 
Cary Devore
Age: 4850 | | Mr. Devore serves as Executive Vice President, Chief FinancialOperating Officer of Utz, having served in this role since July 2019.October 2021. In this role, Mr. Devore joinedworks across the organization to help drive revenue growth, productivity, and operational excellence. In addition, he continues to drive the Company’s strategic corporate initiatives including mergers and acquisitions and capital markets. Prior to his role as Chief Operating Officer, Mr. Devore held the position of Executive Vice President and Chief Financial Officer of Utz companiesfrom July 2019 to October 2021. Mr. Devore began working with Utz in November 2016 as the lead representative of Metropoulos & Co. on the Board of Managers of the Continuing Members, where he worked alongside Dylan Lissette to drive our acquisition and value creation efforts, and became Executive Vice President and Chief Financial Officer in July 2019. Prior to serving as Chief Financial Officer, Mr. Devore served as Executive Vice President since December 2017 and as Senior Vice President from November 2016 until December 2017. From November 2014 until August 2017, Mr. Devore was a Managing Director of Metropoulos & Co., a private equity firm, where he focused on direct equity investments in the food and beverage sector. Prior to his service at Metropoulos, from October 2009 through August 2014, Mr. Devore was Co-Founder and Managing Director of SilverStream Capital, LLC, a family office focused on investments in healthcare and technology. From October 2005 through June 2009, Mr. Devore co-founded and led HBK Private Equity, LLC, the private equity arm of the hedge fund HBK Capital Management. Earlier in his career, Mr. Devore worked for Jordan Industries, Inc., an affiliate of The Jordan Company, from May 1996 to July 2002, focusing on middle market buy and build strategies,strategies; as well as at UBS Investment Bank, an investment bank, from August 2004 to October 20052005; and Price Waterhouse LLP, a multinational professional services network of firms, from August 1994 to May 1996. Mr. Devore graduated from the University of Illinois with a Bachelor of ScienceB.S. in Accounting, Magna Cum Laude, and received his MBAM.B.A. from the University of Michigan with High Honors. |
18
EXECUTIVE OFFICERS OF UTZ BRANDS, INC. | | | 
 Ajay Kataria
Age: 4446 | | Mr. Kataria serves as Executive Vice President, Finance & AccountingChief Financial Officer at Utz, having served in this role since October 2021. In this role, Mr. Kataria is responsible for all of the Company’s financial functions and the Information Technology function that he oversaw in his previous role. Prior to his service as Executive Vice President and Chief Financial Officer, Mr. Kataria served as Executive Vice President of Finance and Accounting from July 2019.2019 until October 2021. Mr. Kataria joined the Utz companies in July 2017 as Senior Vice President of Finance and Treasury to support our financial planning, analytics and business transformation efforts, and became Executive Vice President in July 2019. Prior to joining the Utz companies, from April 2016 until July 2017, Mr. Kataria served as Vice President of Global Finance and Strategy at Armstrong Flooring, Inc., a producer of residential and commercial flooring products. Prior to his time at Armstrong, from August 2014 until April 2016, Mr. Kataria served as Vice President of Supply Chain Finance at Chobani, Inc., a producer of Greek yogurt and dairy products. Prior to Chobani, Mr. Kataria worked for ten years at PepsiCo, Inc. (NASDAQ: PEP), an American multinational food, snack, and beverage corporation, in various supply chain and finance roles of increasing responsibility. Mr. Kataria holds a Bachelor of Technology from the National Institute of Technology, India and earned his MBAM.B.A. from Southern Methodist University, Cox School of Business. |
| | | 
 Thomas Lawrence Shannan Redcay
Age: 5342 | | Mr. Lawrence
Ms. Redcay serves as Executive Vice President, Chief Supply Chain Officer for Utz, having served in this role since January 2015. Mr. Lawrence was a member of the Board of Managers of the Continuing Members from June 2014 until August 2020. Mr. Lawrence joined the Utz companies in September 2004, holding various positions, including roles in Manufacturing and Strategic Planning. Prior to joining the Utz companies, Mr. Lawrence served as Director of Operations for Glatfelter, a global supplier of specialty paper, where he was employed from June 1993 to September 2004. Mr. Lawrence started his career in the paper and packaging industry, working for Westvaco (now part of WestRock), an American corrugated packaging company, from June 1990 to June 1993. Mr. Lawrence holds a Bachelor of Science in Chemical Engineering from The Pennsylvania State University.
