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, 2024 DEAR FELLOW STOCKHOLDERS, |
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I invite you to attend our 2024 Annual Meeting of Stockholders to be held on Thursday, April 25, 2024, at 9:00 a.m. Eastern Time in a virtual meeting format.
A glance back at 2023:
In my first year at Utz, I’m proud of what we accomplished and the progress we made during a dynamic environment. In 2023 our team coalesced around a clear set of priorities to expand margins, and we successfully delivered our earnings target while we delivered sales results that were below the expectations that we set at the beginning of 2023. In fiscal year 2023, total net sales increased 2.1% to $1,438.2 million, GAAP net loss moved from $(14.0 million) to ($40.0 million), and Adjusted EBITDA increased 9.8% to $187.2 million,(1) and we finished the year as the 3rd largest U.S. snacking platform for the 12-week and 26-week periods ended December 31, 2023.(2)
For Utz, 2023 was a year of continuing to capitalize on our growth potential, while we took aggressive actions to optimize our supply chain and product portfolio. In addition, we invested in talent and capabilities that are necessary to support our growth. These collective actions will better position Utz for the future and help capture our full potential.
Our Utz associates had several notable accomplishments during the year including the following:
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Delivering 6.3% retail sales growth led by Power Brands which increased 7.4%.(3) |
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Driving market share gains across our largest channel, the grocery channel. |
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Launching our Utz® Mike’s Hot Honey® chips, which secured placement in our long-term assortment reflecting the strength in our innovation approach. |
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Completing our SKU rationalization program to better position our brand portfolio for market-leading growth. |
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Investing in our supply chain optimization program to unlock future cost savings and operating efficiencies. |
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Improving our cash conversion cycle to drive stronger cash flow to reduce debt and leverage. |
Our mission at Utz is to become the fastest-growing pure-play U.S. snacking company of scale by: building a portfolio of consumer-loved brands coast-to-coast; developing world-class people and capabilities; and delivering top-tier financial performance. I’m confident that our progress in 2023 has us well-positioned to deliver on our mission.
On behalf of the Utz Board of Directors and leadership team, we thank you for being a stockholder of Utz. Your vote is important.
Sincerely,
Howard Friedman
Chief Executive Officer
Utz Brands, Inc.
*See the description of the non-GAAP financial measures and reconciliation of the non-GAAP financial measures to the most comparable GAAP measures in the tables included in Annex A at Page A-1.
(1) See the description of the non-GAAP financial measures and reconciliation of the non-GAAP financial measures to the most comparable GAAP measures in the tables included in Annex A at Page A-1.
(2) Circana Total US MULO-C 12-weeks and 26-week ended 12/31/23.
(3) Circana Total US MULO-C 52-weeks ended 12/31/23.
THIS PROXY STATEMENT IS DATED MARCH XX, 2024
AND IS BEING MAILED WITH THE FORM OF PROXY ON OR SHORTLY AFTER MARCH XX, 2024.
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2024 PROXY STATEMENT 1 |
PROXY SUMMARY ∎ CORPORATE SUSTAINABILITY
Environmental, Social and Governance
In 2023, Utz released an expanded and comprehensive Environmental, Social & Governance (“ESG”) report, in accordance with the Sustainability Accounting Standards Board (SASB) standard, augmenting the baseline data in our 2022 ESG report. The report underscores Utz’s commitment to transparency and accountability while outlining significant strides made in addressing key ESG challenges. These challenges and initiatives focus on the Company’s four pillars:
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People: including Health and Safety, Human Capital, Community Support, and Supply Chain Responsibility |
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Planet: being stewards to our planet through Environmental Management, Climate Impact, and Waste and Water Reduction |
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Products: promising a strategic approach to Packaging, Sustainable Agriculture, and uncompromising Product Quality, Safety, and Transparency |
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Governance: ensuring accountability, transparency, and ethical practices in decision-making and rule-setting processes |
Sustainable Business Practices:
Utz has made significant strides in ESG, aligning the Company’s priorities with stakeholder expectations and regulatory requirements. The Company’s Nominating and Governance Committee oversees these efforts, ensuring transparency and accountability. From boardroom discussions to the manufacturing floor, the Company’s cross-functional ESG teams actively integrate(s) ESG into the Company’s business processes.
Community Partnership:
As a proud member of local communities, Utz prioritizes creating a positive work environment, offering competitive wages, and supporting local organizations. Continuous engagement with local communities harbors many benefits internally and externally.
Ethical Conduct and Corporate Governance:
Integrity is paramount in Utz’s operations. We adhere to a robust Code of Ethics, distributed to employees upon onboarding and annually thereafter. Utz maintains a hotline for anonymous reporting, promptly investigating any violations or concerns. Board oversight is crucial to Utz’s ESG initiatives.
Diversity, Equity, and Inclusion (“DEI”) Commitment:
Promoting diversity and inclusion fuels a culture of collaboration and innovation. Utz is committed to equal opportunity employment, fostering an inclusive environment through workshops, educational activities, and employee resource groups. Our diverse leadership team embodies our commitment to DEI.
Employee Health, Safety, and Product Quality:
Employee health and safety are paramount. Quality remains a top priority, with annual reassessment of food safety plans and certifications. The Company’s pay philosophy emphasizes performance and strives for gender pay equity, ensuring a talented and diverse workforce.
Environmental Stewardship:
Through the Company’s dedication to environmental stewardship, Utz will continue to evaluate and reduce water usage, greenhouse gas emissions, and energy consumption. This commitment is further emphasized by the construction of a new large warehouse in Hanover, PA, designed with sustainability in mind. The Company’s goal is to actively minimize its environmental impact and contribute to the well-being of the planet.
At Utz, our dedication to these practices is integral to our business strategy, aligning with the Company’s core values and contributing to the long-term success of the Company.
Important Dates for 2025 Annual Meeting of Stockholders
In order to have a stockholder proposal included in our 2025 annual meeting of stockholders, in accordance with Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), such proposal must be received by our Corporate Secretary no later than November , 2024.
Notice of a stockholder nomination for candidates for the Board or any other business to be considered at our 2025 annual meeting of stockholders outside of the Rule 14a-8 framework must be received by the Company between December 26, 2024 and January 25, 2025. Any notice of director nomination submitted to the Company must include the information required by Rule 14a-19(b) under the Exchange Act.
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2024 PROXY STATEMENT 7 |
GENERAL INFORMATION
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| PROXY STATEMENT ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON THURSDAY, APRIL 25, 2024 GENERAL INFORMATION |
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UTZ BRANDS, INC. 900 High Street Hanover, Pennsylvania 17331 (717) 637-6644 |
We are furnishing this Proxy Statement on behalf of the Board of Directors (the “Board”) of Utz Brands, Inc., a Delaware corporation, for use at our virtual 2024 Annual Meeting of Stockholders at 9:00 a.m., Eastern Time, on Thursday, April 25, 2024, or at any adjournment or postponement of the meeting (the “Annual Meeting”), for the purposes set forth below and in the accompanying Notice of Annual Meeting of Stockholders.
Utz Brands, Inc. was formed upon the closing (the “Closing”) of the business combination (the “Business Combination”) of Utz Brands Holdings, LLC (“UBH”) with Collier Creek Holdings (“CCH”), a special purpose acquisition company, on August 28, 2020 (the “Closing Date”). On the Closing Date, CCH changed its name to “Utz Brands, Inc.”.
In connection with the Closing of the Business Combination, we entered into an Investor Rights Agreement dated August 28, 2020 (as amended in 2021, the “Investor Rights Agreement”) with the following parties:
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The “Continuing Members” of UBH, consisting of Series U of UM Partners, LLC and Series R of UM Partners, LLC; |
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The “Sponsor” of CCH, Collier Creek Partners LLC, which was dissolved in October 2020, following the Business Combination; |
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The “Founder Holders” consisting of certain founder members of the Sponsor and their family members (together with the Sponsor, the “Sponsor Parties”); |
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CCH’s independent directors; and |
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The “Sponsor’s Representative,” who, following the dissolution of the Sponsor is Jason Giordano, for the purpose of making certain determinations on behalf of certain Sponsor Parties under the Investor Rights Agreement following the dissolution of the Sponsor. |
We refer to the Investor Rights Agreement throughout this Proxy Statement. Under the Investor Rights Agreement, among other things, the Board consists of 12 members. Subject to certain step-down provisions, the Founder Holders and the Continuing Members will take all necessary action (to the extent such actions are not prohibited by applicable Law and within such party’s control, and in the case of any action that requires a vote or other action on the part of the Board to the extent such action is consistent with fiduciary duties that the Company’s directors may have in such capacity) (such actions, the “Necessary Action”) to include in the slate of nominees recommended by the Board for election as directors at each annual or special meeting of stockholders at which directors are to be elected five directors recommended by the Continuing Members (the “Continuing Member Nominees”) to be members of our Board of Directors and, following the dissolution of the Sponsor, five directors recommended by the Sponsor Representative (the “Sponsor Nominees”) to be members of our Board of Directors. Please see “Related Party Transactions — Post-Business Combination Agreements — Investor Rights Agreement” for additional details regarding the terms of the Investor Rights Agreement.
As used in this Proxy Statement, unless otherwise noted or unless the context otherwise requires, the terms “we,” “us,” “Utz,” and the “Company” and similar references refer (1) before the Business Combination, to UBH and its consolidated subsidiaries and (2) from and after the Business Combination, to Utz Brands, Inc. and its consolidated subsidiaries. Throughout this section, unless otherwise noted or unless the context otherwise requires, “CCH” or “Collier Creek” refers to Collier Creek Holdings prior to the consummation of the Business Combination. The term “Board” refers to our Board of Directors following the Business Combination.
On or about March 14, 2024, we will begin mailing to all stockholders entitled to vote at the Annual Meeting this Proxy Statement and the enclosed proxy materials. Although not part of this Proxy Statement, we will also mail with this Proxy Statement our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, containing our financial statements for the fiscal year ended December 31, 2023.
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2024 PROXY STATEMENT 9 |
CORPORATE GOVERNANCE ∎ COMMITTEES AND MEETINGS OF THE BOARD
CORPORATE GOVERNANCE
We have established corporate governance practices designed to serve the best interests of Utz and our stockholders. We are in compliance with the current corporate governance requirements imposed by the rules and regulations of the Securities and Exchange Commission (the “SEC”) and the listing standards of the New York Stock Exchange (“NYSE”). Our current Code of Business Conduct and Ethics, Supplier Code of Conduct, and Corporate Governance Guidelines and charters for the standing committees of the Board are available on our investor website at https://investors.utzsnacks.com/investors under the heading “Governance — Governance Documents.”
Set forth below is information regarding the meetings of the Board during fiscal year 2023, a description of the Board’s standing committees and additional information about our corporate governance policies and procedures.
Committees and Meetings of the Board
Board Composition. Our business affairs are managed under the direction of our Board of Directors. Our Board of Directors consists of twelve members, divided into three classes of staggered three-year terms.
Pursuant to the Investor Rights Agreement, Agreement, subject to certain step-down provisions, the Company, the Founder Holders and the Continuing Members will take all Necessary Action to include in the slate of nominees recommended by the Board for election as directors at each annual or special meeting of stockholders at which directors are to be elected five Continuing Member Nominees recommended by the Continuing Members and five Sponsor Nominees recommended by the Sponsor Representative. In addition, at such time as an Outside CEO is elected by our Board of Directors such Outside CEO will be elected to our Board of Directors, subject to the terms of the Investor Rights Agreement.
At each annual meeting of our stockholders, a class of directors will be elected for a three-year term to succeed the same class whose term is then expiring, as follows:
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The Class I directors are John Altmeyer, Howard Friedman, Jason Giordano, and B. John Lindeman; |
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The Class II directors are Antonio Fernandez, Michael Rice, Craig Steeneck, and Pamela Stewart; and |
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The Class III directors are Timothy Brown, Christina Choi, Roger Deromedi, and Dylan Lissette. |
Each director’s term will continue until the election and qualification of his or her successor, or his or her earlier death, resignation, or removal. Any increase or decrease in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the total number of directors.
Each of our officers serve at the discretion of our Board and will hold office until his or her successor is duly appointed and qualified or until his or her earlier resignation or removal. Except with respect to Messrs. Rice and Lissette, who are related as set forth in their biographies (see “Proposal No. 1: Election of Directors”), there are no family relationships among any of our directors or officers.
Meetings of the Board. Our Corporate Governance Guidelines provide that directors should make every effort to attend all meetings of the Board, meetings of the committees of which they are members, and the annual meeting of stockholders, and be prepared to participate in discussions of issues presented. In 2023, our Board met six times and each of the incumbent directors then serving on our Board attended at least 75% of the aggregate number of meetings held by the Board and by each of the committees on which such director served during his or her tenure on the Board.
Board Committees. Our Board has an Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, consisting of the following directors:
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Audit Committee: Craig Steeneck (Chair), Roger Deromedi, Antonio Fernandez, and B. John Lindeman; |
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Compensation Committee: Jason Giordano (Chair), John Altmeyer, Craig Steeneck, and Pamela Stewart; and |
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Nominating and Corporate Governance Committee: John Altmeyer (Chair), Christina Choi, and Jason Giordano. |
All of the committee members are “independent” under the listing standards of NYSE. Members will serve on these committees until their resignation or until as otherwise determined by our Board.
Audit Committee. Craig Steeneck, Roger Deromedi, Antonio Fernandez and B. John Lindeman serve as members of our Audit Committee. Under the NYSE listing standards and applicable SEC rules, all the directors on the Audit Committee must be
CORPORATE GOVERNANCE ∎ COMMITTEES AND MEETINGS OF THE BOARD
preceding year’s annual meeting. Such stockholder’s notice shall set forth certain information about the stockholder giving the notice and the nominee and other representations and certifications as set forth in our Bylaws. Any notice of director nomination submitted to the Company must include the information required by Rule 14a-19(b) under the Exchange Act.
In addition, the Board has delegated oversight of the Company’s ESG program to the Nominating and Corporate Governance Committee. See “Proxy Summary — Environmental, Social and Governance” at page 7 for additional details.
