Utz Brands, Inc 8-K, filed Oct 3, 2022
Utz Brands, Inc. (UTZ)
About this 8-K
Utz Brands, Inc filed this 8-K on October 3, 2022, reporting on events of September 30, 2022.
Items reported
- Item 5.02: Director or officer change, or executive pay
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.
Appointment of Chief Executive Officer
On September 30, 2022, the Board of Directors (the “Board”) of Utz Brands, Inc. (the “Company”) appointed Howard A. Friedman, age 52, as Chief Executive Officer of the Company and appointed Mr. Friedman as a Class I director on the Board, commencing upon his start date with the Company, expected to occur on or about December 15, 2022 (the “CEO Commencement Date). Mr. Friedman has served as Executive Vice President and Chief Operations Officer of Post Holdings, Inc., a consumer packaged goods holding company, since September 2021. Previously, Mr. Friedman served as President and Chief Executive Officer, Post Consumer Brands from July 2018 to September 2021. Prior to joining Post, Mr. Friedman served as the Executive Vice President and President of the refrigerated meat and dairy business at The Kraft Heinz Company, a global food and beverage company, where he spent the majority of his more than twenty-year career. Mr. Friedman received a bachelor of arts in economics from Dickinson College and a masters of business administration from the Stern School of Business at New York University.
In connection with Mr. Friedman’s appointment as a member of the Board, the Board increased its size from eleven to twelve members, to be effective as of the CEO Commencement Date. There is no arrangement or understanding between Mr. Friedman and any other person, other than the Company, pursuant to which he was appointed as a director. Mr. Friedman has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
Compensatory Arrangements of Chief Executive Officer
In connection with Mr. Friedman’s appointment as Chief Executive Officer of the Company, Mr. Friedman and the Company entered into an offer letter dated September 30, 2022 (the “CEO Offer Letter”). The CEO Offer Letter provides that commencing on the CEO Commencement Date, Mr. Friedman will serve as Chief Executive Officer of the Company as well as its direct and indirect subsidiaries. Mr. Friedman’s service on the Board shall, subject to the re-election of Mr. Friedman by the stockholders of the Company at the next annual meeting of stockholders at which the Class I directors are subject to re-election, continue to serve as a director through the earlier to occur of the termination of his services as Chief Executive Officer of the Company and his earlier death or resignation from the Board.
Mr. Friedman will receive an initial annual base salary equal to $850,000, subject to at least annual reviews for increases by the Compensation Committee of the Board, plus a lump sum annual stipend of $50,000 to compensate Mr. Friedman for travel, in each case subject to standard payroll practices of the Company. Commencing in 2023, Mr. Friedman will also be eligible to participate in the Company’s annual bonus award program, with a target bonus opportunity equal to 110% of his annual base salary and a maximum bonus opportunity equal to 200% of his annual base salary.
On the Commencement Date, Mr. Friedman will receive an award of restricted stock units under the Company’s 2020 Omnibus Equity Incentive Plan (as amended, the “OEIP”) with an aggregate value equal to $2,000,000 based on the weighted average price of a share of the Company’s Class A Common Stock on the New York Stock Exchange for the ten consecutive trading day window closing on the trading day prior to the CEO Commencement Date (the “10-day VWAP”) and an award of performance stock units under the OEIP with an aggregate value equal to $2,000,000 based on the 10-day VWAP, based on target performance. Subject to the forms of awards previously adopted by the Compensation Committee of the Board, the restricted stock units will vest 50% on each of December 31, 2023 and December 31, 2024, subject to Mr. Friedman’s continued service through each such date and the performance stock units will vest on December 31, 2025, subject to the Company’s relative shareholder return. Mr. Friedman will be eligible for the Company’s standard benefits programs, subject to meeting the relevant eligibility requirements, payment of required premiums and the terms of the plans. The CEO Offer Letter provides that, beginning in fiscal year 2023, it is expected that Mr. Friedman will receive awards under the OEIP equal to 250% of his annual base salary.
Mr. Friedman will also be eligible to participate in the Company’s Change in Control Severance Benefit Plan (the “Severance Plan”). Under the Severance Plan, the Company will provide severance benefits to Mr. Friedman in his capacity as the Chief Executive Officer, subject to the execution and non-revocation of a release and non-competition agreement by him upon a termination of employment of Mr. Friedman (a) either (i) by the Company (other than for cause and other than during Mr. Friedman’s disability), (ii) by Mr. Friedman 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 Mr. Friedman will not be considered a Change in Control Termination if Mr. Friedman is offered comparable employment by the Company or any of its affiliates or any of their respective successors, and satisfaction of each of the other conditions set forth in the Severance Plan, Mr. Friedman will receive in equal installments 200% of the sum of his annual base salary and target annual cash bonus in the form of payroll continuation payments, beginning on the Payment Commencement Date (as defined in the Severance Plan) and ending on the two-year anniversary of the Payment Commencement Date. In addition, in the event Mr. Friedman experiences a good reason termination or experiences a termination of employment by the Company other than for cause and other than during his 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. If Mr. Friedman 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, Mr. Friedman will also receive a payment equal to the annual bonus, calculated based on actual performance during the applicable performance period as though Mr. Friedman continued in our employment. Such payment will be prorated based on the number of days during the applicable performance period that Mr. Friedman was employed by the Company 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, Mr. Friedman will also receive outplacement services during the severance period and continuation of welfare benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, for up to 18 months following the termination date. In the event that Mr. Friedman becomes entitled to receive or receives any payments, options, awards or benefits under the Severance Plan or any other plan, agreement, or arrangement with the Company, 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 Mr. Friedman 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 Mr. Friedman, 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.