|
Mark Schreiber
Age: 57
| Mr. Schreiber serves as Executive Vice President, Chief Customer Operating Officer, Sales & Marketing at Utz having served in this role since June 2022. In this role, Ms. Redcay has responsibility for Manufacturing, Manufacturing Operational Excellence, Value Creation, Continuous Improvement, Engineering, Quality Assurance, Safety, Innovation and Research & Development. Prior to her role as EVP, Manufacturing, Ms. Redcay held roles of increasing responsibility at Utz, including as Senior Vice President of Manufacturing from April 2022 to June 2022, Senior Vice President Productivity and Development from November 2021 to April 2022 and Senior Vice President of Innovation and Value Creation from October 2020 to November 2021, during which time Ms. Redcay was tasked with advancing the brand’s innovation initiatives including Utz’s entry into new potential categories, forms and formats and ultimately delivering consumer-led innovation that capitalizes on emerging trends. Prior to these roles, Ms. Redcay served as Senior Director of Innovation and Quality Assurance at Utz from January 2019 to July 2020, and as Director, Product Innovation from April 2015 to January 2019. Prior to joining Utz, Ms. Redcay served in various roles at WhiteWave Foods, an international food company in the plant-based, organic dairy and organic produce categories. During Ms. Redcay’s tenure at WhiteWave from 2006 to 2015, her roles included Director R&D, Dean Foods, where she helped launch TruMoo consolidated formulas across all regional dairies; Director of Packaging and Regulatory with a focus on new packaging format development; and Director of Horizon Organic where she helped drive expansion into Food categories. Ms. Redcay earned her B.S. and M.S. from Purdue University.
|
| | |  Mark Schreiber Age: 59 | | Mr. Schreiber serves as Executive Vice President, Sales and Chief Customer Officer at Utz, having served in this role since June 2021. Prior to serving as Executive Vice President, Chief Sales and Customer Officer, Mr. Schreiber served as EVP, Chief Customer Operating Officer, Sales & Marketing from October 2020 to June 2021, and as Chief Customer Officer from April 2017 until October 2020. Prior to his service at the Utz companies, Mr. Schreiber served as the Senior Vice President of Sales and Operations for Pepperidge Farm, Inc., a commercial bakery that was acquired by Campbell Soup Company, and on the Global Sales Leadership team for Campbell Soup Company (NYSE: CPB), a processed food and snack company, from January 2008 to April 2017. Mr. Schreiber also worked at Pepperidge Farm, Inc., an American commercial bakery, as Customer Vice President from January 2002 until January 2008, and as Vice President Customer Trade Marketing from January 1999 until January 2002. Prior to Pepperidge Farm, from January 1987 to January 1999, Mr. Schreiber began his career at Frito-Lay, a manufacturer of corn chips, potato chips and other snack foods, performing various roles in sales, strategic accounts, supply chain, marketing and DSD strategic operations. Mr. Schreiber is a current member of the Food Industry Association and has served as a Sales Executive Board Member of the Grocery Manufacturers Association from 2010 until 2016. Mr. Schreiber holds a Bachelor of ScienceB.S. in Marketing from The Pennsylvania State University. |
 | 2021 | | | | | | 
| | 2023 PROXY STATEMENT 19 |
EXECUTIVE OFFICERS OF UTZ BRANDS, INC.(CONT.) | | |   Theresa Shea Age: 50 | | Ms. Shea has served as Executive Vice President, General Counsel & Corporate Secretary since July 2021. Prior to joining Utz, Ms. Shea was Vice President & General Counsel of True Value Company, LLC, a hardware wholesaler that services independent hardware store owners, having served in that role since July 2018. Before assuming that role in July 2018, Ms. Shea served as Assistant General Counsel, Labor & Employment for True Value starting in December 2007. During her tenure at True Value, Ms. Shea served as Executive Sponsor of the Inclusion & Diversity Council and True Value Foundation and led the internal COVID Crisis Team. From November 2002 through December 2007, Ms. Shea held the role of Senior Counsel at United Airlines, Inc., assisting the Company as it renegotiated all of its employment commitments during its post-09/11 bankruptcy. Earlier in her career, Ms. Shea worked as an associate for Seyfarth Shaw, an international law firm, out of its Chicago, Illinois office, focusing her practice in labor, employment and education law. Ms. Shea graduated from the University of Illinois at Urbana-Champaign, Bronze Tablet in 1994 with a B.A. Degree in the Teaching of English and Magna Cum Laude in 1997 with a Juris Doctor degree. Ms. Shea obtained a Certificate in Executive Management from the University of Notre Dame in 2015. |
| | |  James Sponaugle