In fiscal year 2023, the Nominating and Corporate Governance Committee met four times.
Director Independence
Our Class A Common Stock is listed on the NYSE. Under the rules of the NYSE, independent directors must comprise a majority of a listed company’s board of directors. In addition, the rules of the NYSE require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and corporate governance committees be independent. Under the rules of the NYSE, a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Audit committee members must also satisfy the additional independence criteria set forth in Rule 10A-3 under the Exchange Act and the rules of the NYSE. Compensation committee members must also satisfy the additional independence criteria set forth in Rule 10C-1 under the Exchange Act and the rules of NYSE.
In order to be considered independent for purposes of Rule 10A-3 under the Exchange Act and under the rules of the NYSE, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the committee, the board of directors, or any other board committee: (1) accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries; or (2) be an affiliated person of the listed company or any of its subsidiaries.
To be considered independent for purposes of Rule 10C-1 under the Exchange Act and under the rules of the NYSE, the board of directors must affirmatively determine that each member of the compensation committee is independent, including a consideration of all factors specifically relevant to determining whether the director has a relationship to the company which is material to that director’s ability to be independent from management in connection with the duties of a compensation committee member, including, but not limited to: (i) the source of compensation of such director, including any consulting, advisory or other compensatory fee paid by the company to such director; and (ii) whether such director is affiliated with the company, a subsidiary of the company or an affiliate of a subsidiary of the company.
Our Board of Directors has undertaken a review of the independence of each director and considered whether each of our directors has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. As a result of this review, nine of our directors are considered “independent directors” as defined under the listing requirements and rules of NYSE and the applicable rules of the Exchange Act.
Corporate Governance Policies
In addition to corporate governance matters described throughout this Proxy Statement, some additional information about our corporate governance policies and procedures is set forth below:
Code of Ethics. Our Board of Directors adopted a Code of Business Conduct and Ethics that applies to all of our associates, officers and directors, including our Chairperson, Chief Executive Officer, Chief Financial Officer and other executive and senior financial officers. The full text of our Code of Business Conduct and Ethics is available on our investor website at http://investors.utzsnacks.com/investors under the heading “Governance — Governance Documents.” We intend to post any amendments to, or any waivers from a provision of, our Code of Business Conduct and Ethics on the same website.
Corporate Governance Guidelines. Our Board of Directors adopted Corporate Governance Guidelines, which address items such as the qualifications and responsibilities of our directors and director candidates and the corporate governance policies and standards applicable to our Board. The Corporate Governance Guidelines reflect the Board’s commitment to effective corporate governance of Utz, with a view to enhancing long-term stockholder value. Topics addressed in the Corporate Governance Guidelines include, without limitation:
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Role and responsibility of the Board; |
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Independence of directors; |
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2024 PROXY STATEMENT 25 |
CORPORATE GOVERNANCE ∎ CORPORATE GOVERNANCE POLICIES
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Director qualification standards; |
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Director orientation and continuing education; |
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Conduct of Board meetings; |
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Committees of the Board; |
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Expectations of directors; |
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Limitations on other board service; |
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Management succession planning; |
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Evaluation of Board performance; and |
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Communications with stockholders and communications with non-management directors. |
A copy of the Corporate Governance Guidelines is available on our investor website at http://investors.utzsnacks.com/investors under the heading “Governance — Governance Documents.”
Risk Management. Utz’s management is responsible for the day-to-day risk management of the Company, subject to oversight by the Board and its committees with regard to the major risks inherent in our business, including strategic, regulatory, compliance, operational, financial, reputational and cybersecurity risks, and the efforts of management to address and mitigate such risks.
The Board receives regular reports concerning our risk assessment and risk management from the Audit Committee, which meets periodically with our independent auditors, with our legal counsel and with management, to discuss the Company’s major risk exposures and the steps that management has taken to monitor and control such exposures. In addition to receiving regular reports from the Audit Committee related to financial risks, the Board also reviews information regarding other risks (including, without limitation, cybersecurity risks) through regular reports of its other committees, including information regarding compensation-related risk from the Compensation Committee and governance-related risk from the Nominating and Corporate Governance Committee. In 2020 the Board adopted a clawback and forfeiture policy which was amended effective October 2023 (the “Clawback Policy”), which, among other things, enables the Board, through the Compensation Committee, to enhance the Company’s risk management by providing for the recoupment or forfeiture of certain incentive-based compensation in the event of financial misstatements or other egregious misconduct by executives that had a detrimental effect on the Company.
We believe the division of risk management responsibilities described above is an effective approach for addressing the risks that we face.
Executive Sessions of Non-Management Directors. In accordance with our Corporate Governance Guidelines, our non- management directors meet in executive session for a portion of most Board meetings with only the Corporate Secretary present, if the presence of the Corporate Secretary is requested by our Board or the Chairperson. The Chairperson (if separate from the Chief Executive Officer) or the Lead Independent Director, if any, or a director designated by the non-management directors, presides at executive sessions of the Board. The Board believes that executive sessions foster free and open communication among the non-management directors, which will ultimately add to the effectiveness of the Board, as a whole.
Consideration and Determination of Executive and Director Compensation. The Compensation Committee has the primary authority to establish and review our overall compensation philosophy and to establish compensation for our executive officers, subject to such further action of our Board, with input from the Compensation Committee. The Board establishes and reviews appropriate compensation for our Chief Executive Officer. In establishing executive officer compensation, the Compensation Committee uses its evaluation of the executives’ performance and responsibilities, our overall performance and our Chief Executive Officer’s recommendations with respect to the other executive officers. In addition, the Compensation Committee has engaged an independent compensation consultant to advise regarding the status of Utz’s executive officer and director compensation in relation to comparable companies.
Management plays a significant role in the executive compensation-setting process. The most significant aspects of management’s role are:
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Evaluating associate performance; |
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Preparing information for Compensation Committee meetings; |
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Proposing business performance targets and objectives for consideration by the Compensation Committee; |
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Providing background information regarding our strategic objectives; and |
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Recommending salary levels and equity awards. |
CORPORATE GOVERNANCE ∎ CORPORATE GOVERNANCE POLICIES
From time to time, the Compensation Committee may invite to its meetings any director, member of management and such other persons as it deems appropriate in order to carry out its responsibilities. Typically, the Company’s Chief Executive Officer reviews the performance of senior management and makes a recommendation on compensation levels. In addition, our executive officers and other invited attendees answer questions posed by the Compensation Committee.
Under our Corporate Governance Guidelines, the compensation of non-employee directors is determined by the Board upon recommendation of the Compensation Committee. The guidelines further provide that non-employee directors are expected to receive a portion of their annual retainer in the form of equity. Employee directors are not paid additional compensation for their services as directors.
Insider Trading Policy. The Board adopted an updated insider trading policy on September 13, 2023, that, among other things, prohibits certain persons who are aware of material nonpublic information about a company from: (i) trading in securities of that company; or (ii) providing material nonpublic information about that company to other persons who may trade on the basis of that information. The Insider Trading Policy is intended to promote compliance with federal, state and foreign securities laws, NYSE listing standards and our obligations as a “control person” under the Insider Trading and Securities Fraud Enforcement Act of 1988 and Section 20(a) of the Exchange Act and the regulations thereunder, which include acting in good faith and avoiding directly or indirectly inducing the act or acts of violation or cause of action with respect to certain insider trading laws.
Restrictions on Short Sales or Speculative Transactions by All Directors and Associates. The Board believes that it is undesirable for our directors, officers and associates to engage in hedging or speculative transactions that may put the personal gain of the insider in conflict with the best interests of the Company and our securityholders or otherwise give the appearance of impropriety. Therefore, our directors, officers, and associates (and their affiliates), whether or not in possession of material non-public information, are generally prohibited from: (i) selling our securities that are of the same class during the six months following the purchase (or vice versa), (ii) selling our securities “short” (i.e., selling stock that is not owned and borrowing the shares to make delivery), (iii) transacting in put options, call options or other derivative securities, on an exchange or in any other organized market, (iv) engaging in hedging or monetization transactions, such as the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds, and (v) certain other transactions set forth in our Insider Trading Policy.
Committee Authority to Retain Independent Advisors. The charters of each of the Audit Committee, Compensation Committee and the Nominating and Corporate Governance Committee provide that each such committee has the authority to retain independent advisors, counsel, experts and consultants, with all fees and expenses paid by the Company.
Board Leadership Structure. Our current Board leadership structure separates the positions of Chief Executive Officer, Chairperson of the Board, and Lead Independent Director of the Board. The Board believes that this structure is appropriate for the Company because it allows for a division of responsibilities and a sharing of ideas between individuals having different perspectives. Our Chief Executive Officer, who is also a member of our Board, is primarily responsible for our operations and strategic direction. Our Chairperson is a non-independent director on our Board, and he, along with our Lead Independent Director, are primarily focused on matters pertaining to corporate governance, including strategic guidance. Our Corporate Governance Guidelines specify that when the Chairperson of the Board is a director who does not otherwise qualify as an independent director, a Lead Independent Director shall be elected annually by plurality vote of the independent directors, pursuant to a secret ballot, following nomination by the Nominating and Corporate Governance Committee. On December 15, 2022, Mr. Deromedi was appointed to the position of Lead Independent Director and Mr. Lissette was appointed Executive Chairperson, and in May 2023, Mr. Lissette transitioned to the role of Chairperson. The Lead Independent Director helps coordinate efforts of the independent and non-management directors in the interest of ensuring that objective judgment is brought to bear on sensitive issues involving the management of the Company and on the performance of senior management.
Policy for Director Attendance at Annual Meetings. Under our Corporate Governance Guidelines, each director is strongly encouraged to attend each Annual Meeting of Stockholders. All of the then current directors attended the 2023 Annual Meeting of Stockholders.
Process for Interested Parties to Send Communications to the Board. Our Corporate Governance Guidelines provide that any interested parties, including our stockholders, who wish to communicate with, or otherwise make his or her concerns known directly to the chairperson of any of the committees, or to the non-management or independent directors as a group, may do so by addressing such communications or concerns to the Corporate Secretary of the Company, 900 High Street, Hanover, Pennsylvania 17331 or tshea@utzsnacks.com. Such communications may be done confidentially and/or anonymously. Communications received are forwarded directly to Board members. The Corporate Secretary may exclude a communication if it is illegal, unduly hostile or threatening or similarly inappropriate.
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2024 PROXY STATEMENT 27 |
EXECUTIVE AND DIRECTOR COMPENSATION ∎ COMPENSATION DISCUSSION AND ANALYSIS
Our Compensation Committee engaged a compensation consultant, F.W. Cook, to provide compensation advice in 2023. The compensation consultant is retained directly by our Compensation Committee and performs no consulting or other services for us or members of our management. Our Compensation Committee is independent and there are no conflicts of interest with respect to the work of F.W. Cook.
Key 2023 Financial Highlights
Despite the challenges posed by inflation through fiscal year 2023, the Company continued to deliver consistent progress, with notable growth in Net Sales and Adjusted EBITDA:
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FISCAL YEAR 2022 |
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FISCAL YEAR 2023 |
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CHANGE |
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| Net Sales |
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1,408.4 |
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1,438.2 |
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2.1 |
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(14.0 |
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(40.0 |
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| Adjusted EBITDA(1) |
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170.5 |
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187.2 |
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9.8 |
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See reconciliation to GAAP financial measures in Annex A. |
Compensation Program Objectives and Design
Our primary objective in establishing our comprehensive compensation program is to be able to successfully recruit, retain and properly incentivize high-level talent to work for and ultimately add value to our business for the benefit of our stockholders, in accordance with our pay for performance philosophy.
Our compensation program is designed to reward performance, which in turn creates value for our stockholders. Performance is reviewed annually for both our executives individually and our business as a whole. When annual Company or individual performance goals are not met, certain elements of the compensation program (including annual bonuses and certain equity grants) are not paid or do not vest.
The compensation program is not only intended to drive short-term results (annual performance), but also to build long-term intrinsic value. Therefore, employee equity programs, which are discussed in more detail below, are key elements of the compensation program.
Each element of the overall comprehensive compensation program is intended to be competitive with similar elements offered by other like-sized companies and competitors.
We designed most of the significant elements of our comprehensive compensation program by soliciting input from our executive leadership team, led by our Chief Executive Officer, with additional input from the Chairperson of the Board, our Executive Vice President & Chief People Officer, our Lead Independent Director, the Chairperson and other members of our Compensation Committee, representatives of F.W. Cook and other members of the Board. These parties annually review significant compensation elements.
After receipt of the input noted and development of proposed plans, such plans were presented to the Compensation Committee, which determines the terms of and ultimately adopts our compensation program. None of our executive officers participate in discussions involving their own compensation. The Compensation Committee reviews and approves annual compensation elements such as bonus plan structure, and our Board reviews full-year sales, earnings and management performance based on the Company objectives.
Our Stockholders Strongly Approve of Our Pay Practices
Last year, our stockholders overwhelmingly approved our “say-on-pay” resolution, with more than 90% of the votes cast by the holders of Common Stock and more than 99% of the combined votes cast by the holders of the Class A Common Stock and Class V Common Stock voting in favor. Our Compensation Committee believes the results of last year’s “say-on-pay” vote affirmed our stockholders’ support of our Company’s executive compensation program. Consequently, our approach to executive compensation in 2023 was substantially the same as the approach stockholders approved in 2022.
Peer Group
The Compensation Committee, in consultation with F.W. Cook, has identified a peer group of 11 publicly-traded companies to be used as a competitive reference point in determining total compensation packages for our executive leadership team, including the named executive officers. Our peer group includes consumer products companies, most of which are focused on food and beverage in North America and which are similar to us with respect to revenue (peer group median revenue $1.7 billion as of December 31, 2023) and
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2024 PROXY STATEMENT 29 |
EXECUTIVE AND DIRECTOR COMPENSATION ∎ COMPENSATION DISCUSSION AND ANALYSIS
The table below reflects the base amounts that were prescribed for fiscal year 2023 and not actual base pay received.
