes that, taken as a whole, it should represent a diverse set of skills, knowledge, experiences and backgrounds appropriate in light of the Company’s needs. In this regard the Board subjectively takes into consideration diversity (with respect to race, gender and national origin) when considering director nominees. The Board does not make any particular weighting of diversity or any other characteristic in evaluating nominees and directors, but considers the diversity in experience, skills and background of each nominee and director holistically.
Using our director skills matrix as a guide, as well as the results of our annual Board and committee self-assessment process, the Nominating and Corporate Governance Committee evaluates the composition of our Board annuallyboard members and identifies for consideration bynominees. Each of the full Board areas of expertise and other qualities that would complement and enhance our current Board. The diverse set of core competencies represented on our current Boardcategories listed in the below table has the meaning as it is summarized below:used in NASDAQ Rule 5605(f).
BOARD DIVERSITY MATRIX | ||||
Total Number of Directors | 8 | |||
| FEMALE | MALE | NON-BINARY | DID NOT DISCLOSE GENDER |
PART I: Gender Identity | ||||
Directors | 2 | 6 | ⸻ | ⸻ |
PART II: Demographic Background | ||||
African American or Black | ⸻ | ⸻ | ⸻ | ⸻ |
Alaskan Native or Native American | ⸻ | ⸻ | ⸻ | ⸻ |
Asian | ⸻ | 1 | ⸻ | ⸻ |
Hispanic or Latinx | ⸻ | ⸻ | ⸻ | ⸻ |
Native Hawaiian or Pacific Islander | ⸻ | ⸻ | ⸻ | ⸻ |
White | 2 | 5 | ⸻ | ⸻ |
Two or More Races or Ethnicities | ⸻ | ⸻ | ⸻ | ⸻ |
LGBTQ+ | ⸻ | |||
Did Not Disclose Demographic Background | ⸻ |
2022 PROXY STATEMENT 12
HOW WE ARE ORGANIZED
Six out of seven directors are independent. The average tenure of our directors is 4.6 years. For additional information on each director, see the biographies in the “Proposal 1—Election of Directors” section of this Proxy Statement.
Board Leadership StructureBOARD LEADERSHIP STRUCTURE
The Board is led by our Chairman and Chief Executive Officer, Mr. Brightbill. Under our Corporate Governance Guidelines, the Board has the flexibility to decide when the positions of Chairman and CEO should be combined or separated and whether an executive or independent director should be Chairman. This approach is designed to allow the Board to choose the most appropriate leadership structure for the Company to serve the interests of the Company and our stockholdersshareholders at the relevant time. At this point in time, the Board believes that the Company and its stockholdersshareholders are best served by having Mr. Brightbill serve as both Chairman and Chief Executive Officer. As the officer ultimately responsible for the day-to-day operation of the Company and for execution of its strategy, the Board believes Mr. Brightbill is the director best qualified to act as Chairman and to lead Board discussions regarding the performance of the Company. The structure also reinforces accountability for the Company’s performance at the highest levels.
Our Corporate Governance Guidelines also provide that, when the position of Chairman is not held by an independent director, a lead director (“Lead Independent Director”) will be appointed by the independent members of the Board. Based on the recommendation of the Nominating and Corporate Governance Committee, the Board has appointedSince December 2019, Roch Lambert to servehas served as our Lead Independent Director. As Lead Independent Director, Mr. Lambert focuses on overseeing the Board’s processes, prioritizing items for Board and committee discussion, and
serving as a liaison between the independent directors and the Chairman. Specifically, Mr. Lambert, among other things, (i) provides leadership to the Board in any situation where there may be a perceived conflict of interest involving any member of the Board (ii) chairs Board meetings in the absence of the Chairman; (iii) consults with the Chairman on, and approves, the schedules, agendas and information provided to the Board for each meeting and on other pertinent matters; (iv) calls and leads independent director meetings; (v) regularly meets with the Chairman and serves as liaison between the Chairman and the independent directors; (vi) makes himself available as the primary Board contact for direct communication with our significant stockholders;shareholders; (vii) works with the Nominating and Corporate Governance Committee to guide the Board’s governance processes, including succession planning and Board evaluations; and (viii) advises the Governance Committee in choosing committee chairs.
The Board continues to believe that its current leadership structure, which has a combined role of Chairman and CEO, counterbalanced by a strong independent Board led by a Lead Independent Director and independent directors chairing each of the Board Committees, is in the best interest of the Company and its stockholders.shareholders. In the Board’s view, this structure allows Mr. Brightbill, as Chairman and CEO, to drive strategy and agenda setting at the Board level, while maintaining responsibility for executing on that strategy as CEO. At the same time, our Lead Independent Director, Mr. Lambert, works with Mr. Brightbill to set the agenda for the Board and also exercises additional oversight on behalf of the independent directors. The Board will continue to review the appropriateness of this structure in light of the constantly evolving corporate governance landscape.
Board Committees and MembershipBOARD COMMITTEES AND MEMBERSHIP
Our Board has established an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance, or NCG, Committee and a Strategy Committee. Each of the committees reports to the Board as they deem appropriate, and as the Board may request. The composition, along with the duties and responsibilities of these committees as set forth in the applicable charter, are described below. The table below sets forth the current membership of each of the committees:
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DIRECTOR | AUDIT | COMPENSATION | NCG |
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| STRATEGY | |||||||||||||
W. Patrick Battle | ⸻ | ⸻ |
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| ♦ | ||||||||||||
Jaclyn Baumgarten | ⸻ | ⸻ |
| ✓ | |||||||||||||||
Frederick A. Brightbill | ⸻ | ⸻ |
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| ⸻ | |||||||||||||
Donald C. CampionÀ | ♦ |
| ⸻ |
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| ⸻ | ||||||||||||
TJ Chung | ⸻ | ✓ | ⸻ | ✓ | |||||||||||||||
Jennifer Deason À | ✓ | ⸻ | ⸻ | ✓ | |||||||||||||||
Roch Lambert ◄ | ✓ | ⸻ | ♦ | ✓ | |||||||||||||||
Peter G. Leemputte À | ✓ | ♦ | ⸻ | ⸻ |
◄ Lead Independent Director♦Chair✓MemberÀAudit Committee Financial Expert
2022 PROXY STATEMENT 13
AUDIT COMMITTEE FUNCTIONS: |
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•Engaging our independent public accountants •Reviewing with the independent public accountants the plans and results of the audit engagement •Approving professional services provided by the independent public accountants •Reviewing the independence of the independent public accountants •Approving the audit and non-audit fees •Reviewing the adequacy of our internal controls over financial reporting •Reviewing and providing oversight to the Company’s enterprise risk management program and the information technology and cybersecurity risk policies and procedures |
| Donald C. Campion, Chair Jennifer Deason Roch Lambert Peter G. Leemputte |
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Audit Committee
Our Audit Committee is responsible for, among other things, engaging our independent public accountants, reviewing with the independent public accountants the plans and results of the audit engagement, approving professional services provided by the independent public accountants, reviewing the independence of the independent public accountants, considering the range of audit and non-audit fees, and reviewing the adequacy of our internal controls over financial reporting.
Our Audit Committee currently consists of Messrs. Campion, Lambert, and Leemputte, with Mr. Campion serving as chair. Our Board has affirmatively determined that Messrs. Campion, Lambert and Leemputte and Ms. Deason each meet the definition of “independent director” for purposes of serving on the Audit Committee under Rule 10A-3 and NASDAQ rules. In addition, our Board has determined that each Audit Committee member is “financially literate” and that Ms. Deason and Messrs. Campion and Leemputte each qualify as an “Audit Committee Financial Expert,” as such term is defined in Item 407(d)(5) of Regulation S-K.
Our Board has adopted a written charter for the Audit Committee. The Audit Committee held 14 meetings during the 2020 fiscal year.
COMPENSATION COMMITTEE FUNCTIONS: | MEMBERS | |
•Determining compensation for our most highly paid employees •Determining director compensation •Administering our other compensation programs •Establishing, periodically re-evaluating and, where appropriate, adjusting and administering policies concerning compensation of management personnel | Peter G. Leemputte, Chair Donald C. Campion TJ Chung | |
Number of meetings: 5 |
Our Compensation Committee is responsible for determining compensation for our most highly paid employees and administering our other compensation programs. The Compensation Committee is also charged with establishing, periodically re-evaluating and, where appropriate, adjusting and administering policies concerning compensation of management personnel.
Our Compensation Committee consists of Messrs. Leemputte, Campion, and Chung, with Mr. Leemputte serving as chair. Our Board has affirmatively determined that Messrs. Leemputte, Campion, and Chung each meet the definition of “independent director” for purposes of serving on a Compensation Committee under NASDAQ rules.
Our Board has adopted a written charter for the Compensation Committee. The Compensation Committee held seven meetings during the 2020 fiscal year.
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE FUNCTIONS: | MEMBERS | |
•Assisting our Board in selecting new directors •Evaluating the overall effectiveness of our Board •Reviewing developments in corporate governance compliance •Oversight of ESG matters | Roch Lambert, Chair W. Patrick Battle Jaclyn Baumgarten | |
Number of meetings: 4 |
Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee is responsible for assisting our Board in selecting new directors, evaluating the overall effectiveness of our Board and reviewing developments in corporate governance compliance.