Mr. Friedman will be eligible to participate in such other employee benefit plans and programs (excluding severance, except as set forth above) generally available to Utz’s senior executives and consistent with such plans and programs of the Company or its subsidiaries.
The CEO Offer Letter contains certain covenants by Mr. Friedman, including a non-competition agreement.
This description is qualified in its entirety by reference to the full text of the CEO Offer Letter, which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Executive Chairman and Lead Director
In connection with the appointment of Mr. Friedman to the office of Chief Executive Officer, the Company announced that commencing on the CEO Commencement Date, Dylan B. Lissette, the Company’s current Chief Executive Officer, will be appointed Executive Chairman from now until the second quarter of 2023, when he will transition to the role of non-executive Chairman of the Board. Beginning on the CEO Commencement Date, Mr. Lissette will be entitled to receive an annualized base salary of $600,000, subject to standard payroll practices of the Company, and on the CEO Commencement Date, Mr. Lissette will receive an award of restricted stock units with an aggregate value equal to $1,000,000 based on the 10-day VWAP. Subject to the forms of awards previously adopted by the Compensation Committee of the Board, the restricted stock units will vest 100% on December 31, 2025, subject to Mr. Lissette’s continued service as a Board Member. Mr. Lissette will receive a $200,000 bonus payment on May 4, 2023 upon completion of his service as Executive Chairman. Thereafter, as non-executive Chairman of the Board, Mr. Lissette will participate in the Company’s standard non-employee director compensation program will be entitled to receive an annual cash retainer of $75,000 as a Board Member, an annual cash retainer of $90,000 as Chairman of the Board, and an annual equity retainer with a value of $125,000 in RSUs.
Roger K. Deromedi, the current Chairman of the Board, has been elected Lead Director, commencing on the CEO Commencement Date. Mr. Deromedi will participate in the Company’s standard non-employee director compensation program as described in the Company’s proxy statement for its annual meeting of stockholders.
Item 7.01 Regulation FD Disclosure.
A copy of the press release announcing the matters set forth in Item 5.02 of this Current Report on Form 8-K is attached hereto as Exhibit 99.1and is incorporated by reference into this Item 7.01. The information and exhibit contained in this Item 7.01 are being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, nor shall it be incorporated by reference into any filing under the Securities Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | ||
| 10.1 | Offer Letter dated September 30, 2022, issued by Utz Brands, Inc. to Howard A. Friedman | ||
| 99.1 | Press Release dated October 3, 2022. | ||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | ||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Utz Brands, Inc. | ||
| Dated: October 3, 2022 | ||
| By: | /s/ Ajay Kataria | |
| Name: | Ajay Kataria | |
| Title: | Executive Vice President, Chief Financial Officer | |
Exhibit 10.1
September 30, 2022
Howard Friedman
[Address]
Re: Offer of Employment
Dear Howard,
We are very pleased to extend an offer of employment to you for the position of Chief Executive Officer (“CEO”) of Utz Brands, Inc., a Delaware corporation (“Utz”). In your role, you will be formally employed by Utz Quality Foods, LLC, a wholly owned subsidiary of Utz. You will also serve as CEO of Utz Quality Foods, LLC and all other Utz subsidiaries while serving as CEO of Utz. Your employment will be subject to the terms and conditions set forth in this letter (the “Offer Letter”). This Offer Letter will be binding upon execution by you and approved by the Board of Directors of Utz (the “Board”).
| 1. | Duties, Authority and Responsibilities |
In your capacity as CEO, you will have such duties, authorities and responsibilities as are (i) commensurate with such title (including managing the day-to-day business activities of Utz and its subsidiaries subject to oversight by the Board), (ii) required of such position (including but not limited to such responsibilities as set forth in Utz’s Bylaws, as may be amended from time to time) and (iii) assigned to you from time to time that are reasonably consistent with your position. You will report directly to the Board and will comply with Utz’s written policies during your employment with Utz. You agree to devote substantially all of your business time and attention to the performance of your duties; provided that (A) you shall not be precluded from engaging in civic, charitable or religious activities, (B) you shall not be precluded from serving on the board of directors of other companies that are not competitors to Utz or its subsidiaries and that are approved by the Board, such approval not to be unreasonably withheld, provided however, that while you are CEO you will not serve on more than one other board of directors for any other company that is a public company (i.e., a company subject to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended). Notwithstanding the foregoing, any outside activities must be in compliance with Utz’s Code of Conduct & Ethics, as amended from time to time, including approval procedures, and must not materially interfere with your duties as CEO. As of the Start Date (as defined below), you will be appointed as a member of the Board and, thereafter during your term as CEO, you will, subject to the approval of the stockholders of Utz, continue to be a member of the Board through the earlier to occur of (i) the termination of your service as CEO and (ii) your death or resignation from the Board.