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| NAMED EXECUTIVE OFFICER |
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2023 ANNUAL BASE
SALARY |
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2024 ANNUAL BASE
SALARY MERIT
INCREASE(1) |
|
2024 BASE SALARY |
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| Howard Friedman |
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$ |
850,000 |
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8.8% |
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$ |
925,000 |
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| Cary Devore |
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$ |
553,500 |
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3.5% |
|
$ |
572,750 |
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| Ajay Kataria |
|
$ |
525,000 |
|
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3.5% |
|
$ |
543,400 |
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| Mark Schreiber |
|
$ |
465,500 |
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3.5% |
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$ |
482,000 |
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| Theresa Shea |
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$ |
460,000 |
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5.0% |
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$ |
483,000 |
|
| (1) |
The Company’s broad-based annual increase was 3.5%. |
Annual Cash Short-Term Incentive Award Program (“Annual Bonus Plan” or “ABP”)
2023 ABP Design
Our 2023 ABP provides for a cash bonus to our management team, including our named executive officers, upon achievement of specific performance milestones for the Company and the participants. We use our ABP to reward achievement of our annual financial performance goals, and to establish appropriate company performance expectations to ensure that our executives are accountable for our continued growth and financial performance, specifically for achieving annual sales targets, annual profit goals, and company objectives.
Awards under the ABP were calculated by multiplying a participant’s base salary for fiscal year 2023 by the individual’s target award percentage, and multiplying the result by the sum of 50% of our Adjusted EBITDA score, 30% of our Net Sales score and 20% of the Objectives, Goals, Strategies, and Metrics (“OGSMs”) score, which we refer to, collectively, as the “Company Rating” and multiplying the total by the Individual Performance Factor (“IPF”), as follows:
ANNUAL BONUS =
BASE SALARY X TARGET %
X COMPANY RATING X IPF
For each performance measure, 100% of the bonus opportunity will be paid with respect to such metric if target performance is achieved, and a bonus ranging from 50% to 200% would be paid with respect to such performance measure at the threshold and maximum results. No bonus will be allocated to a performance measure if minimum threshold results are not achieved. The formula for fiscal year 2023 was constructed with upside potential so that if we exceeded our company performance and individual target performance, the annual bonus could be greater than 100% of the target annual bonus but could not exceed 200% of bonus target.
As part of our annual budget, the Board approves the pool for the ABP, and the Compensation Committee approves actual payment of bonuses pursuant to the ABP and the bonuses paid to, or accrued on behalf of, the named executive officers. The Compensation Committee does not have the discretion to award bonuses under the ABP if the applicable performance factors have not been met.
Company Performance Measures for the Annual Bonus Plan: Adjusted EBITDA, Net Sales, and OGSMs
For fiscal year 2023, the Compensation Committee confirmed that the factors for the ABP would be Adjusted EBITDA, Net Sales, and defined annual goals through the OGSM system. These performance measures most directly align with our operational strategy and generally have the best correlation with stockholder value.
The Adjusted EBITDA and Net Sales goals for fiscal year 2023 are set forth below:
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FISCAL YEAR 2023 GOALS ($ MILLIONS) |
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THRESHOLD |
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TARGET |
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MAXIMUM |
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| Adjusted EBITDA |
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$177
(94% of Target) |
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$190 |
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$215
(112% of Target) |
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| Net Sales |
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$1,408
(95% of Target) |
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$1,475 |
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$1,575
(107% of Target) |
EXECUTIVE AND DIRECTOR COMPENSATION ∎ COMPENSATION DISCUSSION AND ANALYSIS
The Adjusted EBITDA and Net Sales goals and results were calculated for purposes of the ABP in accordance with pre-established rules established by our Compensation Committee.
Net Sales was our GAAP sales excluding the effects of the impact of changes in GAAP and the effects of business combinations and divestitures subject to pre-established criteria and thresholds.
Adjusted EBITDA was defined as Net Income before Interest, Income Taxes, and Depreciation and Amortization, further adjusted to exclude certain non-cash items, such as stock-based compensation, hedging and purchase commitments adjustments, and asset impairments; acquisition and integration costs; business transformation initiatives; and financing-related costs. In addition, Adjusted EBITDA excludes the effects of changes in GAAP and business combinations and divestitures subject to pre-established criteria and thresholds, where applicable.
In 2023, we set forth the below four primary objectives in our OGSM system. OGSMs are departmental objectives, goals, strategies, and metrics that drive specific functional priorities in the organization. These OGSMs are then cascaded deep into the organization with subordinate goals and strategies that support the larger OGSMs. Management, under the Compensation Committee’s supervision,
implemented these objectives through individual projects:
| ∎ |
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Reinvest revenue to accelerate growth |
| ∎ |
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Improve ESG capabilities |
Our performance against the OGSM component of the ABP was determined by the Compensation Committee with input by management based on its assessment of performance, using the following:
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| ASSESSMENT |
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PAYOUT FOR OGSM COMPONENT |
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| Significantly Exceeds Expectations |
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150-200% |
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| Exceeded Expectations |
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120-150% |
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| Met Expectations |
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80-120% |
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| Below Expectations |
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50-80% |
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| Unsatisfactory |
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0-50% |
Individual Performance Factor (IPF)
Each executive officer has individual objectives set at the beginning of each year, as shown below, which are reflective of his or her responsibilities based on his or her role. The Compensation Committee determines an IPF for the Chief Executive Officer based on a review of his performance during the fiscal year. For the other executive officers, the Chief Executive Officer recommends an IPF at the end of the performance year based on the achievement against the individual objectives, and the IPFs are reviewed and approved by the Compensation Committee.
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| IPF RATING |
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IPF |
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| Significantly Exceeded Expectations |
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140-150% |
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| Exceeded Expectations |
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110-140% |
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| Met Expectations |
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80-110% |
|
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| Below Expectations |
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50-80% |
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| Unsatisfactory |
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0% |
2023 ABP Results
The actual Net Sales performance for ABP was $ 1,438.2 million, which resulted in a 74% payout for this component of the ABP. The actual Adjusted EBITDA performance was $187.2 million, which resulted in a 78% payout for this component of the ABP.
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2024 PROXY STATEMENT 33 |
EXECUTIVE AND DIRECTOR COMPENSATION ∎ COMPENSATION DISCUSSION AND ANALYSIS
Restricted Stock Units
Our RSUs represent the right to receive one share of our Class A Common Stock upon vesting, provided that the recipient remains employed with us through the vesting date and subject to certain forfeiture conditions. Our RSUs are generally subject to 1/3 pro-rata vesting over the course of a three-year period. Such forfeiture conditions include (a) forfeiture upon any attempt to assign, alienate, pledge, attach, sell or otherwise transfer or encumber the RSUs, (b) forfeiture of any unvested or vested but unsettled RSUs upon determination by the Compensation Committee that the participant has breached or threatened to breach covenants set forth in the RSU award agreements, and (c) forfeiture to the extent a participant’s RSUs have not yet vested when participant’s employment ends. The RSUs generally vest according to specific time-based vesting conditions set forth in the RSU award agreements.
RSUs that become vested also entitle the holder to be credited with dividend equivalent payments in cash, with such dividend equivalents payable when, and to the extent, the RSUs are settled (or such accrued dividend equivalents will be forfeited to the extent the RSUs are forfeited).
Stock Options
We have previously granted stock options to our named executive officer and other members of our executive leadership team because we believed that they provided executives with a focus on creating long-term stockholder value. The ultimate value received by option holders is directly tied to increases in our stock price, and the stock options serve to link the interests of management and stockholders and to motivate executives to make decisions that will increase the long-term total return to our stockholders. The number of options awarded to each executive is based on an award value that is fixed at the date of grant. The Compensation Committee decided to replace stock option grants to our executive leadership team in our annual long-term incentive awards with restricted stock unit awards beginning in fiscal year 2023, based on a review of our peer group’s and competitors’ practices. We believe that this serves as a stronger retention tool and aligns competitively with peer and competitors’ practices.
2021 Employee Stock Purchase Plan
During fiscal year 2021, we adopted, with stockholder approval, the 2021 Employee Stock Purchase Plan (the “ESPP”) so that we can provide eligible employees of Utz with an opportunity to purchase shares of our Class A Common Stock. In fiscal year 2023 we continued to provide eligible employees of Utz with the opportunity to purchase shares of our Class A Common Stock through the ESPP.
By means of the ESPP, we seek to retain the services of our associates, including our officers, and to provide incentives for such persons to exert maximum efforts for our success. The ESPP accomplishes this purpose by permitting eligible employees to purchase shares of Class A Common Stock from us at a discount from the market price and to pay for such shares through payroll deductions.
1,500,000 shares of our Class A Common Stock were initially reserved for issuance under the ESPP, 99,788 of which were sold to eligible employees during fiscal year 2023 and 1,133,522 of which remain available for issuance as of the last day of fiscal year 2023. The ESPP permits our eligible employees and employees of our designated subsidiaries, which we refer to each as a “Participating Company”, to purchase our Class A Common Stock at a purchase price not less than 85% of the lesser of (i) the “fair market value” of a share on the first day of a purchase period, rounded up to the nearest whole cent per share and (ii) the “fair market value” of a share on the purchase date of such purchase period, rounded up to the nearest whole cent per share, subject to limits set by the Internal Revenue Code of 1986, as amended (the “Code”) and the ESPP. See “Equity Compensation Plan Information” for additional information regarding shares available for issuance under the ESPP. Subject to the preceding limitations, the administrator determines the actual amount of the discounted purchase price, which in 2022 was set at 92.5% and in 2023 was set at 95%. Sales of shares under the ESPP are generally made pursuant to offerings that are intended to satisfy the requirements of Section 423 of the Code.
Covenants and Clawback
Each of the executives who is granted an option, restricted stock unit or a performance share unit is subject to restrictive covenants related to non-competition and non-solicitation for six months following any termination of employment (or, if longer, the period in respect of which the executive receives severance benefits) and covenants for an indefinite period of time covering confidentiality and non-disparagement. Under the award agreements, if the Compensation Committee determines that the participant has breached or threatened to breach any restrictive covenant, the participant will be required to pay us an amount equal to the proceeds received upon the sale or disposition of the equity award and any shares issued in respect thereof.
EXECUTIVE AND DIRECTOR COMPENSATION ∎ COMPENSATION DISCUSSION AND ANALYSIS
Employment Arrangements
Except as described below, we have not entered into employment offer letters or employment agreements with our named executive officers. Except as described below and in “Severance, Change of Control and Other Programs — Change in Control, Severance and Retirement Benefits,” each of the named executive officers is employed on an at-will basis. The summaries below are qualified in their entirety by reference to the actual text of the applicable offer letter, which are filed as exhibits to our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Howard Friedman Offer Letter
Pursuant to an offer letter dated September 30, 2022, as amended by that certain letter agreement dated November 8, 2023, Mr. Friedman accepted an offer to serve as Chief Executive Officer (the “Friedman Offer Letter”). The Friedman Offer Letter sets forth the principal terms and conditions of his employment, Mr. Friedman’s annual base salary was initially $850,000, subject to annual review for increases by the Compensation Committee, plus a lump sum annual stipend of $100,000 to compensate Mr. Friedman for travel. Mr. Friedman is also eligible to participate in our ABP, subject to the terms and conditions approved by the Compensation Committee. The target bonus is 110% of Mr. Friedman’s annual base salary, with a maximum bonus equal to 200% of his annual base salary. Mr. Friedman is also eligible to participate in the 2020 Omnibus Equity Plan. See “Long Term Incentives — 2020 Omnibus Equity Incentive Plan.” In addition, Mr. Friedman is eligible to participate in the Utz Brands, Inc. Change in Control Severance Benefit Plan, which provides for severance in connection with certain qualifying terminations, including qualifying terminations in connection with a change in control, as described in greater detail under “Severance, Change of Control and Other Termination-Related Programs — Change in Control, Severance and Retirement Benefits.” Mr. Friedman is also able to participate in other Utz benefit programs consistent with other associates.
Ajay Kataria Offer Letter
Pursuant to an offer letter dated June 27, 2017, Mr. Kataria joined Utz Quality Foods as Senior Vice President of Finance. Mr. Kataria became the Executive Vice President, Finance & Accounting in July 2019, and was appointed to the position of Executive Vice President & Chief Financial Officer in October 2021. Mr. Kataria’s offer letter sets forth the principal terms and conditions of his employment, including his initial annual base salary of $260,000 for the period beginning on his hire date. Mr. Kataria’s offer letter also provides for a one-time signing bonus of $125,000 and eligibility to receive an annual bonus of up to 20% of his annual base salary. Mr. Kataria’s offer letter also provides that he is eligible to participate in the Utz Quality Foods, LLC 2018 Long-Term Incentive Plan (the “2018 LTIP”), as was then in effect. Mr. Kataria is also eligible to receive severance in certain circumstances. See “Severance, Change of Control and Other Programs — Change in Control, Severance and Retirement Benefits.” We also permit Mr. Kataria to participate in the Utz Quality Foods, LLC Profit Sharing/401(k) Plan — see “Severance, Change of Control and Other Programs — Profit Sharing/401(k) Plan” — under which we match 20% of Mr. Kataria’s salary deferrals up to a limit of 6% of his wages and may make discretionary profit-sharing contributions.
Mark Schreiber Offer Letter
Pursuant to an offer letter, effective April 12, 2017, Mr. Schreiber joined Utz Quality Foods as Chief Customer Officer. Mr. Schreiber became the Executive Vice President & Chief Customer Officer, Sales and Marketing in October 2020 and the Executive Vice President, Sales and Chief Customer Officer in June of 2021. Mr. Schreiber’s offer letter sets forth the principal terms and conditions of his employment, including his initial annual base salary of $375,000 for the period beginning on his hire date. Mr. Schreiber’s offer letter also provides for a one-time signing bonus of $250,000, reimbursement of reasonable relocation expenses up to $130,000, and eligibility to participate in our annual bonus program. Mr. Schreiber’s offer letter also provides that he was eligible to participate in the 2018 LTIP, as then in effect. Mr. Schreiber is also eligible to receive severance in certain circumstances. See “Severance, Change of Control and Other Programs — Change in Control, Severance and Retirement Benefits.” We also permit Mr. Schreiber to participate in the Utz Quality Foods, LLC Profit Sharing/401(k) Plan — see “Severance, Change of Control and Other Programs — Profit Sharing/401(k) Plan” under which we match 20% of Mr. Schreiber’s salary deferrals up to a limit of 6% of his wages and may make discretionary profit-sharing contributions.
