Milwaukee-based Harley-Davidson Inc. has reached a settlement agreement with Impala Asset Management, which had sought to have two new directors elected to the company’s board.
Impala, which owns around 2% of Harley’s stock, had nominated former NASCAR president Brent Dewar and Leo Hindery, a media industry executive, former professional race car driver and avid Harley rider, to be on the company’s board.
The investment management firm had nominated its own directors after playing a role in forcing then-CEO Matt Levatich out of Harley-Davidson. The company questioned Harley’s decision to make longtime board member Jochen Zeitz the acting CEO, including taking issue with the size of his potential pay package.
Harley opposed the nominations, contending its slate of board nominees had the skill to help the motorcycle maker return to solid performance.
On Monday, Harley announced a settlement with Impala in a securities filing.
“The parties entered into the agreement in the spirit of cooperation during trying times, viewing it as a necessity to move forward,” the filing says.
The deal calls for Impala to withdraw its nominees for this year’s board election. After the 2020 annual meeting, a new board member will be added either through expansion or someone else stepping down. To pick the new director, Impala will suggest two candidates to the board and the board’s nominating committee will suggest two candidates to Impala.
Impala’s recommendations cannot include the nominees it put forward for the 2020 board election and cannot be associated with the firm.
If the two sides do not agree on a director from the initial pool, the process will repeat with each side putting forward one candidate until there is an agreement.
The deal also calls for Impala to continue owning at least 1% of Harley’s stock. Harley will also pay Impala $425,000 to cover half the expenses the firm incurred during the proxy process.