| 2. | Start Date/Location |
Your start date will be December 15, 2022 (the “Start Date”). The Company has agreed that you will not need to change your primary residence from the Chicago, IL area to Hanover, PA at the start of your employment. You have agreed to establish a residence in Hanover, PA at your own cost/expense, and spend time when you are working (and not traveling elsewhere on Utz business) in Hanover, PA working out of the corporate office generally Monday- Thursday. You will receive an annual lump sum stipend of $50,000 to compensate you for your travel expenses between Chicago, IL and Hanover, PA. You and the Board will evaluate the commuting arrangement and formally discuss it at your 36-month anniversary. If you decide to relocate to Hanover on a full-time basis at any point during your employment, the Board will provide a relocation package to you net of the annual travel stipend paid during the year in which you relocate. If the Board determined a move was mandatory, and you were not prepared to do so, you would have Good Reason to terminate your employment (as defined within the Utz Executive Change in Control Severance Plan, as amended from time to time) and you would be entitled to severance benefits described in Section 3.1 or Section 3.2 of the Utz Executive Change in Control Severance Plan, subject to the terms and conditions thereof.
| 3. | Base Salary |
In consideration of your services, you will be paid an initial base salary of $850,000 per year, subject to at least annual reviews for increases by the Compensation Committee of the Board (the “Committee”), payable in accordance with the standard payroll practices of Utz. Your initial base salary and any such upward adjustment in initial base salary shall constitute “Base Salary” for the purposes of this Offer Letter.
| 4. | Annual Bonus Award |
During your employment, you will be eligible to participate in Utz’s annual bonus award plan, with terms and conditions as approved by the Committee, and as part of the same annual bonus award plan as other named executive officers of Utz. Your target bonus opportunity will be 110% of your Base Salary, subject to annual review by the Committee, with a maximum bonus opportunity of 200% of your Base Salary. Your actual bonus payment will be based on performance as measured against goals approved annually by the Committee. For fiscal year 2023, the annual bonus award plan will be approved by the Board and the Committee of Utz in February 2023. For illustrative purposes, Exhibit A reflects the 2022 Annual Bonus Plan mechanics. For the avoidance of doubt, you will not be eligible for a bonus under the 2022 Annual Bonus Plan.
| 5. | Utz’s 2020 Omnibus Equity Incentive Plan; Stock Ownership Guidelines |
During your employment with Utz, you will be eligible to participate in Utz’s 2020 Omnibus Equity Incentive Plan (as amended from time to time, the “OEIP”), and receive equity awards thereunder in the form as determined by the Committee, and subject to vesting and other conditions as set forth in the OEIP and the applicable award agreements.
You will receive an initial grant under the OEIP on the Start Date with an aggregate value equal to $4,000,000.00 based on weighted average price of a share of the Company’s Class A Common Stock on the New York Stock Exchange for the ten consecutive trading day window (the “10-day VWAP”) ending on the trading day prior to the Commencement Date, with 50% in the form of restricted stock units (“RSUs”) and 50% in the form of performance stock units (“PSUs”). Subject to your continued service to the Company through each such date, the RSUs will vest 50% on each of December 31, 2023 and December 31, 2024 and the PSUs vest on December 31, 2025, based on the Company’s relative total shareholder return compared against Utz’s peer group. Such awards will provide that, in the event of your termination by the Company without Cause, by you for Limited Good Reason (or for Good Reason in connection with a Change in Control Termination), or due to your death or Disability, (i) the RSUs will become immediately fully vested and promptly settled and (ii) the PSUs will become fully service-vested but remain subject to achievement of the applicable performance requirements and settled upon completion of the performance period accordingly (each such capitalized term not defined above having the meaning defined under the Utz Executive Change in Control Severance Plan).
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You will also be eligible for an annual award under the OEIP at the start of each calendar year beginning in 2023. Your 2023 award will have an aggregate grant date fair value equal to 250% of our base salary and calculated based on the 10-day VWAP ending on January 30, 2023. Your annual award is expected to be weighted equally between RSUs and PSUs.
Awards granted under the OEIP will be made pursuant to the forms of RSUs and PSUs adopted by the Committee, as amended from time to time.
The Board has also adopted stock ownership guidelines, which currently require the Chief Executive Officer to own stock in Utz equal to six times his annual base salary. In connection with such guidelines, the Board understands that it will take time for you to accumulate shares of stock necessary to satisfy this this obligation and will work with you to establish a sufficient period for you to satisfy these guidelines.
| 6. | Severance |
Following the Start Date, you will be entitled to participate in the Utz Executive Change in Control Severance Plan in accordance with its terms and conditions as in effect from time to time.
| 7. | Other Benefits and Perquisites |
Following the Start Date, you will also be eligible and/or continue to be eligible to participate in the employee benefit plans and programs (excluding severance) generally available to Utz’s senior executives and consistent with such plans and programs of Utz Quality Foods, LLC as in effect as of the date hereof, including but not limited to medical, life and disability insurance, retirement, vacation, fringe benefit, perquisite, business expense reimbursement and travel plans or programs, in accordance with and subject to eligibility and other terms and conditions of such plans and programs, as in effect from time to time. Utz reserves the right to amend, modify or terminate any of its benefit plans or programs at any time and for any reason except as set forth in this Offer Letter.
| 8. | Withholding; Clawback |
Notwithstanding anything else in this Offer Letter, all forms of compensation paid to you as an employee of Utz shall be less all applicable withholdings. Compensation paid to you by the Company will be subject to the Company’s Clawback and Forfeiture Policy, as amended from time to time.
| 9. | At-will Employment |
Your employment with Utz will be for no specific period of time. Rather, your employment will be at-will, meaning that you or the Board may terminate your employment relationship at any time, with or without cause, and with or without notice and for any reason or no particular reason. Although your compensation and benefits may change from time to time, the at-will nature of your employment may only be changed by an express written agreement signed on behalf of Utz by an authorized officer of Utz and you. Upon any termination of your employment with Utz, you will immediately and without the need for any additional action be deemed to have resigned from all officer positions with Utz, the Company, and each of their respective subsidiaries and as a member of the governing boards of the Company and its subsidiaries.