Theresa Shea Offer Letter
Pursuant to an offer letter, effective May 11, 2021, Ms. Shea joined Utz Quality Foods as Executive Vice President, General Counsel & Corporate Secretary. Ms. Shea’s offer letter sets forth the principal terms and conditions of her employment, including a salary of $380,000 per year, for the period beginning on her date of hire, as well as a signing bonus of $100,000. Ms. Shea’s offer letter indicates that she will be eligible for an annual bonus target of 60% of her base salary, and that she is eligible to participate in the Company’s 2020 Omnibus Equity Incentive Plan, with each grant under the 2020 Omnibus Equity Incentive Plan to be split equally between stock options and PSUs. See “Long Term Incentives – 2020 Omnibus Equity Incentive
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2024 PROXY STATEMENT 37 |
EXECUTIVE AND DIRECTOR COMPENSATION ∎ COMPENSATION DISCUSSION AND ANALYSIS
Plan” for a discussion of the 2020 Omnibus Equity Incentive Plan. Pursuant to Ms. Shea’s offer letter, based on the Company’s current compensation structure and subject to the Company’s Compensation Committees approval, beginning in January 2022 and in subsequent years, Ms. Shea will be eligible for grants of PSUs, stock options or RSUs, as applicable, split equally at a level targeted to up to 60% of her annual base salary. Ms. Shea is also eligible to receive severance in certain circumstances. See “Severance, Change of Control and Other Programs — Change in Control, Severance and Retirement Benefits.” We also permit Ms. Shea to participate in the Utz Quality Foods, LLC Profit Sharing/401(k) Plan — see “Severance, Change of Control and Other Programs — Profit Sharing/401(k) Plan”— under which we match 20% of Ms. Shea’s salary deferrals up to a limit of 6% of her wages and may make discretionary profit-sharing contributions.
Deferred Compensation Plan
We maintain a nonqualified deferred compensation plan, the Utz Quality Foods, Inc. Nonqualified Deferred Compensation Plan, which became effective January 1, 2008, and amends and restates a prior plan, which became effective March 24, 1998. The plan permits each associate selected by us to participate in the plan to defer from base salary up to the lesser of $999,999 or 50% of the participant’s base salary, and the full annual bonus, if any, paid to such associate. Amounts contributed to the plan by the participant are fully vested at the time of contribution. The contributed amounts are held in a grantor trust by us and invested pursuant to instruction by the participants. Except in connection with an unforeseeable emergency, death, disability, or if we decide to distribute all amounts credited to a participant’s account in connection with a change in control, the amounts credited to such participant’s account will not be distributed until either a date specified by the participant or the participant’s separation from service from our Company. Distributions from the participant’s account may be made either in a lump sum or monthly payments over a period that may be between one year and five years.
Severance, Change of Control and Other Programs
Profit Sharing/401(k) Plan
We maintain a contributory 401(k) retirement plan, the Utz Quality Foods, LLC Profit Sharing/401(k) Plan, which was amended and restated as of December 31, 2021. The plan covers most of our associates, including our named executive officers. Eligible associates may contribute up to 50% of their salary to the plan, subject to limitations under applicable federal tax laws. In fiscal year 2023, the plan provided for matching contributions of up to 20% of deferrals made by most participants, not to exceed 6% of the participant’s wages. The matching contribution formula is applied on a payroll-to-payroll basis. In addition, we may make discretionary, or profit sharing, contributions to the plan. The aggregate contributions, both matching contributions and discretionary contributions, in 2023 were $7.64 million, of which $2.02 million represented matching contributions and $5.62 million represented discretionary contributions.
Change in Control, Severance and Retirement Benefits
Our severance plans provide benefits in the form of a temporary source of income in the event an executive officer is involuntarily separated from service. We believe our severance benefits are generally consistent with peer companies and provide a bridge of pay and benefits to assist displaced executives in finding future employment. The summary of the plans described below are qualified in their entirety by reference to the actual text of the plans, which are filed as exhibits to our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Utz Brands, Inc. Executive Severance Benefit Plan
Upon the consummation of the Business Combination, we implemented the Utz Brands, Inc. Executive Severance Benefit Plan. Under the plan, we provide severance benefits to our Executive Leadership Team (generally, consisting of each of our Executive Officers — see “Executive Officers of Utz Brands, Inc.” — in this instance, other than the Chief Executive Officer) and each member of the Executive Officer Team with the title of Senior Vice President. Subject to the execution and non-revocation of a release and non-competition agreement by an eligible employee, upon a qualifying termination and satisfaction of each of the other conditions set forth in the plan, (x) an eligible employee who is a member of the Executive Leadership Team will receive in equal installments 100% of his or her annual base salary in the form of payroll continuation payments beginning on the first day of the payroll period immediately following both the termination date and the date on which the release and non-competition agreement becomes effective and non-revocable (the “Payment Commencement Date”) and ending on the one-year anniversary of the Payment Commencement Date, and (y) an eligible employee who is a member of the Executive Officer Team with a title of Senior Vice President will receive in equal installments 50% of his or her annual base salary in the form of payroll continuation payments beginning on the Payment Commencement Date and ending on the six-month anniversary of the Payment Commencement Date or the termination date.
EXECUTIVE AND DIRECTOR COMPENSATION ∎ COMPENSATION DISCUSSION AND ANALYSIS
In addition, if an eligible employee experiences a termination qualifying under the plan and on the termination date was eligible to earn a performance based annual cash bonus in respect of the fiscal year in which the termination date occurs, the eligible employee will receive a payment equal to the annual bonus, calculated based on actual performance during the applicable performance period as though the eligible employee continued in our employment. Such payment will be prorated based on the number of days during the applicable performance period that the eligible employee was employed by us and paid at the time that annual bonuses are paid to our active employees. Eligible employees will also receive outplacement services during the severance period and are permitted to continue certain health and welfare benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), for up to 18 months following the termination date.
Only members of our Executive Leadership Team who terminate their employment with good reason or any eligible employee whose employment is terminated by us or our affiliates (other than for cause and other than during an eligible employee’s disability) will receive severance under the plan, unless the eligible employee is offered comparable employment by us or any of our affiliates.
In the event that an eligible employee becomes entitled to receive or receives any payments, options, awards or benefits under the plan or any other plan, agreement, or arrangement with us, or with any person whose actions result in a change in control or an affiliate of such person that may separately or in the aggregate constitute a “parachute payment” within the meaning of Section 280G of the Code and it is determined that, but for the terms of the plan, any of the payments will be subject to an excise tax pursuant to Section 4999 of the Code, we will pay to the eligible employee either (i) the full amount of the payment or (ii) an amount equal to the payments reduced by the minimum amount necessary to prevent any portion of the payments from being an “excess parachute payment,” whichever of the foregoing amounts results in the receipt by the eligible employee, on an after-tax basis, of the greatest amount of payment, notwithstanding that all or some portion of the payments may be subject to the excise tax.
Utz Brands, Inc. Change in Control Severance Benefit Plan
Upon the consummation of the Business Combination, we implemented the Utz Brands, Inc. Change in Control Severance Plan. Under the plan, we will provide severance benefits to the Chief Executive Officer and other members of our Executive Leadership Team and other executives selected on an individual basis. Subject to the execution and non-revocation of a release and non-competition agreement by an eligible employee upon a termination of employment of an eligible employee (a) either (i) by us (other than for cause and other than during an eligible employee’s disability), (ii) by such eligible employee for good reason, in each case within the 90 days prior or two years following a change in control, or (b) at the request of an acquirer or potential acquirer in connection with, or prior to, a change in control (a “Change in Control Termination”), provided, that, any termination of the employment of such eligible employee will not be considered a Change in Control Termination if the eligible employee is offered comparable employment by us or any of our affiliates, and satisfies of each of the other conditions set forth in the plan, (x) the Chief Executive Officer will receive in equal installments 200% of the sum of his or her annual base salary and target annual cash bonus in the form of payroll continuation payments, beginning on the Payment Commencement Date and ending on the two-year anniversary of the Payment Commencement Date, and (y) an eligible employee who is a member of the Executive Leadership Team will receive in equal installments 150% of the sum of his or her annual base salary and target annual cash bonus in the form of payroll continuation payments beginning on the Payment Commencement Date and ending on the 18-month anniversary of the Payment Commencement Date. Other participants, if any, will receive such amounts as determined by the Compensation Committee. In addition, in the event the Chief Executive Officer experiences termination of employment for good reason or experiences a termination of employment by us other than for cause and other than during the Chief Executive Officer’s disability, that is not a Change in Control Termination (a “Chief Executive Officer Non-Change in Control Termination”), then beginning on the Payment Commencement Date and ending on the last day of the 18-month anniversary of the Payment Commencement Date, the Chief Executive Officer will be entitled to receive in equal installments 150% of his or her annual base salary in the form of payroll continuation payments.
In addition, if an eligible employee experiences a Change in Control Termination or Chief Executive Officer Non-Change in Control Termination and on the termination date was eligible to earn a performance based annual cash bonus in respect of the fiscal year in which the termination date occurs, the eligible employee will receive a payment equal to the annual target bonus, calculated based on actual performance during the applicable performance period as though the eligible employee continued in our employment. Such payment will be prorated based on the number of days during the applicable performance period that the eligible employee was employed by us and paid at the time that annual bonuses are paid to our active employees. Upon a Change in Control Termination or Chief Executive Officer Non-Change in Control Termination, eligible employees will also receive outplacement services during the severance period and continuation of welfare benefits under COBRA for up to 18 months following the termination date.
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2024 PROXY STATEMENT 39 |
EXECUTIVE AND DIRECTOR COMPENSATION ∎ COMPENSATION DISCUSSION AND ANALYSIS
If a Director, Chairperson or Chairperson Emeritus is below the annual Minimum Ownership Guidelines in any given review year, he/she shall retain (and not sell) 100% of any eligible shares provided to him/her pursuant to any RSU or PSU award (or any other similar awards).
Annual review of compliance with the above guidelines will occur each June. The Company recognizes that from time to time circumstances may arise that require special consideration. Therefore, the Compensation Committee of the Board may provide exceptions to these ownership guidelines and retention requirements. For purposes of these Stock Ownership Guidelines, eligible shares shall include Company Class A Common Stock and securities convertible into shares of Class A Common Stock owned by Directors/Officers or their Affiliates, as defined in the Guidelines. Unvested or unearned PSUs and unexercised stock options are not considered eligible shares and do not count towards the ownership guidelines.
During fiscal year 2023, each of our directors and members of the Executive Leadership Team and Executive Officer Team are in compliance with our Minimum Ownership Guidelines.
Restrictions on Short Sales or Speculative Transactions by All Directors and Associates
See “Corporate Governance — Corporate Governance Policies — Restrictions on Short Sales or Speculative Transactions by All Directors and Associates” for a description of our restrictions on short sales or speculative transactions by all of our directors and associates.
REPORT OF COMPENSATION COMMITTEE
Notwithstanding anything to the contrary set forth in any of our filings under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act that might incorporate by reference this Proxy Statement, in whole or in part, the following report shall not be incorporated by reference into any such filings.
The Compensation Committee has reviewed and discussed the “Compensation Discussion and Analysis” section of this Proxy Statement with the Company’s management. Based on that review and those discussions, the Compensation Committee recommended to the Board of Directors that the “Compensation Discussion and Analysis” section be included in this Proxy Statement and incorporated by reference into the Company’s Annual Report on Form 10-K for its 2023 fiscal year.
Jason Giordano (Chair)
John Altmeyer
Craig Steeneck
Pamela Stewart
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during fiscal year 2023 were Jason Giordano, John Altmeyer, Craig Steeneck and Pamela Stewart, each of whom served for all of fiscal 2023. No member of this committee was, at any time during fiscal 2023, or at any time, an officer or employee of the Company, and no member of this committee had any relationship with the Company requiring disclosure under Item 404 of Regulation S-K under the Exchange Act. No executive officer of the Company has served on the board of directors or compensation committee of any other entity that has or has had one or more executive officers who served as a member of the Compensation Committee during fiscal 2023.
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS
Sageworth Trust Company Profit Sharing/401(k) Plan Advisory Services
On January 1, 2011, Utz Quality Foods, Inc. entered into an engagement letter with Sageworth Trust Company (“Sageworth Trust”) for fiduciary services in connection with the Utz Quality Foods, Inc. Profit Sharing/401(k) Plan. Timothy P. Brown is the Founder and Chief Executive Officer of Sageworth Trust. Sageworth Trust provided plan design, investment and similar services under the engagement letter. On July 31, 2019, Utz Quality Foods and Sageworth Trust entered into a new engagement letter (“October 1, 2019 Engagement Letter”), which became effective October 1, 2019 and replaced a January 1, 2011 engagement letter. Under the October 1, 2019 Engagement Letter, the services provided by Sageworth Trust to the Utz Quality Foods, LLC Profit Sharing/401(k) Plan and its sponsor remained substantially the same as under the 2011 engagement letter. Under the October 1, 2019 Engagement Letter, UBH was required to pay Sageworth Trust $35,000 each calendar quarter during the term, plus out-of-pocket expenses.
In May of 2021, Utz Brands, Inc. and Sageworth Trust entered into a new engagement letter (the “Current Engagement Letter”) which replaced the October 1, 2019 Engagement Letter. Under the Current Engagement Letter, effective in the third quarter of 2021, Utz pays Sageworth Trust an amount equal to 0.01% of the plan assets under management per fiscal quarter, plus out of pocket expenses. In connection with the services provided by Sageworth Trust with respect to the Utz Quality Foods, LLC Profit Sharing/401(k) Plan during fiscal year 2023, Utz paid Sageworth Trust $91,293.41.