Our Nominating and Corporate Governance Committee consists of Ms. Baumgarten and Messrs. Lambert and Battle, with Mr. Lambert serving as chair. Our Board has affirmatively determined that Ms. Baumgarten and Messrs. Lambert and Battle each meet the definition of “independent director” for purposes of serving on a Nominating and Corporate Governance Committee under NASDAQ rules.
Our 2022 PROXY STATEMENT 14
STRATEGY COMMITTEE FUNCTIONS: | MEMBERS | |
•Overseeing the Company’s ongoing strategic planning initiatives •Developing and refining a strategic plan that identifies long-term goals and business objectives deemed to be in the Company’s best interests •Advising the Company’s executive officers in the identification of significant issues and opportunities facing the Company •Assisting such officers with prioritization and growth initiatives •Monitoring the progress of the implementation of the strategic plans •Identify short-term goals and objectives for the Company’s annual performance | W. Patrick Battle, Chair Jaclyn Baumgarten TJ Chung Jennifer Deason Roch Lambert | |
Number of meetings: 4 |
MEETINGS OF THE BOARD
In addition to a number of informal calls throughout the year, the Board has adopted a written charter for the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee held fourfive official meetings during the 2020 fiscal year.
Strategy Committee
Our Strategy Committee is responsible for overseeing the Company’s ongoing strategic planning initiatives. The Strategy Committee’s primary activities include the development and refinement2022. All of a strategic plan that identifies long-term goals and business objectives deemed to be in the Company’s best interests. The Strategy Committee is also charged with advising the Company’s executive officers in the identification of significant issues and opportunities facing the Company, assisting such officers with prioritization and growth initiatives and monitoring the progressour directors attended 100% of the implementationtotal meetings held by the Board and any committee on which the director served during the period of the strategic plans. fiscal year that the director was a member of the Board. We expect that each continuing director will attend the Annual Meeting of shareholders, absent a valid reason.
EXECUTIVE SESSIONS OF NON-MANAGEMENT DIRECTORS
The independent directors met in executive session, without any non-independent directors or members of management present, three times during fiscal 2022.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The directors serving on the Compensation Committee also helpsof the Board during fiscal 2022 were Peter G. Leemputte (Chairman), Donald C. Campion and TJ Chung. None of these individuals is or has at any time during the past year been an officer or employee of ours. During fiscal 2022, none of our executive officers to identify short-term goalsserved as a director of any corporation for which any of these individuals served as an executive officer and objectives forthere were no other Compensation Committee interlocks or relationships with the Company’s annual performance.
Our Strategy Committee consists of Mr. Battle, Ms. Baumgarten, Mr. Chung and Mr. Lambert,companies with Mr. Battle serving as chair.
Our Board has adopted a written charter for the Strategy Committee. The Strategy Committee held five meetings during the 2020 fiscal year.which these individuals or our other directors are affiliated.
Risk OversightHOW WE ARE GOVERNED AND GOVERN
RISK OVERSIGHT
Our Board is responsible for overseeing our risk management. The Board focuses on our general risk management strategy and the most significant risks facing us, and ensures that appropriate risk mitigation strategies are implemented by management. The Board is also apprised of particular risk management matters in connection with its general oversight and approval of corporate matters and significant transactions.
Our Board has delegated to the Audit Committee responsibility with respect to risk assessment and risk management. Pursuant to its charter, the Audit Committee discusses with management and the Company’s independent auditor the Company’s policies with respect to risk assessment and risk management, the Company’s significant financial and cybersecurity risk exposures and the actions management has taken to limit, monitor or control such exposures. Our other committees of the Board will also consider and address risk as they perform their respective committee responsibilities. All committees will report to the full Board as appropriate, including when a matter rises to the level of a material or enterprise level risk.
Our management is responsible for day-to-day risk management. This oversight includes identifying, evaluating, and addressing potential risks that may exist at the enterprise, strategic, financial, operational, compliance and reporting levels. We believe that the leadership structure of our Board supports its effective oversight of the Company’s risk management.
2022 PROXY STATEMENT Director Resign15ation Policy
DIRECTOR RESIGNATION POLICY
In July 2019, upon recommendation by the Nominating and Corporate Governance Committee, our Board amended our Corporate Governance Guidelines to provide that, in an uncontested election of directors, if an incumbent director who fails to receive the affirmative vote of a majority of the votes cast, he or she must promptly tender an irrevocable offer of resignation to the Board. The Board, upon recommendation by the Nominating and Corporate Governance Committee, will then consider a number of factors in determining whether to accept or reject the resignation, including the director’s contributions to the Company and the reasons he or she did not obtain the requisite stockholdershareholder vote.
Committee Charters and Corporate Governance GuidelinesCOMMITTEE CHARTERS AND CORPORATE GOVERNANCE GUIDELINES
The charters of each of the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee and the Strategy Committee and our Corporate Governance Guidelines may be accessed on our website at www.mastercraft.com by clicking on the Investors link, followed by the Governance link, and are available in print upon request from our Corporate Secretary.Secretary and may be accessed on our website at https://investors.mastercraft.com/corporate-governance/highlights.
Codes of Ethics and ConductCODE OF ETHICS AND CONDUCT
We have a Code of Ethics and Conduct, which is applicable to all directors and employees, including our executive and financial officers. The Code of Ethics and Conduct is available on our website at www.mastercraft.com by clicking the Investors link, followed by the Governance link,https://investors.mastercraft.com/corporate-governance/highlights and is available in print upon request from our Corporate Secretary. Any amendments to, or waivers of, the Code of Ethics and Conduct will be disclosed on our website promptly following the date of such amendment or waiver.
HOW TO COMMUNICATE WITH US
Selection of Director NomineesSHAREHOLDER ENGAGEMENT
General CriteriaOur active investor relations efforts include regular and Process
Itongoing engagement with current and potential investors, financial analysts, and the media through conference calls, face-to-face investor meetings, correspondence, conferences, and other events. Our shareholder outreach and engagement program is the Nominatingdesigned to ensure that management and Corporate Governance Committee’s responsibility to review and recommend to the Board a slate of nominees for director for election at each annual meeting of stockholdersunderstand, consider, and address the issues that matter most to identify one or more candidates to fill any vacancies that may occur onour shareholders. Though the Board. In developing recommendations for new director candidates, the NominatingCOVID-19 pandemic disrupted travel and Corporate Governance Committee identifies potential individuals whose qualifications and skills reflect those desired by the Board, and evaluates and recommends to the Board all nominees for board membership as specified in the committee’s charter.
As expressed in our Corporate Governance Guidelines and discussed in the “Corporate Governance—Board Composition and Director Independence—Director Skills, Qualifications and Experiences” section of this Proxy Statement,”investor conferences, we do not set specific criteria for directors, but the Company seeks to align the compositionhave had one-on-one discussions with shareholders who collectively own about 40 percent of the Board with the Company’s strategic direction so that the directors bring skills, experienceshares outstanding, through conference calls, virtual non-deal roadshows, and backgrounds that are relevant to the key strategic and operational issues that they will oversee and approve. Directors are selected for their integrity, ethics, seasoned judgment, breadth of experience, diversity, insight, knowledge and business acumen, among other things. Leadership skills and executive experience, expertise in recreational boating or vehicles, dealer network knowledge, familiarity with issues affecting global businesses, financial and accounting knowledge, prior experience in the Company’s geographic markets, expertise in operations, strategic planning and marketing expertise, among others, may also be among the relevant selection criteria. The Nominating and Corporate Governance Committee also believes that directors must be willing to devote sufficient time to carrying out their duties and responsibilities effectively and should be committed to serve on the Board for an extended period of time. In addition, the Company strives to maintain a Board that reflects passion and commitment to the Company. These criteria will varyconferences over time depending on the needs of the Board.
For each of the nominees to the Board, the biographies included in this Proxy Statement highlight the experience and qualifications that were among the most important to the Nominating and Corporate Governance Committee in concluding that the nominee should serve as a director.
Stockholder Recommendation of Candidates for Director
Stockholders wishing to recommend candidates to be nominated for election to the Company’s Board may do so by sending to the attention of our Corporate Secretary at the address provided in this Proxy Statement a statement setting forth the information required by the advance notice provision in our Bylaws. Stockholder recommendations provided to our Corporate Secretary will be considered and evaluated by the Nominating and Corporate Governance Committee in the same manner as candidates recommended from other sources.
For information regarding stockholder nominations of directors and stockholder proposals, please see the “Next Annual Meeting—Stockholder Proposals” section of this Proxy Statement.
During the fiscal year ended June 30, 2020, the Board met nine times. All of our directors attended at least 75% (the threshold for disclosure under SEC rules) of the total meetings held by the Board and any committee on which the director served during the period of the fiscal year that the director was a member of the Board. We expect that each continuing director will attend the Annual Meeting of stockholders, absent a valid reason.
Executive Sessions of Non-Management Directors
The independent directors met in executive session, without any non-independent directors or members of management present, four times during fiscal 2020.