Age: 4446 | | Mr. Sponaugle serves as the Executive Vice President, Chief People Officer at Utz, having served in this role since August 2021. Prior to his role as Chief People Officer, Mr. Sponaugle served as Senior Vice President, Human Resources & Personnel Development at Utz, having served in this role sincefrom February 2020.2020 until August 2021. Prior to joining the Utz companies, from January 2009 until January 2020, Mr. Sponaugle worked at the Stewart Companies family of businesses, a company handling the entire range of construction-related services. Starting with Poole Construction from January 2009 to June 2010, and then moving to Riley Welding and Fabricating, a metal fabrication division of Stewart Companies, a full-service construction-related services company, serving as General Manager and Vice President from June 2010 until March 2018. Mr. Sponaugle was promoted to Executive Vice President and added the responsibility of running Stewart & Tate Construction Industrial Division starting March 2018 through January 2020, while also maintaining his responsibilities at Riley Welding and Fabricating. Mr. Sponaugle started his career in January 1999 with Cintas Corporation (NASDAQ: CTAS), a public company operating nearly 500 facilities in JanuaryNorth America, including five manufacturing facilities and eleven distribution centers, which provides a range of 1999,products and forservices to businesses including uniforms, mats, mops, cleaning and restroom supplies, first aid and safety products, fire extinguishers and testing, and safety courses. Mr. Sponaugle spent close to a decade heldat Cintas holding various leadership roles in Sales and Operations, finishing his career as a General Manager overseeing a 3-shift operation with approximately 165 associates, including approximately 55 routes and Service Sales Representatives. Cintas is a public company operating nearly 500 facilities in North America - including five manufacturing facilities and eleven distribution centers. Mr. Sponaugle serves on the Board of Directors of the Hanover Area Chamber of Commerce and servesserved as the Chairman of the Board of Directors of the YMCA of Hanover.Hanover from April 2019 until April 2022. Mr. Sponaugle earned his Bachelor of ScienceB.S. in Business Management from Cornell University. |
| | |   Todd Staub Chad Whyte
Age: 54
Age: 47 | | Mr. Staub Whyte serves asExecutive Vice President, Chief Administration OfficerSupply Chain at Utz, having served in thesethat role since June 2022. As EVP, Supply Chain, he assumed responsibility for procurement in addition to his existing responsibilities for customer logistics, transportation, distribution, and integrated business management (including demand and supply planning), which plays an integral role in the supply chain process. Mr. Whyte joined Utz in January 2022 as Senior Vice President, Supply Chain Planning and Logistics and remained in that position until assuming his current role in June 2022. Mr. Whyte joined Utz with 25 years of experience in supply chain roles, since April 2017.most recently as President and Chief Executive Officer of Aloe Group, LLC, a consulting group focused on logistics, packaging, and transportation, serving in this role from January 2020 to December 2021. Prior to Aloe, Mr. StaubWhyte was a member of the Board of Managers of the Continuing MembersVice President, Supply Chain at Pinnacle Foods from March 2008 until August 2020. Mr. Staub joined the Utz companies in February 19972015 to December 2019, where he was responsible for all transportation, deployment planning, warehousing and has held financial positions with increasing responsibility including Controller from March 1999 to July 2002, Vice President — Finance from July 2002 to July 2012, and Executive VP & Chief Financial Officer from July 2012 to April 2017.network optimization for a $3.5 billion revenue business. Prior to joining the Utz companies,Pinnacle Foods, Mr. Staub servedWhyte was Senior Director, Logistics at Campbell Soup Company (NYSE: CPB), an American processed food and snack company; Director, Logistics North America at Reckitt Benckiser (OTCMKTS: RBGLY), a British multinational consumer goods company headquartered in Slough, England from February 2011 to August 2014, and Director, Supply Chain Planning at Church & Dwight Company (NYSE: CHD), an American consumer goods company focusing on personal care, household products, and specialty products, from May 2001 to January 2011. Mr. Whyte received a B.S. in Supply Chain and Information Systems, as well as an Account SupervisorM.B.A., from The Pennsylvania State University. He was also an adjunct faculty member for United Defense, a government contractor, from March 1996 until February 1997 and as an Accountant at Glatfelter Paper Company, a paper and packaging company, from September 1988 until March 1996. Mr. Staub holds a Bachelor of Arts in Mathematics from Western Maryland College and earned his MBA from York College of Pennsylvania.Penn State’s Executive Education Program on Achieving Supply Chain Transformation. |
20
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 investors.utzsnacks.comhttps://www.investors.utzsnacks.com/investors under the heading “Governance — Governance Documents.” Set forth below is information regarding the meetings of the Board during 2020,fiscal year 2022, 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 tentwelve members, divided into three classes of staggered three-year terms. If a newOn December 15, 2022, Howard Friedman joined the Company as Chief Executive Officer is namedand was appointed to replace Dylan B. Lissette, such person is anticipated to join ourthe Board of Directors as the eleventh member. Directors. Pursuant to the Investor Rights Agreement, the Continuing Members have the right to nominate five Continuing Member Nominees to our Board of Directors and the Sponsor or Sponsor Representative as applicable, havehas the right to nominate five Sponsor Nominees to our Board of Directors for so long as each of them and their respective affiliates and specified family members beneficially own certain specified percentages of the certain economic interests in usUBI and UBH. 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: ■∎ | | The Class I directors are John W. Altmeyer, Howard Friedman, Jason K. Giordano, and B. John Lindeman; |