Third Amended and Restated Limited Liability Company Agreement
On the Closing Date, the existing Second Amended and Restated Limited Liability Company Agreement of UBH was further amended and restated in its entirety to become the Third Amended and Restated Limited Liability Company Agreement.
Rights of the Units
Following the Closing, the Common Company Units are entitled to share in the profits and losses of UBH and to receive distributions as and if declared by our managing member and have no voting rights.
The Third Amended and Restated Limited Liability Company Agreement contains provisions which require that a one-to-one ratio is maintained between interests held by us in UBH and our Common Stock outstanding, subject to certain exceptions (including in respect of management equity which has not been settled in our Common Stock). In addition, the Third Amended and Restated Limited Liability Company Agreement permits us, in our capacity as the managing member, to take actions to maintain such ratio, including in connection with stock splits, combinations, recapitalizations and exercises of the Continuing Members’ exchange rights (described below).
We, as the managing member of UBH, have the authority to create new equity interests in UBH, and establish the rights and privileges of such interests.
Management
We, as the managing member of UBH following the Closing, have the sole authority to manage the business and affairs of UBH in accordance with the Third Amended and Restated Limited Liability Company Agreement or applicable law. The business, property and affairs of UBH is managed solely by the managing member, and the managing member cannot be removed or replaced except by the incumbent managing member.
Distributions
Immediately following the Closing, our Board of Directors adopted a distribution policy in respect of UBH, pursuant to which we, as the managing member of UBH, will declare quarterly ordinary distributions and tax distributions, out of available cash, available borrowings and other funds legally available therefor, unless prohibited by applicable law and subject to applicable restrictions in UBH’s bank financing agreements. The Third Amended and Restated Limited Liability Company Agreement provides for quarterly ordinary distributions as well as quarterly tax distributions, in each case payable in accordance with the
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2024 PROXY STATEMENT 57 |
RELATED PARTY TRANSACTIONS ∎
Third Amended and Restated Limited Liability Company Agreement and UBH’s distribution policy, to the holders of Common Company Units on a pro rata basis based upon, with respect to tax distributions, an agreed-upon formula related to the taxable income of UBH allocable to holders of Common Company Units. Generally, these tax distributions will be computed based on our estimate of the taxable income of UBH allocable to each holder of Common Company Units (based on certain assumptions) multiplied by an assumed tax rate equal to the highest effective marginal combined United States federal, state and local income tax rate applicable to an individual resident in Pennsylvania or a U.S. corporation (whichever is higher), taking into account all jurisdictions in which we are required to file income tax returns and the relevant apportionment information and the character of UBH’s income, subject to various adjustments. Distributions, including tax distributions, will be made to holders of Common Company Units on a pro rata basis.
Upon the liquidation or winding up of UBH, all net proceeds thereof will be distributed one hundred percent (100%) to the holders of Common Company Units on a pro rata basis.
Transfer Restrictions
The Third Amended and Restated Limited Liability Company Agreement contains restrictions on transfers of units and requires the prior consent of the managing member for such transfers, except, in each case, for (i) certain transfers to permitted transferees under certain conditions and (ii) exchanges of Common Company Units for Class A Common Stock.
Exchange of Common Company Units for Class A Common Stock
The Continuing Members will, up to twice per calendar quarter in the aggregate, be able to exchange all or any portion of their Common Company Units, together with the cancellation of an equal number of shares of Class V Common Stock, for a number of shares of Class A Common Stock equal to the number of exchanged Common Company Units by delivering a written notice to UBH, with a copy to Utz; provided that no holder of Common Company Units may exchange less than 100,000 Common Company Units in any single exchange unless exchanging all of the Common Company Units held by such holder at such time, subject in each case to the limitations and requirements set forth in the Third Amended and Restated Limited Liability Company Agreement regarding such exchanges. Notwithstanding the foregoing, we may, at our sole discretion, in lieu of delivering shares of Class A Common Stock for any Common Company Units surrendered for exchange, pay an amount in cash per Common Company Unit equal to the 5-day volume weighted average price (“VWAP”) of the Class A Common Stock ending on the day immediately prior to the date of the giving of the written notice of the exchange.
Exchange Ratio
For each Common Company Unit exchanged, one share of Class V Common Stock will be canceled and one share of Class A Common Stock will be issued to the exchanging member (unless we elect to pay an amount in cash in lieu thereof as described above). The exchange ratio will be adjusted for any subdivision (split, unit distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse unit split, reclassification, reorganization, recapitalization or otherwise) of the Common Company Units that is not accompanied by an identical subdivision or combination of the Class A Common Stock or, by any such subdivision or combination of the Class A Common Stock that is not accompanied by an identical subdivision or combination of the Common Company Units. If the Class A Common Stock is converted or changed into another security, securities or other property, on any subsequent exchange an exchanging Common Company Unit holder will be entitled to receive such security, securities or other property.
Restrictions on Exchange
We may limit the rights of holders of Common Company Units to exchange their Common Company Units under the Third Amended and Restated Limited Liability Company Agreement if we determine in good faith that such restrictions are necessary so that UBH will not be classified as a “publicly traded partnership” under applicable tax laws and regulations.
Expenses
UBH will reimburse all of our expenses in connection with our ownership and management of UBH and its business (other than certain expenses, such as income taxes and payment obligations under the Tax Receivable Agreement).
Tax Receivable Agreement
On the Closing Date, we entered into the Tax Receivable Agreement with the Continuing Members (the “Tax Receivable Agreement”). Pursuant to the Tax Receivable Agreement, we are required to pay to the Continuing Members or exchanging
RELATED PARTY TRANSACTIONS
holders of Common Company Units, as applicable, 85% of the tax savings that we realize as a result of increases in tax basis in UBH’s assets as a result of the sale of Common Company Units for the cash consideration paid to the Continuing Members at the Closing, the purchase and redemption of the common units and preferred units in the Continuing Members and the future exchange of the Common Company Units for shares of Class A Common Stock (or cash) pursuant to the Third Amended and Restated Limited Liability Company Agreement and certain other tax attributes of UBH and tax benefits related to entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement. The term of the Tax Receivable Agreement will continue until all such tax benefits have been utilized or expired unless we exercise our right to terminate the Tax Receivable Agreement for an amount representing the present value of anticipated future tax benefits subject to the Tax Receivable Agreement or certain other acceleration rights occur.
Investor Rights Agreement
On the Closing Date, we entered into an Investor Rights Agreement with the Continuing Members, the Sponsor Parties and the Sponsor Representative, which was amended on October 21, 2021.
Director Nomination
Under the Investor Rights Agreement, subject to certain step-down provisions, the Company, the Founder Holders and the Continuing Members will take all Necessary Action to include in the slate of nominees recommended by the Board for election as directors at each annual or special meeting of stockholders at which directors are to be elected five Continuing Member Nominees recommended by the Continuing Members and five Sponsor Nominees recommended by the Sponsor Representative. The five Continuing Members Nominees and the five Sponsor Nominees comprise our Board of Directors appointed in connection with the domestication of Collier Creek. Pursuant to the Investor Rights Agreement, in January 2022, one additional independent director was added to the Board and, in December 2022, another member of the Board was appointed in connection with the appointment of a new Chief Executive Officer.
Voting
Under the Investor Rights Agreement, the Founder Holders and the Continuing Members have agreed to take all Necessary Action, including voting or providing written consent or proxy with respect to their respective shares of Class A Common Stock and Class V Common Stock, as applicable, in favor of the Continuing Member Nominees and the Sponsor Nominees, as applicable.
Certain Consent Rights
For so long as the Continuing Members (together with their permitted transferees) hold economic interests in UBH and the Company (without duplication) representing more than 50% of the economic interests held by the Continuing Members immediately after the Closing (subject to certain restrictions), the Company shall not undertake the following actions without the prior written consent of the Continuing Members: (i) any direct or indirect sale (including by way of merger, consolidation, transfer, sale or other business combination) of greater than 50% of our property, assets or voting securities or greater than 50% of the property, assets or voting securities of UBH or Utz Quality Foods, (ii) any liquidation or dissolution of the Company, UBH or Utz Quality Foods, (iii) modifications to our charter or bylaws that materially and adversely impact the Continuing Members in their capacity as our stockholders or equity holders of UBH, (iv) moving the Company or any of its consolidated subsidiaries’ headquarters from Hanover, PA, or (v) changing the name of the Company or any of its consolidated subsidiaries.
For so long as the Continuing Members continue to hold at least 75% of the economic interests held by the Continuing Members immediately following the Closing, then at least one Continuing Member Nominee must approve each action of the Board and for so long as the Founder Holders continue to hold at least 75% of the economic interest held by the Founder Holders immediately following the Closing, then at least one Sponsor Nominee must approve each action of the Board.
Registration Rights
The Investor Rights Agreement terminated the Original Registration Rights Agreement that was entered into by Collier Creek, the Sponsor and certain independent directors of Collier Creek on October 4, 2018 in connection with the initial public offering (“IPO”).
Under the Investor Rights Agreement, the Continuing Members and the Sponsor (or its successors in interest, including acting through the Sponsor Representative) are entitled to make unlimited written demands for registration under the Securities Act of all or part of their shares of Class A Common Stock, so long as, in the case of an underwritten offering, such demand is for at least $10,000,000 in shares of Class A Common Stock (or $35,000,000 in shares of Class A Common Stock for a fully marketed
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2024 PROXY STATEMENT 59 |
RELATED PARTY TRANSACTIONS
offering). In addition, subject to certain exceptions, the Continuing Members and the Sponsor (or its successors in interest, including acting through the Sponsor Representative) will be entitled to request in writing that we register the resale of any or all of their Class A Common Stock on Form S-3 and any similar short-form registration that may be available at such time as a “shelf registration.” On September 1, 2021, the Company filed a Form S-3 short form registration. Subject to certain customary exceptions, if any time after the Closing, we propose to file a registration statement under the Securities Act with respect to our securities, we will give notice to the relevant security holders party to the Investor Rights Agreement as to the proposed filing and offer such security holders an opportunity to register the sale of such number of shares of Class A Common Stock as requested by such security holders in writing, subject to customary cutbacks in an underwritten offering. Any other of our security holders with piggyback registration rights may also participate in any such registrations, subject to customary cutbacks in an underwritten offering. We have customary rights to postpone any registration statements for certain events. If the registration is through an underwritten offering, certain of our security holders will agree to lockup restrictions on the same basis as our directors and executive officers.
Under the Investor Rights Agreement, we have agreed to indemnify the security holders and each underwriter and each of their respective controlling persons against any losses or damages resulting from any untrue statement or omission of a material fact in any registration statement or prospectus pursuant to which they sell shares of Class A Common Stock, unless such liability arose from their misstatement or omission, and the security holders have agreed to indemnify us and our officers and directors and controlling persons against all losses caused by their misstatements or omissions in those documents.
Information Access
Under the Investor Rights Agreement, we agree that directors may share any information concerning us and our subsidiaries received by the directors with the party that nominated such directors and such party’s designated representatives.
Termination
The director appointment and voting rights under the Investor Rights Agreement will terminate as to a party when such party (either the Continuing Members or the Sponsor and the Founder Holders, as a group), no longer has the right to appoint a director (which occurs when such group has less than 15% of the economic interests in the Company and UBH that it owned immediately after the Closing). The registration rights in the Investor Rights Agreement will terminate as to each holder of shares of our Common Stock when such holder ceases to hold any such Common Stock or securities exercisable or exchangeable for such Common Stock.
Standstill Agreement
On the Closing Date, we entered into the Standstill Agreement, dated August 28, 2020 (“Standstill Agreement”), with the Continuing Members, the Sponsor, the Founder Holders and certain related parties of the Continuing Members.
Under the Standstill Agreement, the Continuing Members and certain related parties of the Continuing Members agreed that until the third anniversary of the Closing Date, or August 28, 2023, that they shall not acquire or attempt to acquire any additional Common Stock in excess of 55.8% of the voting power of our Common Stock on a fully-diluted basis, subject to certain exceptions. Under such agreement, the Continuing Members, certain related parties of the Continuing Members, the Sponsor and the Founder Holders agreed that (i) until such parties are no longer able to designate a director to our Board of Directors pursuant to the Investor Rights Agreement, such parties shall not solicit proxies to vote or seek to advise or influence any person with respect to the voting of any of our securities in favor of electing any person as a director who is not nominated pursuant to the Investor Rights Agreement or by our Board of Directors or to approve stockholder proposals related thereto; and (ii) until the annual meeting of stockholders held by us after the third anniversary of the completion of the Business Combination, or August 28, 2023, such parties shall not take certain actions contrary to our governance structure other than in accordance with the Investor Rights Agreement.
Sponsor Side Letter Agreement
In connection with the execution of the Business Combination Agreement, the Sponsor, the Founder Holders, and Collier Creek’s independent directors entered into the Sponsor Side Letter Agreement with Collier Creek. Under the Sponsor Side Letter Agreement, 2,000,000 Class B Ordinary Shares of Collier Creek held by the Sponsor and Collier Creek’s independent directors were automatically converted into 1,000,000 shares of Series B-1 Common Stock and 1,000,000 shares of Series B-2 Common Stock, which, collectively, form our Class B Common Stock, and all such Class B Common Stock is referred to herein as the “Restricted Sponsor Shares.” Under the Sponsor Side Letter Agreement, the Restricted Sponsor Shares which are shares
On February 21, 2024, the Board voted unanimously to approve, subject to stockholder approval, and to recommend to our stockholders that they approve at the Annual Meeting, an amendment to the Company’s Certificate of Incorporation adopted August 28, 2020 (the “Existing Certificate of Incorporation”) to permit officer exculpation for certain breaches of fiduciary duties and related claims pursuant to the DGCL (the “Officer Exculpation Amendment”). If approved by the stockholders at the Annual Meeting, the Company would adopt the Officer Exculpation Amendment by causing the filing of a Certificate of Amendment of the Existing Certificate of Incorporation (the “Proposed Certificate of Amendment”), a copy of which is attached as Annex B to this Proxy Statement, with the Delaware Secretary of State.
