DEF 14A 1 mbuu_noticexandxproxyx2020.htm DEF 14A Document

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


 
 

Filed by the Registrant    x        Filed by a Party other than the Registrant    ¨
Check the appropriate box:
¨    Preliminary Proxy Statement
¨    Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x    Definitive Proxy Statement
¨    Definitive Additional Materials
¨    Soliciting Material under §240.14a-12

MALIBU BOATS, 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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Fee paid previously with preliminary materials.

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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MALIBU BOATS, INC.
5075 Kimberly Way
Loudon, Tennessee 37774
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On November 3, 2020
To the Stockholders of Malibu Boats, Inc.:
Notice is hereby given that the 2020 annual meeting of stockholders (the “Annual Meeting”) of Malibu Boats, Inc. (the “Company”) will be held at the Grand Hyatt DFW, 2337 South International Parkway, Dallas, Texas 75261*, Tuesday, November 3, 2020, at 1:00 p.m., Central time, for the following purposes:
(1)To elect to the Board of Directors the three (3) nominees named in the attached Proxy Statement to serve until the Company’s 2023 annual meeting of stockholders and until their successors are duly elected and qualified;
(2)To ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2021;
(3)To approve, on a non-binding advisory basis, the compensation of the Company's named executive officers; and
(4)To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.
Only stockholders of record of the Company’s Class A common stock and Class B common stock as of the close of business on September 17, 2020 are entitled to notice of, and to vote at, the Annual Meeting and any postponements or adjournments thereof.
Your vote is important to us. You may vote your shares by proxy or in person. We urge you to vote by proxy even if you plan to attend the meeting. If you attend the Annual Meeting and vote in person, your proxy will not be used.
By Order of the Board of Directors,
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Wayne R. Wilson
Chief Financial Officer and Secretary
Loudon, Tennessee
September 23, 2020
PLEASE DATE, SIGN AND MAIL THE ENCLOSED PROXY CARD OR
SUBMIT YOUR PROXY USING THE INTERNET.
Use of the enclosed envelope requires no postage for mailing in the United States.
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_______________________

* We intend to hold the meeting in person. However, we are actively monitoring the coronavirus (COVID-19) situation and are sensitive to the public health and travel concerns our stockholders may have and the protocols that federal, state, and local governments may impose. In the event it is not possible or advisable to hold the meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting solely by means of remote communication. If we take this step, we will announce the decision to do so in advance by filing the notice of the applicable change(s) to the meeting as Definitive Additional Materials with the Securities and Exchange Commission. We will also issue a press release and post details on the change(s) to the meeting on our website at www.malibuboats.com. In the event we hold the meeting solely by means of remote communication, you will need the control number included on your proxy card (if you are a stockholder of record) or voting instruction form (if you hold your shares in street name) or included in the email to you if you received the proxy materials by email in order to be able to gain access to, and submit questions during, the Annual Meeting. If you hold shares of Class A common stock and Class B common stock, you will have two separate control numbers, one each for Class A common stock and Class B common stock. Please note that if you hold shares through a bank, broker or other nominee, you cannot vote your shares at the Annual Meeting unless you have obtained a legal proxy from your bank, broker, or nominee that holds your shares giving you the right to vote the shares at the Annual Meeting.
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MALIBU BOATS, INC.
5075 Kimberly Way
Loudon, Tennessee 37774

PROXY STATEMENT

The Board of Directors of Malibu Boats, Inc. solicits your proxy for the 2020 annual meeting of stockholders (the “Annual Meeting”) to be held at 1:00 p.m., Central time, on Tuesday, November 3, 2020 at the Grand Hyatt DFW, 2337 South International Parkway, Dallas, Texas 75261, and at any and all postponements or adjournments of the Annual Meeting.
We intend to hold the meeting in person. However, we are actively monitoring the coronavirus (COVID-19) situation and are sensitive to the public health and travel concerns our stockholders may have and the protocols that federal, state, and local governments may impose. In the event it is not possible or advisable to hold the meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting solely by means of remote communication. If we take this step, we will announce the decision to do so in advance by filing the notice of the applicable change(s) to the meeting as Definitive Additional Materials with the Securities and Exchange Commission (“SEC”). We will also issue a press release and post details on the change(s) to the meeting on our website at www.malibuboats.com. In the event we hold the meeting solely by means of remote communication, you will need the control number included on your proxy card (if you are a stockholder of record) or voting instruction form (if you hold your shares in street name) or included in the email to you if you received the proxy materials by email in order to be able to gain access to, and submit questions during, the Annual Meeting. If you hold shares of Class A common stock and Class B common stock, you will have two separate control numbers, one each for Class A common stock and Class B common stock. Please note that if you hold shares through a bank, broker or other nominee, you cannot vote your shares at the Annual Meeting unless you have obtained a legal proxy from your bank, broker, or nominee that holds your shares giving you the right to vote the shares at the Annual Meeting.
The proposals to be voted on at the Annual Meeting are set forth in the accompanying Notice of Annual Meeting of Stockholders and are described in this Proxy Statement. Stockholders also will transact any other business, not known or determined as of the date of this Proxy Statement, that properly comes before the meeting. The Board of Directors knows of no such other business to be presented as of the date of this Proxy Statement.
When you submit your proxy, you will authorize the proxy holders — Wayne Wilson, our Chief Financial Officer and Secretary, and Ritchie Anderson, our Chief Operating Officer — to represent you and vote your shares of common stock on these proposals at the meeting in accordance with your instructions. By submitting your proxy, you also authorize them to exercise discretionary authority to vote your shares on any other business that properly comes before the meeting, to vote your shares to adjourn the meeting, and to vote your shares at any postponement or adjournment of the meeting.
This Proxy Statement and the accompanying materials are first being sent or given to our stockholders on or about September 23, 2020.

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Unless otherwise expressly indicated or the context otherwise requires, in this Proxy Statement:

we use the terms “Malibu Boats,” the “Company,” “we,” “us,” “our” or similar references to refer (1) prior to the consummation of our initial public offering of Class A common stock (the “IPO”) to Malibu Boats Holdings, LLC (the “LLC”), and its consolidated subsidiaries and (2) after the IPO, to Malibu Boats, Inc. and its consolidated subsidiaries;

we refer to owners of membership interests in the LLC immediately prior to the consummation of the IPO, collectively, as our “pre-IPO owners”; and

we refer to owners of membership interests in the LLC, collectively, as our “LLC members”.

IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS
This Proxy Statement and our 2020 Annual Report on Form 10-K are available on the Internet at http://www.astproxyportal.com/ast/18800/.


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TABLE OF CONTENTS
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Proxy Statement contains forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” the negative of these terms, or by other similar expressions that convey uncertainty of future events or outcomes to identify these forward-looking statements. These statements are only predictions, involving known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Such factors include, but are not limited to: the effects of the COVID-19 pandemic on us; general industry, economic and business conditions; significant fluctuations in our annual and quarterly financial results; unfavorable weather conditions, policies impacting access to waterways and shelter-in-place orders; our reliance on our network of independent dealers and increasing competition for dealers; the financial health of our dealers and their continued access to financing; our obligation to repurchase inventory of certain dealers; the success of our engine integration strategy; our reliance on certain suppliers for our engines and outboard motors; our reliance on third-party suppliers for raw materials and components and any interruption of our informal supply arrangements; our ability to meet our manufacturing workforce needs; exposure to workers' compensation claims and other workplace liabilities; our ability to grow our business through acquisitions and integrate such acquisitions to fully realize their expected benefits; our growth strategy which may require us to secure significant additional capital; our large fixed cost base; intense competition within our industry; increased consumer preference for used boats or the supply of new boats by competitors in excess of demand; the successful introduction of new products; competition with other activities for consumers’ scarce leisure time; the continued strength of our brands; our ability to execute our manufacturing strategy successfully; our exposure to claims for product liability and warranty claims; our dependence on key personnel; our ability to protect our intellectual property; disruptions to our network and information systems; risks inherent in operating in foreign jurisdictions; rising concern regarding international tariffs; changes in currency exchange rates; an increase in energy and fuel costs; any failure to comply with laws and regulations including environmental and other regulatory requirements; a natural disaster, global pandemic or other disruption at our manufacturing facilities; increases in income tax rates or changes in income tax laws; covenants in our credit agreement governing our revolving credit facility and term loan which may limit our operating flexibility; our variable rate indebtedness which subjects us to interest rate risk; and any failure to maintain effective internal control over financial reporting or disclosure controls or procedures.
You should not rely on forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from those suggested by the forward-looking statements for various reasons, including those discussed under “Item 1A. Risk Factors” in our Form 10-K for the fiscal year ended June 30, 2020 filed with the SEC on August 31, 2020. Except as required by law, we assume no obligation to update forward-looking statements for any reason after the date of this Proxy Statement to conform these statements to actual results or to changes in our expectations.