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| 10. | Governing Law, Disputes and Waiver of Jury Trial |
This Offer Letter shall be governed by the laws of the State of Delaware, without regard to conflict of law principles, and any dispute between the parties will be resolved only in the courts of the State of Delaware or in the United States District Court for the District of Delaware and the appellate courts having jurisdiction of appeals in such courts. You and Utz hereby waive, to the fullest extent permitted by law, any right to trial by jury resulting from any proceeding or cause of action brought to resolve any dispute between the parties arising out of, connected with, or related to your employment after the Closing Date with Utz, the Company, or any of its subsidiaries, whether in contract, tort, equity or otherwise.
| 11. | Representations |
You represent that you are not party to any agreement that would limit your ability to discharge your duties to Utz, the Company and their respective subsidiaries. As a condition of accepting this offer of employment, you agree to be subject to Utz’s terms of employment which include restrictive covenants, assignment of inventions, confidentiality and non-disparagement, and non-competition and non-solicitation of employees, customers and suppliers provisions, all as set forth in the form of agreement as attached hereto as Exhibit B.
| 12. | Section 409A |
The intent of the parties is that the payments and benefits under this Offer Letter comply with or be exempt from Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and notices thereunder (“Section 409A”). Accordingly, to the maximum extent permitted, this Offer Letter shall be interpreted to be in compliance with Section 409A.
If any payment, compensation or other benefit provided to you under this Offer Letter in connection with your “separation from service” (within the meaning of Section 409A) is determined, in whole or in part, to constitute “nonqualified deferred compensation” within the meaning of Section 409A and you are a specified employee as defined in Section 409A(2)(B)(i), no part of such payments shall be paid before the day that is six months plus one day after the date of termination or, if earlier, ten (10) business days following your death (the “New Payment Date”). The aggregate of any payments and benefits that otherwise would have been paid and/or provided to you during the period between the date of termination and the New Payment Date shall be paid to you in a lump sum on such New Payment Date. Thereafter, any payments and/or benefits that remain outstanding as of the day immediately following the New Payment Date shall be paid without delay over the time period originally scheduled, in accordance with the terms of this Offer Letter. Notwithstanding anything to the contrary herein, to the extent that the foregoing delay applies to the provision of any ongoing welfare benefits, you shall pay the full cost of premiums for such welfare benefits due and payable prior to the New Payment Date and Utz will pay you an amount equal to the amount of such premiums which otherwise would have been paid by Utz during such period within five (5) business days following its conclusion.
A termination of employment shall not be deemed to have occurred for purposes of any provision of this Offer Letter providing for the payment of any amounts or benefits subject to Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A, and for purposes of any such provision of this Offer Letter, references to a “resignation,” “termination,” “terminate,” “termination of employment” or like terms shall mean separation from service. All expenses or other reimbursements as provided herein shall be payable in accordance with Utz’s policies in effect from time to time, but in any event shall be made on or prior to the last day of the taxable year following the taxable year in which you incurred the expenses. With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A: (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit; and (ii) the amount of expenses eligible for reimbursements or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year.
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For purposes of Section 409A, your right to receive any installment payments pursuant to this Offer Letter shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Offer Letter specifies a payment period with reference to a number of days (e.g., payment shall be made within 30 days following the date of termination), the actual date of payment within the specified period shall be within the sole discretion of Utz.
If you wish to accept this position, please sign below and return this Offer Letter to me. This offer is open for you to accept until 10:00AM ET on Monday, October 3, at which time it will be deemed to be withdrawn.
| Sincerely, | ||
| /s/ Roger Deromedi | ||
| By: | Roger Deromedi | |
| Title: | Chairperson of the Board of Directors | |
| Date: | September 30, 2022 | |
Acceptance of Offer
I have read, understood and accept all the terms of this Offer Letter. I have not relied on any agreements or representations, express or implied, with respect to such employment which are not set forth expressly in this Offer Letter or in the documents referred herein, and this Offer Letter supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to my employment by Utz.