Background and Governance Considerations
On August 1, 2022, an amendment to Section 102(b)(7) of the DGCL became effective that permits a corporation’s certificate of incorporation to eliminate or limit the personal liability of an officer to the corporation or its stockholders for monetary damages for breach of fiduciary duty. This was the first time that Delaware law permitted “officer exculpation” in a manner similar to director exculpation. However, such provision may not eliminate or limit the liability of an officer:
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for any breach of the officer’s duty of loyalty to the corporation or its stockholders; |
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for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; |
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for any transaction from which the director or officer derived an improper personal benefit; or |
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in any action by, or in the right of, the corporation. |
In addition, the DGCL does not permit a duly adopted officer exculpation provision to eliminate or limit the liability of an officer for any act or omission occurring prior to the date when such provision becomes effective. If adopted, an officer exculpation provision adopted pursuant to Section 102(b)(7) of the DGCL would cover: (i) the corporation’s president, chief executive officer, chief operating officer, chief financial officer, chief legal officer, controller, treasurer or chief accounting officer; (ii) any named executive officer identified in the corporation’s filings with the SEC; and (iii) individuals who have agreed to be identified as officers of the corporation pursuant to Section 102(b)(7) of the DGCL (collectively, the “Exculpated Officers”).
The Board and Nominating and Corporate Governance Committee believe that the change in Delaware law provides an opportunity to enhance our ability to attract and retain talented officers, discourage frivolous lawsuits and reduce associated litigation costs and decrease the cost of directors’ and officers’ insurance in the future. Therefore, the Board and Nominating and Corporate Governance Committee believe adoption of the Officer Exculpation Amendment at the Annual Meeting is both a prudent and timely change to the Company’s liability management and corporate governance practices and in the best interests of the Company and our stockholders. However, the Board is unable to unilaterally adopt the Officer Exculpation Amendment to the Existing Certificate of Incorporation without stockholder approval.
Proposed Amendments
The Existing Certificate of Incorporation currently does not provide a right of exculpation to officers of the Company. The Proposed Certificate of Amendment would permit officer exculpation to the Exculpated Officers for certain breaches of fiduciary duties and related claims pursuant to the DGCL. The right of exculpation would extend to the Exculpated Officers and be subject to the limitations set forth in the DGCL. There would be no change to the existing exculpation rights of directors.
The text of the Proposed Certificate of Amendment, which includes the Officer Exculpation Amendment, is attached as Annex B to this Proxy Statement. The summary set forth in this Proposal No. 3 is qualified in its entirety by reference to the text of the Proposed Certificate of Amendment.
Effect of Amendment
If approved by our stockholders at the Annual Meeting, the Officer Exculpation Amendment will become effective immediately upon filing of the Proposed Certificate of Amendment with the Delaware Secretary of State following the Annual Meeting. The officer exculpation right would then apply after the Proposed Certificate of Amendment becomes effective after filing with the Delaware Secretary of State.
If our stockholders do not approve the Officer Exculpation Amendment, the Existing Certificate of Incorporation will remain unchanged.
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2024 PROXY STATEMENT 63 |
REPORT OF AUDIT COMMITTEE
REPORT OF AUDIT COMMITTEE
Notwithstanding anything to the contrary set forth in any of our filings under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act that might incorporate by reference this Proxy Statement, in whole or in part, the following report shall not be incorporated by reference into any such filings.
The Audit Committee oversees our financial reporting process on behalf of the Board. The Audit Committee operates under a written charter, a copy of which is available on our investor website at http://investors.utzsnacks.com/investors under the heading “Governance — Governance Documents.” This report reviews the actions taken by the Audit Committee with regard to our financial reporting process during fiscal 2023 and particularly with regard to the audited consolidated financial statements as of December 31, 2023.
The Audit Committee is composed solely of independent directors. None of the committee members is or has been an officer or employee of the Company or any of our subsidiaries or has any current business or any family relationship with the Company or any of our subsidiaries or affiliates.
Our management has the primary responsibility for the financial statements and reporting process, including the systems of internal controls. The independent auditors are responsible for performing an independent audit of our consolidated financial statements in accordance with auditing standards generally accepted in the United States and issuing a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes and to select annually the accountants to serve as our independent auditors for the coming year.
The Audit Committee has implemented procedures to ensure that during the course of each fiscal year it devotes the attention that it deems necessary or appropriate to fulfill its oversight responsibilities under the Audit Committee’s charter. To carry out its responsibilities, in 2021, the Audit Committee met eight times, in 2022, the Audit Committee met seven times, and in 2023, the Audit Committee met six times.
In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with management the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023, including a discussion of the quality, rather than just the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the financial statements.
The Audit Committee also discussed with the independent auditors, who are responsible for expressing an opinion on the conformity of those audited consolidated financial statements with accounting principles generally accepted in the United States, their judgments as to the quality, rather than just the acceptability, of our accounting principles and such other matters as are required to be discussed with the Audit Committee under the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. The Audit Committee also reviewed and discussed with the independent auditors the critical audit matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the Audit Committee and that (1) relate to accounts or disclosures that are material to the consolidated financial statements, and (2) involved auditor judgement, where such judgment was especially challenging, subjective or complex. In addition, the Audit Committee discussed with the auditors their independence from management and the Company, including the matters in the written disclosures and the letter required by the PCAOB regarding the independent auditors’ communications with the Audit Committee regarding independence. The Audit Committee also considered whether the provision of services during the fiscal year ended December 31, 2023 by the auditors that were unrelated to their audit of the consolidated financial statements referred to above and to their reviews of our interim consolidated financial statements during the fiscal year is compatible with maintaining their independence.
Additionally, the Audit Committee discussed with the independent auditors the overall scope and plan for their audit. The Audit Committee met with the independent auditors, with and without management present, to discuss the results of their examination, their evaluation of our internal controls and the overall quality of our financial reporting.
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for filing with the SEC.
Craig Steeneck (Chair)
Roger Deromedi
Antonio Fernandez
B. John Lindeman
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2024 PROXY STATEMENT 67 |
QUESTIONS AND ANSWERS ABOUT OUR ANNUAL MEETING
QUESTIONS AND ANSWERS ABOUT OUR ANNUAL MEETING
What is the purpose of the Annual Meeting?
Our 2024 Annual Meeting will be held for the following purposes:
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To elect four directors to serve as the Class I directors on the Board until the 2027 annual meeting of stockholders or until their successors are elected and qualified; |
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To vote on an advisory recommendation to the Board of Directors to approve executive compensation; |
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To approve an amendment to the Company’s Certificate of Incorporation to permit officer exculpation for certain breaches of fiduciary duties pursuant to the DGCL; |
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To ratify the selection by our Audit Committee of Grant Thornton LLP to serve as our independent registered public accounting firm for the fiscal year ending December 29, 2024; and |
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To consider such other matters as may properly come before the Annual Meeting or any adjournment(s) or postponement(s) thereof. |
Who can vote at the Annual Meeting?
The close of business on March 5, 2024 has been fixed as the record date for the determination of our stockholders entitled to notice of, and to vote at, the Annual Meeting. We have two classes of common stock: Class A and Class V, each of which has one vote per share. The Class A Common Stock and Class V Common Stock generally vote together as a single class on all matters submitted to a vote of stockholders, except as otherwise required by applicable law or our organizational documents. On the record date, we had outstanding shares of Class A Common Stock and 59,349,000 shares of Class V Common Stock.
How many shares must be present to conduct business at the Annual Meeting?
A quorum is necessary to hold a valid meeting of stockholders. For each of the proposals to be presented at the Annual Meeting, the holders of shares entitled to vote on such matter at the meeting, present in person or by proxy, will constitute a quorum. Based on the number of shares of Class A Common Stock and Class V Common Stock outstanding on March 5, 2024 the record date, shares representing votes must be present at the Annual Meeting, virtually or by proxy to constitute a quorum. If you vote, including by Internet or proxy card, your shares voted will be counted towards the quorum for the Annual Meeting. Abstentions and “broker non-votes” are counted as present for the purpose of determining a quorum. Generally, a “broker non-vote” does not count as a vote in favor of or against a particular proposal for which the broker has no discretionary voting authority. However, with respect to Proposal No. 3, broker non-votes will be deemed a vote AGAINST such proposal. “Broker non-votes” are votes that brokers holding shares of record for their customers (i.e., in “street name”) are not permitted to cast under applicable stock market regulations because the brokers have not received instructions (or have received incomplete instructions) from their customers as to certain proposals.
How do I vote?
The procedures for voting are as follows:
If your shares are registered directly in your name with our transfer agent, Equiniti Trust Company, on March 5, 2024, the record date, then you are considered, with respect to those shares, the “stockholder of record.” As the stockholder of record, you have the right to grant your voting proxy directly to us or to a third party, or to vote your shares at the Annual Meeting.
If you are a stockholder of record, you may vote in person at the virtual Annual Meeting, vote by proxy using a proxy card, vote by proxy over the telephone, or vote by proxy via the Internet. Whether or not you plan to attend the virtual Annual Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the virtual Annual Meeting and vote at the Annual Meeting, even if you have already voted by proxy. The vote you cast at the Annual Meeting will supersede any previous votes that you may have submitted.
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2024 PROXY STATEMENT 69 |
QUESTIONS AND ANSWERS ABOUT OUR ANNUAL MEETING
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| To vote using the proxy card, simply complete, sign and date the proxy card and return it promptly in the envelope provided. If you return your signed proxy card to us before the Annual Meeting, we will vote your shares as you direct. |
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To vote through the internet, go to http://www.proxypush.com/utz and follow the on-screen instructions. To be counted, your internet vote must be received by 11:59 p.m., Eastern Time, on April 24, 2024. |
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To vote by telephone, dial toll- free 1-866-883-3382 using a touch-tone phone and follow the recorded instructions. You will be asked to provide the company number and control number from your proxy card or voting instruction form. To be counted, your telephone vote must be received by 11:59 p.m., Eastern Time, on April 24, 2024. |
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To attend and vote at the virtual Annual Meeting, register at http://register.proxypush.com/utz. You will need the virtual control number included on your proxy card to register. Registered attendees will receive a meeting link an hour before the meeting begins. |
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Beneficial Owner. If your shares are held in a brokerage account, by a trustee or by another nominee, then you are considered the “beneficial owner” of those shares. As the beneficial owner of those shares, you have the right to direct your broker, trustee, or nominee on how to vote and you also are invited to attend the Annual Meeting. Each beneficial owner of shares should have received a notice containing voting instructions from that organization rather than from us. Simply follow the voting instructions in that notice to ensure that your vote is counted.
If you are not a stockholder of record, please understand that we do not know that you are a stockholder or how many shares you own.
How do I obtain a copy of this Proxy Statement?
In accordance with the rules of the SEC, we are using the Internet as our primary means of furnishing proxy materials to stockholders. Consequently, many stockholders will not receive paper copies of our proxy materials. We will instead send these stockholders a Notice of Internet Availability of Proxy Materials with instructions for accessing the proxy materials, including our Proxy Statement and annual report on Form 10-K, and access to voting via the Internet. The Notice of Internet Availability of Proxy Materials also provides information on how stockholders may obtain paper copies of our proxy materials if they so choose. This makes the proxy distribution process more efficient and less costly and helps conserve natural resources. If you previously elected to receive our proxy materials electronically, these materials will continue to be sent via email unless you change your election.
How may I participate in the virtual Annual Meeting?
The Annual Meeting will be conducted completely online via the Internet. Stockholders may attend and participate in the meeting by registering at http://register.proxypush.com/utz. Registered attendees will receive a meeting link an hour before the meeting begins.
To access the Annual Meeting, you will need the control number found on your proxy card. If you are a stockholder of record and you have misplaced your virtual control number, please email the Company at tshea@utzsnacks.com.
We encourage you to access the Annual Meeting before the start time of 9:00 a.m., Eastern Time, on April 25, 2024. If you check in prior to 8:45 a.m., you will be placed on hold until the meeting site opens.
Stockholders who participate in the virtual Annual Meeting by way of the website above or the link provided following registration will be considered to have attended the meeting “in person,” as such term is used in this Proxy Statement, including for purposes of determining a quorum and counting votes.
QUESTIONS AND ANSWERS ABOUT OUR ANNUAL MEETING
By conducting our Annual Meeting completely online via the Internet, we eliminate many of the costs associated with a physical meeting. In addition, we believe that a virtual meeting will provide greater access to those stockholders who want to attend and improves our ability to communicate more effectively with our stockholders during the meeting.
What is the minimum vote required for each proposal to be approved?
At the Annual Meeting, stockholders will consider and act upon (1) the election of four Class I directors for terms expiring at the 2027 Annual Meeting of Stockholders, (2) an advisory recommendation to the Board of Directors to approve executive compensation, (3) the approval of an amendment to the Company’s Certificate of Incorporation to permit officer exculpation for certain breaches of fiduciary duties pursuant to the DGCL; (4) the ratification of the selection by our Audit Committee of Grant Thornton LLP as our Independent Registered Public Accounting Firm for the fiscal year ending December 29, 2024, and (5) such other business as may properly come before the Annual Meeting.
With regard to Proposal No. 1 (Election of Directors), votes may be cast for the nominees or may be withheld. Each director nominee was recommended by the Nominating and Corporate Governance Committee of the Board, and all nominees are current directors. The election of directors requires a plurality of the votes cast, and, therefore, the four nominees receiving the greatest number of votes will be elected. Votes that are withheld and broker non-votes are not considered “votes cast,” and therefore will have no effect on the outcome of Proposal No. 1.
With regard to Proposal No. 2 (Approval of Advisory Recommendations to the Board of Directors to approve Executive Pay Structure) a majority of the votes cast is required to approve such proposal; votes that are withheld and broker non-votes are not considered “votes cast” and therefore will have no effect on the outcome of Proposal No. 2.