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PROXY SUMMARY
This summary highlights certain information about us and does not contain all of the information you should consider before voting. Please read the entire Proxy Statement and our Annual Report on Form 10-K before voting.
2020 Annual Meeting of Stockholders
Date and TimeRecord DateLocation
November 3, 2020 at 1:00 p.m. Central timeSeptember 17, 2020The Grand Hyatt DFW, 2337 South International Parkway, Dallas, Texas 75261
Proposals to be Voted on and Voting Recommendations
ProposalBoard Recommendations
1.The election to the Board of Directors of the three (3) nominees named in this Proxy Statement — Ivar S. Chhina, Michael J. Connolly and Mark W. Lanigan — to serve until the 2023 annual meeting of stockholders and until their successors are duly elected and qualifiedFOR
2.The ratification of the appointment of KPMG LLP (“KPMG”) as our independent registered public accounting firm for the fiscal year ending June 30, 2021FOR
3.The approval, on a non-binding advisory basis, of our named executive officer compensationFOR
Board of Director Nominees
Our Board of Directors is divided into three classes with staggered three-year terms. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. A summary of information surrounding each director nominee as of September 17, 2020 is below and more information can be found under "Board of Directors and Executive Officers - Directors of the Company".
NamePositionAgeDirector SinceCommittee Memberships
Ivar S. ChhinaFormer chief financial officer and executive vice president for Recreational Equipment, Inc. (REI). Former chairman and chief executive officer of Interdent, Inc. Serves on the boards of Northwestern Management Services LLC, PPV Holding Company LLC, Troy Lee Designs Inc., and Lone Peak Holdings LLC572014Audit (Chair); Nominating and Governance
Michael J. ConnollyFounding partner of Breakaway Capital Management, LLC. Chief executive officer and sole director of Motorini, Inc.542014Nominating and Governance (Chair); Compensation
Mark W. LaniganCo-founder and a managing director of Black Canyon Capital LLC. Consultant with Tailwind Capital. Serves on the boards of LRW Holdings, LLC and Lone Peak Holdings, LLC602014Compensation (Chair); Nominating and Governance
Business Overview
We are a leading designer, manufacturer and marketer of a diverse range of recreational powerboats, including performance sport boats, sterndrive and outboard boats under four brands—Malibu, Axis, Cobalt, and Pursuit. We have the #1 market share position in the United States in the performance sport boat category through our Malibu and Axis brands and the #1 market share position in the United States in the 24’—29’ segment of the sterndrive
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category through our Cobalt brand, and we are among the leading market share positions in the fiberglass outboard fishing boat market with our Pursuit brand. Our product portfolio of premium brands are used for a broad range of recreational boating activities including, among others, water sports such as water skiing, wakeboarding and wake surfing, as well as general recreational boating and fishing. Our passion for consistent innovation, which has led to propriety technology such as Surf Gate, has allowed us to expand the market for our products by introducing consumers to new and exciting recreational activities. We design products that appeal to an expanding range of recreational boaters and water sports enthusiasts whose passion for boating and water sports is a key aspect of their lifestyle and provide consumers with a better customer-inspired experience. With performance, quality, value and multi-purpose features, our product portfolio has us well positioned to broaden our addressable market and achieve our goal of increasing our market share in the expanding recreational boating industry.
Our flagship Malibu boats offer our latest innovations in performance, comfort and convenience, and are designed for consumers seeking a premium performance sport boat experience. Our Axis boats appeal to consumers who desire a more affordable performance sport boat product but still demand high performance, functional simplicity and the option to upgrade key features. Our Cobalt boats consist of mid to large-sized luxury cruisers and bowriders that we believe offer the ultimate experience in comfort, performance and quality. Our Pursuit boats expand our product offerings into the saltwater outboard fishing market and include center console, dual console and offshore models. Retail prices for our boat models range from $60,000 to $800,000.
Our boats are constructed of fiberglass, available in a range of sizes, hull designs and propulsion systems (i.e., inboard, sterndrive and outboard). We employ experienced product development and engineering teams that enable us to offer a range of models across each of our brands while consistently introducing innovative features in our product offerings. Our engineering teams closely collaborate with our manufacturing personnel in order to improve product quality and process efficiencies. The results of this collaboration are reflected in our receipt of numerous industry awards, including the Boating Industry Magazine's "Top Product" award for the Malibu M240 in 2020, Pursuit S 378 in 2020, Malibu 25 LSV in 2019, Surf Band in 2018 and for our Integrated Surf Platform in 2016, as well as the Boating Industry's Best New and Innovative Products in 2019 for the Cobalt A29. We have also been recognized as Sounding Trade Only Today’s “2019 Top Most Innovative Marine Companies,” and we earned the honors of "WSIA Innovation of Year" award for our Malibu M240 M-Line Hull with Surf Gate Fusion in 2020, Malibu Monsoon Engines in 2019 and our Malibu Command Center in 2017.
We sell our boats through a dealer network that we believe is the strongest in the recreational powerboat industry. As of July 1, 2020, our distribution channel consisted of over 350 dealer locations globally. Our dealer base is an important part of our consumers’ experience, our marketing efforts and our brands. We devote significant time and resources to find, develop and improve the performance of our dealers and believe our dealer network gives us a distinct competitive advantage.
Financial Highlights for Fiscal Year 2020
The COVID-19 pandemic has significantly impacted health and economic conditions throughout the United States and the world, and it had a significant impact on our operations and financial results for fiscal year 2020. On March 24, 2020, we elected to suspend operations at all of our facilities. We resumed operations at our Loudon, Tennessee facility (Malibu and Axis boats) on April 20, 2020, our Neodesha, Kansas facility (Cobalt boats) on April 27, 2020 and our Fort Pierce, Florida facility (Pursuit boats) on May 4, 2020. The temporary shutdown of our facilities in the second half of 2020 resulted in a decrease in production that we were not able to fully recover during fiscal year 2020. We were not able to ship boats to our dealers during the suspension of our operations, which negatively impacted our net sales. While costs of sales also declined, we still recognized a decrease in gross profit primarily related to the declines in sales volumes resulting from our suspension of operations.
Notwithstanding our lower net sales resulting from decrease in production, our dealers continued to experience strong demand for our boats during the summer months. While sales were negatively impacted by COVID-19 in late March and through April, retail sales improved materially from May through July 2020. Consumers turned to boating as a form of outdoor, socially distanced recreation during the COVID-19 pandemic. The increase in retail sales combined with our lower wholesale shipment levels during the fourth quarter of fiscal year 2020 resulted in lower inventory levels at our dealers as of June 30, 2020 compared to last year. We expect these lower inventory
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levels, while having the potential to impact retail sales in the near-term, will provide us strong order flow for our model year 2021 product, unless consumer demand meaningfully decreases. Our year-over-year results are provided below.
Net sales decreased 4.5% to $653.2 million compared to fiscal year 2019.
Unit volume decreased 12.5% to 6,444 boats compared to fiscal year 2019.
Net sales per unit increased 9.1% to $101,360 per unit compared to fiscal year 2019.
Gross profit decreased 10.2% to $149.3 million compared to fiscal year 2019.
Net income decreased 7.2% to $64.7 million, or $2.98 per share, compared to fiscal year 2019.
Adjusted EBITDA decreased 11.9% to $110.9 million compared to fiscal year 2019.
Adjusted fully distributed net income decreased 13.3% to $71.2 million compared to fiscal year 2019.
Adjusted fully distributed net income per share decreased 12.5% to $3.29 on a fully distributed weighted average share count of 21.6 million shares of Class A Common Stock as compared to fiscal year 2019.
Adjusted EBITDA, adjusted fully distributed net income and adjusted fully distributed net income per share are non-GAAP financial measures. Definitions of each of these measures and a reconciliation of our net income as determined in accordance with GAAP to adjusted EBITDA, and the numerator and denominator for our net income available to Class A Common Stock per share to adjusted fully distributed net income per share of Class A Common Stock is provided in Appendix A to this Proxy Statement.
Business Achievements in Fiscal Year 2020
Despite unprecedented challenges during fiscal year 2020, we had many business achievements during the year and expect fiscal year 2021 will continue our high velocity of design and introduction of new products to consumers. Some of our business highlights are provided below.
Expedited our model year 2021 launch for all brands to June 1, 2020. Our early 2021 model year introduction will support what we believe should be a strong fiscal year 2021 as we introduce new innovations and products to strengthen our market-leading portfolio.
Introduced four new boats for fiscal year 2020, more than any other competitor. We also continued our introduction of more new features and options than any other competitor.
In July, Malibu introduced the all-new Malibu Wakesetter 23 LSV, the best-selling boat in the history of performance boats. This introduction was followed by three more new boats, the 24 MXZ, the A24 for Axis and the new Malibu M220, sibling to our ultra-premium Malibu M240. The demand for all four of these new boats is well ahead of plan with orders extending into the third quarter of fiscal year 2021.
Cobalt, while bringing new product to market in fiscal year 2020, prepared for an unprecedented delivery of new product in fiscal year 2021 as Cobalt prepares to bring seven new boats to market in fiscal year 2021.
Introduced the R6 Standard and the R6 Outboard, the newest models in the R Series of Cobalt boats. These boats provide a suite of luxurious and convenient features, including maximum interior space, enhanced audio output, and the Cobalt-patented Swim Step technology for easy water access. In addition, we announced our new automated E-Step in August 2020, which electronically automates our patented Flip-Down Swim Step for even easier usage and deployment.
Phase 1 and phase 2 expansions of our cruiser plant and small boat plant at Cobalt are complete. The third and last phase of our plant improvement is now underway. This third phase is the expansion and modernization of our gelcoat and lamination departments. Once complete, this will finalize our capability of building more products with even better quality, while improving efficiency.
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Pursuit introduced four new boats in fiscal year 2020, two above 30 feet and two below 30 feet as we continue to introduce new product across our product spectrum and into product white spaces that exist in the portfolio.
Pursuit continues to perform very well, and the product development engine is hitting on all cylinders. We expect that Pursuit will introduce another four new boats in fiscal year 2021 with a couple filling important product white spaces we have identified. The S 428 was brought to market in September 2020 as the first new model release for fiscal year 2021 and three additional models are anticipated to be announced quarter-by-quarter in fiscal year 2021. These new models are infused with Pursuit DNA and are expected to significantly drive profitability and market share.
As of mid-June 2020, the new Pursuit large boat plant is up and running. Boats 32 feet and larger, including the S378 and S428 will be manufactured in this plant. The expansion at Pursuit not only helps us to increase our capacity, but it also allows us to grow our distribution as well, further increasing the value of this already powerful brand.
Corporate Governance Highlights
We maintain governance practices that we believe establish meaningful accountability for our Company and our Board, including:
All directors except our Chief Executive Officer are independent
Independent Chairman of the Board
Average tenure of director nominees of six years
Female representation of 11% on the Board with an average age of 59 years
Annual Board and Committee evaluations
Focus on Board’s risk oversight role
Active Board oversight of the Company’s corporate governance
Prohibition on short sales, transactions in derivatives and hedging of Company securities by directors, officers and employees
Prohibition on pledging of Company securities by directors, officers and employees subject to a limited exception
Environmental, Social and Governance Matters
Our Board of Directors oversees management’s efforts on issues such as environmental sustainability, culture and human capital. We are committed to operating with responsibility and integrity while making a positive contribution to our industry and society. Our ESG initiatives address a broad set of stakeholders, including customers, employees, suppliers, business partners and governments. Among the ways in which we have demonstrated our commitment to ESG matters are the following, which are detailed elsewhere in this Proxy Statement under "Corporate Governance - Environmental, Social and Governance Matters":
We are committed to minimizing adverse impacts to the environment, including reducing the amount of hazardous manufacturing-related waste.
We are committed to improving our quality management system to provide our customers with an unparalleled experience and product.
We are committed to fostering and promoting an inclusive and diverse company culture and providing employee training and development opportunities.
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We place the highest priority on the health and safety of our workforce.
We follow and expect our suppliers and business partners to comply with human rights principles, and evaluate our source materials for conflict minerals.
We maintain a whistleblower hotline providing for confidential reporting of any suspected violation of laws and our Code of Conduct.
Engagement with Stockholders
We recognize that stockholder engagement is fundamental to strengthening our corporate governance practices and we maintain direct and frequent engagement with our stockholders. We value the views of our stockholders and regularly seek their input to gain valuable insights into key business matters they care most about, including but not limited to capital allocation, corporate governance, risk management, environmental and social matters, sustainability and executive compensation. Feedback from these meetings and conversations is shared with our Board of Directors and used to inform the Board’s decisions. Our active investor relations efforts include regular and ongoing engagement with current and potential investors, financial analysts, and the media through conference calls, face-to-face investor meetings, correspondence, conferences, and other events. In the past, we held an Investor Day which included management presentations that provided an overview of our strategy and our growth opportunities, a tour of our manufacturing facility, and product demos. During fiscal year 2020, our senior management team met with shareholders at three conferences, nine roadshows, two investor dinners, and over numerous phone calls, representing approximately 77% of our outstanding institutional shares.
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INFORMATION ABOUT THE ANNUAL MEETING
Q:    What items will be voted on at the Annual Meeting?
A:    The items of business scheduled to be voted on at the Annual Meeting are:
the election to the Board of Directors of the three (3) nominees named in this Proxy Statement Ivar S. Chhina, Michael J. Connolly and Mark W. Lanigan to serve until the 2023 annual meeting of stockholders and until their successors are duly elected and qualified (Proposal No. 1);
the ratification of the appointment of KPMG LLP (“KPMG”) as our independent registered public accounting firm for the fiscal year ending June 30, 2021 (Proposal No. 2); and
the approval, on a non-binding advisory basis, of our named executive officer compensation (Proposal No. 3).
We will also consider any other business that properly comes before the Annual Meeting or any adjournments or postponements thereof. See “—How will voting on any other business be conducted?” below.
Q:    How does the Board recommend I vote on these items?
A:    The Board of Directors recommends that you vote your shares:
•    FOR the election to the Board of Directors of each of the following three nominees: Ivar S. Chhina, Michael J. Connolly and Mark W. Lanigan (Proposal No. 1);
FOR the ratification of the appointment of KPMG as our independent registered public accounting firm for the fiscal year ending June 30, 2021 (Proposal No. 2); and
FOR the approval, on a non-binding advisory basis, of our named executive officer compensation (Proposal No. 3).
Q:    How will voting on any other business be conducted?
A:    Although the Board of Directors does not know of any business to be considered at the Annual Meeting other than the items described in this Proxy Statement, if any other business properly comes before the Annual Meeting, a stockholder’s properly submitted proxy gives authority to the proxy holders to vote on those matters in their discretion.
Q:    Who is entitled to vote at the Annual Meeting?
A:    The record date for the Annual Meeting is September 17, 2020. Stockholders of record of Malibu Boats’ Class A common stock and Class B common stock as of the close of business on the record date are entitled to vote at the Annual Meeting.
Q:    What options are available to me to vote my shares?
A:    Whether you hold shares directly as the stockholder of record or through a bank, broker or other nominee (that is, in “street name”), your shares may be voted at the Annual Meeting by following any of the voting options available to you below:
You may vote via the Internet.
(1)    If you received proxy materials by email, you may submit your proxy or voting instructions over the Internet by following the instructions included in the email; or
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(2)    If you received a printed set of the proxy materials by mail, including a paper copy of the proxy card (if you are a stockholder of record) or voting instruction form (if you hold your shares in street name), you may submit your proxy or voting instructions over the Internet by following the instructions on the proxy card or voting instruction form.
If you hold shares of Class A common stock and Class B common stock, you will receive two separate proxy cards or voting instruction forms with two separate control numbers, one each for Class A common stock and Class B common stock. You must follow the instructions on each separate proxy card or voting instruction form, one each for Class A common stock and Class B common stock, for all of your votes to be counted.
You may vote by mail.
If you received a printed set of the proxy materials, you can submit your proxy or voting instructions by completing and signing the separate proxy card or voting instruction form you received and mailing it in the accompanying prepaid and addressed envelope. If you hold shares of Class A common stock and Class B common stock, you will receive two separate proxy cards, one each for Class A common stock and Class B common stock. You must submit both cards, one each for Class A common stock and Class B common stock, for all of your votes to be counted. For instance, if you only submit the proxy card for your shares of Class A common stock, but not the proxy card for your shares of Class B common stock, we will not include your votes for your Class B common stock.
You may vote in person at the meeting.
All stockholders of record may vote in person at the Annual Meeting. Written ballots will be passed out to anyone who wants to vote at the Annual Meeting. However, if you are the beneficial owner of shares held in street name through a bank, broker or other nominee, you may not vote your shares at the Annual Meeting unless you obtain a “legal proxy” from the bank, broker or nominee that holds your shares giving you the right to vote the shares at the Annual Meeting.
Even if you plan to attend the Annual Meeting, we recommend that you submit your proxy or voting instructions in advance to authorize the voting of your shares at the Annual Meeting so that your vote will be counted if you later are unable to attend the Annual Meeting.
Q:    What is the deadline for voting my shares?
A:    If you are a stockholder of record, your proxy must be received by the Internet by 11:59 p.m. Eastern time on November 2, 2020 in order for your shares to be voted at the Annual Meeting. However, if you are a stockholder of record and you received a copy of the proxy materials by mail, you may instead mark, sign, date and return the proxy card you received and return it in the accompanying prepaid and addressed envelope so that it is received by Malibu Boats before the Annual Meeting in order for your shares to be voted at the Annual Meeting. If you hold your shares in street name, please provide your voting instructions by the deadline specified by the bank, broker or other nominee who holds your shares.
Q:    Once I have submitted my proxy, is it possible for me to change or revoke my proxy?
A:    Yes. Any stockholder of record has the power to change or revoke a previously submitted proxy at any time before it is voted at the Annual Meeting by:
•    submitting to our Secretary, before the voting at the Annual Meeting, a written notice of revocation bearing a later date than the proxy;
•    properly submitting a proxy on a later date prior to the deadlines specified in “—What is the deadline for voting my shares?” above (only the latest proxy submitted by a stockholder by Internet or mail will be counted); or
•    attending the Annual Meeting and voting in person.
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For shares held in street name, you may revoke any previous voting instructions by submitting new voting instructions to the bank, broker or nominee holding your shares by the deadline for voting specified in the voting instructions provided by your bank, broker or nominee. Alternatively, if your shares are held in street name and you have obtained a legal proxy from the bank, broker or nominee giving you the right to vote the shares at the Annual Meeting, you may revoke any previous voting instructions by attending the Annual Meeting and voting in person.
Attendance at the Annual Meeting will not by itself constitute a revocation of a proxy.
Q:    How many shares are eligible to vote at the Annual Meeting?
A:    If you are a holder of our Class A common stock, then you are entitled to one vote at our Annual Meeting for each share of our Class A common stock that you held as of the record date. If you are a holder of our Class B common stock, then you are entitled to the number of votes at our Annual Meeting that is equal to the number of membership units in Malibu Boats Holdings, LLC (the “LLC Units”) held by you, regardless of the number of shares of Class B common stock held by you. All matters presented to our stockholders at the Annual Meeting will be voted on by the holders of our Class A common stock and Class B common stock voting together as a single class.
As of September 17, 2020, we had 20,630,438 shares of Class A common stock outstanding that will carry 20,630,438 votes and 13 shares of Class B common stock outstanding that will carry an aggregate of 702,869 votes (i.e., a number of votes that is equal to the aggregate number of outstanding LLC Units, other than LLC Units held by Malibu Boats, Inc.).
Q:    How is a quorum determined?
A:    A quorum refers to the number of shares that must be in attendance at an annual meeting of stockholders to lawfully conduct business. The representation, in person or by proxy, of holders entitled to cast a majority of all of the votes entitled to be cast at the Annual Meeting constitutes a quorum at the meeting. Your shares will be counted for purposes of determining whether a quorum exists for the Annual Meeting if you returned a signed and dated proxy card or voting instruction form, if you submitted a proxy or voting instructions by the Internet, or if you vote in person at the Annual Meeting, even if you abstain from voting on any of the proposals. In addition, if you are a street name holder, your shares may also be counted for purposes of determining whether a quorum exists for the Annual Meeting even if you do not submit voting instructions to your broker. See
—What is required to approve each proposal at the Annual Meeting and what effect do votes withheld, abstentions and broker non-votes have?” below.
Q:    How will my shares be voted if I do not give specific voting instructions in the proxy or voting instruction form I submit?
A:     If you are a stockholder of record and you properly submit a proxy but do not indicate your specific voting instructions on one or more of the items listed above in the notice of meeting, your shares will be voted as recommended by the Board of Directors on those items. See “—How does the Board recommend I vote on these items?” above.
If you hold your shares in street name through a brokerage account and you do not submit voting instructions to your broker, your broker may generally vote your shares in its discretion on routine matters but not on non-routine matters. See “—What is required to approve each proposal at the Annual Meeting and what effect do votes withheld, abstentions and broker non-votes have?” below.
Q:    What is required to approve each proposal at the Annual Meeting and what effect do votes withheld, abstentions and broker non-votes have?