| /s/ Howard Friedman | ||
| Howard Friedman | ||
| Date: | October 2, 2022 | |
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Exhibit A
2022 Annual Bonus Award Plan
Exhibit B
Utz’s Terms of Employment
1. Restrictive Covenants.
1.1 Non-Disclosure of Confidential Information.
(a) The term “Confidential Information,” as used in this Agreement, shall mean any and all information (in whatever form and whether or not expressly designated as confidential) relating directly or indirectly to the respective businesses, operations, financial affairs, assets or technology of the Company and any of its subsidiaries (collectively, the “Companies”) including, but not limited to, marketing and financial information, personnel, sales and statistical data, plans for future development, computer programs, information and knowledge pertaining to the products and services offered, inventions, innovations, designs, ideas, recipes, formulas, manufacturing processes, trade secrets, technical data, computer source codes, software, proprietary information, construction, advertising, manufacturing, distribution and sales methods and systems, pricing, sales and profit figures, customer and client lists, and relationships with customers, clients, suppliers, distributors and others who have business dealings with any of the Companies and information with respect to various ingredients, formulas, manufacturing processes, techniques, procedures, processes and methods. Confidential Information also includes information received by the Associate from third parties in connection with the Associate’s employment by any of the Companies subject to an obligation to maintain the confidentiality of such information. Confidential Information does not include information which (a) becomes generally known to and available for use by the public other than as a result of the Associate’s violation of this Agreement; (b) is or becomes generally available within the relevant business or industry other than as a result of the Associate’s violation of this Agreement; or (c) is or becomes available to the Associate on a non-confidential basis from a source other than the Companies, which source is not known by the Associate, after reasonable inquiry, to be subject to a contractual or fiduciary obligation of secrecy to the Companies.
(b) The Associate acknowledges and agrees that all Confidential Information known or obtained by the Associate, whether before or after the Grant Date and regardless of whether the Associate participated in the discovery or development of such Confidential Information, is the property of the Company. Except as expressly authorized in writing by the Company or as necessary to perform the Associate’s services while an employee of the Company, the Associate agrees that the Associate will not, during or after the Associate’s employment with any of the Companies, for any reason, directly or indirectly, duplicate, use, make available, sell, misappropriate, exploit, remove, copy or disclose to any Person Confidential Information, unless such information is required to be produced by the Associate under order of a court of competent jurisdiction or a valid administrative or congressional subpoena; provided, however, that upon receipt of any such order or subpoena, the Associate shall promptly notify the Company and shall provide the Company with an opportunity at its cost and expense to contest the propriety of such order or subpoena or restrict or condition the disclosure of such Confidential Information or to arrange for appropriate safeguards against any further disclosure by the court or administrative or other body seeking to compel disclosure of such Confidential Information.
1.2 Assignment of Inventions.
(a) The Associate acknowledges and agrees that all ideas, methods, inventions, discoveries, improvements, work products, developments, software, know-how, processes, techniques, works of authorship and other work product, whether patentable or unpatentable, (i) that are reduced to practice, created, invented, designed, developed, contributed to, or improved with the use of any of the Companies’ resources and/or within the scope of the Associate’s duties to the Companies or that relate to the business, operations or actual or demonstrably anticipated research or development of the Companies, and that are made or conceived by the Associate, solely or jointly with others, during the Associate’s employment by any of the Companies; or (ii) suggested by any work that the Associate performs in connection with any of the Companies, either while performing the Associate’s duties to the Companies or on the Associate’s own time, will belong exclusively to the Companies (or their designees), whether or not patent or other applications for intellectual property protection are filed thereon (the “Inventions”). The Associate will keep full and complete written records (the “Records”), in the manner prescribed by the Companies, of all Inventions, and will promptly disclose all Inventions completely and in writing to the Companies. The Records are the sole and exclusive property of the Companies, and the Associate will surrender them upon termination of employment, or upon any of the Companies’ request. The Associate irrevocably conveys, transfers and assigns to the Companies the Inventions and all patents or other intellectual property rights that may issue thereon in any and all countries, whether during or subsequent to the Associate’s employment by any of the Companies, together with the right to file, in the Associate’s name or in the name of any of the Companies (or their designees), applications for patents and equivalent rights (the “Applications”). The Associate will, at any time during and subsequent to employment by or service to any of the Companies, make such applications, sign such papers, take all rightful oaths, and perform all other acts as may be requested from time to time by any of the Companies to perfect, record, enforce, protect, patent or register the Companies’ rights in the Inventions, all without additional compensation to the Associate from the Companies. The Associate will also execute assignments to the Companies (or their designees) of the Applications and give the Companies and their attorneys all reasonable assistance (including the giving of testimony) to obtain the Inventions for the Companies’ benefit.
Exhibit B
(b) In addition, the Inventions are deemed Work for Hire, as such term is defined under the copyright laws of the United States, on behalf of the Companies, and the Associate agrees that the Companies are the sole owners of the Inventions and all underlying rights therein, in all media now known or hereinafter devised, throughout the universe and in perpetuity without any further obligations to the Associate. If the Inventions, or any portion thereof, are deemed not to be Work for Hire, or the rights in such Inventions do not otherwise automatically vest in the Companies, the Associate hereby irrevocably conveys, transfers and assigns to the Companies all rights, in all media now known or hereinafter devised, throughout the universe and in perpetuity, in and to the Inventions, including, without limitation, all of the Associate’s right, title and interest in the copyrights (and all renewals, revivals and extensions thereof) to the Inventions, including, without limitation, all rights of any kind or any nature now or hereafter recognized, including, without limitation, the unrestricted right to make modifications, adaptations and revisions to the Inventions, to exploit and allow others to exploit the Inventions and all rights to sue at law or in equity for any infringement, or other unauthorized use or conduct in derogation of the Inventions, known or unknown, before the date hereof, including, without limitation, the right to receive all proceeds and damages therefrom. In addition, the Associate hereby waives any so-called “moral rights” with respect to the Inventions. To the extent that the Associate has any rights in the results and proceeds of the Associate’s service to the Companies that cannot be assigned in the manner described herein, the Associate agrees to unconditionally waive the enforcement of such rights. The Associate hereby waives any and all currently existing and future monetary rights in and to the Inventions and all patents and other registrations for intellectual property that may issue thereon, including, without limitation, any rights that would otherwise accrue to the Associate’s benefit by virtue of the Associate being an employee of or other service provider to any of the Companies.