Compensation Committee Interlocks and Insider Participation
The directors serving on the Compensation Committee of the Board during the fiscal year ended June 30, 2020 were Peter G. Leemputte (Chairman), Donald C. Campion and TJ Chung. None of these individuals is or has at any time during the past year been an officer or employee of ours. During the 2020 fiscal year, none of our executive officers served as a director of any corporation for which any of these individuals served as an executive officer and there were no other Compensation Committee interlocks or relationships with the companies with which these individuals or our other directors are affiliated.year.
Communications with the BoardCOMMUNICATIONS WITH THE BOARD
Any interested parties who have concerns that they wish to make known to the Company’s non-management directors, should send any such communication to the Board as a group or the non-management directors as a group in care of the Company’s registered office at 100 Cherokee Cove Drive, Vonore, Tennessee 37885 to the attention of our Corporate Secretary or send an email to the Board as a group or the non-management directors as a group at a specified email address provided by the Company on our website.to investorrelations@mastercraft.com. Our Corporate Secretary shall review all written and emailed correspondence received from stockholdersshareholders and other interested parties and forward such correspondence periodically to the directors. Advertisements, solicitations for business, requests for employment, requests for contributions or other inappropriate material will not be forwarded to the directors.
Director CompensationHOW WE ARE PAID
DIRECTOR COMPENSATION
The following table sets forth information concerning the fiscal year 20202022 compensation of our non-employee directors that served during the period from July 1, 20192021 through June 30, 2020:2022:
Name |
| Fees earned or paid in cash ($) |
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| Stock / option awards ($) |
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| Other ($)(1) |
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| Total ($) |
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Frederick A. Brightbill(2) |
| $ | 56,520 |
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| $ | 65,000 |
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| $ | — |
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| $ | 121,520 |
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NAME | FEES EARNED OR PAID IN CASH ($) | RESTRICTED STOCK AWARDS ($) | OTHER ($)1 | TOTAL ($) | ||||||||||||||||
W. Patrick Battle |
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| 67,500 |
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| 65,000 |
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| 2,873 |
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| 135,373 |
| 77,500 | 75,000 | — | 152,500 |
Jaclyn Baumgarten |
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| 57,500 |
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| 65,000 |
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| 11,482 |
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| 133,982 |
| 70,000 | 75,000 | 4,782 | 149,782 |
Donald C. Campion |
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| 82,500 |
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| 65,000 |
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| 3,716 |
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| 151,216 |
| 92,500 | 75,000 | 1,718 | 169,218 |
TJ Chung |
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| 62,500 |
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| 65,000 |
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| — |
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| 127,500 |
| 72,500 | 75,000 | — | 147,500 |
Jennifer Deason | 75,000 | 75,000 | 210 | 150,210 | ||||||||||||||||
Roch Lambert |
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| 76,250 |
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| 65,000 |
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| 3,682 |
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| 144,932 |
| 112,500 | 75,000 | 5,008 | 192,508 |
Peter G. Leemputte |
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| 77,500 |
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| 65,000 |
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| 1,588 |
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| 144,088 |
| 87,500 | 75,000 | 1,568 | 164,068 |
(1) | The amounts in this column reflect imputed income for boat usage. Each of our Non-Employee Directors is provided the opportunity to use one of our MasterCraft boats and trailers in order to better understand the quality, features, components, operation, etc. of our products, and to aid |
2022 PROXY STATEMENT 16
in the product development and portfolio strategy, while minimizing the cost to the Company. Directors are provided with use of the boat at no charge, but are responsible for paying all insurance, maintenance, fuel and other fees, costs and charges (other than registration or use fees and taxes) related to their operation of the boat. |
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Non-management members of the Board receive a $50,000$60,000 annual retainer related to their Board duties and responsibilities, which is paid in advance in four equal installments of $12,500$15,000 each. Additionally, there is a $20,000$25,000 annual retainer for serving as our Lead Independent Director, also paid in four equal installments. We reimburse directors for their out-of-pocket expenses incurred in attending meetings of the Board of Directors or any committee thereof.
Directors also receive an additional annual retainer for each committee on which they serve, paid in four equal installments. Each Audit Committee member receives a $10,000 annual retainer. Additionally, there is a $15,000 annual retainer for serving as the chairman of the Audit Committee. Each Compensation Committee member receives a $7,500 annual retainer. Additionally, there is a $10,000 annual retainer for serving as the chairman of the Compensation Committee. Each Nominating and Corporate Governance Committee member receives a $5,000 annual retainer. Additionally, there is a $7,500 annual retainer for serving as the chairman of the Nominating and Corporate Governance Committee. Each Strategy Committee member receives a $5,000 annual retainer. Additionally, there is a $7,500 annual retainer for serving as the chairman of the Strategy Committee.
Under the director compensation policy, directorseach director may elect to receive all (but not less than all) of his or her annual retainers in the form of common stock (in lieu of cash). Each non-employee director is also eligible to participate in our boat usage and testing program and may therefore receive certain additional benefits that we categorize as compensation for purposes of calculating a director’s compensation in this Proxy Statement.
Pursuant to the director compensation policy in effect during fiscal 2020,2022, we also granted an annual award of restricted stock with a grant date fair value of $65,000$75,000 to each non-employee director who received cash compensation. The terms of each restricted stock award are set forth in a written award agreement between each director and us, which we intend will generally provide for vesting after one year of continued service as a director, prorated as necessary to account for changes in service on the Board, subject, in either case, to acceleration upon a change of control. Directors elected or appointed, or those who leave service on the Board mid-quarter will receive a prorated portion of the annual retainer and the annual award, in each case adjusted to reflect his or her period of service.
Under the director compensation policy, the aggregate amount of cash and equity compensation that may be paid or granted to any non-employee director during any calendar year may not exceed $500,000, subject to limited exceptions. We have adopted a director stock ownership policy encouraging directors to hold shares of our common stock with a value equal to four times his or her annual cash retainer fee (exclusive of any committee retainers).
BENEFICIAL OWNERSHIP OF THE COMPANY’S SECURITIES
The following table sets forth information concerning beneficial All our directors have achieved the ownership of our common stockthreshold as of August 19, 2020, unless otherwise indicated, by eachthe date of the directors and nominees for director, by each of the named executive officers, by all directors, nominees for director and executive officers asthis proxy, except one who has a group, and by beneficial owners of more than five percent ofshort tenure on our common stock.board.
Name |
| Number of Shares of Common Stock Owned(1) |
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| Number of Shares Subject to Right to Acquire Beneficial Ownership |
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| Total Shares of Common Stock Beneficially Owned |
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| Percent of Shares of Common Stock Outstanding(2) |
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Beneficial owners of 5% or more of our common stock |
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Divisar Capital Management LLC(3) |
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| 1,646,969 |
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| — |
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| 1,646,969 |
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| 8.68 | % |
Fairfax Financial Holdings Limited(4) |
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| 1,599,333 |
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| — |
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| 1,599,333 |
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| 8.42 | % |
BlackRock, Inc.(5) |
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| 1,326,554 |
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| — |
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| 1,326,554 |
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| 6.99 | % |
The Vanguard Group(6) |
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| 985,446 |
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| — |
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| 985,446 |
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| 5.19 | % |
Systematic Financial Management, L.P.(7) |
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| 972,407 |
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| — |
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| 972,407 |
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| 5.12 | % |
Directors and named executive officers |
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Frederick A. Brightbill |
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| 117,580 |
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| — |
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| 117,580 |
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| * |
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Timothy M. Oxley |
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| 95,582 |
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| 15,146 |
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| 110,728 |
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| * |
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W. Patrick Battle |
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| 11,980 |
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| — |
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| 11,980 |
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| * |
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Jaclyn Baumgarten |
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| 8,438 |
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| — |
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| 8,438 |
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| * |
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Donald C. Campion |
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| 19,919 |
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| — |
|
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| 19,919 |
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| * |
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TJ Chung |
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| 13,518 |
|
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| — |
|
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| 13,518 |
|
| * |
| |
Roch Lambert |
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| 14,336 |
|
|
| — |
|
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| 14,336 |
|
| * |
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Peter G. Leemputte |
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| 14,336 |
|
|
| — |
|
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| 14,336 |
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| * |
| |
Terry McNew, Former President and Chief Executive Officer |
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| 337,765 |
|
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| — |
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| 337,765 |
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| 1.78 | % |
Jay S. Povlin, Former President, NauticStar |
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| 26,919 |
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| 5,452 |
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| 32,371 |
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| * |
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All current executive officers, directors and director nominees as a group (10 persons) |
|
| 319,383 |
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| 15,146 |
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| 334,529 |
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| 1.76 | % |
2022 PROXY STATEMENT 17
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Delinquent Section 16(a) Reports
Directors, officers and persons who beneficially own more than 10% of our common stock are required by Section 16(a) of the Exchange Act of 1934, as amended (the “Exchange Act”) to file reports of ownership and changes in ownership of our common stock with the SEC, the NASDAQ, and us. To the our knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required, during the 2020 fiscal year, all Section 16(a) filing requirements applicable to directors, executive officers and greater than ten percent beneficial owners were complied with by such persons, except for late Form 4s to report shares surrendered for taxes in connection with the vesting of RSAs, which were filed on November 22, 2019 for the following individuals: Mr. Oxley (for RSAs that vested on July 19, 2019, July 20, 2019 and August 25, 2019), Mr. Povlin (for RSAs that vested on July 19, 2019, July 20, 2019 and August 25, 2019) and Mr. May (for RSAs that vested on July 19, 2019).