With regard to Proposal No. 3 (Approval of an Amendment to the Company’s Certificate of Incorporation) 66 2/3% of the total voting power of all of the outstanding shares of stock of the Company entitled to vote generally in the election of directors, voting together as a single class, is required to approve such proposal; votes that are withheld and broker non-votes are considered votes AGAINST the proposal and thus will have an effect on the outcome of Proposal No. 3.
With regard to Proposal No. 4 (Ratification of the Selection of Independent Registered Public Accounting Firm), the affirmative vote of a majority of the votes cast is required to ratify the selection by our Audit Committee of Grant Thornton LLP as our independent registered public accounting firm. Abstentions will have no effect on the results of this vote. Brokerage firms have authority to vote shares held in street name on this proposal without instructions from beneficial owners. As a result, we do not expect there will be any broker non-votes on this matter. We are not required to obtain the approval of our stockholders to select our independent registered public accounting firm. However, if our stockholders do not ratify the selection of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 29, 2024, the Audit Committee of the Board will reconsider its selection.
Will my shares be voted if I do not provide voting instructions?
If you provide specific voting instructions on a properly completed and submitted proxy, then your shares will be voted as instructed.
If you hold shares as the stockholder of record and submit a proxy without giving specific voting instructions, then your shares will be voted in accordance with the recommendations of our Board. Our Board recommends voting “FOR” all nominees listed in Proposal No. 1, “FOR” approval of the advisory recommendation to the Board of Directors to approve executive compensation in Proposal No. 2; “FOR” the amendment of the Company’s Certificate of Incorporation in Proposal No. 3 and “FOR” the ratification of the selection by our Audit Committee of Grant Thornton LLP as our Independent Registered Public Accounting Firm for the fiscal year ending December 29, 2024 in Proposal No. 4 and in accordance with the discretion of the named proxies on other matters brought before the Annual Meeting.
You may have granted to your broker, trustee, or other nominee discretionary voting authority over your account. Your broker, trustee, or other nominee may be able to vote your shares depending on the terms of the agreement you have with your broker, trustee, or other nominee.
The persons identified as having the authority to vote the proxies also will have discretionary authority to vote, to the extent permitted by applicable law, in favor of the ratification of the selection of our Audit Committee of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 29, 2024 in Proposal No. 4 and such other business as may properly come before the Annual Meeting and any postponement or adjournment thereof. The Board is not
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2024 PROXY STATEMENT 71 |
QUESTIONS AND ANSWERS ABOUT OUR ANNUAL MEETING
aware of any other matters that are likely to be brought before the Annual Meeting. If any other matter is properly presented for action at the Annual Meeting, including a proposal to adjourn or postpone the Annual Meeting to permit us to solicit additional proxies in favor of any proposal, the persons identified as having the authority to vote the proxies will vote on such matter in their own discretion.
If you do not provide your broker, trustee, or other nominee specific voting instructions, such firm will not have the authority to vote, and your shares will be considered broker non-votes with respect to Proposal Nos. 1, 2 and 4. We urge you to provide voting instructions so that your shares will be votes.
Can I change my vote after I have voted?
A stockholder of record who has given a proxy may revoke it at any time prior to its exercise at the Annual Meeting by (i) giving written notice of revocation to our Corporate Secretary, (ii) properly submitting a later proxy via the Internet or by telephone, (iii) properly submitting a duly executed proxy bearing a later date, or (iv) voting your shares at the virtual Annual Meeting.
If you are the beneficial owner of shares held through a broker, trustee, or other nominee, then you must follow the specific instructions, including applicable deadlines, provided to you by your broker, trustee, or other nominee to change or revoke any instructions you have already provided to your broker, trustee, or other nominee. If you have obtained a voter instruction form from your broker, trustee, or other nominee that holds your shares giving you the right to vote the shares and you have your sixteen-digit control number, you may change your vote by attending the virtual Annual Meeting and voting electronically.
Attendance at the Annual Meeting, in and of itself, will not constitute a revocation of a proxy.
What is the deadline to vote?
If you hold shares as the stockholder of record, your in-person vote by proxy must be received before the polls close at the virtual Annual Meeting. Phone and mail votes are due by 11:59PM Eastern Time on April 24, 2024. If you are the beneficial owner of shares, please follow the voting instructions provided by your broker, trustee or other nominee.
Where can I find the results of the voting?
We intend to announce preliminary voting results at the Annual Meeting and will publish final results through a Current Report on Form 8-K to be filed with the SEC within four business days after the Annual Meeting. The Current Report on Form 8-K will be available on the Internet at http://investors.utzsnacks.com/investors.
Who will pay for the cost of soliciting proxies?
We are soliciting proxies in connection with this Proxy Statement and will bear the expense of preparing this Proxy Statement and soliciting the proxies it is seeking. In addition to the use of the mail, proxies may be solicited by our officers, directors and employees, in person or by telephone, e-mail or facsimile transmission. Our officers, directors and employees will receive no additional compensation for any such solicitations. We also will request brokerage firms, banks, nominees, custodians and fiduciaries to forward proxy materials to the beneficial owners of the underlying shares as of the record date and will reimburse the cost of forwarding the proxy materials in accordance with customary practice. Your cooperation in promptly voting by proxy will help to avoid additional expense.
What is “householding” and how does it affect me?
In accordance with notices to many stockholders who hold their shares through a bank, broker or other holder of record (a “street-name stockholder”) and share a single address, only one copy of our Proxy Statement and included periodic reports to stockholders is being delivered to that address unless contrary instructions from any stockholder at that address were received. This practice, known as “householding,” is intended to reduce our printing and postage costs. However, any such street-name stockholder residing at the same address who wishes to receive a separate copy of this Proxy Statement and annual report may request a copy by contacting the bank, broker or other holder of record, or by sending a written request to: Utz Brands, Inc. 900 High Street, Hanover, PA 17331, Attn.: Corporate Secretary or by contacting our Corporate Secretary by email at tshea@utzsnacks.com or by telephone at 312.933.9348. The voting instruction form sent to a street-name stockholder should provide information on how to request (1) householding of future Company materials or (2) separate materials if only one set of documents is being sent to a household. A stockholder who would like to make one of these requests should contact us as indicated above.
ANNEX B
Amendment to the Company’s Certificate of Incorporation
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
UTZ BRANDS, INC.
(Pursuant to Section 242 of the
General Corporation Law of the State of Delaware)
Utz Brands, Inc., a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify as follows.
1. That at a meeting of the Board of Directors of Utz Brands, Inc., resolutions were duly adopted setting forth a proposed amendment of the Certificate of Incorporation of said corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of said corporation for consideration thereof. The resolution setting forth the proposed amendment is as follows:
RESOLVED, that the Certificate of Incorporation of this corporation be amended by changing Section 8.01 of Article VIII so that, as amended, said Section shall be and read as follows:
Section 8.1. Limited Liability of Directors and Officers. To the fullest extent permitted by law, no director or officer of the Corporation will have any personal liability to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as a director or officer, as applicable. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors or officers, then the liability of a director of the Corporation, as applicable, shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. Neither the amendment nor the repeal of this Article VIII shall eliminate, reduce or otherwise adversely affect any limitation on the personal liability of a director or officer of the Corporation existing prior to such amendment or repeal.
2. That thereafter, pursuant to resolution of its Board of Directors, an annual meeting of the stockholders of said corporation was duly called and held upon notice in accordance with Section 222 of the DGCL at which meeting the necessary number of shares as required by statute were voted in favor of the amendment.
3. This aforesaid amendment has been duly adopted in accordance with Section 242 of the DGCL.
IN WITNESS WHEREOF, this Certificate of Amendment has been executed by a duly authorized officer of this corporation on this day of , .
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2024 PROXY STATEMENT B-1 |
Pay vs Performance Disclosure - USD ($)
|
12 Months Ended |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
| Pay vs Performance Disclosure |
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| Pay vs Performance Disclosure, Table |
Pay vs Performance Tabular Disclosure
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Pay vs. Performance Disclosure (1) |
| |
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Value of Fixed $100
Investment Based On: |
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| |
|
Summary Compensation Table Total for First PEO (2) |
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Summary Compensation Table Total for Second PEO (3) |
|
|
Compensation
Actually Paid
to First |
|
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Compensation Actually Paid to Second PEO (3)(4) |
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Average Summary Compensation Table Total for Non-PEO NEOs (5) |
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Average Compensation Actually Paid to Non-PEO NEOs (5)(6) |
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Utz Brands, Inc. Total Shareholder Return (7) |
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S&P 1500 Composite Packaged Foods & Meats Index Total Shareholder Return (8) |
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Net Income (Loss) in Millions (9) |
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|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
— |
|
|
$ |
4,113,444 |
|
|
|
— |
|
|
$ |
3,844,446 |
|
|
$ |
1,666,798 |
|
|
$ |
1,608,290 |
|
|
$ |
163 |
|
|
$ |
107 |
|
|
($ |
40.0 |
) |
|
$187.2 |
|
|
|
|
|
|
|
|
|
|
|
| |
|
$ |
5,870,043 |
|
|
$ |
4,252,567 |
|
|
$ |
5,856,068 |
|
|
$ |
4,134,920 |
|
|
$ |
3,157,332 |
|
|
$ |
3,215,423 |
|
|
$ |
159 |
|
|
$ |
118 |
|
|
($ |
14.0 |
) |
|
$170.5 |
|
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|
|
|
|
|
|
|
|
|
| |
|
$ |
1,012,309 |
|
|
|
— |
|
|
($ |
1,572,541 |
) |
|
|
— |
|
|
$ |
605,171 |
|
|
($ |
377,493 |
) |
|
$ |
158 |
|
|
$ |
112 |
|
|
$ |
8.0 |
|
|
$156.2 |
|
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|
|
|
|
|
|
|
|
|
| |
|
$ |
6,695,741 |
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|
|
— |
|
|
$ |
7,728,482 |
|
|
|
— |
|
|
$ |
2,444,023 |
|
|
$ |
2,834,026 |
|
|
$ |
216 |
|
|
$ |
101 |
|
|
|
Predecessor -
$3.4
Successor -
($107.9) |
|
|
Predecessor -
$86.3
Successor -
$47.6 |
(1) |
Equity compensation fair value is calculated based on the assumptions determined in accordance with FASB ASC Topic 718. For the fiscal periods in 2020, such amounts also include the stock-based compensation modification expense associated with the conversion of the Phantom Units under the 2018 LTIP into 2020 LTIP RSUs. For a discussion of the assumptions made in such valuation of the equity awards reported in this table, see Note 1 “Operations and Summary of Significant Accounting Policies” to our audited financial statements for the fiscal year ended December 31, 2023, included in our Annual Report on Form 10-K. |
(2) |
The Company’s principal executive officer (“PEO”) for the fiscal periods in 2020 until December of fiscal year 2022 was Dylan Lissette (the “First PEO”), at which point he transitioned to Executive Chairperson upon commencement of Howard Friedman’s employment as Chief Executive Officer. |
(3) |
The Company’s PEO from December of fiscal year 2022 through fiscal year 2023 was Howard Friedman (the “Second PEO”). |
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| |
|
PEO "CAP" Calculation Detail |
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| |
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First PEO - Dylan Lissette |
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Second PEO -
Howard Friedman |
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Second PEO -
Howard Friedman |
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| |
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SCT Reported Total Compensation |
|
$ |
6,695,741 |
|
|
$ |
1,012,309 |
|
|
$ |
5,870,043 |
|
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$ |
4,252,567 |
|
|
$ |
4,113,444 |
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|
|
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|
|
Aggregate SCT Reported Equity Compensation (-) |
|
($ |
2,999,856 |
) |
|
$ |
0 |
|
|
($ |
3,298,145 |
) |
|
($ |
4,229,682 |
) |
|
($ |
2,375,116 |
) |
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|
|
Year-End Fair Value of Awards Granted During the FY & Outstanding (+) |
|
$ |
3,149,458 |
|
|
$ |
0 |
|
|
$ |
3,313,719 |
|
|
$ |
4,112,036 |
|
|
$ |
1,922,497 |
|
|
|
|
|
|
|
|
|
|
Year-Over-Year Change in Fair Value of Awards Granted During Prior FY & Outstanding (+/-) |
|
$ |
883,139 |
|
|
($ |
1,641,497 |
) |
|
($ |
52,845 |
) |
|
$ |
0 |
|
|
($ |
208,404 |
) |
|
|
|
|
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|
|
Vesting Date Fair Value of Awards Granted & Vested During the Covered FY (+) |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
349,858 |
|
|
|
|
|
|
|
|
|
|
Year-Over-Year Change in Fair Value of Awards Granted During Prior FY & Vesting During Covered FY (+/-) |
|
$ |
0 |
|
|
($ |
943,353 |
) |
|
$ |
11,285 |
|
|
$ |
0 |
|
|
$ |
21,288 |
|
|
|
|
|
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|
|
Value of Dividends Payable not Otherwise Reflected in Fair Value Determination or Total Compensation (+) |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
12,011 |
|
|
$ |
0 |
|
|
$ |
20,878 |
|
|
|
|
|
|
|
|
|
|
"Compensation Actually Paid" Determination |
|
$ |
7,728,482 |
|
|
($ |
1,572,541 |
) |
|
$ |
5,856,068 |
|
|
$ |
4,134,920 |
|
|
$ |
3,844,446 |
|
(5) |
The Company’s other, non-PEO, named executive officers (“NEOs”) for each fiscal year set forth in the table above were: |
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| |
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| 2020 |
|
Cary Devore and Mark Schreiber |
|
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| 2021 |
|
Cary Devore, Ajay Kataria, Mark Schreiber, Shane Chambers, and Tucker Lawrence |
|
|
| 2022 |
|
Cary Devore, Ajay Kataria, Mark Schreiber, and Theresa Shea |
|
|
| 2023 |
|
Cary Devore, Ajay Kataria, Mark Schreiber, and Theresa Shea |
|
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| |
|
Average Non-PEO NEOs "CAP" Calculation Detail |
|
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| |
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| |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCT Reported Total Compensation |
|
$ |
2,444,023 |
|
|
$ |
605,171 |
|
|
$ |
3,157,332 |
|
|
$ |
1,666,798 |
|
|
|
|
|
|
|
|
|
Aggregate SCT Reported Equity Compensation (-) |
|
($ |
1,361,103 |
) |
|
$ |
0 |
|
|
($ |
1,894,898 |
) |
|
($ |
847,073 |
) |
|
|
|
|
|
|
|
|
Year-End Fair Value of Awards Granted During the FY & Outstanding (+) |
|
$ |
880,305 |
|
|
$ |
0 |
|
|
$ |
1,626,584 |
|
|
$ |
742,203 |
|
|
|
|
|
|
|
|
|
Year-Over-Year Change in Fair Value of Awards Granted During Prior FY & Outstanding (+/-) |
|
$ |
870,801 |
|
|
($ |
258,883 |
) |
|
($ |
7,742 |
) |
|
($ |
47,961 |
) |
|
|
|
|
|
|
|
|
Vesting Date Fair Value of Awards Granted & Vested During the Covered FY (+) |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
330,622 |
|
|
$ |
74,395 |
|
|
|
|
|
|
|
|
|
Year-Over-Year Change in Fair Value of Awards Granted During Prior FY & Vesting During Covered FY (+/-) |
|
$ |
0 |
|
|
($ |
723,781 |
) |
|
$ |
1,590 |
|
|
$ |
18,066 |
|
|
|
|
|
|
|
|
|
Value of Dividends Payable not Otherwise Reflected in Fair Value Determination or Total Compensation (+) |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
1,935 |
|
|
$ |
1,861 |
|
|
|
|
|
|
|
|
|
"Compensation Actually Paid" Determination |
|
$ |
2,834,026 |
|
|
($ |
377,493 |
) |
|
$ |
3,215,423 |
|
|
$ |
1,608,290 |
|
(7) |
TSR calculated based on an assumed $100 investment as of December 29, 2019, the last day of the fiscal period for our predecessor company prior to fiscal periods in 2020, and the reinvestment of any issued dividends, including period prior to the Business Combination. |
(8) |
Peer TSR calculated for the S&P 1500 Composite Packaged Foods & Meat Index based on an assumed $100 investment as of December 29, 2019 and the reinvestment of any issued dividends. |
(9) |
fiscal periods in 2020 financial performance reflects financial performance for the Company during the Successor period following the Business Combination, as well as during the period for our predecessor company prior to the Business Combination. |
(10) |
See Annex A for reconciliation of Adjusted EBITDA performance in accordance with GAAP to non-GAAP financial results. |
|
|
|
|
| Company Selected Measure Name |
Adjusted EBITDA
|
|
|
|
| Named Executive Officers, Footnote |
(2) |
The Company’s principal executive officer (“PEO”) for the fiscal periods in 2020 until December of fiscal year 2022 was Dylan Lissette (the “First PEO”), at which point he transitioned to Executive Chairperson upon commencement of Howard Friedman’s employment as Chief Executive Officer. |
(3) |
The Company’s PEO from December of fiscal year 2022 through fiscal year 2023 was Howard Friedman (the “Second PEO”). |
(5) |
The Company’s other, non-PEO, named executive officers (“NEOs”) for each fiscal year set forth in the table above were: |
|
|
|
| |
|
|
|
|
| 2020 |
|
Cary Devore and Mark Schreiber |
|
|
| 2021 |
|
Cary Devore, Ajay Kataria, Mark Schreiber, Shane Chambers, and Tucker Lawrence |
|
|
| 2022 |
|
Cary Devore, Ajay Kataria, Mark Schreiber, and Theresa Shea |
|
|
| 2023 |
|
Cary Devore, Ajay Kataria, Mark Schreiber, and Theresa Shea |
|
|
|
|
| Peer Group Issuers, Footnote |
Peer TSR calculated for the S&P 1500 Composite Packaged Foods & Meat Index based on an assumed $100 investment as of December 29, 2019 and the reinvestment of any issued dividends.