A:    Election of Directors (Proposal No. 1). Once a quorum has been established, the affirmative vote of a plurality of all the votes cast on the matter at the Annual Meeting in person or by proxy will be required for the election of each director nominee, meaning that the persons receiving the highest number of FOR votes, up to the total
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number of directors to be elected at the meeting, will be elected. Stockholders are not permitted to cumulate their shares for the purpose of electing directors. For purposes of Proposal No. 1 (election of directors), you may vote “FOR” any or all of the nominees or “WITHHOLD” your vote from any or all of the nominees. Shares voted WITHHOLD and broker non-votes will not be counted in determining the outcome of the director nominees’ election.
Other Items (Proposals No. 2 and 3). Once a quorum has been established, pursuant to our Bylaws, approval of each of the other items to be submitted for a vote of stockholders at the Annual Meeting requires the affirmative vote of a majority of all of the votes cast on the item at the Annual Meeting. Notwithstanding this vote standard required by our Bylaws, Proposal No. 2 (ratification of the appointment of KPMG as our independent registered public accounting firm for the fiscal year ending June 30, 2021) and Proposal No. 3 (approval, on a non-binding advisory basis, of our named executive officer compensation) are advisory only and are not binding on us. Our Board of Directors will consider the outcome of the vote on each of these items in considering what action, if any, should be taken in response to the vote by stockholders.
For purposes of Proposal No. 2 (ratification of the appointment of KPMG as our independent registered public accounting firm for the fiscal year ending June 30, 2021) and Proposal No. 3 (approval, on a non-binding advisory basis, of our named executive officer compensation), you may vote “FOR,” “AGAINST” or “ABSTAIN.”
Abstentions with respect to any proposal at the Annual Meeting will be counted as present and entitled to vote for purposes of determining the presence of a quorum, but will not be counted as a vote cast on the proposal and therefore will not be counted in determining the vote for the election of directors, the ratification of the appointment of KPMG or the approval of named executive officer compensation.
If you hold your shares in street name through a brokerage account and you do not submit voting instructions to your broker, your broker may generally vote your shares in its discretion on routine matters. However, a broker cannot vote shares held in street name on non-routine matters unless the broker receives voting instructions from the street name holder. The proposal to ratify the appointment of KPMG as our independent registered public accounting firm for the fiscal year ending June 30, 2021 (Proposal No. 2) is considered routine under applicable rules, while each of the other items to be submitted for a vote of stockholders at the Annual Meeting is considered non-routine. Accordingly, if you hold your shares in street name through a brokerage account and you do not submit voting instructions to your broker, your broker may exercise its discretion to vote your shares on Proposal No. 2, but will not be permitted to vote your shares on any of the other proposals at the Annual Meeting. If your broker exercises this discretion, your shares will be counted as present for the purpose of determining the presence of a quorum at the Annual Meeting and will be voted on Proposal No. 2 in the manner directed by your broker, but your shares will constitute “broker non-votes” on Proposals No. 1 and 3 at the Annual Meeting. Broker non-votes will not be counted as a vote cast with respect to Proposals No. 1 and 3 and therefore will not be counted in determining the outcome of those items.
Q:    Who will bear the costs of the solicitation of proxies?
A:    The cost of preparing the Notice of Annual Meeting of Stockholders, this Proxy Statement, and the form of proxy, the cost of making such materials available on the Internet and the cost of soliciting proxies will be paid by Malibu Boats. We have retained D.F. King & Co., Inc., a third-party solicitation firm, to assist in the distribution of proxy materials and solicitation of proxies on our behalf for an estimated fee of $5,500 plus reimbursement of certain out-of-pocket expenses. In addition to solicitation by mail, certain officers, regular employees and directors of Malibu Boats, without receiving any additional compensation, may solicit proxies personally or by telephone. Malibu Boats will request brokerage houses, banks and other custodians or nominees holding stock in their names for others to forward proxy materials to their customers or principals who are the beneficial owners of shares of our Class A common stock and Class B common stock and will reimburse them for their expenses in doing so.
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Q:    Where can I find the voting results of the Annual Meeting?
A:    We intend to announce preliminary voting results at the Annual Meeting and disclose final voting results in a Current Report on Form 8-K to be filed with the SEC within four business days following the Annual Meeting.
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SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth information regarding the beneficial ownership of shares of our Class A common stock and Class B common stock and of LLC Units of our subsidiary, Malibu Boats Holdings, LLC, as of September 17, 2020 by (1) each person known to us to beneficially own more than 5% of any class of the outstanding voting securities of Malibu Boats, Inc., (2) each of our directors and named executive officers and (3) all of our current directors and executive officers as a group.
The number of shares of our Class A common stock and of LLC Units outstanding and the percentage of beneficial ownership is based on 20,630,438 shares of our Class A common stock and 21,333,307 LLC Units outstanding as of September 17, 2020. Each holder of LLC Units holds one share of our Class B common stock. Each share of Class B common stock entitles the holder to one vote for each LLC Unit held by such holder. Accordingly, the holders of LLC Units collectively have a number of votes in Malibu Boats, Inc. that is equal to the aggregate number of LLC Units that they hold. Beneficial ownership reflected in the table below includes the total shares or units held by the individual and his or her affiliates. Beneficial ownership is determined in accordance with the rules of the SEC.
Unless otherwise indicated and subject to applicable community property laws, to our knowledge, each stockholder named in the following table possesses sole voting and investment power over the shares listed. Unless otherwise noted below, the address of each person listed on the table is c/o Malibu Boats, Inc., 5075 Kimberly Way, Loudon, Tennessee 37774.
Class A Common Stock Beneficially Owned (1)
LLC Units
Beneficially Owned
(1)
Class B Common Stock Beneficially Owned
Combined Voting Power (2)
Name of Beneficial OwnerNumber%Number%Number%
5% Stockholders
BlackRock, Inc. (3)
1,852,2899.0    8.7 
Lord, Abbett & Co. LLC (4)
1,591,7657.7    7.5 
Renaissance Technologies LLC (5)
1,364,2016.6    6.4 
Macquarie Group Limited (6)
1,241,7376.0    5.8 
The Vanguard Group (7)
1,052,7175.1    4.9 
Malibu Boats, Inc. (8)
  20,630,43896.7   
Directors and Named Executive Officers
Jack D. Springer (9)
241,9871.2 52,735*1 1.4 
Wayne R. Wilson (10)
95,921*29,352*1 *
Ritchie L. Anderson (11)
44,606*9,912*1 *
Deborah S. Kent (12)
2,814* * *
William Paxson St. Clair, Jr. (13)
626* * *
Michael K. Hooks (14)
41,835*12,500*1 *
James R. Buch (15)
23,223*   *
Ivar S. Chhina (16)
23,223*   *
Michael J. Connolly (17)
40,725*   *
Mark W. Lanigan (18)
40,611*25,136*1 *
Joan M. Lewis (19)
2,870*   *
Peter E. Murphy (20)
23,223*   *
John E. Stokely (21)
23,223*   *
Current Directors and Executive Officers as a group
(11 persons) (22)
601,4472.9 129,635*5 3.4 
___________
*    Less than 1.0%
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(1)Subject to the terms of the exchange agreement, the LLC Units are exchangeable for shares of our Class A common stock on a one-for-one basis. See “Certain Relationships and Related Party Transactions—Exchange Agreement.” Beneficial ownership of LLC Units reflected in these tables has not been reflected as beneficial ownership of shares of our Class A common stock for which such units may be exchanged.
(2)Includes the voting power of each owner based on the voting power held through both the owners’ Class A common stock and Class B common stock (which Class B common stock reflects each owner’s holdings of LLC Units). Represents percentage of voting power of the Class A common stock and Class B common stock of Malibu Boats, Inc. voting together as a single class.
(3)Based on a Schedule 13G/A filed on February 5, 2020 by BlackRock, Inc. (“BlackRock”). According to the Schedule 13G/A, as of December 31, 2019, BlackRock has sole voting power over 1,750,049 shares and sole dispositive power over 1,852,289 shares. The address of BlackRock is 55 East 52nd Street, New York, New York 10055.
(4)Based on a Schedule 13G/A filed on February 14, 2020 by Lord, Abbett & Co. LLC (“Lord Abbett”). According to the Schedule 13G/A, as of December 31, 2019, Lord Abbett has sole voting power over 1,504,083 shares and sole dispositive power over 1,471,688 shares. The address of Lord Abbett is 90 Hudson Street, Jersey City, New Jersey 07302.
(5)Based on a Schedule 13G/A filed on February 13, 2020 by Renaissance Technologies LLC on behalf of itself and Renaissance Technologies Holdings Corporation. According to the Schedule 13G/A, as of December 31, 2019, both Renaissance Technologies LLC and Renaissance Technologies Holdings Corporation each has sole voting power over 1,364,201 shares and sole dispositive power over 1,364,201 shares. The address of Renaissance Technologies LLC and Renaissance Technologies Holdings Corporation is 800 Third Avenue, New York, New York 10022.
(6)Based on a Schedule 13G/A filed on February 13, 2020 by Macquarie Group Limited on behalf of itself and Macquarie Bank Limited, Macquarie Investment Management Holdings Inc., Macquarie Investment Management Business Trust and Macquarie Funds Management Austria Kapitalanlage AG. According to the Schedule 13G/A, as of December 31, 2019, Macquarie Investment Management Holdings Inc. has sole voting and dispositive power over 1,235,561 shares, Macquarie Investment Management Business Trust has sole voting and dispositive power over 1,235,561 shares and Macquarie Funds Management Austria Kapitalanlage AG has sole voting and dispositive power over 1,990 shares. Macquarie Group Limited and Macquarie Bank Limited are each deemed to beneficially own 1,241,737 shares due to their ownership of the entities above. The address of Macquarie Group Limited and Macquarie Bank Limited is 50 Martin Place, Sydney, New South Wales, Australia. The address of Macquarie Investment Management Holdings Inc. and Macquarie Investment Management Business Trust is 2005 Market Street, Philadelphia, Pennsylvania 19103. The address of Macquarie Investment Management Austria Kapitalanlage AG is L3, Kaerntner Strasse 28, Vienna C4 1010.
(7)Based on a Schedule 13G filed on February 11, 2020 by The Vanguard Group (“Vanguard”). According to the Schedule 13G, as of December 31, 2019, Vanguard had sole voting power over 42,986 shares, shared voting power over 1,790 shares, sole dispositive power over 1,010,587 shares and shared dispositive power over 42,130 shares. The address of Vanguard is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.
(8)Represents the number of LLC Units held by Malibu Boats, Inc. Malibu Boats, Inc. does not hold any Class B common stock.
(9)Includes (i) 66,482 shares of Class A common stock held directly by Mr. Springer, (ii) 5,062 shares of restricted stock vesting on November 4, 2020, (iii) 5,500 shares of restricted stock vesting in two equal annual installments beginning on November 6, 2020, (iv) 9,000 shares of restricted stock vesting in three equal annual installments beginning on November 6, 2020, (v) 14,718 shares of restricted stock vesting in four equal annual installments beginning on November 6, 2020, (vi) options to purchase 48,500 shares of Class A common stock that are fully vested, (vii) options to purchase 2,500 shares of Class A common stock vesting on November 6, 2020 and (viii) 53,133 shares of restricted stock that vest subject to
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achievement of certain performance targets. Does not include (i) options to purchase 13,000 shares of Class A common stock vesting on June 29, 2021, (ii) options to purchase 12,500 shares of Class A common stock vesting in two equal annual installments beginning on August 22, 2021, (iii) options to purchase 2,500 shares of Class A common stock vesting on November 6, 2021 and (iv) options to purchase 5,000 shares of Class A common stock that vest subject to the achievement of certain performance targets. Includes 37,092 shares of Class A common stock and 52,735 LLC Units held directly by a limited liability company. Mr. Springer and his wife each own a 50% membership interest in, and Mr. Springer is the managing member of, the limited liability company.
(10)Includes (i) 29,401 shares of Class A common stock held directly by Mr. Wilson, (ii) 1,750 shares of restricted stock vesting on November 4, 2020, (iii) 2,750 shares of restricted stock vesting in two equal annual installments beginning on November 6, 2020, (iv) 4,500 shares of restricted stock vesting in three equal annual installments beginning on November 6, 2020, (v) 6,833 shares of restricted stock vesting in four substantially equal installments beginning on November 6, 2020, (vi) options to purchase 24,250 shares of Class A common stock that are fully vested, (vii) options to purchase 1,250 shares of Class A common stock vesting on November 6, 2020 and (viii) 25,187 shares of restricted stock that vest subject to the achievement of certain performance targets. Does not include (i) options to purchase 6,500 shares of Class A common stock vesting on June 29, 2021, (ii) options to purchase 6,250 shares of Class A common stock vesting in two equal annual installments beginning on August 22, 2021, (iii) options to purchase 1,250 shares of Class A common stock vesting on November 6, 2021 and (iv) options to purchase 2,500 shares of Class A common stock that vest subject to the achievement of certain performance targets. Includes 29,352 LLC Units held directly by Mr. Wilson.
(11)Includes (i) 2,836 shares of Class A common stock held directly by Mr. Anderson, (ii) 1,250 shares of restricted stock vesting on November 4, 2020, (iii) 2,750 shares of restricted stock vesting in two equal annual installments beginning on November 6, 2020, (iv) 4,500 shares of restricted stock vesting in three equal annual installments beginning on November 6, 2020, (v) 6,833 shares of restricted stock vesting in four substantially equal installments beginning on November 6, 2020, (vi) options to purchase 1,250 shares of Class A common stock vesting on November 6, 2020 and (vii) 25,187 shares of restricted stock that vest subject to the achievement of certain performance targets. Does not include (i) options to purchase 6,500 shares of Class A common stock vesting on June 29, 2021, (ii) options to purchase 6,250 shares of Class A common stock vesting in two equal annual installments beginning on August 22, 2021, (iii) options to purchase 1,250 shares of Class A common stock vesting on November 6, 2021 and (iv) options to purchase 2,500 shares of Class A common stock that vest subject to the achievement of certain performance targets. Includes 9,912 LLC Units held directly by Mr. Anderson.
(12)Includes (i) 863 shares of Class A common stock held directly by Ms. Kent, (ii) 725 restricted stock units vesting on November 4, 2020, (iii) 369 restricted stock units vesting on November 6, 2020, (iv) 331 restricted stock units vesting on November 6, 2020 and (v) 526 restricted stock units vesting on November 6, 2020. Does not include (i) 368 restricted stock units vesting on November 4, 2021, (ii) 662 restricted stock units vesting in two equal annual installments beginning on November 6, 2021 and (iii) 1,051 restricted stock units vesting in two substantially equal annual installments beginning on November 6, 2021. The restricted stock units represent the contingent right to receive an equivalent number of shares of our Class A common stock. Ms. Kent is a named executive officer for the fiscal year ended June 30, 2020.
(13)Includes (i) 313 shares of Class A common stock held directly by Mr. St. Clair and (ii) 313 restricted stock units vesting on November 6, 2020. Does not include 624 restricted stock units vesting in two equal annual installments beginning on November 6, 2021. The restricted stock units represent the contingent right to receive an equivalent number of shares of our Class A common stock. Mr. St. Clair is a named executive officer for the fiscal year ended June 30, 2020 but resigned as President of Cobalt Boats, LLC and as a director effective as of July 6, 2019 and transitioned to the role of Corporation Liaison - Sales and External Relationships for Cobalt Boats.
(14)Includes 41,835 stock units and 12,500 LLC Units held directly by Mr. Hooks. The stock units are fully vested and payable in an equivalent number of shares of our Class A common stock upon or as soon as
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practicable, and in all events within 30 days, following the first to occur of (A) the date of Mr. Hooks’ separation from service (as defined in our director compensation policy) or (B) the occurrence of a change in control under our Long-Term Incentive Plan.
(15)Includes 23,223 stock units. The stock units are fully vested and payable in an equivalent number of shares of our Class A common stock upon or as soon as practicable, and in all events within 30 days, following the first to occur of (A) the date of Mr. Buch’s separation from service (as defined in our director compensation policy) or (B) the occurrence of a change in control under our Long-Term Incentive Plan.
(16)Includes 23,223 stock units. The stock units are fully vested and payable in an equivalent number of shares of our Class A common stock upon or as soon as practicable, and in all events within 30 days, following the first to occur of (A) the date of Mr. Chhina’s separation from service (as defined in our director compensation policy) or (B) the occurrence of a change in control under our Long-Term Incentive Plan.
(17)Includes 40,725 stock units. The stock units are fully vested and payable in an equivalent number of shares of our Class A common stock upon or as soon as practicable, and in all events within 30 days, following the first to occur of (A) the date of Mr. Connolly’s separation from service (as defined in our director compensation policy) or (B) the occurrence of a change in control under our Long-Term Incentive Plan.
(18)Includes 40,611 stock units and 25,136 LLC Units held directly by Mr. Lanigan. The stock units are fully vested and payable in an equivalent number of shares of our Class A common stock upon or as soon as practicable, and in all events within 30 days, following the first to occur of (A) the date of Mr. Lanigan’s separation from service (as defined in our director compensation policy) or (B) the occurrence of a change in control under our Long-Term Incentive Plan.
(19)Includes 2,870 shares of Class A common stock held directly by Ms. Lewis.
(20)Includes 23,223 stock units held directly by Mr. Murphy. The stock units are fully vested and payable in an equivalent number of shares of our Class A common stock upon or as soon as practicable, and in all events within 30 days, following the first to occur of (A) the date of Mr. Murphy’s separation from service (as defined in our director compensation policy) or (B) the occurrence of a change in control under our Long-Term Incentive Plan.
(21)Includes 23,223 stock units. The stock units are fully vested and payable in an equivalent number of shares of our Class A common stock upon or as soon as practicable, and in all events within 30 days, following the first to occur of (A) the date of Mr. Stokely’s separation from service (as defined in our director compensation policy) or (B) the occurrence of a change in control under our Long-Term Incentive Plan.
(22)Includes 65,446 shares of restricted stock with time-based vesting requirements and 103,507 shares of restricted stock that vest subject to the achievement of certain performance targets. Also includes (i) 101,589 shares of Class A common stock, (ii) 216,063 vested stock units, (iii) vested options to purchase 72,750 shares of Class A Common Stock and (vi) options to purchase 5,000 shares of Class A common stock vesting on November 6, 2020. Does not include (i) options to purchase 26,000 shares of Class A common stock vesting on June 29, 2021, (ii) options to purchase 25,000 shares of Class A common stock vesting in two equal annual installments beginning on August 22, 2021, (iii) options to purchase 5,000 shares of Class A common stock vesting on November 6, 2021 and (iv) options to purchase 10,000 shares of Class A common stock that vest subject to the achievement of certain performance targets. The vested stock units are payable in an equivalent number of shares of our Class A common stock upon or as soon as practicable, and in all events within 30 days, following the first to occur of the director’s separation from service (as defined in our director compensation policy) or the occurrence of a change in control under our Long-Term Incentive Plan. Also includes 37,092 shares of Class A common stock held directly by a limited liability company of which Mr. Springer and his wife each own a 50% membership interest in, and Mr. Springer is the managing member of, the limited liability company.
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BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
Directors of the Company
Our Board of Directors is divided into three classes with staggered three-year terms. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. Our directors are currently divided among the three classes as follows:
•    The Class I directors are Messrs. Chhina, Connolly and Lanigan, and their terms will expire at the Annual Meeting;
•    The Class II directors are Mr. Buch, Mr. Murphy and Ms. Lewis, and their terms will expire at the annual meeting of stockholders to be held in 2021; and;
•    The Class III directors are Messrs. Hooks, Springer, and Stokely, and their terms will expire at the annual meeting of stockholders to be held in 2022.
The following sets forth certain information about our directors as of September 17, 2020:
NameAgePrincipal Position
Jack D. Springer59Chief Executive Officer and Director
Michael K. Hooks58Chairman of the Board and Director
James R. Buch66Director
Ivar S. Chhina57Director
Michael J. Connolly54Director
Mark W. Lanigan60Director
Joan M. Lewis54Director
Peter E. Murphy57Director
John E. Stokely67Director
Jack D. Springer, Chief Executive Officer and Director. Mr. Springer was our interim Chief Executive Officer beginning in May 2009 and became our Chief Executive Officer in February 2010. He has been a member of our Board of Directors since our IPO in February 2014. Mr. Springer was a director of the LLC from May 2009 until our recapitalization in connection with the IPO in February 2014. From June 2003 to February 2010, Mr. Springer was a partner and managing director with Qorval, LLC, a private consultancy that provides strategic leadership and executive management across various industries. As a result of his role with Qorval, Mr. Springer has served as Chief Executive Officer at Diamondback Tactical LLP, a manufacturer of tactical armor systems for federal, state and local law enforcement agencies and defense contractors, as Chief Restructuring Officer of American Plastics, Inc., a thermoform plastics manufacturer for the restaurant and hospitality industry and as interim Chief Executive Officer of Allen White Inc., a furniture manufacturer and wholesaler. While at Qorval, Mr. Springer was also Chief Integration Officer at Nautic Global Group from 2004 to 2007, during which time he was responsible for the integration of two boat manufacturers. Mr. Springer received a B.A. in Accountancy from the University of Texas of the Permian Basin. Based on his perspective and experience as our Chief Executive Officer, as well as his depth of experience in the boat manufacturing industry and as a chief executive, we believe that Mr. Springer is qualified to serve on our Board of Directors.
Michael K. Hooks, Chairman of the Board and Director. Mr. Hooks has been a member of our Board of Directors since our IPO in February 2014. Mr. Hooks was a director of the LLC from May 2009 until our recapitalization in connection with the IPO in February 2014. He is a co-founder and has been managing partner of Westhook Capital LLC since 2017, and he is a co-founder and has been a managing director of Black Canyon Capital LLC since 2004. Previously, Mr. Hooks was a co-head of the Los Angeles office of Credit Suisse First Boston and a managing director in the Los Angeles office of Donaldson, Lufkin & Jenrette. He also serves on the
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board of directors of Metco Landscape Holdings, LLC, a private company. He previously served on the boards of directors of JDC Healthcare Management, Saunders & Associates, TASI Holdings, Virgin America, Logan’s Roadhouse and Switchcraft, as well as the Supervisory Board of Pfeiffer Vacuum Technology, at the time a public company listed on the New York Stock Exchange. Mr. Hooks received a degree in Economics from Princeton University and an M.B.A. with distinction from the Wharton School of Business. Based on his extensive experience as an investment banker advising companies on their financing and strategic alternatives, his experience as a private equity manager working with companies and their management teams to grow and improve their businesses, and his deep knowledge of Malibu Boats given his initial tenure as a board member of the LLC, we believe Mr. Hooks is qualified to serve on our Board of Directors.