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The following are summaries of certain transactions, arrangements and relationships with certain of our directors, executive officers or stockholders owning 5% or more of our outstanding common stock.OUR AUDITORS
We have entered into certain compensation plans to provide payments to certain of our service providers (including our named executive officers and certain of our non-employee directors) as described under the section titled “Executive Compensation.”
Crest Related Party Transactions
In connection with the operations of Crest, the Company made rental payments to Crest Marine Real Estate LLC (“Real Estate”) for a manufacturing facility, storage and office building (the “Crest Facility”). One of the minority owners of Real Estate is a member of the Crest management team. The lease was to expire on September 30, 2028, and was subject to four consecutive, five-year renewal periods. The lease terms included an option for the Company to purchase the Crest Facility for an amount equal to its fair market value, as determined by appraisals and negotiation between the Company and Real Estate (the “Purchase Option”). The annual rent under the lease was $0.3 million for the first five years of the lease term, and was to increase to $0.4 million for the remaining five years. Additionally, at the beginning of each of the optional renewal terms the rent was to be adjusted based on the change in the Consumer Price Index. In accordance with the Purchase Option, on October 24, 2019 the Company purchased the Crest Facility for $4.1 million.
Crest purchases fiberglass component parts from a supplier whose minority owner was the same member of the Crest management team that has a minority ownership interest in Real Estate. On January 31, 2020 this minority ownership interest was divested and this supplier ceased being a related party. During the period beginning July 1, 2019 and ending January 31, 2020, the Company purchased $1.8 million of products from the supplier.
Our Policy Regarding Related Party Transactions
Our Board has adopted a written related party transaction policy setting forth the policies and procedures for the review and approval or ratification of related party transactions. This policy covers, with certain exceptions set forth in Item 404 of Regulation
S-K under the Securities Act, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we were or are to be a participant, where the amount involved exceeds $120,000 in any fiscal year and a related party had, has or will have a direct or indirect material interest, including without limitation, purchases of goods or services by or from the related person or entities in which the related party has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related party. In reviewing and approving any such transactions, our Audit Committee is tasked to consider all relevant facts and circumstances, including, but not limited to, whether the transaction is on terms comparable to those that could be obtained in an arm’s length transaction and the extent of the related party’s interest in the transaction.
PROPOSAL 2—RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the Company’s independent registered public accounting firm.
Changes in Independent Registered Public Accounting Firm
On September 26, 2019, the Audit Committee approved the dismissal of BDO LLP (“BDO”) as the Company’s independent registered public accounting firm. The Company notified BDO of its decision on September 26, 2019.
The reports of BDO on the Company’s consolidated financial statements for the fiscal years ended June 30, 2019, 2018 and 2017 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles.
During the fiscal years ended June 30, 2019, 2018 and 2017, there were no “disagreements” (as defined in Item 304(a)(1)(iv) of Regulation S-K and related instructions) with BDO on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements if not resolved to the satisfaction of BDO would have caused BDO to make reference thereto in its reports on the consolidated financial statements for such years. During the fiscal years ended June 30, 2019, 2018 and 2017, there have been no “reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K).
The Company provided BDO with a copy of the disclosures made in a Current Report on Form 8-K (the “Report”) prior to the time the Report was filed with the SEC and requested that BDO furnish the Company with a copy of its letter addressed to the SEC stating whether or not BDO agrees with the statements made by the Company therein, and, if not, stating the respects in which it does not agree. The Letter from BDO to the SEC dated as of September 26, 2019, was filed in our Current Report on Form 8-K on September 27, 2019 and is incorporated therein by reference.
Information regarding fees paid to BDO as the Company’s independent registered public accounting firm for fiscal year 2019 is set out below in “Fees Billed by Independent Registered Public Accounting Firms.”
Engagement of Deloitte & Touche LLP
On September 26, 2019, the Audit Committee approved the appointment ofappointed Deloitte & Touche LLP (“Deloitte”) as the Company’s new independent registered public accounting firm, effective immediately, to perform independent audit servicesour consolidated financial statements for the fiscal year ending June 30, 2020.2023 and to prepare a report on this audit. A representative of Deloitte will be present at the Annual Meeting, will have the opportunity to make a statement and will be available to respond to appropriate questions by shareholders.
DuringWe are asking our shareholders to ratify the fiscal years ended June 30, 2020 and 2019, neither the Company, nor anyone on its behalf, consulted Deloitte regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered with respect to the consolidated financial statements of the Company, and no written report or oral advice was provided to the Company by Deloitte that was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue; or (ii) any matter that was the subject of a “disagreement” (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a “reportable event” (as that term is defined in Item 304(a)(1)(v) of Regulation S-K).
The Audit Committee believes that the retentionappointment of Deloitte as our independent registered public accounting firm is in the best interest of the Company and our stockholders, and we are asking our stockholders to ratify the selection of Deloitte as our independent registered public accounting firm for fiscal 2021.
firm. Although ratification is not required by our Bylaws or otherwise, the Board of Directors is submitting the selection of Deloitte to our stockholdersshareholders for ratification because we value our stockholders’shareholders' views on the Company’sCompany's independent registered public accounting firm and as a matter of good corporate practice. In the event that our stockholdersshareholders fail to ratify the appointment, it will be considered as a direction to the Board of Directors and the Audit Committee to consider the appointment of a different firm. Even if the appointment is ratified, the Audit Committee in its discretion may 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.shareholders.
Information regarding fees paid to Deloitte during fiscal 2022 and fiscal 2021 is set out below in “Fees Billed by Independent Registered Public Accounting Firm.”
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board recommends that you vote FOR “FOR” the ratification of the
appointment of Deloitte as our independent registered public accounting firm.
2022 PROXY STATEMENT 18
REPORT OF THE AUDITAUDIT COMMITTEE
The Audit Committee is responsible for, among other things, reviewing with Deloitte, our independent registered public accounting firm for fiscal year 2020,2022, the scope and results of their audit engagement. In connection with the audit for the fiscal year ended June 30, 2020,2022, the Audit Committee has:
reviewed and discussed with management the audited financial statements of MasterCraft to be included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020;2022;
discussed with Deloitte the matters required by the statement of Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1 AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T; and
received the written disclosures and letter from Deloitte required by the applicable requirements of the Public Company Accounting Oversight Board regarding Deloitte’s communications with the Audit Committee concerning independence, and has discussed with Deloitte their independence.
Management is primarily responsible for the Company’s financial reporting process (including its system of internal control) and for the preparation of the consolidated financial statements of the Company in accordance with generally accepted accounting principles (“GAAP”). Deloitte is responsible for auditing those financial statements and issuing an opinion on whether the audited financial statements conform with GAAP.GAAP and, for fiscal 2021 and 2022, for auditing the effectiveness of the Company’s internal control over financial reporting and issuing an opinion thereon. The Audit Committee’s responsibility is to monitor and review these processes. It is not the Audit Committee’s duty or responsibility to conduct auditing or accounting reviews or procedures. Therefore, the Audit Committee has relied on management’s representation that the financial statements have been prepared with integrity and objectivity and in conformity with accounting principles generally accepted in the United States and on the representations of Deloitte included in their report to the financial statements of the Company.
Based on the review and the discussions described in the preceding bullet points, the Audit Committee recommended to the Board that the audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020.2022.
Submitted by the Audit Committee:
Donald C. Campion, Chair
Jennifer Deason
Roch Lambert
Peter G. Leemputte
FEES BILLED BY INDEPENDENT REGISTEREDREGISTERED PUBLIC ACCOUNTING FIRMS
We were billed for professional services provided with respect to fiscal 2019 by BDO, which served as the Company’s independent registered public accounting firm for fiscal 2019 and Deloitte, which served as the Company’s independent registered accounting firm for fiscal 2020. The following table sets forth the aggregate fees billed by Deloitte, the Company’s independent registered accounting firm, during the fiscal years ended June 30, 20202022 and June 30, 2019:fiscal 2021:
DELOITTE
| FISCAL 2022 |
| FISCAL 2021 | ||||||||||||||||||||||||||||||||||||||
Audit Fees(1) | $ | 1,020,000 | $ | 1,080,000 | |||||||||||||||||||||||||||||||||||||
All other Fees(2) | $ | 1,895 | $ | 1,895 | |||||||||||||||||||||||||||||||||||||
Total | $ | 1,021,895 | $ | 1,081,895 |
| (1) | Audit fees represent fees billed or accrued for professional |
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BDO
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| Fiscal Year 2020 |
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| Fiscal Year 2019 |
| ||
Audit Fees(3) |
| $ | 140,000 |
|
| $ | 821,000 |
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|
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|
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Total |
| $ | 140,000 |
|
| $ | 821,000 |
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|
Audit Fees include fees for services rendered for the audit of ourMasterCraft Boat Holdings, Inc.’s annual financial statements, and the review of the interim condensed consolidated financial statements. Audit fees also include fees associated withstatements included in quarterly filings, and in fiscal 2021 and 2022, the review of filings made withevaluation and reporting on the SEC.