■∎ | | The Class II directors are Antonio F. Fernandez, Michael W. Rice, Craig Steeneck, and Craig D. Steeneck;Pamela Stewart; and |
■∎ | | The Class III directors are Timothy P. Brown, Christina Choi, Roger K. Deromedi, and Dylan B. 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. This classification of our Board may have the effect of delaying or preventing changes in control of us. 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. Prior to the Closing of the Business Combination, the Board of CCH met five times in 2020. Following the Business Combination and through the end of our fiscal year,In 2022, our Board met four times. In 2020,eight 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: ■∎ | | Audit Committee: Craig D. Steeneck (Chair), Roger Deromedi, Antonio F. Fernandez, and B. John Lindeman; |
■∎ | | Compensation Committee: Jason K. Giordano (Chair), John W. Altmeyer, Craig Steeneck, and Craig D. Steeneck;Pamela Stewart; and |
■∎ | | Nominating and Corporate Governance Committee: John W. Altmeyer (Chair), Christina Choi, and Jason K. 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. | 2021 PROXY STATEMENT 21 |
CORPORATE GOVERNANCE(CONT.)
Audit Committee.Craig D. Steeneck, Roger Deromedi, Antonio F. 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 independent; our Board of Directors has determined that each of Messrs. Steeneck, Deromedi, Fernandez and Lindeman are independent | | | | | | | | | 2023 PROXY STATEMENT 21 |
CORPORATE GOVERNANCE ∎ COMMITTEES AND MEETINGS OF THE BOARD under the NYSE listing standards and applicable SEC rules. Mr. Steeneck serves as the Chairman of the Audit Committee. Each member of the Audit Committee is financially literate and our Board of Directors has determined that Mr. Steeneck qualifies as an “audit committee financial expert” as defined in applicable SEC rules. Our Audit Committee is responsible for, among other things: ■∎ | | Selecting a qualified firm to serve as the independent registered public accounting firm to audit our financial statements; |
■∎ | | Helping to ensure the independence and performance of the independent registered public accounting firm; |
■∎ | | Discussing the scope and results of the audit with the independent registered public accounting firm and reviewing, with management and the independent registered public accounting firm, our interim and year-end financial statements; |
■∎ | | Developing procedures for associates to submit concerns anonymously about questionable accounting or audit matters; |
■∎ | | Reviewing and overseeing our policies on risk assessment and risk management, including enterprise risk management; |
■∎ | | Reviewing related person transactions; |
■∎ | | Reviewing the adequacy and effectiveness of internal control policies and procedures and our disclosure controls and procedures; and |
■∎ | | Approving or, as required, pre-approving, all audit and all permissible non-audit services, other than de minimis non-audit services, to be performed by the independent registered public accounting firm. |
Our Board of Directors adopted a written charter for the Audit Committee which is available on our investor website at investors. utzsnacks.comhttp://investors.utzsnacks.com/investors under the heading “Governance — Governance Documents.” Prior to the Closing of the Business Combination,In fiscal year 2022, the Audit Committee of the CCH Board of Directors met three times during 2020. Following the Closing of the Business Combination and through the end of our fiscal year, the Audit Committee of our Board of Directors met twice.seven times.
Compensation Committee.Jason K. Giordano, John W. Altmeyer, Craig Steeneck and Craig D. SteeneckPamela Stewart serve as members of our Compensation Committee. Under the NYSE listing standards, we are required to have a Compensation Committee composed entirely of independent directors; our Board of Directors has determined that each of Messrs. Giordano, Altmeyer and Steeneck and Ms. Stewart are independent. Mr. Giordano serves as Chairman of the Compensation Committee. For more information on the Compensation Committee, see “— Corporate Governance Policies — Consideration and Determination of Executive and Director Compensation.” Our Compensation Committee is responsible for, among other things: ■∎ | | Reviewing, approving and determining the compensation of our officers and key associates; |
| ∎ | ■ | Reviewing, approving and determining compensation and benefits, including equity awards, to directors for service on our Board of Directors or any committee thereof; |
| ∎ | ■ | Administering our equity compensation plans; |
| ∎ | ■ | Reviewing, approving and making recommendations to our Board of Directors regarding incentive compensation and equity compensation plans; and |
| ∎ | ■ | Establishing and reviewing general policies relating to compensation and benefits of our associates. |
Our Board of Directors adopted a written charter for the Compensation Committee, which is available on our investor website at investors.utzsnacks.comhttp://investors.utzsnacks.com/investors under the heading “Governance — Governance Documents.” Prior to the Closing of the Business Combination,In fiscal year 2022, the Compensation Committee of the CCH Board of Directors met three times in 2020. Following the Closing of the Business Combination and through the end of our fiscal year, the Compensation Committee of our Board of Directors met once.five times.