1.3 Return of Companies’ Property and Companies’ Information. The Associate agrees to return, promptly following the termination of the Associate’s employment with any of the Companies, or earlier if directed by any of the Companies, any and all of the Companies’ property in the Associate’s possession, as well as any and all records, files, correspondence, reports and computer disks relating to any of the Companies’ operations, products and potential products, marketing, research and development, production and general business plans, customer information, accounting and financial information, distribution, sales, and confidential cost and price characteristics and policies in the Associate’s possession (including on any personal computer).
1.4 Nothing in this Agreement is intended to conflict with the whistleblower provisions of any United States federal, state or local law or regulation, including but not limited to Rule 21F-17 of the Securities Exchange Act of 1934 or § 1833(b) of the Defend Trade Secrets Act of 2016. Accordingly, notwithstanding anything to the contrary herein, nothing in this Agreement shall prohibit the Associate from reporting possible violations of United States federal, state or local law or regulation to any United States federal, state or local governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any agency Inspector General, or to an attorney, or from making other disclosures that are protected under the whistleblower provisions of federal law or regulation, or from disclosing trade secrets and other confidential information in the course of such reporting; provided, that the Associate uses the Associate’s reasonable best efforts to (a) disclose only information that is reasonably related to such possible violations or that is requested by such agency or entity and (b) requests that such agency or entity treat such information as confidential. The Associate does not need the prior authorization from the Company to make any such reports or disclosures and is not required to notify the Company that it has made such reports or disclosures. In addition, the Associate has the right to disclose trade secrets and other confidential information in a document filed in a lawsuit or other proceeding; provided, that the filing is made under seal and protected from public disclosure.
Exhibit B
1.5 In consideration of the employment, the Associate agrees and covenants as follows:
(a) During the entire period of the Associate’s employment with any of the Companies and for a period of six (6) months following the termination of the Associate’s employment for any reason, the Associate shall not, directly or indirectly, for the Associate’s own account, or on behalf of, or together with, any other Person (other than on behalf of the Companies) anywhere in any state of the United States or the District of Columbia:
(i) own, manage, operate, control, finance or participate in the ownership, management, operation, control or financing of, render financial assistance to, be connected as an officer, director, stockholder, employee, partner, member, manager, principal, agent, representative, consultant or otherwise with, use or permit the Associate’s name to be used in connection with, or develop products or services for, any Competing Business. “Competing Business” means any business which is engaged in the development, manufacture, distribution, marketing or sale of snack foods; notwithstanding the foregoing, it shall not be a breach of this Section 6.5(a)(i) for the Associate to own a passive investment of less than one percent (1%) of a class of stock of a publicly held company that is traded on a national securities exchange or in the over the counter market;
(ii) contact, solicit, induce or attempt to contact, solicit or induce any Person who is or was, within the one-year period prior to termination of the Associate’s employment with the Companies, a customer, supplier or agent of any of the Companies or with which any of the Companies or the Associate had contact during the Associate’s employment with any of the Companies, to terminate their relationship with any of the Companies, or do any act which may interfere with or result in the impairment of the relationship, including any reduction in sales or purchases, between any of the Companies and such customers, suppliers or agents; or
(iii) hire any Person who is or was, within the one-year period prior to termination of the Associate’s employment with any of the Companies, an employee of any of the Companies; or contact, solicit, induce or attempt to contact, solicit or induce any Person who is or was, within the one-year period prior to termination of the Associate’s employment with the Companies, an employee of any of the Companies for the purpose of seeking to have such Person terminate his or her employment or engagement with any of the Companies.
Exhibit 99.1
FOR IMMEDIATE RELEASE
Utz Brands Announces CEO Succession Plan
Dylan Lissette to Become Executive Chairman of the Board,
Effective December 15, 2022
Howard Friedman, Current COO of Post Holdings,
to Join as Chief Executive Officer
Company Reaffirms Fiscal Year 2022 Outlook
Hanover, PA. – October 3, 2022 – Utz Brands, Inc. (NYSE: UTZ) (“Utz” or the “Company”), a leading U.S. manufacturer of branded salty snacks, has announced that, after 27 years with the Company, Dylan Lissette, currently Chief Executive Officer, will be appointed Executive Chairman of the Board, effective December 15, 2022. At that time, Howard Friedman, currently Chief Operations Officer of Post Holdings, Inc., will join the Company as Chief Executive Officer and serve as a member of the Utz Board. Commensurate with these appointments, Roger Deromedi, current Chairman of the Board, will become Lead Independent Director. Mr. Lissette will transition to the role of Non-Executive Chairman of the Board in the second quarter of 2023.
This leadership transition was initially contemplated at the time of the merger between Collier Creek Holdings and Utz and is a natural next step as Utz continues to develop as a public company. The search for the next CEO of Utz included the consideration of both internal and external candidates, leading to the identification of Mr. Friedman as an ideal successor to Mr. Lissette, with the right CPG experience and expertise to lead the Company as it accelerates its proven growth strategy.