The Audit Committee has established policies and procedures for the approval and pre-approval of audit services and permitted non-audit services. The Audit Committee has the responsibility to engage and terminate our independent registered public accounting firm, to pre-approve the performance of all audit and permitted non-audit services provided to us by our independent registered public accounting firm in accordance with Section 10Aeffectiveness of the Exchange Act,Company’s internal controls over financial reporting, along with services that are normally provided by Deloitte in connection with statutory and to review with our independent registered public accounting firm their fees and plans for all auditing services. All fees paid to Deloitte were pre-approved by the Audit Committee and there were no instances of waiver of approval requirementsregulatory filings or guidelines.engagements.
The Audit Committee considered the provision of non-audit services by the independent registered public accounting firm and determined that provision of those services was compatible with maintaining auditor independence.
There were no “reportable events” as that term is described in Item 304(a)(1)(v) of Regulation S-K.
(2) | Other fees billed by Deloitte are for access to Deloitte's accounting research tools and subscription services. |
Audit Fees include fees for services rendered for the audit of our annual financial statements and the review of the interim financial statements. Audit fees also include fees associated with the review of filings made with the SEC.
The Audit Committee has established policies and procedures for the approval and pre-approval of audit services and permitted non-audit services. The Audit Committee has the responsibility to engage and terminate our independent registered public accounting firm, to pre-approve the performance of all audit and permitted non-audit services provided to us by our independent registered public accounting firm in accordance with Section 10A of the Exchange Act, and to review with our independent registered public accounting firm their fees and plans for all auditing services. All fees paid to Deloitte were pre-approved by the Audit Committee and there were no instances of waiver of approval requirements or guidelines.
The Audit Committee considered the provision of non-audit services by the independent registered public accounting firm and determined that provision of those services was compatible with maintaining auditor independence.
There were no “reportable events” as that term is described in Item 304(a)(1)(v) of Regulation S-K.
2022 PROXY STATEMENT 20
OUR LEADERSHIP
Frederick A. Brightbill serves as a director and as an executive officer. His business experience is discussed above in “Proposal 1—Election of Directors.”
The other executive officers as of the date of this Proxy Statement are:
TIMOTHY M. OXLEY | |
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GEORGE STEINBARGER | |
Age: 43 Executive Officer since: 2020 | Mr. Steinbarger |
PATRICK MAY | |
Age: 63 Executive Officer since: 2019 | Mr. May
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2022 PROXY STATEMENT 21
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE
As a company whose products are enjoyed outdoors on the water, we recognize the importance of social and environmental responsibility. We are committed to reducing our environmental impact, ensuring a healthy and safe workplace for our employees, and acting as a good corporate citizen in the communities we serve.
We are proud to have published our inaugural sustainability report in September 2022 that highlights our commitment to sustainability:
SASB and TCFD reporting: We utilized the Sustainability Accounting Standards Board (SASB) and Task Force on Climate-Related Financial Disclosures (TCFD) frameworks.
Safety milestone: Over two million hours worked without a lost time incident and counting.
Climate action: We started to report our Scope 1 and Scope 2 carbon emissions, and in 2022 we made financial and human-resources commitments to zero-emissions electric boating.
Employee development: We added a Director of Training to expand focus on employee development at all levels.
Additionally, we are very proud that we believe our MasterCraft brand is the only boat manufacturer in the marine industry to achieve three prestigious International Organization for Standardization’s (ISO) global certifications for:
With these foundations in place, we look forward to Making Boating Better and keeping our company at the forefront of the marine industry. You can access the full sustainability report here: https://investors.mastercraft.com/making-boating-better.
2022 PROXY STATEMENT 22
PROPOSAL 3—ADVISORY VOTE ON THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS (SAY-ON-PAY VOTE)
In accordance with Section 14A of the Exchange Act, which was amended pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), we are asking shareholders to approve a non-binding advisory resolution our executive compensation as reported in this Proxy Statement. At our 2021 annual meeting, we received approximately 98.3% approval on our advisory vote on the compensation of the named executive officers.
As described above in this Proxy Statement, our executive compensation program is designed to motivate the Company’s named executive officers to create long-term value for our shareholders and is heavily weighted towards both short and long-term performance-based compensation.
We urge shareholders to read the “Compensation Discussion and Analysis” section, which describes in more detail our executive compensation objectives and the key elements of our executive compensation program. The Compensation Committee and the Board of Directors believe that our executive compensation program is appropriately designed to achieve the objectives of our executive compensation philosophy.
We are asking shareholders to approve the following advisory resolution at the Annual Meeting:
RESOLVED, that the shareholders of the Company approve, on an advisory basis, the compensation of the Company’s named executive officers set forth under “Compensation Discussion and Analysis”, including Summary Compensation Table and the related compensation tables and narratives in the Proxy Statement for the 2022 Annual Meeting of Shareholders.
This proposal to approve the compensation paid to our named executive officers is advisory only and will not be binding on the Company, the Board of Directors or the Compensation Committee, and will not be construed as overruling a decision by, or creating or implying any additional fiduciary duty for, the Company, the Board of Directors or the Compensation Committee. However, the Compensation Committee, which is responsible for designing and administering the Company’s executive compensation program, values the opinions expressed by shareholders in their vote on this proposal and will consider the outcome of the vote when making future compensation decisions for our named executive officers.
Based on the frequency chosen by our shareholders at the 2021 Annual Meeting of Shareholders, the non-binding advisory vote on the compensation of our named executive officers will occur on an annual basis.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board recommends that you vote “FOR” the advisory resolution
approving the compensation of our named executive officers.
2022 PROXY STATEMENT 23
COMPENSATION DISCUSSION AND ANALYSIS
EXECUTIVE SUMMARY
The compensation program reflects the Compensation Committee’s performance-oriented philosophy.
Approximately 50% of our CEO’s target pay, and approximately 38% of our other named executive officers’ target pay, is strictly performance based.
Another year of record performance.
Fiscal 2022 was the most profitable fiscal year in the Company’s history. On a consolidated basis, revenue was $707.9 million, 135.3% of target, and Adjusted EBITDA was $121.1 million, 90.2% of target.
Annual incentives reflected our record performance for the year.
Our annual incentive program resulted in payouts of between 103% and 186% of target for four of our named executive officers.
Returned Capital to Shareholders.
We completed share repurchases of $25.5 million during the fiscal year, while reducing debt by $36.7 million.
Strong Management Performance Amidst Macroeconomic Headwinds.
Despite ongoing supply chain disruptions, inflationary pressures and other macroeconomic headwinds, management continued its strong performance with record net sales and increased market share, based on rolling twelve-month data through December 2021.
INTRODUCTION
This Compensation Overview provides a discussion of our executive compensation program, together with a description of the material factors underlying the decisions that resulted in the compensation provided to our named executive officers, as presented in the tables which follow this discussion.
The Company’s named executive officers and positions held during fiscal 2022 are set forth in the table below:
| FREDERICK A. BRIGHTBILL | TIMOTHY M. OXLEY | GEORGE STEINBARGER | PATRICK MAY | SCOTT WOMACK(1) | |||||
Chief Executive Officer and Chairman of the Board | Chief Financial Officer, Treasurer and Secretary | Chief Revenue Officer | President, Crest | Former President, NauticStar |
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(1) | Mr. Womack left the Company in February 2022. | |
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2022 PROXY STATEMENT 24
This discussion contains statements regarding our performance targets and goals, with respect to performance metrics including Revenue, Adjusted EBITDA,revenue, Adjusted EBITDA, Adjusted EBITDA Margin and Strategic Metrics. These targets and goals are disclosed in the limited context of our compensation program and should not be understood to be statements of management’s expectations or estimates of financial results or other guidance. We specifically caution investors not to apply these statements to other contexts. Adjusted EBITDA is a non-GAAP financial measures. See “Appendix A—Reconciliation of Non-GAAP Measures” below for a reconciliation of Adjusted EBITDA to the most directly comparable financial measures presented in accordance with GAAP. Strategic Metrics are the Company’s goals to align executives and provide an ongoing mechanism to monitor progress toward these performance measures, and include market share attainment and consumer satisfaction index (“CSI”) scores for each of our reporting segments.
EXECUTIVE COMPENSATION PHILOSOPHY AND OBJECTIVES
Our executive compensation program is designed to facilitate high performance and generate results that will create value for us and our shareholders. The key objectives of our executive compensation program are as follows:
Pay for performance.
Reward our executives with equity in the Company in order to align their interests with the interests of our shareholders and allow our executives to share in our shareholders’ success.
Create a high-performance culture and maintain morale.
Attract, motivate and retain top executive talent.
Our Compensation Committee and Board review and approve our executive compensation program, and maintain the discretion to adjust awards and amounts paid to our executive officers as they deem appropriate. In evaluating and approving executive compensation, the Compensation Committee and Board consider a variety of factors, including significant acquisitions, changes in our business strategy, performance expectations for the Company, external market data, actual performance of the Company, and individual executive performance.