Nominating and Corporate Governance Committee.John W. Altmeyer, ChristineChristina Choi and Jason K. Giordano serve as members of our Nominating and Corporate Governance Committee. Under the NYSE listing standards, we are required to have a nominating and corporate governance committee composed entirely of independent directors; our Board of Directors has determined that each of Messrs. Altmeyer and Giordano and Ms. Choi are independent. Mr. Altmeyer serves as Chairman of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee is responsible for, among other things: ■∎ | | Identifying, evaluating and selecting, or making recommendations to our Board of Directors regarding nominees for election to our Board of Directors and its committees; |
| ∎ | ■ | Evaluating the performance of our Board of Directors and of individual directors; |
CORPORATE GOVERNANCE ∎ COMMITTEES AND MEETINGS OF THE BOARD | ∎ | | Considering, and making recommendations to our Board of Directors regarding the composition of our Board of Directors and its committees; |
| ∎ | ■ | Reviewing developments in corporate governance practices; |
| ∎ | ■ | Evaluating the adequacy of the corporate governance practices and reporting; and |
| ∎ | ■ | Developing and making recommendations to our Board of Directors regarding corporate governance guidelines and matters. |
Our Board of Directors adopted a written charter for the Nominating and Corporate Governance Committee, which is available on our investor website at investors.utzsnacks.comhttp://investors.utzsnacks.com/investors under the heading “Governance — Governance Documents.” Our Corporate Governance Guidelines provide that the Nominating and Corporate Governance Committee is responsible for conducting all necessary and appropriate inquiries into the background and qualification of each potential director candidate and recommend to our Board of Directors those candidates to be nominated for election to our Board of Directors, subject to the Investor Rights Agreement or any other stockholder agreement setting forth procedures or requirements governing the nomination of directors to our Board of Directors. In identifying, evaluating and determining whether to ultimately recommend a person as a candidate for election as a director, the Nominating and Corporate Governance Committee evaluates all factors that it deems appropriate, including the terms of the Investor Rights Agreement (or any other stockholder agreement applicable to us from time to time), as well as the qualifications set forth in our Corporate Governance Guidelines. It also takes into account specific characteristics and expertise that it believes will enhance the diversity of experience, technical skills, industry knowledge and experience, financial expertise, and local or community ties. Each director is expected to be an individual of high character and mature judgment, who has familiarity with the Company’s business and industry, independence of thought and an ability to work collegially. In determining whether to recommend a director for re-election, the Nominating and Corporate Governance Committee also considers matters relating to the retirement of members, including any term limits or age limits, as well as the performance of such directors and any other qualifications and characteristics set forth in the committee’s charter. The Nominating and Corporate Governance Committee may retain and obtain the advice of any advisor to conduct or assist with this evaluation. Ultimately, the Nominating and Corporate Governance Committee seeks to recommend to our Board those nominees whose specific experience, qualifications, attributes, diversity and skills to assurewill ensure that the Board, as a whole, has the necessary tools to perform its oversight function effectively in light of the Company’s business and structure and the environment in which the Company is operating. In particular, the Nominating and Corporate Governance Committee will seek nominees who will: (i) dedicate sufficient time, energy and attention to ensure the diligent performance of Board duties; (ii) comply with the duties and responsibilities set forth in our Corporate Governance Guidelines and in our bylaws; (iii) comply with all duties of care, loyalty and confidentiality applicable to them as directors of publicly traded corporations organized in Delaware; and (iv) adhere to our Code of Business Conduct and Ethics. | 2021 PROXY STATEMENT 23 |
CORPORATE GOVERNANCE(CONT.)
The Nominating and Corporate Governance Committee will also consider recommendations of qualified nominees by stockholders on a substantially similar basis as it considers other nominees. If any stockholder wishes to recommend candidates directly to our Nominating and Corporate Governance Committee, such stockholder may do so by sending timely notice to the Corporate Secretary and otherwise in accordance with the terms of our bylaws. To be timely, a stockholder’s notice shall be delivered to the Corporate Secretary not less than 90 days nor more than 120 days prior to the first anniversary of the 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. Prior Any notice of director nomination submitted to the ClosingCompany must include the information required by Rule 14a-19(b) under the Exchange Act.
