Sec Form 13D Filing - LOBEL DAVID S filing for Holley Inc. (HLLY) - 2021-07-26

Empower Merger Sub I Inc., a Delaware corporation and a direct wholly owned subsidiary of Empower (“Merger Sub I”), Empower Merger Sub II, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Empower (“Merger Sub II”), and Holley Intermediate Holdings, Inc., a Delaware corporation (“Holley Intermediate”). In connection with the Closing, the registrant changed its name from Empower Ltd. to Holley Inc. (the “Transaction”) was completed on July 16, 2021 (the “Closing Date” and the completion of the Transaction, the “Closing”).

In connection with the Transaction, the Reporting Persons received 67,673,884 shares (subject to adjustment) of Common Stock, (at a deemed value of $10.00 per share).

Pursuant to the Merger Agreement, at the Closing, all outstanding shares of Holley Intermediate common stock held by the Reporting Persons as of immediately prior to the Closing were cancelled and the Reporting Persons received $264,717,627.49 in cash and 67,673,884 shares of Common Stock (at a deemed value of $10.00 per share).

Item 4. Purpose of Transaction

The information set forth in Items 3 and 6 of this Statement are incorporated by reference in its entirety into this Item 4.

The Reporting Person acquired the securities reported herein for investment purposes. Under the terms of the Merger Agreement and the Stockholders’ Agreement (as defined below), so long as the Reporting Persons beneficially own, in the aggregate, a number of shares of Common Stock equal to or greater than 43,491,429 shares, 26,634,286 shares, and 9,777,143 shares (36.9%, 22.6% and 8.3% of the number of shares of Common Stock issued and outstanding at the Closing) respectively, the Reporting Persons have the right to nominate three, two or one director(s), respectively. The Reporting Persons review and intend to continue to review their investment in the Issuer. Depending upon the factors discussed below and subject to applicable law, the Reporting Persons may from time to time acquire additional securities of the Issuer or sell or otherwise dispose of some or all of their securities of the Issuer. The Reporting Persons may pursue any such transactions at any time and from time to time without prior notice, and such transactions will depend upon a variety of factors, including current and anticipated future trading prices of the securities of the Issuer, the financial condition, results of operations and prospects of the Issuer, general economic, financial market and industry conditions, other investment and business opportunities available to the Reporting Persons, tax considerations and other factors.

Except as described in this Item 4, the Reporting Persons currently have no plans or proposals that relate to or would result in any transaction, event or action set forth in subsections (a) through (j) of Item 4 of Schedule 13D. The Reporting Persons reserve the right to formulate plans or make proposals, and take such action with respect thereto, including any or all of the items set forth in subsections (a) through (j) of Item 4 of Schedule 13D and any other actions, as they may determine.

Item 5. Interest in Securities of the Issuer

The information set forth in or incorporated by reference in Items 2, 3, 4 and on the cover page of this Statement is incorporated by reference in its entirety into this Item 5.

(a) - (b) As of the date hereof, the Reporting Persons each beneficially own 67,673,884 shares of Common Stock, representing approximately 57.35% of the outstanding shares of Common Stock. The percentage of the outstanding shares of Common Stock held by the Reporting Person is based on 117,993,139 shares of Common Stock issued and outstanding as of July 16, 2021, as reported by the Issuer in its Current Report on Form 8-K filed with the Securities and Exchange Commission on July 21, 2021.

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(c) Except as reported herein, neither the Reporting Person nor any of the individuals listed on Schedule I has effected any transactions in the Common Stock during the past sixty (60) days.

(d) Except as otherwise described in this Item 5, no one other than the Reporting Person has the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of, any of the Common Stock beneficially owned by the Reporting Person as described in this Item 5.

(e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

The information set forth in Item 3 of this Statement is incorporated by reference in its entirety into this Item 6.

Amended and Restated Registration Rights Agreement

Concurrent with the Closing, Empower Sponsor Holdings, LLC, a Delaware limited liability company (“Sponsor”), Issuer and Holley Stockholder, and together with Sponsor and Holley Stockholder, the “RRA Holders”), entered into an Amended and Restated Registration Rights Agreement (the “A&R Registration Rights Agreement”), pursuant to which Issuer agreed to register for resale, pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), certain shares of Common Stock and other equity securities of Issuer that are held by the RRA Holders from time to time. Under the A&R Registration Rights Agreement, the Holley Stockholder and Sponsor are entitled within any twelve-month period to make four written shelf takedown requests that Issuer register the resale of any or all of their Common Stock on Form S-3 (or Form S-1 if Issuer is ineligible to use Form S-3), so long as such demand is for at least $30,000,000 in shares of Common Stock of all stockholders participating in such shelf takedown, or all registrable securities held by the requesting party. Subject to certain customary exceptions, if Issuer proposes to file a registration statement under the Securities Act with respect to its securities, Issuer will give notice to the relevant security holders party to the A&R Registration Rights Agreement as to the proposed filing and offer such security holders an opportunity to register the resale of such number of their Common Stock as requested by such stockholders, subject to customary cutbacks in an underwritten offering. Any other stockholders of Issuer with piggyback registration rights may also participate in any such registrations, subject to customary cutbacks in an underwritten offering.

The foregoing description of the A&R Registration Rights Agreement is not complete and is qualified in its entirety by reference to the complete text of the A&R Registration Rights Agreement, a copy of which is attached hereto as Exhibit 1 and is incorporated herein by reference.

Stockholders’ Agreement

Concurrent with the Closing, Sponsor, the Holley Stockholder, certain affiliates of Sponsor (the “Sponsor Investors”), Issuer and certain affiliates of the Holley Stockholder (the “Sentinel Investors”) entered into a Stockholders’ Agreement (the “Stockholders’ Agreement”), pursuant to which the Holley Stockholder and the Sponsor have the right to designate nominees for election to Holley’s board of directors subject to certain beneficial ownership requirements. The number of nominees that Holley Stockholder, on the one hand, and the Sponsor, on the other hand, are entitled to nominate under the Stockholders’ Agreement is dependent on the Sentinel Investors’ and the Sponsor Investors’, respectively, beneficial ownership of shares of Common Stock. For so long as the Sentinel Investors beneficially own, in the aggregate, a number of shares of Common Stock equal to or greater than 43,491,429 shares, 26,634,286 shares, and 9,777,143 shares (36.9%, 22.6% and 8.3% of the number of shares of Common Stock issued and outstanding at the Closing) respectively, the Holley Stockholder has the right to nominate

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three, two or one director(s), respectively. In addition, the Holley Stockholder, on the one hand, and the Sponsor, on the other hand, have the right to designate the replacement for any of their respective designees whose board service has terminated prior to the end of such director nominee’s term. The Holley Stockholder, on the one hand, and the Sponsor, on the other hand, also have the right to have their respective designees participate on committees of the board of directors, subject to compliance with applicable law and stock exchange listing rules.

The foregoing description of the Stockholders’ Agreement is not complete and is qualified in its entirety by reference to the complete text of the Stockholders’ Agreement, a copy of which is attached hereto as Exhibit 2 and is incorporated herein by reference.

Item 7. Materials to Be Filed as Exhibits

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SIGNATURE

After reasonable inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.

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Schedule I

Name, business address, present principal occupation or employment and place of citizenship of the directors and executive officers of the Reporting Persons

Executive Officers and Directors of the Reporting Persons

The business address of each director and executive officer is c/o 3300 Madison Avenue, 27th Floor, New York, NY 10017. Unless otherwise indicated, each director and executive officer is a citizen of the United States.

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