COMPENSATION BEST PRACTICES
WHAT WE DO | ||||
✓ | Strong emphasis on performance-based compensation, with a significant portion of named executive officers’ overall compensation tied to objective Company performance measures | ✓ | Rigorous measures tied to Company Revenue, Adjusted EBITDA, relative Total Shareholder Return and Cumulative Adjusted EPS | |
✓ | Aggressive annual Revenue and Adjusted EBITDA | ✓ | Compensation Committee composed solely of independent directors | |
✓ | Appropriate mix of short-term and long-term incentives | ✓ | Additional rigorous strategic goals considered for each executive | |
✓ | Annual limits for cash incentives for named executive officers financial (200% of Target) and strategic performance (150% of Target) metrics | ✓ | Meaningful stock ownership guidelines for certain executive officers and directors | |
✓ | Robust clawback policy for incentive cash and equity compensation paid to our named executive officers | ✓ | Compensation Committee advised by third-party advisors including independent compensation consultant |
WHAT WE DON’T DO | |||
✘ | Provide incentives that encourage excessive executive risk-taking | ✘ | Allow hedging or short sales |
✘ | Gross up excise taxes that may become due upon a change in control | ✘ | Guarantee incentive awards for executives |
SAY-ON PAY VOTE AND SHAREHOLDER ENGAGEMENT
As approved at our 2021 Annual Meeting of Shareholders, the say-on-pay vote will be held on an annual basis. At our 2021 annual meeting, we received 98.3% approval of the “say-on-pay” proposal. With shareholder support of our 2021 pay practices, the Compensation Committee applied the same overall principles to determine the amounts and types of executive compensation for 2022.
2022 PROXY STATEMENT 25
Our shareholder outreach and engagement program is designed to ensure that management and the Board understand, consider, and address the issues that matter most to our shareholders. Though the COVID-19 pandemic disrupted travel and investor conferences, we have had one-on-one discussions with shareholders who collectively own about 40 percent of the shares outstanding, through conference calls, virtual non-deal roadshows, and conferences over the past year.
The Compensation Committee will continue to monitor best practices, future advisory votes on executive compensation and other shareholder feedback to guide it in evaluating our named executive officer compensation program. The Compensation Committee invites our shareholders to communicate any concerns or opinions on executive pay directly to our Board. Please refer to “Corporate Governance – How to Communicate with Us – Communications with the Board” for information about communicating to our Board.
ELEMENTS OF OUR COMPENSATION PROGRAM
The primary elements of our fiscal 2022 executive compensation structure are base salary, annual bonuses, equity incentive awards and certain employee benefits. Each principal element of our executive compensation program for fiscal 2022 along with the objectives of each element are summarized in the following table and described in more detail below.
COMPENSATION ELEMENT | BRIEF DESCRIPTION | OBJECTIVES |
BASE SALARY | ➣Fixed compensation | ➣Provide a competitive, fixed level of cash compensation to attract and retain talented and skilled executives |
ANNUAL BONUSES: SHORT TERM INCENTIVE COMPENSATION | ➣Variable, performance-based cash compensation earned based on achieving pre-established annual goals | ➣Motivate executives to achieve or exceed our current-year financial goals and reward them for their achievements ➣Aid in retention of key executives in a highly competitive market for talent |
LONG TERM EQUITY INCENTIVE AWARDS | ➣Variable, equity-based compensation to promote achievement of longer-term goals | ➣Align executives’ interests with those of our shareholders and encourage executive decision-making that maximizes growth and value creation over the long-term ➣Aid in retention of key executives and ensure continuity of management in a highly competitive market for talent |
EMPLOYEE BENEFITS AND PERQUISITES | ➣Participation in all broad-based employee health and welfare programs and retirement plans ➣Allow usage of a Company-owned boat | ➣Aid in retention of key executives in a highly competitive market for talent by providing overall benefits package competitive with industry peers ➣Familiarize executives with the functionality and quality of current model year boats |
TERMS OF EMPLOYMENT
Since the expiration of Mr. Oxley’s employment agreement on July 1, 2022, we currently do not maintain employment agreements, severance or change in control agreements with any of our named executive officers. For Mr. Brightbill and Mr. Womack, prior to his departure, the basic terms of their employment such as salary, bonus, incentive awards and benefits are set forth in an offer letter. These offer letters do not provide for specific rights upon termination or change in control. All rights relating to accelerated vesting of equity awards upon termination or change in control are set forth in the LTIP or applicable award agreement. For a discussion of the offer letters, see “Offer Letters with our Named Executive Officers.” For a discussion regarding potential payments upon termination or change in control, see “Potential Payments upon Termination or Change in Control.”
2022 PROXY STATEMENT 26
STRUCTURE OF OUR COMPENSATION PROGRAM
Our compensation program is structured to be reasonable in magnitude of total opportunity, largely performance-based, and majority equity-oriented.
BASE SALARY
The base salary component of executive officer compensation is intended to provide a competitive, stable level of minimum compensation to each officer commensurate with the executive’s role, experience and duties. The Compensation Committee reviews and approves base salaries for our named executive officers based on several factors, including the individual’s experience, responsibilities, performance, expected future contribution, our expected financial performance and salaries of similarly situated executives of our public peers.
The base salaries for our named executive officers were established based on an evaluation of the factors described above, our desire to reward and retain the key executives who we believe are instrumental to our success, and the competitiveness of base salaries based upon a review of publicly available data for our competitors.
NAMED EXECUTIVE OFFICER | BASE SALARY | |
Frederick A. Brightbill | $ | 700,000 |
Timothy M. Oxley | $ | 345,000 |
George Steinbarger | $ | 290,000 |
Patrick May | $ | 280,000 |
Scott Womack, Former President, NauticStar(1) | $ | 340,000 |
(1) | Mr. Womack left the Company in February 2022. The actual base salary received by Mr. Womack in fiscal 2022 was $219,692. |
2022 PROXY STATEMENT 27
ANNUAL BONUS: SHORT TERM CASH INCENTIVE COMPENSATION
The Company has established the Short-Term Incentive Plan (“STIP”) to provide annual cash incentive compensation to our executives. The graphic below illustrates the weighting of the metrics and the calculation of the objective component of the STIP.
Each component of the STIP determined on a segment level basis, and then aggregated to determine the consolidated results. For Messrs. Brightbill, Oxley and Steinbarger, STIP payouts are based on consolidated results. For Mr. May, President of Crest, and Mr. Womack, former President of NauticStar, STIP payouts are based on their respective segment performance.
TARGET ANNUAL CASH INCENTIVE
The target annual cash incentive is expressed as a percentage of each named executive officer’s base salary and is set at the beginning of each year by the Compensation Committee. The threshold annual incentive opportunity for each named executive officer ranges from 5.0 percent to 10.0 percent of their target opportunity, and the maximum annual incentive opportunity ranges from 95.0 percent to 190.0 percent of their target opportunity. The target opportunity for each named executive officer is as follows:
AWARD OPPORTUNITY | |||||
NAME | BASE SALARY | TARGET ANNUAL INCENTIVE OPPORTUNITY (as a percentage of base salary) | TARGET ANNUAL INCENTIVE OPPORTUNITY | ||
Frederick A. Brightbill | $ | 700,000 | 100% | $ | 700,000 |
Timothy M. Oxley | $ | 345,000 | 50% | $ | 172,500 |
George Steinbarger | $ | 290,000 | 50% | $ | 145,000 |
Patrick May | $ | 280,000 | 60% | $ | 168,000 |
Scott Womack(1) | $ | 340,000 | 50% | $ | 170,000 |
(1) | Mr. Womack left the Company in February 2022, and therefore was not eligible to receive a payout under the 2022 STIP. |
The STIP sets a threshold, target, and maximum level for each of these metrics applicable to all executive officers. The targets are set for the year by the Compensation Committee based on recommendations from the CEO and the CFO and are communicated to executives at the beginning of each year.
2022 PROXY STATEMENT 28
The target criteria and actual fiscal 2022 results for Total Company Revenue, Adjusted EBITDA, and the strategic metrics, which consist of market share attainment, and CSI scores, are as follows:
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| GOAL |
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WEIGHTING | MINIMUM | MAXIMUM | RESULTS | PERCENTAGE PAYOUT ATTAINED | ACHIEVEMENT | |
FINANCIAL METRICS (1) |
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Revenue | 32% | $525.8 million | $734.8 million | $707.9 million | 43.3% | Between target and maximum |
Adjusted EBITDA(2) | 48% | $93.4 million | $133.0 million | $121.1 million | 43.3% | Between minimum and target |
STRATEGIC METRICS (3) | 20% |
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| 16.4% |
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TOTAL (blended result) | 100% |
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| 103.0% |
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(1) | Financial metrics represent 80% of the bonus opportunity. |
(2) | For additional information regarding and reconciliation of this non-GAAP financial |
(3) | Strategic metrics represent 20% of |
The table below sets forth the threshold, target and maximum percentages of base salary for awards under the 2022 STIP, together with the achievement and actual bonus levels paid to our named executive officers, based on actual Company and individual results.
| AWARD OPPORTUNITY | ACHIEVEMENT | BONUS EARNED | ||||||
THRESHOLD | TARGET | MAXIMUM | ACHIEVEMENT (actual) | ACHIEVEMENT (as adjusted) | % OF TARGET | $ |
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Frederick A. Brightbill | 10% of base salary | 100% of base salary | 190% of base salary | 103.0% | 103.0% | 103.0% | $ | 721,000 |
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Timothy M. Oxley | 5% of base salary | 50% of base salary | 95% of base salary | 103.0% | 103.0% | 103.0% | $ | 177,675 |
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George Steinbarger | 5% of base salary | 50% of base salary | 95% of base salary | 103.0% | 103.0% | 103.0% | $ | 149,350 |
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Patrick May | 6% of base salary | 60% of base salary | 114% of base salary | 186.2% | 186.2%(1) | 186.2% | $ | 312,816 |
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Scott Womack(2) | 5% of base salary | 50% of base salary | 95% of base salary | — | — | — | $ | — |
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Calculation is based upon financial and
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| Mr. Womack left the Company in |
LONG-TERM EQUITY INCENTIVE COMPENSATION
Equity awards represent an important component of our named executive officer compensation. We believe long-term incentive awards align the interests of our shareholders and our named executive officers by increasing the proprietary interest of our named executive officers in the Company’s growth and success, advance the Company’s interests by attracting and retaining qualified employees over time and motivate our executives to act in the long-term best interests of our shareholders. In particular, the Compensation Committee and the Board feel that one way to align the Company’s strategy with the executive long-term incentive compensation is to tie the awards directly to the Company’s performance.