In addition, the Board has delegated oversight of the Business Combination,Company’s EST program to the Nominating and Corporate Governance Committee. See “Proxy Summary - Environmental, Social and Governance” at page 7 for additional details. In fiscal year 2022, the Nominating and Corporate Governance Committee of the CCH Board of Directors met three times in 2020. Following the Closing of the Business Combination and through the end of our fiscal year, the Nominating and Corporate Governance Committee of our Board met once.five 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 committeeCommittee 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. | | | | | | | | | 2023 PROXY STATEMENT 23 |
CORPORATE GOVERNANCE ∎ DIRECTOR INDEPENDENCE 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 the 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, seveneight 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. 24
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 Executive 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 investors.utzsnacks.comhttp://investors.utzsnacks.com/investors under the heading “Corporate Governance.“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 corporate governance policies and standards applicable. 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: ■∎ | | Role and responsibility of the Board; |
■∎ | | Independence of directors; |
■∎ | | Director qualification standards; |
■∎ | | Director orientation and continuing education; |
■∎ | | Conduct of Board meetings; |
■∎ | | Committees of the Board; |
■∎ | | Expectations of directors; |
■∎ | | Limitations on other board service; |
■∎ | | Management succession planning; |
■∎ | | Evaluation of Board performance; and |
■∎ | | Communications with stockholders and communications with non-management directors. |
A copy of the Corporate Governance Guidelines is available on our investor website at investors.utzsnacks.comhttp://investors.utzsnacks.com/investors under the heading “Corporate Governance.“Governance — Governance Documents.” Risk Management.Utz’s management is responsible for 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 financial
CORPORATE GOVERNANCE ∎ CORPORATE GOVERNANCE POLICIES 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 risk exposures,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 relatedcompensation-related risk from the Compensation Committee and governance relatedgovernance-related risk from the Nominating and Corporate Governance Committee. In 2020 the Board adopted a clawback and forfeiture policy, which 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 executive egregious misconduct 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. | 2021 PROXY STATEMENT 25 |
CORPORATE GOVERNANCE(CONT.)
Executive Sessions of IndependentNon-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 no membersonly the Corporate Secretary present, if the presence of management present.the Corporate Secretary is requested by our Board or the Chairperson. 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 ourcertain executive officers, subject to such further action of our Board. The Board of Directors as our Board of Directors shall determine with respect toestablish and review 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: ■∎ | | Evaluating associate performance; |
■∎ | | Preparing information for Compensation Committee meetings; |
■∎ | Establishing | Proposing business performance targets and objectives;objectives for consideration by the Compensation Committee; |
■∎ | | Providing background information regarding our strategic objectives; and |
■∎ | | Recommending salary levels and equity awards. |
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, Mr. Lissettethe Company’s chief executive officer reviews the performance of senior management and make recommendationsmakes a recommendation on compensation levels. In addition, our executive officers and other invited attendees answer questions posed by the committee. 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. 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 our affiliates,(and their affiliates), whether or not in possession of material non- publicnon-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. | | | | | | | | | 2023 PROXY STATEMENT 25 |
CORPORATE GOVERNANCE ∎ CORPORATE GOVERNANCE POLICIES Committee Authority to Retain Independent Advisors.The charters of each of the Audit Committee, Compensation Committee and the Nominating and Corporate Governance Committee and the Compensation Committee provide that each such committee has the authority to retain independent advisors, counsel, experts and consultants, with all fees and expenses paid by us.the Company. 26
Board Leadership Structure.Our current Board leadership structure separates the positions of Chief Executive Officer, andExecutive Chairperson of the Board, although we do not have a corporate policy requiring such structure.and Lead Independent Director of the Board. The Board believes that this separationstructure is appropriate for the Company at this time 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, whiledirection. Our Executive Chairperson is a non-independent Director on our Board, Chairperson, who is an independent member of the Board, isand he, along with our Lead Independent Director, are primarily focused on matters pertaining to corporate governance, including management oversight and strategic guidance. The Board believes that this is the most appropriate structure at this time but will make future determinations regarding whether or not to separate the roles of Chair and Chief Executive Officer based on then-current circumstances. Under ourOur Corporate Governance Guidelines specify that when the Chairperson of the Board is also the Chief Executive Officer or is a director who does not otherwise qualify as an “independentindependent director,” a “Lead Director”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, when Mr. Friedman was appointed Chief Executive Officer, Mr. Lissette was appointed Executive Chairperson and Mr. Deromedi Lead Independent Director. The Lead Independent Director would helphelps 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, in particular, the performance of senior management. A description of the position of Lead Independent Director is set forth in Annex A to our Corporate Governance Guidelines, which is available on our investor website at investors.utzsnacks.comhttp://investors.utzsnacks.com/investors under the heading “Corporate Governance.“Governance — Governance Documents.” Currently, Dylan B. Lissette serves as our Chief Executive Officer, and the independent Chairman position is held by Roger K. Deromedi. Therefore, we do not currently have a Lead Director. We believe that the structure of our Board and its committees provides strong overall management of the Company.