James R. Buch, Director. Mr. Buch became a member of our Board of Directors in 2014 in connection with the IPO. Now retired, he held the position of chief executive officer of UMA Enterprises, Inc., which is a private company and one of the largest distributors of home decor products in North America, from May 2017 through September 2019. From 2012 to 2016, he served as president and chief executive officer of Lynx Grills, a manufacturer of grills and outdoor kitchen products for residential consumers. In 2011 and 2012, Mr. Buch was interim president and chief executive officer of Sunbrite TV, a manufacturer of high-definition televisions, and he was a consultant and operating advisor to various private equity and investment firms from 2008 to 2010, assisting businesses on multiple fronts, including growth strategies, restructuring and business model assessment. Mr. Buch has also served and continues to serve on board and advisory councils for a number of private and nonprofit organizations. He received a bachelor’s degree and an M.B.A. from California State University-Fullerton. Based on his extensive leadership and advisory experience with manufacturers of consumer products, we believe Mr. Buch is qualified to serve on our Board.
Ivar S. Chhina, Director. Mr. Chhina became a member of our Board of Directors in 2014 in connection with the IPO. Now retired, from 2009 to 2011, he served as the chief financial officer and executive vice president for Recreational Equipment, Inc. (REI), a national retailer of outdoor recreational equipment and apparel, and previously served on its board from 2006 to 2009, where he was chair of its audit and finance committee as well as board vice chair. From 2001 to 2007, Mr. Chhina was chairman and chief executive officer, and previously chief operating officer and chief restructuring officer of Interdent, Inc., a health care services company. From 1991 to 2001, Mr. Chhina held senior executive, finance and operational roles with several portfolio companies of Mehta & Company, a private equity firm for which he was an operating partner and is currently a venture partner. Mr. Chhina also currently serves on the boards of Northwestern Management Services LLC, PPV Holding Company LLC, Troy Lee Designs Inc., and Lone Peak Holdings LLC, all of which are private companies. Previously, he held executive positions and/or board directorships with several companies, including as interim chief executive officer, and later as a director/advisor to the managing member of JDC Management LLC, on the board of directors of Stat Health Holding LLC, DDP DMO Superholdings LLC, and Dimensional Dental Management LLC; and has served on and chaired boards and committees of charitable and educational entities, including as a board director and member of the audit and finance committee of the Pacific Science Center, as a director and chair of the finance committee of the Washington chapter of The Nature Conservancy, and as a director, board chair and finance chair of Fort Mason Center. Mr. Chhina received an M.A. in international policy studies from the Middlebury College Monterey Institute and a dual B.A. in economics and political science from the University of Nevada-Reno. We believe Mr. Chhina is qualified to serve on our Board of Directors based on his financial expertise, knowledge of the recreational products industry and extensive experience advising, operating and directing businesses across multiple industries.
Michael J. Connolly, Director. Mr. Connolly became a member of our Board of Directors in 2014 in connection with the IPO. He is a founding partner of Breakaway Capital Management, LLC, a private investment fund manager which provides debt and structured equity capital to lower middle market companies. In addition, Mr. Connolly is chief executive officer and sole director of Motorini, Inc., which operates a motorcycle dealership and service provider. From 2007 to 2013, he was a partner with Leonard Green & Partners, LP., a private equity firm. Previously, Mr. Connolly was an investment banker at UBS Securities, LLC, where he served as managing director and co-head of UBS’s Los Angeles investment banking office, and a senior vice president at Donaldson, Lufkin & Jenrette. From 2010 through May 2017, he was on the board of Cascade Bancorp (Nasdaq: CACB), where he was the chairman of the board loan committee and member of the compensation and audit committees. From 2011 through 2016, he was on the board of FP Holdings, LP, a private company and the parent company of the Palms
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Casino Resort. He is a member of the emeritus board of the Los Angeles Regional Food Bank. He received a bachelor’s degree from the University of California-Berkeley. Based on his extensive experience as an investment banker advising companies on their strategic alternatives and his experience as a private equity manager working with companies and their management teams to grow and improve their businesses, we believe Mr. Connolly is qualified to serve on our Board of Directors.
Mark W. Lanigan, Director. Mr. Lanigan has been a member of our Board of Directors since our IPO in February 2014. Mr. Lanigan was a director of the LLC from May 2009 until our recapitalization in connection with the IPO in February 2014. He was a co-founder and has been a managing director of Black Canyon Capital LLC since 2004. Mr. Lanigan has also been a consultant with Tailwind Capital, a private equity firm, since 2015. Mr. Lanigan was formerly a co-head of the Los Angeles office and a member of the Investment Banking Executive Board of Credit Suisse First Boston and head of the Los Angeles office of Donaldson, Lufkin & Jenrette. He also serves on the boards of directors of LRW Holdings, LLC and Lone Peak Holdings, LLC, which are all private companies, and he previously served on the boards of directors of Benevis Holdings, LLC, Abode Healthcare, Inc., JDC Healthcare Management, Virgin America, Archway Marketing Services, TASI Holdings, Inc. and Saunders & Associates. Mr. Lanigan graduated summa cum laude, Phi Beta Kappa with a degree in Economics from Colgate University and received a J.D. degree from Harvard Law School and an M.B.A. from Harvard Business School. We believe Mr. Lanigan is qualified to serve on our Board of Directors based on his extensive experience as an investment banker advising companies on their financing and strategic alternatives, his experience as a private equity manager working with companies and their management teams to grow and improve their businesses, and his deep knowledge of Malibu Boats given his initial tenure as a board member of the LLC.
Joan M. Lewis, Director. Ms. Lewis became a member of our Board of Directors in July 2019. Ms. Lewis serves on the boards of several private companies and is an independent consultant to product/service companies and fast-growing technology start-ups. Previously, she was Senior Vice President and Officer, Consumer & Market Knowledge of The Procter & Gamble Company, a consumer packaged goods company, from 2008 through December 2014. Prior to that, she held a number of other leadership positions with Procter & Gamble Consumer & Market Knowledge, including Vice President, Global Operations and Director, North America. Ms. Lewis previously served as Board Chair of comScore, Inc. in 2016 and as a member of the Audit Committee and Chair of the Technology and Innovation Committee of comScore, Inc. from 2015 to 2016. Ms. Lewis has also previously served on the Singapore Industry Advisory Board for Consumer Insights, the Advertising Research Foundation Board of Directors, and the Business Advisory Council for the Farmer School of Business at Miami University. She holds a B.S. from Miami University. We believe Ms. Lewis is qualified to serve on our Board of Directors based on her experience working as a consultant to product/service companies, her background in consumer and market knowledge, her history as an executive at a global company and her prior service as a director of a public company.
Peter E. Murphy, Director. Mr. Murphy became a member of our Board of Directors in February 2014 in connection with the IPO. He is the founder and chief executive officer of Wentworth Capital Management, a private investment and venture capital firm focused on media, technology and branded consumer businesses. From 2009 to 2011, he served as president of strategy & development of Caesars Entertainment, where he was responsible for corporate strategy and growth, mergers and acquisitions, corporate development and real estate development around the world. From 2007 to 2008, Mr. Murphy served as an operating partner at Apollo Global Management and, prior to that, he spent 18 years in senior executive roles with The Walt Disney Company, including chief strategic officer of Disney and chief financial officer of ABC, Inc. Until 2019, Mr. Murphy served as a board member and chairman of the audit committee of Tribune Media (NYSE: TRCO), and is a board advisor to DECA TV. He has previously served as chairman of the board of Revel Entertainment and on the boards of The Stars Group, Inc., Dial Global and Fisher Communications. Mr. Murphy received an M.B.A. from the Wharton School of Business and a bachelor’s degree, magna cum laude and Phi Beta Kappa, from Dartmouth College. We believe Mr. Murphy is qualified to serve on our Board because of his long history as an executive and director of national and international companies and experience facilitating international growth and strategy.
John E. Stokely, Director. Mr. Stokely became a member of our Board of Directors in February 2014 in connection with the IPO. He has been the lead independent director of Pool Corporation (Nasdaq: POOL) since 2000 and has been its chairman of the board since May 2017. Mr. Stokely is also a member of the audit committee and chair of the governance committee of Pool Corporation. In addition, Mr. Stokely was president, chief executive
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officer and chair of the board of Richfood Holdings, Inc., a food retailer and wholesale grocery distributor, and he served as president of JES, Inc., an investment and consulting firm. Previously, he also served on the boards and committees of a number of other publicly traded companies, including ACI Worldwide, Inc., AMF Bowling, Imperial Sugar Company (which was previously a publicly traded company), O’Charley’s Inc., Performance Food Group and Nash-Finch Company. Mr. Stokely received a bachelor’s degree from the University of Tennessee. We believe Mr. Stokely is qualified to serve on our Board because of his extensive experience as a director of publicly-traded companies engaged in a variety of industries, strategic insights, distribution experience and senior leadership experience.
Executive Officers of the Company
The following sets forth certain information about our executive officers as of September 17, 2020:
Name AgePrincipal Position
Jack D. Springer59Chief Executive Officer and Director
Wayne R. Wilson40Chief Financial Officer
Ritchie L. Anderson55Chief Operating Officer
Please see “—Directors of the Company” above for the biographical information for Jack D. Springer. The biographical information for our other executive officers is set forth below.
Wayne R. Wilson, Chief Financial Officer. Mr. Wilson has served as our Chief Financial Officer since November 2009. From September 2008 to November 2009, Mr. Wilson served on the LLC’s executive board. Prior to joining Malibu Boats, Mr. Wilson was a vice president of Black Canyon Capital LLC where he was employed since its founding in 2004. While at Black Canyon Capital, he was responsible for due diligence and execution of numerous acquisitions and financings. Prior to joining Black Canyon Capital, Mr. Wilson was an investment banker at Credit Suisse First Boston, where he gained experience advising and financing companies across a range of industries. Mr. Wilson received a B.A. in Business Economics from the University of California, Los Angeles.
Ritchie L. Anderson, Chief Operating Officer. Mr. Anderson has served as our Chief Operating Officer since September 2013 and joined Malibu Boats in July 2011 as our Vice President of Operations. Prior to joining Malibu Boats, Mr. Anderson was Vice President of Operations at MasterCraft Boat Company, where he spent 28 years in production management. While at MasterCraft, he held various roles in operations that included management responsibility for manufacturing, supply chain, quality, customer service, environmental and safety. Mr. Anderson has over 30 years of experience in the boat manufacturing industry.
There are no family relationships between or among any of our executive officers or directors.
Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires our directors and executive officers, and persons who own more than 10% of a registered class of our equity securities, to file with the SEC reports of ownership and reports of changes in ownership of our equity securities. To our knowledge, based solely on our review of reports filed electronically with the SEC during the fiscal year ended June 30, 2020, including any amendments thereto, and written responses to annual directors’ and officers’ questionnaires that no other reports were required, all Section 16(a) reports required to be filed during the fiscal year ended June 30, 2020 were timely filed.
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CORPORATE GOVERNANCE
Corporate Governance Principles
The Board of Directors has adopted Corporate Governance Principles, which provide the framework for the governance of our company and represent the Board’s current views with respect to selected corporate governance issues considered to be of significance to our stockholders. The Corporate Governance Principles direct our Board’s actions with respect to, among other things, our Board composition and director qualifications, composition of the Board’s standing committees, stockholder communications with the Board, succession planning and the Board’s annual performance evaluation. A current copy of the Corporate Governance Principles is posted in the Investors Corporate Governance section of our website at www.malibuboats.com.
Director Independence
Under the listing requirements and rules of the Nasdaq Stock Market, LLC (“Nasdaq”), independent directors must compose a majority of our Board of Directors. Audit Committee members must satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act. Applicable Nasdaq rules also require that each member of our Compensation Committee must be independent within the meaning of applicable Nasdaq rules. Applicable Nasdaq rules also require that director nominees must be selected, or recommended for selection by our Board of Directors, either by (1) a nominating committee comprised solely of independent directors or (2) independent directors constituting a majority of our independent directors in a vote in which only independent directors participate.
The Board of Directors has reviewed the independence of our directors, based on the corporate governance standards of Nasdaq. Based on this review, the Board of Directors determined that each of Messrs. Buch, Chhina, Connolly, Hooks, Lanigan, Murphy and Stokely and Ms. Lewis is an “independent director” under the applicable Nasdaq rules (the “Independent Directors”). In making this determination, our Board of Directors considered the relationships that each of these non-employee directors has with Malibu Boats and all other facts and circumstances our Board of Directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock held by each non-employee director. As required under applicable Nasdaq rules, our Independent Directors will meet in regularly scheduled executive sessions at which only Independent Directors are present.
Board Committees
Our Board of Directors has three standing committees — the Audit Committee, the Compensation Committee and the Nominating and Governance Committee — each of which operates under a written charter adopted by our Board of Directors, which is available in the Investors Corporate Governance section of our website at www.malibuboats.com. Our Board of Directors may establish additional committees from time to time, in accordance with our Bylaws.
The following table summarizes the composition of the standing committees of the Board of Directors and the responsibilities of each committee is described below.
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DirectorIndependentAudit CommitteeCompensation CommitteeNominating and Governance Committee
James R. Buch***
Ivar S. Chhina*(1)*
Michael J. Connolly**(1)
Michael K. Hooks**
Mark W. Lanigan*(1)*
Joan M. Lewis***
Peter E. Murphy***
Jack D. Springer
John E. Stokely***
(1) The indicated person serves as the chairperson of the committee.
Audit Committee
Our Audit Committee oversees our corporate accounting and financial reporting process. The Board of Directors has determined that each member of the Audit Committee is an “independent director” under the Nasdaq rules. In addition, each member of the Audit Committee is also “independent” under Rule 10A-3 of the Exchange Act, and satisfies the additional financial literacy requirements of the Nasdaq rules. The Board of Directors has designated one member of the Audit Committee, Mr. Chhina as an “audit committee financial expert” as defined by SEC rules. Among other matters, the Audit Committee:
evaluates the independent registered public accounting firm’s qualifications, independence and performance;
determines the engagement of the independent registered public accounting firm;
reviews and approves the scope of the annual audit and the audit fee;
discusses with management and the independent registered public accounting firm the results of the annual audit and the review of our quarterly financial statements;
approves the retention of the independent registered public accounting firm to perform any proposed permissible non-audit services;
reviews our critical accounting policies and estimates;
reviews and provides oversight over information technology and cybersecurity risk policies and procedures;
reviews and approves related party transactions; and
annually reviews the Audit Committee charter and the committee’s performance.
The Audit Committee operates under a written charter adopted by the Board that satisfies the applicable standards of Nasdaq.
Compensation Committee
The Board of Directors has determined that each member of the Compensation Committee is an “independent director” under the Nasdaq rules. In making the determination regarding the independence of each member of the Compensation Committee, the Board of Directors considered whether the director has a relationship with Malibu Boats that is material to the director’s ability to be independent from management in connection with the duties of a member of the Compensation Committee. Our Compensation Committee reviews and approves the compensation of our Chief Executive Officer and other executive officers, including salaries, bonuses, perquisites and awards of equity-based compensation, approves all employment, severance and similar agreements for executive officers,
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makes recommendations to the Board of Directors with respect to our stock-based benefit plans, administers our stock-based benefit plans and makes recommendations to the Board of Directors concerning the compensation of directors. The Compensation Committee also reviews and approves corporate goals and objectives relevant to the compensation of our Chief Executive Officer and other executive officers, evaluates the performance of these officers in light of those goals and objectives, and either approves or makes recommendations to the independent members of the Board of Directors regarding compensation of these officers based on such evaluations. The Compensation Committee reviews and evaluates, at least annually, the performance of the Compensation Committee. The Compensation Committee operates under a written charter adopted by the Board of Directors that satisfies the applicable standards of Nasdaq.
Our Compensation Committee (or the independent members of the Board of Directors based on the recommendation of the Compensation Committee) is responsible for making the final decisions on compensation for our Chief Executive Officer and other executive officers. However, the Compensation Committee takes into account recommendations of our Chief Executive Officer in determining the compensation (including stock awards) of executive officers other than the Chief Executive Officer. Otherwise, our executive officers do not have any role in determining the form or amount of compensation paid to our executive officers. In addition, the Compensation Committee retains the power to appoint and delegate matters to a subcommittee comprised of at least one member of the Compensation Committee, and may also delegate the authority to make compensation decisions (including the ability to grant stock awards) with respect to non-executive employees of the Company to the Chief Executive Officer. The Compensation Committee does not currently intend to delegate any of its responsibilities to a subcommittee or the Chief Executive Officer.
Pursuant to its charter, the Compensation Committee is authorized to retain compensation consultants to assist in the evaluation of compensation for our executive officers and other employees. As further described under “Executive Compensation Compensation Discussion and Analysis” below, during fiscal year 2020, the Compensation Committee retained Exequity LLP (“Exequity”) as its independent compensation consultant to assist the Compensation Committee with the design and structure of our executive compensation programs and the amounts payable thereunder. During fiscal year 2020, the Compensation Committee engaged Exequity to help the Compensation Committee review a representative group of peer companies, and also to perform an independent review of our executive compensation programs to provide a competitive reference on pay levels for our executives relative to our peer group of companies. This independent review by Exequity was considered by the Compensation Committee when establishing the amounts of compensation paid to our executive officers during fiscal year 2020. The Compensation Committee is directly responsible for the appointment, compensation and oversight of Exequity’s work, and pursuant to SEC rules, does not believe Exequity’s work has raised any conflict of interest. Exequity reports only to the Compensation Committee and does not perform services for us, except for executive and director compensation-related services on behalf of, and as instructed by, the Compensation Committee. All compensation decisions were made solely by the Compensation Committee.
Nominating and Governance Committee
The Board of Directors has determined that each member of the Nominating and Governance Committee is an “independent director” under the Nasdaq rules. Among other matters, the Nominating and Governance Committee:
assists our Board of Directors in identifying prospective director nominees and recommends nominees for each annual meeting of stockholders to our Board of Directors;
recommends members for each committee of our Board of Directors;
oversees the evaluation of our Board of Directors and its committees; and
reviews developments in corporate governance matters and develops appropriate recommendations for the Board of Directors.
The Nominating and Governance Committee operates under a written charter adopted by the Board that satisfies the applicable standards of Nasdaq.
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Meetings and Attendance
During the fiscal year ended June 30, 2020, there were eleven meetings of the Board of Directors, four meetings of the Audit Committee, three meetings of the Compensation Committee and four meetings of the Nominating and Governance Committee. Each of our directors who served on our Board of Directors during the fiscal year ended June 30, 2020 attended at least 75% of the aggregate meetings of the Board and the committees of the Board on which the director served during fiscal year 2020. In addition, the Independent Directors meet regularly in executive session without the presence of management.
Our Board of Directors expects each director to attend the annual meeting of stockholders. All directors attended our annual meeting of stockholders during the fiscal year ended June 30, 2020.
Annual Board Evaluation
Pursuant to our Corporate Governance Principles, the Nominating and Governance Committee shall lead an annual evaluation of the Board, and each committee shall lead an annual self-evaluation. The evaluations are designed to assess whether the Board of Directors and its committees function effectively and make valuable contributions and to identify opportunities for improving its operations and procedures. The effectiveness of individual directors is considered each year when the relevant directors stand for re-nomination.
In fiscal year 2020, the Board completed an evaluation process focusing on the experience, qualifications, attributes and skills of each individual director, the effectiveness of the performance of the Board as a whole and each of the Board’s committees.
Board Leadership Structure
The Board does not have a policy regarding the separation of the roles of Chief Executive Officer and Chairman of the Board as the Board believes it is in the best interests of the Company to make that determination based on the position and direction of the Company and the membership of the Board. The Board has determined that having a non-employee director serve as Chairman is in the best interests of the Company’s stockholders at this time. This structure permits the Chief Executive Officer to focus on the management of the Company’s day-to-day operations. The Company also believes that having a non-employee director serve as Chairman of the Board ensures a greater role for the non-employee directors in the oversight of the Company and active participation of the non-employee directors in setting agendas and establishing Board priorities and procedures.
Risk Oversight
Our Board believes that effective risk management involves our entire corporate governance framework. Both management and our Board have key responsibilities in managing risk throughout the Company, as shown below. Oversight of risks inherent in their respective areas of oversight are delegated to the various Board committees. At each regular meeting of our Board of Directors, the chairperson of each committee reports to the full Board regarding the matters reported and discussed at any committee meetings, including any matters relating to risk assessment or risk management. Our Chief Executive Officer, Chief Financial Officer and outside legal counsel regularly attend meetings of these committees when they are not in executive session, and often report on matters that may not be otherwise addressed at these meetings. In addition, our directors are encouraged to communicate directly with members of management regarding matters of interest, including matters related to risk, at times when meetings are not being held. Our Board of Directors believes that the processes it has established for overseeing risk would be effective under a variety of leadership frameworks and therefore do not materially affect its choice of leadership structure as described under “Board Leadership Structure” above.