Joining the Company in 1995 and serving as CEO since 2013, Mr. Lissette has been integral in the Company’s success, guiding Utz through its evolution from a regional snack food brand to the third largest branded salty snack platform in the United States. During his tenure as CEO, Mr. Lissette oversaw a decade of significant accomplishments, including sales growth that nearly tripled to reach over $1.3 billion, Utz’s debut as a public company, and the completion of six acquisitions since the Company’s public listing in 2020.
Mr. Lissette said, “I have had the honor and privilege to work for and to help lead this great company for nearly three decades. It has been immensely gratifying to see the success of our team over so many years, as Utz continues to achieve enhanced scale while never compromising the family crafted quality and great flavors that our consumers expect. Our track record of success has been incredible, and I am truly excited to transition into the role of Executive Chairman and to welcome Howard to our team.”
Mr. Friedman has more than 25 years of experience in the food and beverage sector leading some of America’s most iconic brands, including PEBBLES™ cereal, LUNCHABLES™ snacks, PHILADELPHIA™ cream cheese, KOOL-AID™ drinks and KRAFT™ foods. Throughout the course of his career, Mr. Friedman has built a proven track record of profitably growing businesses through world-class marketing, strategy, and innovation. Additionally, he has deep experience in new business integration, commercial execution, and value creation.
Mr. Lissette continued, “I am thrilled we found such an excellent leader in Howard to help take Utz to even greater heights. Howard brings extensive experience increasing market share and unlocking growth potential, with a focus on building innovative brands and strategic business development. The Board and I are confident that he will help lead Utz to tremendous success as we grow our presence across geographies, salty snack sub-categories, and channels. I look forward to stepping into my new strategic role working with Howard, our management team, and our Board to help ensure the continuity of Utz’s heritage, culture, and forward growth momentum.”
Mr. Friedman said, “I am honored to join Utz as CEO at this important time, and I see enormous potential to continue Utz’s exciting journey. I am confident that, with such a values-driven, passionate organization, and a portfolio of iconic snacks beloved by families across the U.S., Utz is just getting started. I am eager to start this new chapter and work with Dylan, the Utz leadership team, and the Board to drive value, expand the Company’s reach, and deliver growth as we produce world-class product innovation and the flagship snacks consumers have connected with for more than a century.”
Mr. Deromedi stated, “We are pleased to welcome Howard as our next CEO after a thorough search and succession planning process. Howard is an exceptionally strong leader with the skills, experience, and perspective to execute our strategy and lead Utz to succeed well into the future. We are also fortunate to have Dylan as an integral member of the Board, building on both his legacy of successful leadership at Utz, as well as the Rice and Lissette’s continuing and significant ownership stake in the Company.”
Michael Rice, Utz Chairman Emeritus and previous Utz CEO of more than 30 years, added, “Utz has been blessed with talented associates every step of the way on our journey to becoming one of the largest salty snack companies in the country. With the foundation that Dylan and the team have built, and now under Howard’s leadership, I feel we have tremendous continued growth potential. The Utz team continues to strengthen our nationwide capabilities, and our associates always amaze me with their passion for creating the best snack foods in the industry. With Dylan as the Chairman of the Board and Howard leading the business, I anticipate continued success long into the future.”
Company Reaffirms Fiscal Year 2022 Outlook(1)
The Company today also reaffirmed its fiscal year 2022 outlook, which it last updated on August 11, 2022. For 2022, the Company continues to expect total net sales growth of 13-15%, Organic Net Sales growth of 10-12%, and Adjusted EBITDA growth of 2-5%.
| (1) | With respect to projected fiscal 2022 Adjusted EBITDA, a quantitative reconciliation is not available without unreasonable efforts due to the high variability, complexity, and low visibility with respect to certain items, which are excluded from Adjusted EBITDA. We expect the variability of these items to have a potentially unpredictable, and potentially significant, impact on our future financial results. |
About Howard Friedman
Mr. Friedman has served as Executive Vice President and Chief Operations Officer of Post Holdings, Inc. since September 2021. Prior to this role at Post, he served as President and CEO of Post Consumer Brands, its flagship cereal business, from 2018 to 2021. Prior to Post, Mr. Friedman served in roles of increasing responsibility at The Kraft Heinz Company over more than 20 years, gaining extensive experience in consumer products and culminating in his role as Executive Vice President and President Refrigerated (Meat and Dairy), leading Kraft Heinz’s largest business unit.
Mr. Friedman started his career in the United States Army serving in the U.S. and overseas, completing his service as a Captain. He holds a B.A. from Dickinson College and an M.B.A. in Marketing and Finance from New York University’s Stern School of Business.
About Utz Brands, Inc.
Utz Brands, Inc. (NYSE: UTZ) manufactures a diverse portfolio of savory snacks through popular brands including Utz®, ON THE BORDER® Chips & Dips, Golden Flake®, Zapp’s®, Good Health®, Boulder Canyon®, Hawaiian Brand®, and TORTIYAHS!®, among others.
After a century with strong family heritage, Utz continues to have a passion for exciting and delighting consumers with delicious snack foods made from top-quality ingredients. Utz’s products are distributed nationally through grocery, mass merchandisers, club, convenience, drug, and other channels. Based in Hanover, Pennsylvania, Utz has multiple manufacturing facilities located across the U.S. to serve our growing customer base. For more information, please visit www.utzsnacks.com or call 1-800-FOR-SNAX.