Long-Term Incentive Plan (“LTIP”) awards are granted to our executive officers annually under our Amended and Restated MasterCraft Boat Holdings, Inc. 2015 Incentive Award Plan. In order to balance performance and retention incentives, during fiscal 2022, LTIP awards consisted of 50% restricted stock awards (“RSAs”) and 50% performance stock units (“PSUs”). The Compensation Committee believes that RSAs promote an “ownership” culture, align executives’ interests with those of our shareholders and provide retention incentives for our executive officers, while PSUs act as an additional tool for linking individual interests of our executive officers to those of our shareholders.
RSAs vest annually in equal installments over a three-year period, subject to the executive officer’s continued employment.
2022 PROXY STATEMENT 29
Shares subject to PSUs are earned based upon the Company’s performance, over a three-year period, measured by a cumulative adjusted earnings per share, in each case subject to a potential adjustment based upon the application of a total shareholder return (“TSR”) modifier and subject to the executive officer’s continued employment with the Company. The TSR modifier is determined as the percentile ranking of the Company’s total shareholder return as compared to the total shareholder return of the companies represented in the Russell 2000 Index. At the end of the three-year performance period, the Compensation Committee determines the actual number of shares the individual will receive based on achievement of the established performance goals and the TSR modifier.
Results for the 2020 – 2022 performance period for awards granted in fiscal 2020 are set forth in the table below.
TARGET | RESULTS | ACHIEVEMENT | |
Cumulative Adjusted EPS(1) | $8.70 | $9.09 | Between target and maximum |
Payout % | 100.0% | 118.6% | Between target and maximum |
TSR Modifier |
| 1.12x |
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Calculated Payout |
| 132.8% |
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RELATIVE TSR LEVEL | RELATIVE TSR MODIFIER |
10th Percentile or less | -30.0% |
25th Percentile | -20.0% |
50th Percentile | No adjustment |
75th Percentile | 20.0% |
90th Percentile or greater | 30.0% |
65th Percentile (Actual) | 12.0% |
(1) | Three-year cumulative adjusted earnings per share for fiscal 2020, 2021 and 2022. |
The table below sets forth the shares earned by our named executive officers in fiscal 2022 for the fiscal 2020–2022 performance period:
SHARES SUBJECT TO PSUs GRANTED IN FISCAL 2020 | SHARES EARNED
| SHARES EARNED (as a percentage of target) |
| |
Frederick A. Brightbill | 18,563 | 24,658 | 132.8% |
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Timothy M. Oxley | 5,117 | 6,797 | 132.8% |
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George Steinbarger | 3,127 | 4,154 | 132.8% |
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Patrick May | 4,264 | 5,664 | 132.8% |
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COMPENSATION GOVERNANCE
EXECUTIVE STOCK OWNERSHIP POLICY
The Company has established stock ownership and retention guidelines in order to further align the long-term interests of our executive officers with those of our shareholders. Our stock ownership guidelines require our CEO and CFO to own shares of the Company’s common stock having an aggregate value equal to six times and three times their respective annual base salaries within five years of being appointed. As of June 30, 2022, our CFO owns 6.8 times his annual base salary. Our CEO owns 4.2 times his annual base salary and has made significant progress given his recent hire date of December 2019.
2022 PROXY STATEMENT 32
Except for excess life insurance, we do not make gross up payments to cover our named executive officers’ personal income taxes that may pertain to any of the compensation or perquisites paid or provided by the Company.
None of the named executive officers are entitled to gross-up payments in the event that any payments or benefits provided to her or him by the Company are subject to the golden parachute excise tax under Sections 280G and 4999 of the Internal Revenue Code.
INSIDER TRADING POLICY PROHIBITION ON HEDGING AND PLEDGING
We have adopted an insider trading compliance policy, which prohibits the hedging and pledging of our securities by our directors and officers. None of our executive officers or directors holds any of our stock subject to a hedge or pledge.
CLAWBACK POLICY
We have adopted a claw-back policy. Under this policy, the Company may seek to recover or cause to be forfeited any or all performance-based compensation received by employees and directors of the Company, including the named executive officers, in the event of restatement of the Company’s financial statements resulting in whole or in part from the fraud or intentional misconduct of such employees or directors.
2022 PROXY STATEMENT 33
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management and, based on such review and discussions, the Compensation Committee recommended to our Board that these disclosures be included in this Proxy Statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended June 30, 2022.
Submitted by the Compensation Committee:
Peter G. Leemputte, Chair
Donald C. Campion
Tzan-Jin (TJ) Chung
2022 PROXY STATEMENT 34
SUMMARY OF COMPENSATION TABLE
The following table sets forth information concerning the total compensation awarded to, earned by or paid to the named executive officers for fiscal years ended June 30, 2022, June 30, 2021 and June 30, 2020, calculated in accordance with SEC rules and regulations.
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YEAR | SALARY ($) | BONUS ($) | STOCK AWARDS ($)(1) | OPTION AWARDS ($)(1) | NON-EQUITY INCENTIVE PLAN COMPENSATION ($) | CHANGE IN PENSION VALUE AND NON-QUALIFIED DEFERRED COMPENSATION EARNINGS ($) | ALL OTHER COMPENSATION ($)(2) | TOTAL ($) |
FREDERICK A. BRIGHTBILL, CEO and Chairman of the Board |
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2022 | 700,000 | — | 1,050,037 | — | 721,000 | — | 20,831 | 2,491,868 |
2021 | 700,000 | — | 1,373,637 | — | 1,118,425 | — | 16,604 | 3,208,666 |
2020 | 456,923 | — | 606,986 | — | 104,216 | — | 18,177 | 1,186,302 |
TIMOTHY M. OXLEY, Chief Financial Officer, Treasurer and Secretary | ||||||||
2022 | 345,000 | — | 258,786 | — | 177,675 | — | 13,942 | 795,403 |
2021 | 330,000 | — | 398,840 | — | 263,629 | — | 13,181 | 1,005,650 |
2020 | 300,000 | — | 180,000 | — | 32,702 | — | 15,673 | 528,375 |
GEORGE STEINBARGER, Chief Revenue Officer | ||||||||
2022 | 290,000 | — | 145,043 | — | 149,350 | — | 15,294 | 599,687 |
2021 | 275,000 | — | 226,552 | — | 219,691 | — | 14,104 | 735,347 |
PATRICK MAY, President, Crest | ||||||||
2022 | 280,000 | — | 168,010 | — | 312,816 | — | 10,160 | 770,986 |
2021 | 270,000 | — | 263,559 | — | 260,415 | — | 8,500 | 802,474 |
SCOTT WOMACK, Former President, NauticStar(3) | ||||||||
2022 | 219,692 | — | 170,041 | — | — | — | 13,133 | 402,866 |
2021 | 308,329 | — | 154,197 | — | — | — | 26,225 | 488,751 |
Represents the aggregate grant date fair value of
The amounts shown in this column for |
Messrs. Brightbill, Oxley, Steinbarger, May and Womack received $8,556, $10,413, $10,412, $10,160, and $5,939, respectively, for matching contributions to each individual’s account in our 401(k) plan.
Messrs. Brightbill, Oxley, Steinbarger and Womack received $5,391, $2,100, $243, and $493, respectively, for a Company paid life insurance policy.
Messrs. Brightbill, Oxley, Steinbarger and Womack received imputed income of $6,884, $1,430, $4,638, and $2,281, respectively, for boat usage.
Mr. Womack received $4,420 for a housing allowance.
(3) | Mr. |
2022 PROXY STATEMENT 35
GRANTS OF PLAN-BASED AWARDS IN 2022
The following table provides information concerning grants of plan-based awards during 2022 to our named executive officers.