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Board Responsibilities
Overall oversight concerning the assessment and management of risk related to our business
Decision-making for fundamental financial and business strategies and major corporate activities, including material acquisitions and financings
Oversight of management and Board committees
Receives regular reports from Board committees on specific risk oversight responsibilities
Receives regular reports from management regarding business operations and strategic planning, financing planning and budgeting and regulatory matters
Audit CommitteeCompensation CommitteeNominating and Governance Committee
Oversight of accounting and financial reporting processes and audits of financial statements
Oversight of financial risk management policies and controls
Oversight of quality and integrity of the accounting, auditing, internal control and financial reporting practices
Responsible for the appointment, compensation, retention and oversight of independent registered public accounting firm
Oversight of the internal audit function
Oversight of information technology and cybersecurity risk policies
Oversight of compensation plans, policies and programs and overall philosophy including confirming that incentive pay arrangements do not encourage unnecessary risk taking
Identifies, evaluates and provides recommendations regarding Board and Committee composition
Oversight of evaluation of the Board and Committees
Advises Board on corporate governance matters and Board performance matters
Management Responsibilities
Identify material risks facing us
Implement appropriate risk management strategies
Integrate risk management into our decision making process
Ensure that information with respect to material risks is transmitted to the Board or the appropriate Board committee
Risk Areas
Strategic
Reputational
Financial
Operational
Legal, regulatory and compliance
Financial reporting and internal control
Information systems and cybersecurity
Human capital management
ESG/sustainability