Policy for Director Attendance at Annual Meetings.Under our Corporate Governance Guidelines, each director is strongly encouraged to attend each Annual Meeting of Stockholders. ThisAll eleven of the then current directors attended the 2022 Annual Meeting will be our first annual meeting of stockholders.Stockholders. Process for SecurityholdersInterested Parties to Send Communications to the Board.Our Corporate Governance Guidelines provide that any stakeholder,interested parties, including our stockholders, who wisheswish 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 (1) addressing such communications or concerns to the Corporate Secretary of the Company, 900 High Street, Hanover, Pennsylvania 17331 who will forward such communications to the appropriate party, or (2) sending an e-mail to Jeremiah Garvey at jgarvey@cozen.com.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. | 2021 PROXY STATEMENT 27 | | | | 26 | | | | |
EXECUTIVE AND DIRECTOR COMPENSATION ∎COMPENSATION DISCUSSION AND ANALYSIS (NARRATIVE TO THE SUMMARY COMPENSATION TABLE) EXECUTIVE AND DIRECTOR COMPENSATION COMPENSATION DISCUSSION AND ANALYSIS Executive Summary The core principles of our executive compensation program are to align the compensation of our executive officers with the long- termlong-term interests of our stockholders and to provide a total compensation opportunity that allows us to attract and retain talented executive officers and motivate them to achieve exceptional business results. We achieve these goals by offering a total compensation program that consists of both fixed components (in the form of base pay and benefits) and variable, performance-based pay (in the form of short and long-term incentives) designed to reward performance. The total target compensation for our executive officers is weighted more heavily toward incentive compensation.compensation, in the form of an annual bonus program, restricted stock units, and performance stock units. Our compensation program is designed to achieve an appropriate balance of short-term and long-term incentives to ensure executive officers are properly balancing the need for consistent annual performance with the need for consistent performance over a multiple yearmultiple-year horizon. This compensation balance is intended to ensure that our executive officers share in both downside risk and upside opportunity based on our performance. Prior to the Business Combination in August 2020, none of CCH’sThe following discussion describes and analyzes our compensation program for our named executive officers received any cash compensation for services rendered to CCH. Accordingly, this Compensation Discussion and Analysis (Narrative to the Summary Compensation Table) relates to the compensation of executive officers of UBH prior to the Business Combination who became our executive officers following the Business Combination.
officers. Our named executive officers are our Executive Chairperson, who served as our principal executive officer until December 15, 2022, our newly appointed Chief Executive Officer who serves as our principal executive officer, our Chief Financial Officer who serves as our principal financial officer, and twothe three other most highly compensated persons serving as executive officers as of the last day of our most recent fiscal year, which ended January 3, 20211, 2023 (the “named executive officers”), which individuals are: ■∎ | | Dylan B. Lissette, Chief Executive OfficerChairperson |
■∎ | | Howard Friedman, Chief Executive Officer |
| ∎ | | Ajay Kataria, Executive Vice President, Chief Financial Officer |
| ∎ | | Cary Devore, Executive Vice President, Chief FinancialOperating Officer |
■∎ | | Mark Schreiber, Executive Vice President, &Sales and Chief Customer Officer Sales and Marketing |
On August 28, 2020, we closed the Business Combination with UBH. Upon the consummation of the Business Combination, each of the named executive officers were appointed to their respective offices of Utz Brands, Inc. In addition, Mr. Lissette accepted an offer letter to serve as our Chief Executive Officer.
| ∎ | | Theresa Robbins Shea, Executive Vice President, General Counsel & Corporate Secretary |
| | | | | | | | | 2023 PROXY STATEMENT 27 |
In connection with the consummation of the Business Combination, we adopted our 2020 Omnibus Equity Incentive Plan, as well as severance benefit plans for our executive officers. We also implemented our annual bonus plan, based on achievement of company performance goals, based on Net Sales and Adjusted EBITDA milestones, and individual achievements.