|
|
|
|
| Adjustment To PEO Compensation, Footnote |
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
PEO "CAP" Calculation Detail |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
First PEO - Dylan Lissette |
|
|
Second PEO -
Howard Friedman |
|
|
Second PEO -
Howard Friedman |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCT Reported Total Compensation |
|
$ |
6,695,741 |
|
|
$ |
1,012,309 |
|
|
$ |
5,870,043 |
|
|
$ |
4,252,567 |
|
|
$ |
4,113,444 |
|
|
|
|
|
|
|
|
|
|
Aggregate SCT Reported Equity Compensation (-) |
|
($ |
2,999,856 |
) |
|
$ |
0 |
|
|
($ |
3,298,145 |
) |
|
($ |
4,229,682 |
) |
|
($ |
2,375,116 |
) |
|
|
|
|
|
|
|
|
|
Year-End Fair Value of Awards Granted During the FY & Outstanding (+) |
|
$ |
3,149,458 |
|
|
$ |
0 |
|
|
$ |
3,313,719 |
|
|
$ |
4,112,036 |
|
|
$ |
1,922,497 |
|
|
|
|
|
|
|
|
|
|
Year-Over-Year Change in Fair Value of Awards Granted During Prior FY & Outstanding (+/-) |
|
$ |
883,139 |
|
|
($ |
1,641,497 |
) |
|
($ |
52,845 |
) |
|
$ |
0 |
|
|
($ |
208,404 |
) |
|
|
|
|
|
|
|
|
|
Vesting Date Fair Value of Awards Granted & Vested During the Covered FY (+) |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
349,858 |
|
|
|
|
|
|
|
|
|
|
Year-Over-Year Change in Fair Value of Awards Granted During Prior FY & Vesting During Covered FY (+/-) |
|
$ |
0 |
|
|
($ |
943,353 |
) |
|
$ |
11,285 |
|
|
$ |
0 |
|
|
$ |
21,288 |
|
|
|
|
|
|
|
|
|
|
Value of Dividends Payable not Otherwise Reflected in Fair Value Determination or Total Compensation (+) |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
12,011 |
|
|
$ |
0 |
|
|
$ |
20,878 |
|
|
|
|
|
|
|
|
|
|
"Compensation Actually Paid" Determination |
|
$ |
7,728,482 |
|
|
($ |
1,572,541 |
) |
|
$ |
5,856,068 |
|
|
$ |
4,134,920 |
|
|
$ |
3,844,446 |
|
|
|
|
|
| Non-PEO NEO Average Total Compensation Amount |
$ 1,666,798
|
$ 3,157,332
|
$ 605,171
|
$ 2,444,023
|
| Non-PEO NEO Average Compensation Actually Paid Amount |
$ 1,608,290
|
3,215,423
|
(377,493)
|
2,834,026
|
| Adjustment to Non-PEO NEO Compensation Footnote |
|
|
|
|
|
|
|
|
|
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Average Non-PEO NEOs "CAP" Calculation Detail |
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| |
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| |
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|
|
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|
|
SCT Reported Total Compensation |
|
$ |
2,444,023 |
|
|
$ |
605,171 |
|
|
$ |
3,157,332 |
|
|
$ |
1,666,798 |
|
|
|
|
|
|
|
|
|
Aggregate SCT Reported Equity Compensation (-) |
|
($ |
1,361,103 |
) |
|
$ |
0 |
|
|
($ |
1,894,898 |
) |
|
($ |
847,073 |
) |
|
|
|
|
|
|
|
|
Year-End Fair Value of Awards Granted During the FY & Outstanding (+) |
|
$ |
880,305 |
|
|
$ |
0 |
|
|
$ |
1,626,584 |
|
|
$ |
742,203 |
|
|
|
|
|
|
|
|
|
Year-Over-Year Change in Fair Value of Awards Granted During Prior FY & Outstanding (+/-) |
|
$ |
870,801 |
|
|
($ |
258,883 |
) |
|
($ |
7,742 |
) |
|
($ |
47,961 |
) |
|
|
|
|
|
|
|
|
Vesting Date Fair Value of Awards Granted & Vested During the Covered FY (+) |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
330,622 |
|
|
$ |
74,395 |
|
|
|
|
|
|
|
|
|
Year-Over-Year Change in Fair Value of Awards Granted During Prior FY & Vesting During Covered FY (+/-) |
|
$ |
0 |
|
|
($ |
723,781 |
) |
|
$ |
1,590 |
|
|
$ |
18,066 |
|
|
|
|
|
|
|
|
|
Value of Dividends Payable not Otherwise Reflected in Fair Value Determination or Total Compensation (+) |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
1,935 |
|
|
$ |
1,861 |
|
|
|
|
|
|
|
|
|
"Compensation Actually Paid" Determination |
|
$ |
2,834,026 |
|
|
($ |
377,493 |
) |
|
$ |
3,215,423 |
|
|
$ |
1,608,290 |
|
|
|
|
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| Tabular List, Table |
Provided below are the most important measures used to link compensation actually paid with the Company’s performance during the most recently completed fiscal year:
|
| |
| Adjusted EBITDA |
| |
| Net Sales |
| |
| OGSM Rating |
|
|
|
|
| Total Shareholder Return Amount |
$ 163
|
159
|
158
|
216
|
| Peer Group Total Shareholder Return Amount |
107
|
118
|
112
|
101
|
| Net Income (Loss) |
$ (40,000,000)
|
$ (14,000,000)
|
$ 8,000,000
|
|
| Company Selected Measure Amount |
187,200,000
|
170,500,000
|
156,200,000
|
|
| Measure:: 1 |
|
|
|
|
| Pay vs Performance Disclosure |
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|
|
|
| Name |
Adjusted EBITDA
|
|
|
|
| Non-GAAP Measure Description |
See Annex A for reconciliation of Adjusted EBITDA performance in accordance with GAAP to non-GAAP financial results.
|
|
|
|
| Measure:: 2 |
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|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Name |
Net Sales
|
|
|
|
| Measure:: 3 |
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|
|
| Pay vs Performance Disclosure |
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|
|
|
| Name |
OGSM Rating
|
|
|
|
| Dylan Lissette [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| PEO Total Compensation Amount |
|
$ 5,870,043
|
$ 1,012,309
|
6,695,741
|
| PEO Actually Paid Compensation Amount |
|
$ 5,856,068
|
$ (1,572,541)
|
7,728,482
|
| Net Income (Loss) |
|
|
|
$ 3,400,000
|
| Company Selected Measure Amount |
|
|
|
86,300,000
|
| PEO Name |
|
Dylan Lissette
|
Dylan Lissette
|
Dylan Lissette
|
| Howard Friedman [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| PEO Total Compensation Amount |
$ 4,113,444
|
$ 4,252,567
|
|
|
| PEO Actually Paid Compensation Amount |
$ 3,844,446
|
$ 4,134,920
|
|
|
| Net Income (Loss) |
|
|
|
$ (107,900,000)
|
| Company Selected Measure Amount |
|
|
|
47,600,000
|
| PEO Name |
Howard Friedman
|
Howard Friedman
|
|
|
| PEO | Dylan Lissette [Member] | Aggregate SCT Reported Equity Compensation [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
|
$ (3,298,145)
|
$ 0
|
$ (2,999,856)
|
| PEO | Dylan Lissette [Member] | Year End Fair Value of Awards Granted During the FY Outstanding [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
|
3,313,719
|
0
|
3,149,458
|
| PEO | Dylan Lissette [Member] | Year Over Year Change in Fair Value of Awards Granted During Prior Fiscal Year Outstanding [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
|
(52,845)
|
(1,641,497)
|
883,139
|
| PEO | Dylan Lissette [Member] | Vesting Date Fair Value of Awards Granted Vested During the Covered Fiscal Year [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
|
0
|
0
|
0
|
| PEO | Dylan Lissette [Member] | Year Over Year Change in Fair Value of Awards Granted During Prior Fiscal Year Vesting During Covered Fiscal Year [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
|
11,285
|
(943,353)
|
0
|
| PEO | Dylan Lissette [Member] | Value of Dividends Payable not Otherwise Reflected in Fair Value Determination or Total Compensation [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
|
12,011
|
0
|
0
|
| PEO | Howard Friedman [Member] | Aggregate SCT Reported Equity Compensation [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
$ (2,375,116)
|
(4,229,682)
|
|
|
| PEO | Howard Friedman [Member] | Year End Fair Value of Awards Granted During the FY Outstanding [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
1,922,497
|
4,112,036
|
|
|
| PEO | Howard Friedman [Member] | Year Over Year Change in Fair Value of Awards Granted During Prior Fiscal Year Outstanding [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
(208,404)
|
0
|
|
|
| PEO | Howard Friedman [Member] | Vesting Date Fair Value of Awards Granted Vested During the Covered Fiscal Year [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
349,858
|
0
|
|
|
| PEO | Howard Friedman [Member] | Year Over Year Change in Fair Value of Awards Granted During Prior Fiscal Year Vesting During Covered Fiscal Year [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
21,288
|
0
|
|
|
| PEO | Howard Friedman [Member] | Value of Dividends Payable not Otherwise Reflected in Fair Value Determination or Total Compensation [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
20,878
|
0
|
|
|
| Non-PEO NEO | Aggregate SCT Reported Equity Compensation [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
(847,073)
|
(1,894,898)
|
0
|
(1,361,103)
|
| Non-PEO NEO | Year End Fair Value of Awards Granted During the FY Outstanding [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
742,203
|
1,626,584
|
0
|
880,305
|
| Non-PEO NEO | Year Over Year Change in Fair Value of Awards Granted During Prior Fiscal Year Outstanding [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
(47,961)
|
(7,742)
|
(258,883)
|
870,801
|
| Non-PEO NEO | Vesting Date Fair Value of Awards Granted Vested During the Covered Fiscal Year [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
74,395
|
330,622
|
0
|
0
|
| Non-PEO NEO | Year Over Year Change in Fair Value of Awards Granted During Prior Fiscal Year Vesting During Covered Fiscal Year [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
18,066
|
1,590
|
(723,781)
|
0
|
| Non-PEO NEO | Value of Dividends Payable not Otherwise Reflected in Fair Value Determination or Total Compensation [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
$ 1,861
|
$ 1,935
|
$ 0
|
$ 0
|