On July 1, 2020 (the “Cooperation Agreement Effective Date”), e.l.f. Beauty, Inc. (the “Company”) entered into a cooperation agreement (the “Cooperation Agreement”) with Marathon Partners Equity Management, LLC, Marathon Partners L.P., Marathon Focus Fund L.P., Marathon Partners LUX Fund, L.P., Cibelli Research & Management, LLC and Mario Cibelli (collectively, “Marathon Partners”) regarding the composition of the Company’s Board of Directors (the “Board”) and certain other matters.

The Cooperation Agreement provides, among other things, that:

Under the terms of the Cooperation Agreement, Marathon Partners also agreed to abide by certain customary standstill restrictions during the period (the “Support Period”) from the Cooperation Agreement Effective Date until the date that is 30 days prior to the deadline for submission of stockholder nominations of individuals for election as directors of the Company at the Company’s 2021 annual meeting of stockholders (the “2021 Annual Meeting Nomination Window Date”), including, among other things, (i) not to propose or otherwise solicit stockholders of the Company for the approval of any stockholder proposals or call, attempt to call or solicit consents to call a special meeting of stockholders of the Company, (ii) not to engage in any solicitation of proxies from the Company’s stockholders, and (iii) not to seek additional representation on the Board or the removal of any member of the Board. Marathon Partners further agreed not to make any public statement relating to the Company during the Support Period, subject to certain exceptions.

The Support Period will be automatically extended until the date that is 30 days prior to the deadline for submission of stockholder nominations of individuals for election as directors of the Company at the Company’s 2022 annual meeting of stockholders if either of the following conditions are met:

The foregoing summary of the Cooperation Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Cooperation Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

Appointment of Lori Keith to the Board

On June 30, 2020, the Board increased the size of the Board from eight to nine directors and appointed Ms. Keith to the Board as a Class III director and to the Nominating and Corporate Governance Committee of the Board, in each case subject to, and effective as of, the full execution of the Cooperation Agreement.

Ms. Keith, 51, is a portfolio manager at Parnassus Investments, an investment advisor, where she is responsible for managing the Parnassus Mid Cap Fund, a socially responsible mutual fund with assets under management over $5 billion. Ms. Keith has held this position since 2008. Ms. Keith also serves on the executive committee of Parnassus Investments. Prior to joining Parnassus Investments in 2005, Ms. Keith served as vice president of investment banking at Deloitte & Touche Corporate Finance LLC and was a senior associate in the investment banking division at Robertson Stephens & Company. Ms. Keith started her career as a management consultant at Ernst & Young. Ms. Keith has a B.A. in economics from the University of California, Los Angeles and an M.B.A. from Harvard Business School.

Ms. Keith will be entitled to compensation for her service as a member of the Board that is consistent with the compensatory arrangements the Company has in place with its other non-employee directors. The Company expects to enter into the Company’s standard form of indemnification agreement with Ms. Keith.

Other than the Cooperation Agreement, there was no arrangement or understanding to which Ms. Keith was appointed to the Board. There are no family relationships between Ms. Keith and any director or executive officer of the Company, or any person chosen by the Company to become a director or executive officer. There are no related party transactions of the kind described in Item 404(a) of Regulation S-K in which Ms. Keith was or is a participant.

Amendment of 2016 Equity Incentive Award Plan

On June 30, 2020, the Board approved an amendment to the 2016 Incentive Plan, subject to the full execution of the Cooperation Agreement. The amendment, effective July 2, 2020, reduces the maximum automatic annual increase of shares of the Company’s common stock reserved for issuance under the 2016 Incentive Plan from 4% of the Company’s common stock outstanding on the last day of the immediately preceding calendar year to 2% of the Company’s common stock outstanding on the last day of the immediately preceding calendar year, starting in calendar year 2021.

The foregoing summary of the amendment to the 2016 Incentive Plan does not purport to be complete and is qualified in its entirety by reference to the full text of the amendment to the 2016 Incentive Plan, a copy of which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.

On July 2, 2020, the Company issued a press release which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

(d) Exhibits.

e.l.f. Beauty, Inc. Exhibit
EX-10.1 2 exhibit101elf8k_20200702.htm EXHIBIT 10.1 Exhibit Exhibit 10.1COOPERATION AGREEMENTThis Cooperation Agreement (“Agreement”) is entered into as of July 1,…
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About e.l.f. Beauty, Inc. (NYSE:ELF)

e.l.f. Beauty, Inc., formerly J.A. Cosmetics Holdings, Inc., is a cosmetic company. The Company conducts its business under the name e.l.f. Cosmetics, and offers products for eyes, lips and face to consumers through its retail customers, e.l.f. stores and e-commerce channels. The Company offers a range of products for eyes, such as eyeshadow, eyeliner, mascara and eyelashes, eyebrows, concealer and primer, brushes and tools, and sets and palettes. The Company offers lipstick, lip gloss, lipliner, and lip care and brushes. The Company launches its products on elfcosmetics.com, and distribution is generally only broadened to its retail customers after it receives consumer validation online. The Company sells its products in national and international retailers (with international primarily serviced by distributors) and direct-to-consumer channels. It sells its products in retail stores in the United States across mass, drug store, food and specialty retail channels.