| Item 1.01 |
Entry into a Material Definitive Agreement. |
On March 9, 2026, Turtle Beach Corporation (the “Company”) entered into a Cooperation Agreement (the “Agreement”) with TDG CP LLC, The Donerail Group Inc., The Donerail Group & Co LLC and William Wyatt (collectively, the “Donerail Group”) related to the composition of the Company’s board of directors (the “Board”) and certain other matters.
Pursuant to the Agreement, no later than thirty (30) days following the date of the Agreement, the Board will expand the size of the Board from six (6) to eight (8) members and appoint two (2) independent directors (the “New Directors”) to the Board with initial terms expiring at the Company’s 2026 annual meeting of stockholders (the “2026 Annual Meeting”). The New Directors will be identified and selected by the Donerail Group, subject to applicable director qualification requirements.
In addition, pursuant to the Agreement, the Board will take all necessary actions to appoint William Wyatt as Chairman of the Board. The Company has also agreed that the Board shall nominate only the Continuing Directors (consisting of Elizabeth B. Bush, Cris Keirn, Julia W. Sze and William Wyatt) and the New Directors (together, the “Incumbent Board”) for election to the Board at the 2026 Annual Meeting, and will include the members of the Incumbent Board in the Company’s slate of recommended nominees for the election at the 2026 Annual Meeting.
Following the 2026 Annual Meeting until the termination of the Agreement, upon the request of the Donerail Group, the Board will expand the size of the Board from six (6) to seven (7) members and appoint one additional independent director (the “Additional Director”) as identified by the Donerail Group, with an initial term expiring at the Company’s 2027 annual meeting of stockholders (the “2027 Annual Meeting”). Until the 2026 Annual Meeting, the Board will not increase the size of the Board to greater than eight (8) directors without the unanimous consent of the Continuing Directors, and from the 2026 Annual Meeting until the termination of the Agreement, the Board will not increase the size of the Board to greater than seven (7) directors without the unanimous consent of all the members of the Board.
The Agreement also provides that the Donerail Group will maintain certain rights to propose candidates to replace Mr. Wyatt, any New Director or the Additional Director pursuant to the terms of the Agreement should Mr. Wyatt, any New Director or the Additional Director cease to serve as a member of the Board during the term of the Agreement, provided that the Donerail Group will no longer have the right to propose such replacement candidates if the Donerail Group ceases to beneficially own, in the aggregate, at least 2.0% of the outstanding shares of the Company’s common stock.
The Donerail Group and the Company have each agreed to a general release of each other and their respective affiliates with respect to claims arising on or prior to the date of the Agreement. During the term of the Agreement, the Company and the Donerail Group have agreed that they will not disparage each other or initiate any litigation against each other.
At each annual or special meeting of the Company’s stockholders during the term of the Agreement, the Donerail Group has agreed to vote the shares of the Company’s common stock then held by them in accordance with the Board’s recommendations on all proposals other than proposals with respect to extraordinary transactions. Moreover, other than with respect to certain proposals relating to Board composition, if Institutional Shareholder Services, Inc. (“ISS”) or Glass Lewis & Co. (“Glass Lewis”) recommends differently from the Board, the Donerail Group may vote in accordance with the recommendation of either ISS or Glass Lewis.
The Donerail Group has also agreed to certain customary standstill provisions during the term of the Agreement prohibiting them from, among other things, (i) purchasing or otherwise acquiring ownership of any securities of the Company as a result of which the Donerail Group would beneficially own more than 9.9% of the Company’s common stock, subject to certain limited exceptions, (ii) selling, assigning, transferring or disposing of any shares of common stock to any third party if it would result in the third party owning more than 4.9% of the Company’s common stock outstanding at such time or if it would increase the ownership of a third party owning more than 4.9% of the Company’s outstanding common stock, (iii) taking certain actions to change or influence the Board, Company