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Policy on Hedging and Pledging
We recognize that hedging against losses in Company stock is not appropriate or acceptable trading activity for individuals employed by or serving the Company. We have incorporated prohibitions on various hedging activities within our stock trading guidelines, which guidelines apply to directors, officers and employees. The guidelines prohibit:
all short sales of the Company’s securities and any transactions in puts, calls or other derivative securities, on an exchange or in any other organized markets;
purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds), or otherwise engaging in transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of the Company’s securities; and
holding the Company’s securities in a margin account or pledging securities of the Company as collateral for a loan, subject to a limited exception where a person wishes to pledge Company securities as collateral for a loan (not including margin debt) and clearly demonstrates in the sole discretion of our Chief Financial Officer that such person has the financial capacity to repay the loan without resort to the pledged securities.
Director Nomination Process
Identifying and Evaluating Director Nominee Candidates
A class of directors is elected each year by the Company’s stockholders at the annual meeting of the stockholders. The Nominating and Governance Committee will review the qualifications of prospective candidates to determine whether they will make good candidates for membership on the Board. As set forth in the Corporate Governance Principles, in considering candidates for membership on the Board, the Nominating and Governance Committee will consider the prospective candidate’s character, judgment, experience, expertise, age, diversity, independence under applicable law and freedom from other conflicts, as well as other factors that the Nominating and Governance Committee may deem relevant in light of the needs of the Board and the Company and that are in the best interests of the Company. Such factors include relevant experience, the ability to dedicate sufficient time, energy and attention to performance of Board duties, financial expertise, experience with a company in the powerboat or recreational products industry and whether the prospective candidate is a director-selected prospective candidate or a stockholder-recommended prospective candidate. In addition, the Nominating and Governance Committee will consider the diversity of a prospective candidate while identifying nominees for director. The Nominating and Governance Committee seeks to elect directors that will collectively represent a diversity of backgrounds and experiences.
Stockholder Recommendations
The Nominating and Governance Committee will consider written nominations from stockholders of the Company for director nominees. Properly communicated stockholder recommendations will be considered in the same manner as recommendations received from other sources although as described above, one of the factors that the Nominating and Governance Committee considers is the source of the recommendation. To be properly communicated, stockholders desiring to recommend candidates for nomination or election to the Board of Directors should submit their recommendations in writing to the attention of the Secretary, Malibu Boats, Inc., 5075 Kimberly Way, Loudon, Tennessee 37774, together with the following information: (i) all information relating to such proposed candidate that would be required to be disclosed in a proxy statement; (ii) a description of all direct and indirect compensation and other material agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such stockholder and the proposed nominee; (iii) a completed and signed questionnaire regarding the background and qualifications of the proposed candidate to serve as a director; and (iv) all the information about the stockholder and the candidate that would be required pursuant to Article 2, Section 11 of our Bylaws if the stockholder was nominating the candidate for election to the Board of Directors.
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The Nominating and Governance Committee may request additional information concerning the director candidate to determine the eligibility or qualifications of the director candidate to serve as a member of our Board of Directors.
Code of Business Conduct and Code of Ethics
Our Board of Directors has adopted a Code of Business Conduct applicable to our employees, directors and officers and a Code of Ethics. The Code of Ethics applies to our principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions. The codes are available on our website at www.malibuboats.com. To the extent required by rules adopted by the SEC or Nasdaq, we intend to promptly disclose future amendments to certain provisions of the codes, or waivers of such provisions granted to executive officers and directors on our website at www.malibuboats.com.
Stockholder Communications with the Board
Stockholders may send written communications to the Board of Directors or to specified individuals on the Board, by writing to: Malibu Boats, Inc., 5075 Kimberly Way, Loudon, Tennessee 37774, Attention: Chief Financial Officer. Stockholders should indicate prominently on the outside of any envelope that the communication is intended for (i) the Board, (ii) the Chair of the Board, (iii) a specific committee of the Board, (iv) the non- management directors or (v) any other director or subset of directors of the Board. The Chief Financial Officer will review all correspondence submitted and regularly forward, to the appropriate director or directors, copies of all communications, that in the opinion of the Chief Financial Officer, deal with the functions of or otherwise require the attention of individual directors, the Board or committees or subsets thereof. Unless, in the opinion of the Chief Financial Officer, a communication is improper or irrelevant, a communication will not be withheld from its intended recipient(s) without the approval of the Chair of the Board, the Chair of the appropriate committee or the director who presides during non-management executive sessions.
Engagement with Stockholders
We recognize that stockholder engagement is fundamental to strengthening our corporate governance practices and we maintain direct and frequent engagement with our stockholders. We value the views of our stakeholders and regularly seek their input to gain valuable insights into key business matters they care most about, including but not limited to capital allocation, corporate governance, risk management, environmental and social matters, sustainability and executive compensation. Feedback from these meetings and conversations is shared with our Board of Directors and used to inform the Board’s decisions. Our active investor relations efforts include regular and ongoing engagement with current and potential investors, financial analysts, and the media through conference calls, face-to-face investor meetings, correspondence, conferences, and other events. In the past, we held an Investor Day which included management presentations that provided an overview of our strategy and our growth opportunities, a tour of our manufacturing facility, and product demos. During fiscal year 2020, our senior management team met with shareholders at three conferences, nine roadshows, two investor dinners, and over numerous phone calls, representing approximately 77% of our outstanding institutional shares.
Environmental, Social and Governance Matters
Our Board of Directors oversees management’s efforts on issues such as environmental sustainability, culture and human capital. We are committed to operating with responsibility and integrity while making a positive contribution to our industry and society. Our ESG initiatives address a broad set of stakeholders, including customers, employees, suppliers, business partners and governments. Among the ways in which we have demonstrated our commitment to ESG matters are the following, as discussed in more detail below:
We are committed to minimizing adverse impacts to the environment, including reducing the amount of hazardous manufacturing-related waste.
We are committed to improving our quality management system to provide our customers with an unparalleled experience and product.
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We are committed to fostering and promoting an inclusive and diverse company culture and providing employee training and development opportunities.
We place the highest priority on the health and safety of our workforce.
We follow and expect our suppliers and business partners to comply with human rights principles, and evaluate our source materials for conflict minerals.
We maintain a whistleblower hotline providing for confidential reporting of any suspected violation of laws and our Code of Conduct.
Environmental
One of our key environmental goals is to conduct our operations in an environmentally responsible manner. We are committed to reducing any negative environmental impact of our company by working together with the government and our suppliers, partners and customers to develop policies and practices that will ensure a healthy environment for present and future generations, including reducing the amount and toxicity of manufacturing-related waste and carefully sourcing materials to minimize the environmental impact.
We have a waste management plan in place that evaluates our technologies, procedures, and personnel training programs to minimize the quantity of hazardous waste generated as much as practicable. When we created this plan in 2018, we laid out a goal to reduce hazardous waste by 5% and we believe we are on track to achieve this. We will continue to focus on improving our efficiency and taking extra steps to reduce our carbon footprint, energy use, water use, wastes, and other emissions to protect the communities and environments that surround us.
Corporate Responsibility, Culture and Human Capital
Commitment to our customers. We are committed to exceeding our customers’ needs and expectations. We are customer-focused, performance minded and improvement driven, which has led to the Malibu Monsoon engine achieving the International Organization for Standardization’s (ISO) global certifications for quality (9001:2015). We continually work on our internal processes to maximize their effectiveness and efficiency, employ risk-based thinking throughout the organization to address potential risks and opportunities, and work towards the continuous improvement of our quality management system to ensure we provide our customers with an unparalleled experience and product.
Commitment to our employees.
Company Culture. We are committed to creating a company culture that promotes inclusivity, acceptance, equality and diversity. Our Board of Directors oversees management’s efforts on issues related to human capital management, including employee training and development, culture, compensation, benefits, employee recruiting and retention, and diversity and inclusion. We have policies in place in our Code of Conduct with respect to anti-discrimination and provide our employees with access to an anonymous whistleblower hotline for any reporting concerns. We also have a separate policy with respect to anti-harassment for the protection of our employees.
Health and Safety. The health and safety of our employees remains our top priority. When the COVID-19 pandemic swept the country in late March and we voluntarily suspended production at our manufacturing facilities for four to six weeks, we did not lay off one employee. During the shutdown period, we continued to pay our employees for the first two weeks and maintained their regular benefits package, including health insurance, throughout the entire duration of the shutdown.
We recognize that our most valuable resource is our employees. We are committed to protecting all company personnel from occupational hazards whether they are laborers or working in the office environment. The success of our business depends, in part, upon the prevention of accidents, the reduction and/or prevention of occupational injuries and illnesses, and compliance with established safety and health policies and requirements. The safety and health program is made up of company policies and requirements in order to assist in the protection of company personnel. All employees are required to follow the contents of this program and all applicable federal and state occupational safety and health (OSHA) regulations. The general requirements of this program are applicable to all
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company personnel. Dependent upon job tasks, some personnel will be required to have OSHA training and/or documentation to satisfy job requirements. Workplace safety is a fundamental organizational wide value and we are committed to running an efficient program. As of the date of this Proxy Statement, we have not had a “Lost Time Accident” and have had four million manhours without an accident. We remain focused on building a safer workplace for our employees and will continue to work toward an injury free workplace through the implementation of training and other industry-leading safety initiatives.
Compliance and Ethics
Human Rights. We respect the human rights of our employees across all of our operations and supply chain. We follow and expect our suppliers and business partners to comply with human rights principles, including laws that prohibit slavery, forced labor, child labor, human trafficking, harassment, and unlawful discrimination, amongst others. We have processes in place, as well as an established Code of Conduct that address the expected behavior of our employees and partners, to promote safe working conditions and individual security to reduce the risk that we become complicit in any human rights violations.
Conflict Minerals Policy. We have a responsibility as a company to respect human rights throughout our operations and value chains and we are committed to sourcing materials from companies that share our values around human rights, ethics and environmental responsibility. We endeavor to work with our suppliers to increase transparency regarding the origin of minerals contained in our products by requiring suppliers to comply with our supplier code of conduct, which includes requirements relating to conflict minerals and responsible sourcing. We and all of our operating divisions and business units support the humanitarian goal of ending the violence and human rights violations in the Democratic Republic of Congo (“DRC”), which is widely believed to be financed with the exploitation and trade of conflict minerals.
We will continue to carry out a reasonable country of origin inquiry and will perform supply chain due diligence on our suppliers that provide products to be used in our manufacturing process to identify whether any of the products supplied to us contain conflict minerals sourced from the DRC. On an annual basis, each of our affected suppliers is required to provide a completed Conflict Minerals Reporting Template (CMRT) to communicate conflict minerals data (including smelter data). We ask our suppliers to cooperate with us in our efforts toward procurement of non-conflict minerals. Our Conflict Minerals Policy can be accessed on the Investors — Corporate Governance section of our website at www.malibuboats.com.
Whistleblower Hotline. Our Code of Conduct provides guidance to all our directors, officers and employees and assists us in conducting our activities within appropriate ethical and legal standards. Our Board of Directors and Audit Committee oversee our compliance program. We foster a free and open atmosphere that allows and encourages directors, officers, employees and agents and others to express work-related concerns about ethical issues and/or to report violations or suspected violations of laws, regulations and our policies. We have established an anonymous employee hotline, which is monitored by our Chief Financial Officer. Directors, officers and employees are not only encouraged, but are required, to report any violations of law or of our Code of Conduct to his or her supervisor or to the Chief Financial Officer, as appropriate. The Audit Committee of our Board of Directors receives timely periodic reports regarding any material violations of our Code of Conduct. We will not tolerate retaliation for reports made in good faith.
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DIRECTOR COMPENSATION
The following table sets forth certain information concerning the compensation of the members of our Board of Directors who are not also our employees (“Non-Employee Directors”) for the fiscal year ended June 30, 2020. The compensation paid to Mr. Springer, who is also one of our employees, is presented in the Summary Compensation Table and the related tables included below. Mr. Springer is not entitled to receive additional compensation for his service as a director. Mr. St. Clair was a director for part of the fiscal year ended June 30, 2020 until he resigned as President, Cobalt Boats, LLC and as a director on July 6, 2019 and transitioned to the role of Corporation Liaison - Sales and External Relationships for Cobalt Boats, LLC. The compensation paid to Mr. St. Clair is also presented in the Summary Compensation Table and the related tables included below. Mr. St. Clair did not receive any additional compensation for his service as a director.
Name (a)
Fees Earned or Paid in Cash
($)(b)(1)
Stock Awards
 ($)(c)(2)(3)
Total
($)(h)
Michael K. Hooks85,000 (4)74,993 159,993 
James R. Buch65,000 74,993 139,993 
Ivar S. Chhina80,000 74,993 154,993 
Michael J. Connolly70,000 (4)74,993 144,993 
Mark W. Lanigan (5)
74,740 (4)74,993 149,733 
Joan M Lewis (6)
62,329 74,993 137,322 
Peter E. Murphy70,260 74,993 145,253 
John E. Stokely65,000 74,993 139,993 
(1)Amounts reported reflect the cash retainers paid to each Non-Employee Director for fiscal year 2020, except as noted in footnote (4).
(2)Amounts reported represent the aggregate grant date fair value of the annual equity awards granted to the Non-Employee Directors on November 6, 2019. The aggregate grant date fair value of these awards was computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, and excludes the effects of estimated forfeitures. The reported award values have been determined using the $33.72 closing price of a share of our Class A common stock on grant date.
(3)As of June 30, 2020, no Non-Employee Director held any unvested stock units or unvested shares of Class A common stock.
(4)Messrs. Hooks, Connolly and Lanigan each elected to receive all of their annual retainers and any additional retainers in the form of stock units instead of cash. Accordingly, Messrs. Hooks, Connolly and Lanigan each received 2,355, 1,939 and 2,058 fully vested stock units for service rendered during fiscal 2020. Stock units are contractual rights to receive shares of Class A common stock in the future, but are not actual shares of Class A common stock. However, the retainers that each of these Non-Employee Directors elected to receive in units or shares are reported as though they had been paid in cash and not converted to units or shares.
(5)Mr. Lanigan became the chair of the Compensation Committee effective November 6, 2019.
(6)Ms. Lewis was appointed to our Board of Directors on July 16, 2019.
Our current Directors’ Compensation Policy was adopted effective November 2, 2017 and applies to the Non-Employee Directors. Under our Directors’ Compensation Policy, each Non-Employee Director is entitled to receive an annual retainer of $65,000, payable in four equal quarterly installments. Any Non-Employee Director serving as the Chairperson of the Board of Directors is entitled to receive an additional $20,000 annual retainer, payable in four equal quarterly installments. Any Non-Employee Director serving as chair of our Compensation Committee or Audit Committee is entitled to receive an additional $15,000 annual retainer, while any Non-Employee Director serving as chair of our Nominating and Governance Committee is entitled to receive an additional $5,000 annual retainer, each payable in four equal quarterly installments. The annual retainer and any additional retainers are each pro-rated for partial years of service. The Non-Employee Directors have the right to elect to receive their annual retainers and any additional annual retainers in the form of stock units or shares of Class A common stock in lieu of cash, which
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shares or units would be issued as of the last day of the quarter in which the retainers relate and the shares or units would be valued as of the award date.
On the date of each annual meeting, each Non-Employee Director then in office will be entitled to receive a fully vested annual equity award consisting of either stock units or shares of Class A common stock. The annual equity award will be valued at $75,000, and will be converted into shares or units based on the price of a share of Class A common stock on the grant date. Any Non-Employee Director who joins the Board of Directors after the date of an annual meeting will be entitled to a pro-rata annual equity award upon joining the Board.
For any Non-Employee Director who elects to receive stock units, the stock units will not be payable in shares of Class A common stock until the earlier of a change in control for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) or the Non-Employee Director’s separation from service from the Board of Directors. All stock units are entitled to receive dividend equivalent payments, which are reinvested into additional stock units.
Each of our Non-Employee Directors is provided the opportunity to use one of our performance sports boats during his or her term of service as a director. We believe permitting our Non-Employee Directors to use one of our sports boats encourages the directors to familiarize themselves with our products and to better understand the consumer experience. Directors are provided with use of the boat at no charge, but are responsible for paying all insurance, maintenance, gas and other fees, costs and charges (other than registration or use fees and taxes) related to their operation of the boat. At the end of each director’s term of service, the director has the option of either returning the boat to us or purchasing the boat at a purchase price equal to 75% of the dealer invoice price.
Each of our Non-Employee Directors is reimbursed for out-of-pocket expenses for attendance at Board of Directors and committee meetings.
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COMPENSATION DISCUSSION AND ANALYSIS
Introduction
This Compensation Discussion and Analysis contains information regarding the Company’s fiscal 2020 compensation programs, policies and objectives and the compensation awarded to, earned by or paid to our Named Executive Officers during fiscal 2020. Our Named Executive Officers for fiscal 2020 are:
NamePosition
Jack D. SpringerChief Executive Officer
Wayne R. WilsonChief Financial Officer
Ritchie L. AndersonChief Operating Officer
Deborah S. KentVice President of Human Resources
William Paxson St. Clair, Jr.
Former President of Cobalt Boats
Due to the impact of the COVID-19 pandemic, we elected to suspend operations at all our facilities on March 24, 2020, which impacted the second half of fiscal 2020. The shut-down continued into the fourth quarter of fiscal 2020 with operations resuming between late April and early May, depending on the facility. As a result, our financial results for fiscal 2020 were impacted by the COVID-19 pandemic. Selected financial highlights for fiscal 2020 include:
Net sales decreased 4.5% to $653.2 million compared to fiscal 2019
Unit volume decreased 12.5% to 6,444 units compared to fiscal 2019
Net sales per unit increased 9.1% to $101,360 per unit compared to fiscal 2019
Gross profit decreased 10.2% to $149.3 million compared to fiscal 2019
Net income decreased 7.2% to $64.7 million, or $2.98 per share, compared to fiscal 2019
Adjusted EBITDA decreased 11.9% to $110.9 million compared to fiscal 2019
Adjusted fully distributed net income per share decreased 12.5% compared to fiscal 2019 to $3.29 per share on a fully distributed weighted average share count of 21.6 million shares of Class A common stock
In fiscal year 2020, we overcame a volatile operating environment to deliver solid financial and operational performance. Our operational excellence and strong supply chain management, along with the strength of our
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balance sheet, allowed us to respond quickly and effectively to the rapidly changing environment to meet the heightened demand and deliver strong results. As we meet the continued strong demand in our retail markets, we remain confident in our ability to drive further market share gains and profitability in each of the markets we serve. Our proven, consistent execution is demonstrated in all that we do, and we believe our premium brands have proven their ability to excel in whatever market conditions that exist. As a result, we expect Malibu will continue to be successful in driving growth, enhancing margins, and creating value for our shareholders.
Summary of Fiscal 2020 Compensation Decisions
Our Compensation Committee’s primary executive compensation objective in fiscal 2020 was to structure a balanced mix of compensation elements that would incentivize our Named Executive Officers to create long-term stockholder value. The Compensation Committee believes that the Named Executive Officers should be rewarded for successfully creating long-term stockholder value, and should be required to forfeit compensation opportunities if they are not able to grow long-term stockholder value.
Primary objective of fiscal 2020 compensation decisions:

Incentivize Named Executive Officers to create long-term stockholder value
Our Board of Directors and Compensation Committee believe that our three most senior Named Executive OfficersMessrs. Springer, Wilson and Andersonare critical to driving our performance and delivering long-term stockholder value. The Compensation Committee has therefore structured the compensation for these three executives, who we refer to as our Senior Executives, to be more heavily weighted towards performance-based compensation than our other Named Executive Officers in order to properly incentivize our Senior Executives.
In November 2019, the Compensation Committee granted each of our Senior Executives a long-term equity award consisting of 60% performance-based restricted shares and 40% time-based restricted shares. The 60% weighting for performance-based restricted shares represented a 10 percentage point increase over prior years composition, when time-and performance-based restricted stock awards for the Senior Executives were equally weighted. The Compensation Committee determined to increase the weighting of performance-based restricted stock awards in order to enhance the performance-based nature of our long-term incentive awards.
The Compensation Committee also introduced several other design changes to the fiscal 2020 long-term incentive awards for the Senior Executives that we believe enhance the incentives for these awards to motivate the executives to create long-term stockholder value. First, the Compensation Committee introduced relative TSR-based restricted stock awards in our long-term incentive award program for fiscal 2020. The relative TSR awards have a three-year performance period and are eligible to become vested based on our three-year actual total stockholder return as measured against the total stockholder return of the Russell 2000 Index over the same three-year period. We believe the relative TSR awards will complement our existing Adjusted EBITDA awards, and fiscal 2020 performance-based awards for the Senior Executives consisted of an equal target number of relative TSR awards and Adjusted EBITDA awards.
Second, the Compensation Committee determined that our Adjusted EBITDA awards will be eligible to become vested following the end of a three-year performance period based on our Adjusted EBITDA performance achieved through the end of the performance period. This was a change in plan design from prior years, when our Adjusted EBITDA awards were eligible to become vested ratably based on annual Adjusted EBITDA performance for each calendar year in the four-year performance period. We believe this design change reinforces the long-term nature of the Adjusted EBITDA awards. Consistent with prior years, in order to achieve the Adjusted EBITDA target for fiscal 2022, we will be required to grow our Adjusted EBITDA over the three-year performance period at a compounded annual growth rate equal to at least 10%.
Lastly, the Compensation Committee designed the new relative TSR awards and Adjusted EBITDA awards to include a scaling feature where the Senior Executives may earn in excess of the target number of performance-based awards for outperformance, while still forfeiting the awards if the minimum performance levels are not achieved. Unlike prior year awards where the Senior Executives were only able to vest (or not vest) in the target number of
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awards, the new relative TSR awards will vest at a 50% threshold payout level if we achieve a total stockholder return equal to 80% of the Russell 2000 Index and will vest at a maximum 200% payout level if we achieve a total stockholder return equal to 140% of the Russell 2000 Index. In order to reinforce the importance of achieving a 10% compounded annual Adjusted EBITDA growth rate, no Adjusted EBITDA awards are eligible to vest if our actual Adjusted EBITDA performance is below our target performance level. However, the Senior Executives are eligible to vest up to a maximum 150% payout level if we are able to grow our annual Adjusted EBITDA at a rate at or in excess of 15%. As with our other design changes introduced in fiscal 2020, we believe these changes enhance the performance-based nature of our long-term incentive awards and will motivate the executives to create long-term stockholder value.
60% of each Senior Executive's long-term equity award is performance-based, and performance-based awards consist of an equal target number of relative TSR awards and Adjusted EBITDA awards
The Compensation Committee also introduced a design change to our fiscal 2020 annual incentive plan. Rather than having 100% of the annual incentive payments tied to Adjusted EBITDA targets as in prior years, the Compensation Committee included a net income performance metric for the first time during fiscal 2020 in order to reduce the weighting of the Adjusted EBITDA performance metric. Under our 2020 annual incentive plan approved by the Compensation Committee in November 2019, 50% of each executive’s bonus opportunity is payable based on the achievement of the net income GAAP performance targets and the remaining 50% of each executive’s bonus opportunity is payable based on the achievement of the Adjusted EBITDA performance targets.
The net income and Adjusted EBITDA targets for fiscal 2020 were determined by the Compensation Committee prior to the emergence of the COVID-19 pandemic. The COVID-19 pandemic has significantly impacted health and economic conditions throughout the United States and the world, and it had a significant impact on our operations and financial results for fiscal 2020. On March 24, 2020, we elected to suspend operations at all of our facilities. We resumed operations at our Loudon, Tennessee facility (Malibu and Axis boats) on April 20, 2020, our Neodesha, Kansas facility (Cobalt boats) on April 27, 2020 and our Fort Pierce, Florida facility (Pursuit boats) on May 4, 2020. We were not able to ship boats to our dealers during the suspension of our operations, which negatively impacted our net sales and sales volumes for fiscal 2020. While costs of sales also declined, we still recognized a decrease in gross profit and Adjusted EBITDA, primarily related to declines in sales volumes resulting from our suspension of operations which impacted fiscal 2020. The Compensation Committee believes that but for the COVID-19 pandemic, it is likely that annual bonuses for our executives would have become payable at or above the target performance level. However, because the threshold performance levels were ultimately not achieved, no Named Executive Officers earned any cash incentive bonus for fiscal 2020. The Compensation Committee determined that it was important to measure fiscal 2020 performance based on the original targets without making any adjustments related to COVID-19, even though the pandemic was unexpected at the start of the fiscal year and impacted performance in a manner that was outside of our executives’ control.
The remainder of this section describes our executive compensation program and the material elements of compensation awarded to, earned by or paid to the Named Executive Officers during fiscal 2020.
Compensation Program Objectives
Our compensation program for executives is intended to:
incentivize our executive officers to create long-term stockholder value;
align the interests of our executive officers with the interests of our stockholders;
attract and retain quality executive officers;
motivate and reward high performance levels; and
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inspire teamwork and collaboration among the executives.
We believe that our executive compensation program is appropriately structured to accomplish these objectives. Our executive compensation program consists of three material elements: base salaries, annual cash incentive compensation opportunities, and long-term equity incentive awards.
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*at risk implies awards that are subject to performance conditions and/or stock price.
Each of these compensation elements is described in more detail below.
Role of the Compensation Committee
Pursuant to its charter, the Compensation Committee establishes and regularly reviews our executive compensation philosophy and programs, exercises authority with respect to the determination and payment of compensation to each of the Named Executive Officers, and is responsible for administering our equity compensation plan, including approving grants of awards under the plan. In performing its duties, the Compensation Committee is authorized to consider the recommendations of our Chief Executive Officer when determining the compensation of the other Named Executive Officers.
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As described above, the Compensation Committee is also responsible for overseeing Malibu Boats’ incentive and other compensation programs to confirm that they do not encourage unnecessary risk taking. The Compensation Committee has concluded that the current executive compensation program does not encourage inappropriate or excessive risk-taking.
The elements of our executive compensation program were each approved by the Compensation Committee. None of the Named Executive Officers is a member of the Compensation Committee or, except for recommendations made by Mr. Springer with respect to the compensation of the other Named Executive Officers, had any role in determining the compensation of the Named Executive Officers.
Role of the Compensation Consultant
Since 2018, the Compensation Committee has engaged Exequity as its independent compensation consultant. Exequity helped the Compensation Committee construct the Company’s peer group of companies that is described below. In September 2019 and July 2020, Exequity performed an independent review of our executive compensation program to provide a competitive reference on pay levels for our Senior Executives. As part of its review, Exequity analyzed the salaries, target bonus opportunities, actual bonus payments, target total cash compensation opportunities, actual total cash compensation, equity award opportunities, targeted total direct compensation and actual total direct compensation paid by the defined peer group of companies described below to their similarly situated executives.
The Compensation Committee reviewed the report prepared by Exequity in September 2019 and used this report as a reference point when determining the amount of each Senior Executive’s base salary, target annual bonus opportunity and long-term incentive award for fiscal 2020.
The Compensation Committee is directly responsible for the appointment, compensation and oversight of Exequity’s work and pursuant to SEC rules does not believe Exequity’s work has raised any conflict of interest. Exequity reports only to the Compensation Committee, and does not perform services for us, except for executive and director compensation-related services on behalf of, and as instructed by, the Compensation Committee.
Peer Companies
The Compensation Committee constructed a new group of peer companies in 2019 with assistance from Exequity. We used the following objective peer group selection methodology to select the peer group companies:
We initially screened U.S. publicly traded companies with a Global Industry Classification Standard (GICS) sector classification of leisure products;
Due to the limited number of GICS leisure products companies, we expanded the GICS screen to include adjacent industry sectors such as apparel, accessories and luxury goods, auto parts and equipment, automobile manufacturers, construction machinery and heavy trucks, consumer electronics, homebuilding, home furnishings, housewares and specialties, industrial machinery and specialty stores;
We applied an objective financial screen focusing on GICS-screened companies with total trailing 12-month revenues ranging from approximately 0.5x to 3.0x times ours, and also applied a secondary objective financial screen focusing on GICS-screened companies with a relatively similar market capitalization, enterprise value, trailing 12-month EBITDA, and/or total number of employees as us;
We then also considered the peer group companies used by certain proxy advisory firms and companies with similar business profiles (such as cyclicality) based on input from our Compensation Committee and Board of Directors.
Our new peer group consists of the following 17 companies:
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Peer Group Companies
Callaway Golf CompanyDouglas Dynamics, Inc.Fox Factory Holding Corp.
Helios TechnologiesJohnson Outdoors Inc.Lifetime Brands, Inc.
Lydall, Inc.Marine Products CorporationMarine Max, Inc.
MasterCraft Boat Holdings, Inc.Motorcar Parts of America, Inc.Nautilus, Inc.
Smith & Wesson BrandsShyft Group Inc. (formerly Spartan Motors, Inc.)Sturm, Ruger & Company, Inc.
Universal Electronics Inc.Winnebago Industries, Inc.
The Compensation Committee, with the assistance of Exequity, reviewed our peer group in July 2020 and determined not to make any changes to the peer group. The Compensation Committee believes that the peer group of companies is a reasonable reference point for compensation decisions with respect to the Named Executive Officers based on each peer company’s similarity to Malibu Boats. For example, as of July 2020, our market capitalization, total enterprise value, and trailing 12-month EBITDA and revenues were at the 69th percentile, 71st percentile, 95th percentile and 67th percentile, respectively, relative to the peer companies.
The Compensation Committee believes it is important to understand and reference what similarly-situated companies are paying their executives, and it intends to use this information as one of the data points it considers when making compensation decisions for the Named Executive Officers using its business judgment. While the Compensation Committee does not utilize a formal benchmarking strategy, we believe the base salaries for the Senior Executives approximate the 50th percentile range of the base salaries provided by our peer group of companies to similarly situated executives, while performance-based annual and long term incentive opportunities for the Senior Executives were generally above the 50th percentile range.
The Role of Stockholder Say-on-Pay Votes
For the first time last year, our stockholders had the opportunity to cast a non-binding, advisory vote on the compensation of our Named Executive Officers. At last year’s annual meeting, approximately 82% of the votes cast supported our say-on-pay proposal. We currently provide stockholders with the opportunity to cast an annual non-binding, advisory vote on the compensation of our Named Executive Officers, which we refer to as a say-on-pay proposal. At the Annual Meeting, stockholders will have the chance to cast their second vote on our say-on-pay proposal. The Compensation Committee will continue to consider the outcome of stockholders’ votes on our say-on-pay proposals when making future compensation decisions for the Named Executive Officers.
Material Elements of Compensation
Base Salaries
We pay each Named Executive Officer a base salary to provide each executive with a minimum, fixed level of cash compensation.
In the fall of 2019, the Compensation Committee reviewed each Named Executive Officer’s base salary. The Compensation Committee approved modest base salary increases for Mr. Springer and Ms. Kent to align with competitive market practices, but did not approve any increases for any of the other Named Executive Officers. Base salary information for the Named Executive Officers is presented in the table below.
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Named Executive Officer
FY 2019
Base Salary
($)
FY 2020
Increase
($)
Current
Base Salary
($)
Jack D. Springer700,000 35,000 735,000 
Wayne R. Wilson
385,000  385,000 
Ritchie L. Anderson
385,000  385,000 
Deborah S. Kent
150,000 7,500 157,500 
William Paxson St. Clair, Jr.
400,000  90,000 (1)
(1) Mr. St. Clair, Jr. resigned as the President of Cobalt Boats, LLC and as a member of our Board of Directors on July 6, 2019 and transitioned to the role of Corporate Liaison - Sales and External Relationships. Mr. St. Clair, Jr.’s current position is a non-officer position where he is entitled to receive an annual base salary of $90,000.
Annual Incentive Compensation Opportunity
Annual Incentive Plan. In November 2019, the Compensation Committee approved our annual incentive plan for fiscal 2020. The annual cash incentive bonus for each Named Executive Officer (other than Mr. St. Clair, who was not eligible for a fiscal 2020 bonus) was payable based on our achievement of equally weighted annual net income and Adjusted EBITDA targets for fiscal 2020 established by our Compensation Committee. The Compensation Committee included a net income performance metric for the first time during fiscal 2020 in order to reduce the weighting of the Adjusted EBITDA performance metric and to have 50% of each executive’s bonus opportunity payable based on the achievement of the GAAP performance measure.
Annual net income for purposes of the incentive plan was defined as our net income as publicly reported in our press release announcing our financial results for fiscal 2020, but adjusted to exclude the results of any businesses acquired during fiscal 2020. Our fiscal 2020 net income target was set at $89.1 million dollars. This target represented an approximate 28% increase over our fiscal 2019 annual net income performance.
Adjusted EBITDA for purposes of the incentive plan was defined as our Adjusted EBITDA as publicly reported in our press release announcing our financial results for fiscal 2020, but adjusted to exclude the results of any businesses acquired during fiscal 2020. The fiscal 2020 Adjusted EBITDA target for the Company was set at $136.7 million dollars. This target represented an approximate 9% increase over our comparable fiscal 2019 Adjusted EBITDA performance.
The threshold and maximum annual net income and Adjusted EBITDA amounts were each set as a percentage of the applicable target amount described above. The threshold performance level for each metric was set at an amount equal to 90% of the applicable target amount, while the maximum performance level for each metric was set at an amount equal to 130% of the applicable target amount. Although the annual net income and Adjusted EBITDA metrics are equally weighted independent performance metrics, in order for any bonus to become payable, our plan design required that both annual net income and Adjusted EBITDA performance must be achieved at a minimum of the threshold performance level. Our annual bonus plan payout scale and the associated incentive payments as a percentage of each Named Executive Officer’s target bonus amount were as follows:
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Net Income/Adjusted EBITDA Performance LevelNet Income/Adjusted EBITDA Amount as a % of Target% of Target Bonus Becoming Payable
Below Threshold<90%0%
Threshold90%35%
Target100% (Net income of $89.1 million and Adjusted EBITDA of $136.7 million)100%
Above Target110%134%
Above Target120%167%
Maximum130%200%
Above Maximum>130%200%
The bonus payment for performance between any of the performance levels specified above is interpolated on a straight-line basis.
In addition, under our plan design, the Compensation Committee also retained the discretion to reduce each Named Executive Officer’s incentive bonus amount based on any reason determined to be appropriate by the Compensation Committee.
The net income and Adjusted EBITDA targets for fiscal 2020 described above were determined by the Compensation Committee prior to the emergence of the COVID-19 pandemic. The COVID-19 pandemic has significantly impacted health and economic conditions throughout the United States and the world, and it had a significant impact on our operations and financial results for fiscal 2020. On March 24, 2020, we elected to suspend operations at all of our facilities. We resumed operations at our Loudon, Tennessee facility (Malibu and Axis boats) on April 20, 2020, our Neodesha, Kansas facility (Cobalt boats) on April 27, 2020 and our Fort Pierce, Florida facility (Pursuit boats) on May 4, 2020. We were not able to ship boats to our dealers during the suspension of our operations, which negatively impacted our net sales and sales volumes for fiscal 2020. While costs of sales also declined, we still recognized a decrease in gross profit and Adjusted EBITDA, primarily related to declines in sales volumes resulting from our suspension of operations which impacted fiscal 2020. The Compensation Committee believes that but for the COVID-19 pandemic, it is likely that annual bonuses for our executives would have become payable at or above the target performance level. However, because the threshold performance levels for net income and Adjusted EBITDA were ultimately not achieved, no Named Executive Officers earned any cash incentive bonus for fiscal 2020. The Compensation Committee determined that it was important to measure fiscal 2020 performance based on the original targets without making any adjustments related to COVID-19, even though the pandemic was unexpected at the start of the fiscal year and impacted performance in a manner that was outside of our executives’ control.
Total Fiscal 2020 Cash Bonus Payments. For each Named Executive Officer, the fiscal 2020 target incentive bonus amount and total fiscal 2020 cash bonus payment are as follows:
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Named Executive Officer
FY 2020
Target Bonus
($)
FY 2020
Annual Incentive
Payment
($)
Jack D. Springer735,000  
Wayne R. Wilson
271,000  
Ritchie L. Anderson
271,000  
Deborah S. Kent
75,000  
William Paxson St. Clair, Jr.
  