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| ESTIMATED FUTURE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS(1) |
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NAME | GRANT DATE | THRESHOLD ($) | TARGET ($) | MAXIMUM ($) | ALL OTHER STOCK AWARDS: NUMBER OF SHARES OF STOCK OR UNITS(2) (#) | GRANT DATE FAIR VALUE OF STOCK AND OPTION AWARDS(3) ($) |
FREDERICK A. BRIGHTBILL | ||||||
2022 ANNUAL INCENTIVE BONUS | — | 70,000 | 700,000 | 1,330,000 |
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RSAs | 7/27/2021 |
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| 20,162 | 525,018 |
PSUs | 7/27/2021 |
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| 20,162 | 525,018 |
TIMOTHY M. OXLEY | ||||||
2022 ANNUAL INCENTIVE BONUS | — | 17,250 | 172,500 | 327,750 |
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RSAs | 7/27/2021 |
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| 4,969 | 129,393 |
PSUs | 7/27/2021 |
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| 4,969 | 129,393 |
GEORGE STEINBARGER | ||||||
2022 ANNUAL INCENTIVE BONUS | — | 14,500 | 145,000 | 275,500 |
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RSAs | 7/27/2021 |
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| 2,785 | 72,521 |
PSUs | 7/27/2021 |
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| 2,785 | 72,521 |
PATRICK MAY | ||||||
2022 ANNUAL INCENTIVE BONUS | — | 16,800 | 168,000 | 319,200 |
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RSAs | 7/27/2021 |
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| 3,226 | 84,005 |
PSUs | 7/27/2021 |
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| 3,226 | 84,005 |
SCOTT WOMACK(4) | ||||||
2022 ANNUAL INCENTIVE BONUS | — | 17,000 | 170,000 | 323,000 |
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RSAs | 7/27/2021 |
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| 3,265 | 85,021 |
PSUs | 7/27/2021 |
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| 3,265 | 85,021 |
(1) Reflects the threshold, target and maximum annual cash incentive opportunities under our 2022 short-term incentive plan. At the time of the filing of this proxy statement, the actual results of our short-term incentive plan were finalized, and our named executive officers received the amounts set forth in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.
(2) Reflects the number of restricted stock awards and performance stock units granted. These restricted stock awards will vest in equal installments on June 30, 2022, 2023 and 2024. The performance stock units are earned based upon the Company’s performance, over a three-year period, in each case subject to a potential adjustment based upon the application of a total shareholder return. The amounts reported with respect to PSUs are based on the probable outcome of the performance conditions as of the grant date, which is estimated at target. Had the achievement of the highest level of performance been assumed, the aggregate grant date fair value of the PSUs would be as follows: Mr. Brightbill $1,260,044; Mr. Oxley $310,543; Mr. Steinbarger $174,051; Mr. May $201,612; and Mr. Womack $204,049.
(3) Reflects the aggregate grant date fair value of equity awards, calculated in accordance with FASB ASC Topic 718, excluding the estimated effect of forfeitures.
(4) Mr. Womack left the Company in February 2022.
2022 PROXY STATEMENT 36
OUTSTANDING EQUITY AWARDS AT FISCAL 2022 YEAR-END
The following table sets forth information with respect to outstanding option awards for each of the named executive officers as of June 30, 2022.
| OPTION AWARDS | STOCK AWARDS | ||||
GRANT DATE | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) EXERCISABLE | NUMBER OF SECURITIES UNDERLYING UNEXERCISED UNEARNED OPTIONS (#) | OPTION EXERCISE PRICE ($)(1) | OPTION EXPIRATION DATE | NUMBER OF SECURITIES THAT HAVE NOT VESTED (#) | MARKET VALUE OF SECURITIES THAT HAVE NOT VESTED ($)(2) |
FREDERICK A. BRIGHTBILL | ||||||
12/2/2019 | — | — | — | — | 6,188(4) | 130,257 |
7/16/2020 | — | — | — | — | 17,544(5) | 369,301 |
7/16/2020 | — | — | — | — | 26,316(6) | 553,952 |
7/27/2021 | — | — | — | — | 13,441(7) | 282,933 |
7/27/2021 | — | — | — | — | 20,162(8) | 424,410 |
TIMOTHY M. OXLEY | ||||||
7/16/2015 | 15,146 | — (3) | 10.70 | 7/16/2025 | — | — |
9/10/2019 | — | — | — | — | 1,706(4) | 35,911 |
7/16/2020 | — | — | — | — | 4,136(5) | 87,063 |
7/16/2020 | — | — | — | — | 6,204(6) | 130,594 |
7/27/2021 | — | — | — | — | 3,313(7) | 69,739 |
7/27/2021 | — | — | — | — | 4,969(8) | 104,597 |
GEORGE STEINBARGER | ||||||
9/10/2019 | — | — | — | — | 1,042(4) | 21,934 |
7/16/2020 | — | — | — | — | 2,298(5) | 48,373 |
7/16/2020 | — | — | — | — | 3,447(6) | 72,559 |
7/27/2021 | — | — | — | — | 1,857(7) | 39,090 |
7/27/2021 | — | — | — | — | 2,785(8) | 58,624 |
PATRICK MAY | ||||||
9/10/2019 | — | — | — | — | 1,421(4) | 29,912 |
7/16/2020 | — | — | — | — | 2,707(5) | 56,982 |
7/16/2020 | — | — | — | — | 4,061(6) | 85,484 |
7/27/2021 | — | — | — | — | 2,151(7) | 45,279 |
7/27/2021 | — | — | — | — | 3,226(8) | 67,907 |
* The table above excludes Mr. Womack as all of his outstanding awards were cancelled in connection with his departure from the Company.
(1) | The option exercise price has been reduced by $4.30, the amount of the special cash dividend paid on June 10, 2016, from an exercise price of $15.00 to an exercise price of $10.70. |
(2) | Based on the closing price of the Company’s common stock on June 30, 2022 of $21.05. |
(3) | As of July 2019, all options are vested and exercisable. |
(4) | The restricted stock vests in three equal annual installments beginning on September 10, 2020. |
(5) | The restricted stock vests in three equal annual installments beginning on July 16, 2021. |
(6) | The performance stock units will be earned based upon the Company’s performance, over a three-year period, measured by cumulative adjusted earnings per share, subject to a TSR modifier. The “Performance Period” for |
(7) | The restricted stock vests in three equal annual installments beginning on June 30, 2022. |
(8) | The performance stock units will be earned based upon the Company’s performance, over a three-year period, measured by cumulative adjusted earnings per share, subject to a TSR modifier. The “Performance Period” for the awards is a three-year period commencing July 1, 2021 and ending June 30, 2024. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
Termination of Employment: Except in connection with a change in control (as defined below), upon a named executive officer’s termination of employment for any reason, all unvested RSUs and PSUs are automatically forfeited (unless the Compensation Committee determines otherwise). Upon the expiration of Mr. Oxley’s employment agreement on June 30, 2022, no named executive officer is entitled to additional severance or other payments upon termination of employment.
2022 PROXY STATEMENT 37
Pursuant to his previously effective employment agreement, as of June 30, 2022, upon a termination by the Company without cause, Mr. Oxley was entitled to severance consisting of (a) continued base salary through the 12 month anniversary of the termination of employment, (b) reimbursement of the COBRA premiums (provided that coverage shall be equivalent to the coverage received while he was employed with the Company) for up to 12 months following termination of employment, and (c) continued STIP and LTIP payments on a pro rata basis for the remainder of the fiscal year following termination of employment (provided he was on track to meet applicable performance targets). Payment of continued base salary would have been subject to reduction for any compensation earned by Mr. Oxley during the 12-month period following termination of employment.
Termination of Employment with Change in Control: In the event a named executive officer’s employment is terminated in connection with a change in control, any unvested RSAs will immediately become vested (assuming no replacement award is offered) and all PSUs (unless the executive is terminated for cause as determined by the Compensation Committee) will be entitled to a payment equal to the target award.
Death or Disability. In the event of death or disability, all PSUs will be entitled to a payment of a pro rata portion of the target award, calculated based on a fraction, the numerator of which is the number of days from the grant date until the date of termination of service resulting from death or disability, and the denominator of which is the total number of days from the grant date until the end of the applicable performance period. RSAs do not automatically vest upon death or disability unless the Compensation Committee in its sole discretion determines otherwise.
The information below describes and quantifies the estimated amount of certain compensation that would become payable to each named executive officer as of June 30, 2022 under the following circumstances: (i) upon termination by the Company; (ii) upon termination in connection with a change in control and (iii) upon death or disability. The estimated value of all unvested equity awards in the above below is based on our closing stock price as of June 30, 2022 of $21.05 per share.
NAME EXECUTIVE OFFICER | TERMINATION OF EMPLOYMENT WITHOUT CAUSE(1) | TERMINATION IN CONNECTION WITH A CHANGE-IN-CONTROL(2) | DEATH OR DISABILITY(3) |
Frederick A. Brightbill | — | 1,760,854 | 510,771 |
Timothy M. Oxley | 466,929 | 772,904 | 466,929 |
George Steinbarger | — | 240,580 | 67,914 |
Patrick May | — | 285,564 | 79,625 |
Scott Womack(4) | — | — | — |
(1) | No named executive officer is entitled to payment or acceleration of vesting of equity awards in connection with a
2022 PROXY STATEMENT 38 As defined by the LTIP, “Change in Control” shall mean and includes each of the following: A transaction or series of transactions (other than an offering of common stock to the general public through a registration statement filed with the Securities and Exchange Commission) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its subsidiaries, an employee benefit plan maintained by the Company or any of its subsidiaries or a “person” that, prior to such transaction, directly or indirectly beneficially owns voting securities representing more than 50% of the voting power of the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting power of the Company’s securities outstanding immediately after such acquisition; or
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