Investors and others should note that Utz announces material financial information to its investors using its investor relations website (https://investors.utzsnacks.com/investors/default.aspx), U.S. Securities and Exchange Commission (the “Commission”) filings, press releases, public conference calls, and webcasts. Utz uses these channels, as well as social media, to communicate with our stockholders and the public about the Company, the Company’s products and other issues. It is possible that the information that Utz posts on social media could be deemed to be material information. Therefore, Utz encourages investors, the media, and others interested in the Company to review the information posted on the social media channels listed on Utz’s investor relations website.
Utz Brands, Inc. Contact:
Investors
Kevin Powers
kpowers@utzsnacks.com
Media
Kevin Brick
kbrick@utzsnacks.com
Non-GAAP Financial Measures:
Organic Net Sales and Adjusted EBITDA are non-GAAP financial measures. Utz uses non-GAAP financial information and believes it is useful to investors as it provides additional information to facilitate comparisons of historical operating results, identify trends in our underlying operating results and provides additional insight and transparency on how we evaluate the business. We use non-GAAP financial measures to budget, make operating and strategic decisions, and evaluate our performance. These non-GAAP financial measures do not represent financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing financial results. Therefore, these measures should not be considered in isolation or as an alternative to net income, cash flows from operations or other measures of profitability, liquidity or performance under GAAP. You should be aware that the presentation of these measures may not be comparable to similarly titled measures used by other companies.
Management believes that non-GAAP financial measures should be considered as supplements to the GAAP measures reported in our Annual Report on Form 10-K, Quarterly Report on Form 10-Q and other earnings information, should not be considered replacements for, or superior to, the GAAP measures and may not be comparable to similarly named measures used by other companies. We believe that these non-GAAP measures of financial results provide useful information to investors regarding certain financial and business trends relating to the financial condition [and results of operations of the Company to date] and that the presentation of non-GAAP financial measures is useful to investors in the evaluation of our operating performance compared to other companies in the salty snack industry, as similar measures are commonly used by the companies in this industry. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. The non-GAAP financial measures are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance.
Organic Net Sales is defined as net sales excluding the impact of acquisitions and excluding the impact of Independent Operator route conversions.
Adjusted EBITDA is 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. Adjusted EBITDA is one of the key performance indicators we use in evaluating our operating performance and in making financial, operating, and planning decisions. We believe Adjusted EBITDA is useful to the users of this release and financial information contained in the release in the evaluation of Utz’s operating performance compared to other companies in the salty snack industry, as similar measures are commonly used by companies in this industry. We have historically reported an Adjusted EBITDA metric to investors and banks for covenant compliance.
Forward-Looking Statements
This press release includes certain statements made herein that are not historical facts but are “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended. The forward-looking statements generally are accompanied by or include, without limitation, statements such as “will”, “expect”, “intends”, “goal” or other similar words, phrases or expressions. These forward-looking statements include future plans for Utz Brands, Inc. (the “Company”), the estimated or anticipated future results and benefits of the Company’s future plans and operations, future opportunities for the Company, the effects of leadership changes in the Company’s management and Board of Directors, projected sales and earnings results, and other statements that are not historical facts. These statements are based on the current expectations of the Company’s management and are not predictions of actual performance. These statements are subject to a number of risks and uncertainties and the Company’s business and actual results may differ materially. Factors that may cause such differences include, but are not limited to: the risk that recently completed business combinations and other acquisitions recently completed by the Company (collectively, the “Business Combinations”) disrupt plans and operations; the ability to recognize the anticipated benefits of such Business Combinations, which may be affected by, among other things, competition and the ability of the Company to grow and manage growth profitably and retain its key employees; the outcome of any legal proceedings that may be instituted against the Company following the consummation of such Business Combinations; changes in applicable law or regulations; costs related to the Business Combinations; the ability of the Company to maintain the listing of the Company’s Class A Common Stock on the New York Stock Exchange; the inability of the Company to develop and maintain effective internal controls; the risk that the Company’s gross profit margins may be adversely impacted by a variety of factors, including variations in raw materials pricing, retail customer requirements and mix, sales velocities and required promotional support; changes in consumers’ loyalty to the Company’s brands due to factors beyond the Company’s control; changes in demand for the Company’s products affected by changes in consumer preferences and tastes or if the Company is unable to innovate or market its products effectively; costs associated with building brand loyalty and interest in the Company’s products, which may be affected by the Company’s competitors’ actions that result in the Company’s products not suitably differentiated from the products of competitors; fluctuations in results of operations of the Company from quarter to quarter because of changes in promotional activities; the possibility that the Company may be adversely affected by other economic, business or competitive factors; and other risks and uncertainties set forth in the section entitled “Risk Factors” and “Forward-Looking Statements” in the Company’s Annual Report on Form 10-K filed with the Commission, for the fiscal year ended January 2, 2022 and other reports filed by the Company with the Commission. In addition, forward-looking statements provide the Company’s expectations, plans or forecasts of future events and views as of the date of this communication. These forward-looking statements should not be relied upon as representing the Company’s assessments as of any date subsequent to the date of this communication. The Company cautions investors not to place undue reliance upon any forward-looking statements, which speak only as of the date made. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based, except as otherwise required by law.