Please see Appendix A for the definition of Adjusted EBITDA which is a non-GAAP financial measure and a reconciliation of Adjusted EBITDA to net income as reported under GAAP.
Long-Term Incentives
Structure of Fiscal 2020 Equity Awards. The long-term equity incentive awards granted to the Named Executive Officers in fiscal 2020 consisted of a combination of time-based restricted shares or units and performance-based restricted shares. The long-term equity award for each of our Senior Executives consisted of 60% performance-based restricted shares and 40% time-based restricted shares. The 60% weighting for performance-based restricted shares represented a 10 percentage point increase over prior years composition, when time-and performance-based restricted stock awards for the Senior Executives were equally weighted. The Compensation Committee determined to increase the weighting of performance-based restricted stock awards in order to enhance the performance-based nature of our long-term incentive awards.
The table below summarizes the fiscal 2020 equity award grants for each Named Executive Officer:
Name
Relative TSR Performance Awards
Adjusted EBITDA Performance Awards
Time-Based Shares or Units
Jack D. Springer$538,826 $438,869 $560,020 
11,038 target shares11,038 target shares14,718 shares
Wayne R. Wilson
$250,179 $203,758 $259,996 
5,125 target shares5,125 target shares6,833 shares
Ritchie L. Anderson
$250,179 $203,758 $259,996 
5,125 target shares5,125 target shares6,833 shares
Deborah S. Kent
$ $ $60,005 
1,577 shares
William Paxson St. Clair, Jr.
$ $ $ 
Time-Based Shares or Units: Time-based restricted shares and units are included as part of each Named Executive Officer’s long-term equity award to provide an equity incentive linked to the value realized by our stockholders that becomes earned based on the executive’s continued employment with us. Each executive’s time-based shares or units granted in fiscal 2020 become vested in equal annual installments over a period of four years (or three years for Ms. Kent).
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Performance-Based Shares. The performance-based shares granted to each Senior Executive consisted of an equal number of relative TSR awards and Adjusted EBITDA awards.
Relative TSR Awards. The Compensation Committee introduced a relative TSR award as part of our long-term incentive program for the first time in fiscal 2020. We believe the relative TSR awards will complement our existing Adjusted EBITDA awards and provide additional incentives for the Senior Executives to create long-term stockholder value. The relative TSR awards have a three-year performance period and are eligible to become vested based on our three-year actual total stockholder return as measured against the total stockholder return of the Russell 2000 Index over the same three-year period. The relative TSR performance requirements and the vesting schedule for the relative TSR awards can be illustrated by the following table.
Performance LevelTSR Achieved Relative to the TSR of the Russell 2000 Index% of Relative TSR Awards Vesting
Below Threshold<80%0%
Threshold80%50%
Target100%100%
Above Target120%150%
Maximum140%200%
Above Maximum>140%200%
The relative TSR award vesting for performance between any of the performance levels specified above is interpolated on a straight-line basis.
Adjusted EBITDA Awards. As in prior years, our long-term incentive program for the Senior Executives includes Adjusted EBITDA awards. However, the Compensation Committee made several design changes to the Adjusted EBITDA awards in fiscal 2020 that we believe will enhance the long-term incentives that are provided by the Adjusted EBITDA awards.
The fiscal 2020 Adjusted EBITDA awards will be eligible to become vested following the end of a three-year performance period based on our Adjusted EBITDA performance through the end of the performance period. This is a change in plan design from prior years, when our Adjusted EBITDA awards were eligible to become vested ratably based on annual Adjusted EBITDA performance for each calendar year in the four-year performance period. We believe this design change reinforces the long-term nature of the Adjusted EBITDA awards. Consistent with prior years, in order to achieve the Adjusted EBITDA target for fiscal 2022, we will be required to grow our Adjusted EBITDA over the three-year performance period at a compounded annual growth rate equal to at least 10%.
In order to reinforce the importance of achieving a 10% compounded annual Adjusted EBITDA growth rate, no Adjusted EBITDA awards are eligible to vest if our actual Adjusted EBITDA performance is below our target performance level. However, the Senior Executives are eligible to vest up to a maximum 150% payout level if we are able to grow our annual Adjusted EBITDA at a rate at or in excess of 15%. The Adjusted EBITDA performance requirements and the vesting schedule for the Adjusted EBITDA awards can be illustrated by the following table.
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Performance LevelCompounded Annual Adjusted EBITDA Growth Rate Achieved% of Adjusted EBITDA Awards Vesting
Below Threshold<10%0%
Target10%100%
Above Target11%110%
Above Target12%120%
Above Target13%130%
Above Target14%140%
Maximum≥15%150%
The Adjusted EBITDA award vesting for performance between any of the performance levels specified above is interpolated on a straight-line basis. Adjusted EBITDA has substantially the same meaning as under the annual incentive plan described above. The annual incentive plan also uses an Adjusted EBITDA-based performance metric, however the 10% compounded annual growth rate requirement over three years used to establish the Adjusted EBITDA award target is intended to incentivize sustained long-term earnings growth. As a result, we believe that the Adjusted EBITDA awards (which now only comprise 50% of the performance-based shares awarded to the Senior Executives) incentivize growth and long-term performance. In contrast, the Adjusted EBITDA targets under the annual incentive plan (which only represented 50% of the executives’ fiscal 2020 target bonus opportunity and were not achieved this year in any event) are established on an annual basis and are intended to incentivize short-term execution of our earnings objectives for the relevant fiscal year.
Dividend Equivalents: Restricted stock units granted under our long-term equity award program entitle the executive to receive an additional credit of stock units having a value equal to the amount of any ordinary cash dividends paid on the shares of Class A common stock underlying the award (i.e., dividend equivalents are reinvested in additional units). Any additional stock units credited as a dividend equivalent payment will not be paid unless they vest and are subject to the same vesting requirements as the stock unit awards to which they relate (including any applicable performance conditions).
The Company has heretofore not paid any annual cash or stock dividends.
Payouts of Previously Granted Performance-Based Awards. The performance period applicable to certain previously granted Adjusted EBITDA awards ended on June 30, 2020.Our Adjusted EBITDA for fiscal 2020 was $110.9 million, which exceeded the Adjusted EBITDA target of $70.6 million applicable to the Adjusted EBITDA awards granted in November 2016 and resulted in these awards becoming vested. Our actual Adjusted EBITDA for fiscal 2020 was less than the targets applicable to the Adjusted EBITDA awards granted in 2017 and 2018. As a result, the 2017 and 2018 Adjusted EBITDA awards did not vest based on fiscal 2020 performance, but these awards will continue to remain outstanding and will be eligible to vest if we are able to achieve the Adjusted EBITDA targets established for any subsequent year in the applicable performance period.
Severance and Change in Control Benefits
We believe that severance protections, particularly in the context of the uncertainty surrounding any potential change in control transaction, play a valuable role in attracting and retaining quality executive officers. We provide severance protections to each of the Senior Executives pursuant to the terms of his employment agreement. Ms. Kent and Mr. St. Clair, Jr. are not currently party to an employment or severance agreement with us, and each is currently employed on an “at will” basis and would not be entitled to any fixed contractual severance benefits.
As described in more detail below under the heading “Potential Payments Upon Termination or Change in Control,” each of the Senior Executives would be entitled to severance benefits in the event of a termination of employment by us without “cause” or by the executive for “good reason”. Severance benefits for the Senior Executives include 12 months of continued base salary payments.
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Cash severance benefits for the Senior Executives are not enhanced in connection with a change in control of the Company, and the Senior Executives would only receive 12 months of continued base salary payments if their employment is terminated involuntarily in connection with a change in control.
However, under the terms of our shareholder approved Long Term Incentive Plan, all outstanding equity awards will fully vest if the awards are not assumed or substituted by a surviving entity in connection with a change in control or, if assumed or substituted, an executive’s employment is terminated without “cause” or for “good reason” within 18 months following such change in control. For the TSR awards and Adjusted EBITDA awards granted in fiscal 2020, actual performance will be measured through the date of the change in control, and the change in control provisions in the Long Term Incentive Plan will apply to any TSR award or Adjusted EBITDA award shares actually becoming earned based on performance.
No Named Executive Officer is entitled to receive a “gross-up” or similar payment for any excise taxes that may become payable in connection with a change in control pursuant to Sections 280G and 4999 of the Code.
Other Compensation and Benefits
We maintain a 401(k) savings plan and various health and welfare benefit plans for our employees. Our Named Executive Officers are generally eligible to participate in each of these plans on the same terms as our other employees. The Named Executive Officers are also entitled to limited perquisites such as use of one of the Company’s boats.
Policy with Respect to Section 162(m)
Section 162(m) of the Code generally prohibits a publicly-held company from deducting compensation paid to a current or former Named Executive Officer that exceeds $1.0 million during the tax year. Certain awards granted before November 2, 2017 that were based upon attaining pre-established performance measures that were set by the Compensation Committee under a plan approved by our stockholders, as well as amounts payable to former executives pursuant to a written binding contract that was in effect on November 2, 2017, may qualify for an exception to the $1.0 million deductibility limit.
Prior to our 2018 annual meeting of stockholders, we were eligible for a special Section 162(m) grandfathering rule available for certain compensation paid or awarded by newly public companies. Each Senior Executive’s restricted stock awards and stock option awards granted before the date of our 2018 annual meeting have been structured to take advantage of this special grandfathering rule. Our ability to rely on this grandfathering rule expired on the date of our 2018 annual meeting of stockholders.
Following the expiration of our grandfathering eligibility, the Compensation Committee notes the Section 162(m) deductibility limitation as one of the factors in its consideration of compensation matters. However, the Compensation Committee has the flexibility to take any compensation-related actions that it determines are in the best interests of the Company and our stockholders, including awarding compensation that may not be deductible for tax purposes. There can be no assurance that any compensation will in fact be deductible as a result of the limitations under Section 162(m).
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COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed with management the disclosures contained in the Compensation Discussion and Analysis section of this Proxy Statement. Based upon this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis section be included in this Proxy Statement.
Compensation Committee of the Board of Directors
Mark W. Lanigan (Chair)
Michael J. Connolly
Joan M. Lewis
Peter E. Murphy
The foregoing report of the Compensation Committee does not constitute soliciting material and shall not be deemed filed, incorporated by reference into or a part of any other filing by Malibu Boats, Inc. (including any future filings) under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except to the extent Malibu Boats, Inc. specifically incorporates such report by reference therein.
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EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information concerning compensation we paid or accrued for the last three fiscal years with respect to each of our “Named Executive Officers”—our Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Vice President of Human Resources and former President of Cobalt Boats, LLC.
Name and
Principal Position(a)
Year
(b)
(1)
Salary
($)
(c)
Bonus
($)
(d)
Stock
Awards
($)
(e)
(2)
Option
Awards
($)
(f)
(3)
Non-Equity Incentive Plan Compensation
($)
(g)
(4)
Nonqualified Deferred Compensation Earnings
($)
(h)
All Other Compensation
($)
(i)
(5)
Total
($)
(j)
Jack D. Springer2020720,193  1,537,715    8,550 2,266,458 
Chief Executive Officer2019658,866 290,000 1,004,400 366,522 671,337  6,917 2,998,042 
2018535,769  679,140 202,610 622,784  4,233 2,044,536 
Wayne R. Wilson
2020385,000  713,932    5,775 1,104,707 
Chief Financial Officer
2019363,481 41,000 502,200 183,261 325,669  7,055 1,422,666 
2018287,019  339,570 101,305 296,392  26,940 1,051,226 
Ritchie L. Anderson
2020385,000  713,932    4,362 1,103,294 
Chief Operating Officer
2019363,481 41,000 502,200 183,261 325,669  6,473 1,422,084 
2018277,500  339,570 101,305 296,392  24,976 1,039,743 
Deborah S. Kent
2020154,327  60,005    6,665 220,997 
Vice President of Human Resources
2019149,135  55,451  75,000  6,239 285,825 
William Paxson St. Clair, Jr.
202098,309      3,750 102,059 
Former President of Cobalt Boats, LLC (6)
2019401,543  52,313  101,250  7,154 562,260 
__________________
(1)Reflects fiscal years ended June 30.
(2)The amounts reported for fiscal 2020 reflect the grant date fair value of restricted stock or restricted stock unit awards granted under the Long Term Incentive Plan and accounted for in accordance with FASB ASC Topic
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718. For more information, see Note 16 included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020.
For fiscal 2020, Messrs. Springer, Wilson and Anderson were each granted a restricted stock award based on our performance in fiscal 2019. The restricted stock award for these Senior Executives consisted of time-based restricted shares, relative TSR awards and Adjusted EBITDA awards. The Adjusted EBITDA awards are valued based on the probable outcome of the applicable performance conditions as determined on the grant date, which results in a grant date fair value for the Adjusted EBITDA awards as follows: Mr. Springer $438,869; Mr. Wilson $203,758; and Mr. Anderson $203,758. If we achieve the highest level of performance under the Adjusted EBITDA awards, the grant date fair value for the Adjusted EBITDA awards would increase to the following amounts: Mr. Springer $629,994; Mr. Wilson $292,490; and Mr. Anderson $292,490.
For fiscal 2020, Ms. Kent was granted time-based restricted stock units based on our performance in fiscal 2019.
(3)The amounts reported for fiscal year 2019 reflect the grant date fair value of stock option awards granted under the Long Term Incentive Plan and accounted for in accordance with FASB ASC Topic 718. For more information, see Note 16 included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020.
(4)As described in the Compensation Discussion & Analysis section above, no Named Executive Officer earned any annual cash bonus for fiscal 2020 under our annual incentive plan.
(5)Amounts reported for Messrs. Springer, Wilson, Anderson and St. Clair, Jr and Ms. Kent include $8,550, $5,775, $4,362, $3,750 and $6,665, respectively, for the Company's contribution to the defined contribution plan.
(6)Mr. St. Clair, Jr. resigned as the President of Cobalt Boats, LLC and as a member of our Board of Directors effective as of July 6, 2019 and transitioned to the role of Corporate Liaison - Sales and External Relationships for Cobalt Boats.
Employment Agreements
Mr. Springer
Pursuant to his employment agreement with the Company, Mr. Springer is entitled to receive a fixed minimum annual base salary and is eligible for a minimum cash incentive bonus of up to 75% of his annual base salary based upon the achievement of performance criteria established by the Compensation Committee of our Board of Directors in its sole discretion. Effective as of October 1, 2019, Mr. Springer’s annual base salary was increased to $735,000. Mr. Springer is also eligible to participate in all employee benefit plans and vacation programs and is eligible for the use of a company-owned boat. For information relating to potential payments upon termination of Mr. Springer’s employment, see “—Potential Payments upon Termination or Change in Control.” Mr. Springer’s employment agreement includes non-competition, non-solicitation and confidentiality provisions.
Mr. Wilson
Pursuant to his employment agreement with the Company, Mr. Wilson is entitled to receive a fixed minimum annual base salary and is eligible for a minimum cash incentive bonus of up to 50% of his annual base salary based upon meeting performance criteria established by the Compensation Committee of our Board of Directors in its sole discretion. Effective as of October 1, 2018, Mr. Wilson’s annual base salary was increased to $385,000, and this remains his current base salary. Mr. Wilson is also eligible to participate in all employee benefit plans and vacation programs and is eligible for the use of a company-owned boat. For information relating to potential payments upon termination of Mr. Wilson’s employment, see “—Potential Payments upon Termination or Change in Control.” Mr. Wilson’s employment agreement includes non-competition, non-solicitation and confidentiality provisions.
Mr. Anderson
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Pursuant to his employment agreement with the Company, Mr. Anderson is entitled to receive a fixed minimum annual base salary and is eligible for a minimum cash incentive bonus of up to 40% of his annual base salary based upon meeting performance criteria established by the Compensation Committee of our Board of Directors in its sole discretion. Effective as of October 1, 2018, Mr. Anderson’s annual base salary was increased to $385,000, and this remains his current base salary. Mr. Anderson is also eligible to participate in all employee benefit plans and vacation programs and is eligible for the use of a company-owned boat. For information relating to potential payments upon termination of Mr. Anderson’s employment, see “—Potential Payments upon Termination or Change in Control.” Mr. Anderson’s employment agreement includes non-competition, non-solicitation and confidentiality provisions.
Ms. Kent and Mr. St. Clair, Jr.
Ms. Kent and Mr. St. Clair, Jr. are not currently party to an employment agreement with us and each is currently employed on an “at will” basis.
Grants of Plan-Based Awards
The following table sets forth all plan-based awards granted to our Named Executive Officers during the fiscal year ended June 30, 2020. All of these awards were granted under the Long Term Incentive Plan.
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Grant Date
Estimated Possible Payouts Under Non-Equity Incentive Plan Award (1)
Estimated Future Payouts Under Equity Incentive Plan AwardsAll Other Stock Awards: Number of Shares of Stock or Units
Grant Date Fair Value of Stock and Option Awards (2)
NameThreshold
($)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)
(#)($)
Jack D. Springer
2020 Annual Incentive Bonus 257,250 735,000 1,470,000      
Restricted Stock Award - Time-Based11/22/2019      14,718 560,020 
Restricted Stock Award - Relative TSR11/22/2019   5,519 11,038 22,076  538,826 
Restricted Stock Award - Adjusted EBITDA11/22/2019    11,038 16,557  438,869 
Wayne R. Wilson
2020 Annual Incentive Bonus 94,850 271,000 542,000      
Restricted Stock Award - Time-Based11/22/2019      6,833 259,996 
Restricted Stock Award - Relative TSR11/22/2019   2,562 5,125 10,250  250,179 
Restricted Stock Award - Adjusted EBITDA11/22/2019    5,125 7,687  203,758 
Ritchie L. Anderson
2020 Annual Incentive Bonus 94,850 271,000 542,000      
Restricted Stock Award - Time-Based11/22/2019      6,833 259,996 
Restricted Stock Award - Relative TSR11/22/2019   2,562 5,125 10,250  250,179 
Restricted Stock Award - Adjusted EBITDA11/22/2019    5,125 7,687  203,758 
Deborah S. Kent
2020 Annual Incentive Bonus 26,250 75,000 150,000      
Restricted Stock Award - Time-Based11/22/2019      1,577 60,005 
William Paxson St. Clair, Jr.
(1)The amounts reported in these columns represent the range of possible annual cash incentive payouts to our Named Executive Officers under the Long Term Incentive Plan based on performance during fiscal 2020. As described in the Compensation Discussion & Analysis section above, no Named Executive Officer earned any annual cash bonus for fiscal 2020 under our annual incentive plan.
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(2)The amounts reported in this column reflect the grant date fair value of restricted stock and restricted stock unit awards, as applicable, granted under the Long Term Incentive Plan and accounted for in accordance with FASB ASC Topic 718. The Adjusted EBITDA awards are each valued based on the probable outcome of the performance conditions as determined on the grant date.
Description of Equity Awards
For fiscal 2020, we granted a combination of time-based restricted stock or restricted stock unit awards, relative TSR awards and Adjusted EBITDA awards to the Named Executive Officers. Each restricted stock unit award represents the contractual right to receive one share of Class A common stock. All of these awards were granted under, and are subject to the terms of the Long Term Incentive Plan. Certain of the terms of these awards are described above in “Compensation Discussion and Analysis—Material Elements of Compensation—Long-Term Incentives.”
Outstanding Equity Awards at Fiscal Year-End
The table below sets forth certain information concerning outstanding restricted stock, stock options or restricted stock units held by each of our Named Executive Officers as of June 30, 2020.
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Option AwardsStock Awards
NameNumber of Securities Underlying Unexercised Options
(#)
Exercisable
Number of Securities Underlying Unexercised Options
(#)
Unexercisable
Equity Incentive Plan Awards:
Number of Unearned Shares,
Units or Other Rights That Have Not Vested
(#)
Option Exercise PriceOption Expiration DateNumber of Shares or Units of Stock That Have Not Vested
(#)
Market Value of Shares or Units of Stock That Have Not Vested
($)(1)
Equity Incentive Plan Awards:
Number of Unearned Shares,
Units or Other Rights That Have Not Vested
(#)
Equity Incentive Plan Awards:
Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
($)(1)
Jack D. Springer26,000 13,000 (2)25.85 6/28/20235,062 (6)262,971 5,500 (11)285,725 
10,000 5,000 (3)5,000 (4)30.87 11/5/20235,500 (7)285,725 9,000 (12)467,550 
6,250 18,750 (5)42.13 8/21/20249,000 (8)467,550 11,038 (13)573,424 
14,718 (9)764,600 11,038 (14)573,424 
Wayne R. Wilson13,000 6,500 (2)25.85 6/28/20231,750 (6)90,913 2,750 (11)142,863 
5,000 2,500 (3)2,500 (4)30.87 11/5/20232,750 (7)142,863 4,500 (12)233,775 
3,125 9,375 (5)42.13 8/21/20244,500 (8)233,775 5,125 (13)266,244 
6,833 (9)354,974 5,125 (14)266,244 
Ritchie L. Anderson6,500 6,500 (2)25.85 6/28/20231,250 (6)64,938 2,750 (11)142,863 
 2,500 (3)2,500 (4)30.87 11/5/20232,750 (7)142,863 4,500 (12)233,775 
9,375 (5)42.13