EXECUTIVE AND DIRECTOR COMPENSATION ∎ COMPENSATION DISCUSSION AND ANALYSIS Our Compensation Committee engaged a compensation consultant, F.W. Cook, to provide compensation advice in 2020.2022. 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 2022 Financial Highlights We are an “emergingDespite the challenges posed by inflation through fiscal year 2022, the Company continued to deliver consistent progress, with notable growth company,” within the meaning of the JOBS Act,in Net Sales and have elected to comply with the reduced compensation disclosure requirements available to emerging growth companies under the JOBS Act.Adjusted EBITDA:
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Key 2020 Financial Highlights
In 2020, as a result of the leadership and their execution of the Company’s key strategies and completion of the Business Combination, we had a strong financial year:
| ($ IN MILLIONS) | | FISCAL YEAR 2020(1) | | FISCAL YEAR 2019 | | CHANGE | | | FISCAL YEAR 2022 | | FISCAL YEAR 2021 | | | CHANGE | | | | Net Sales | | $ | 964.3 | | | $ | 768.2 | | | | 25.5% | | | | 1,408.4 | | | | 1,180.7 | | | | 19.3 | % | | Net Loss | | | (12.6) | | | | (13.4) | | | | nm | | | | Adjusted EBITDA(2) | | | 133.9 | | | | 86.5 | | | | 54.8% | | | | Net (Loss) Income | | | | (14.0 | ) | | | 8.0 | | | | | Adjusted EBITDA(1) | | | | 170.5 | | | | 156.2 | | | | 9.2 | % |
| (1) | Reflects combined selected financial data for the Successor period from August 29, 2020 through January 3, 2021 and the Predecessor period from December 30, 2019 through August 28. 2020. The combined results of operations included in our discussion below are not considered to be prepared in accordance with U.S. GAAP and should not be viewed as a substitute for the results of operations of the Predecessor and Successor periods presented in accordance with U.S. GAAP. |
(2) | See reconciliation to GAAP financial measures in Appendix B.Annex A. |
Compensation Program Objectives and Design In connection with the Business Combination, we adopted several design changes to our compensation program, including adoption of an omnibus equity incentive plan, employee stock purchase plan, severance benefit plans for our management team and an offer letter with our chief executive officer. Our primary objective in establishing our comprehensive compensation program is to be able to successfully recruit, attract, retain and properly incentincentivize high-level talent to work for and ultimately add value to our business for the benefit of our stockholders.
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 reward bothdrive short-term results (annual performance) and, but also to build long-term Company performance.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 (discussed in greater detail below) is intended to be competitive with similar elements offered both locally and nationally by other like-sized employers companies and competitors, and the elements taken together are intended to present a comprehensive competitive program to accomplish the objectives noted above. competitors. We designed most of the significant elements of our comprehensive compensation program by soliciting initial thoughts and ideasinput from our senior managementexecutive leadership team, consisting ofled by our former Chief Executive Officer and current Executive Chairperson and our Executive Vice President & Chief Administrative Officer, and Senior Vice President Human Resources and Personnel Development, and in consultation with other members of our senior management.People Officer. Additional input and suggested objectives were received from our Chairman,Lead Independent Director, the chairpersonChairperson of our Compensation Committee, representatives of F. W.F.W. Cook and other members of the Board. Significant compensation elements are reviewed annually by our senior management. these parties. 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 named executive officers participates in discussions involving their own compensation. The Compensation Committee intends to reviewreviews and approveapproves annual compensation elements such as bonus plan attainment,structure, and our Board of Directors reviews full year sales, earnings and management performance by our executives.based on the company objectives. The Board of Directors also approves elements of our annual budgets, which include some elements of the compensation program such as annual bonuses and annual base salary increases, if any, for our executives. | 2021 PROXY STATEMENT 29 |
EXECUTIVE AND DIRECTOR COMPENSATION(CONT.)
Elements of Compensation
The table below lists the key elements of our 2020 compensation program from our Executive Leadership Team. We generally construct this program with consideration of the median compensation package for our peer group.
ELEMENT OF COMPENSATION | | OBJECTIVE | | KEY FEATURES | | % OF TARGET
TOTAL DIRECT
COMPENSATION | Base Salary | | Provide a competitive level of fixed compensation | | ■ Fixed pay component based on level of responsibility of position held
■ Adjustments based on individual performance, internal equity and external benchmarking against peer group companies
| | 25-43% | Annual Cash Incentive Award Program | | Motivate and reward executive contributions in achieving annual performance goals | | ■ Variable pay component
■ Payouts are based on a formula that includes Company performance against Adjusted EBITDA and Net Sales, as well as individual performance against pre- determined objectives
| | 25-26% | Long-Term Incentive Awards | | Motivate and reward executive contributions in achieving long-term objectives that align with the interests of our stockholders
| | ■ Variable pay component
■ Awards to senior management are issued as performance share units and stock options and have a multi-year vesting period
■ Option award value is fixed at grant, and ultimate value to the executive is based on stock performance
■ Awards in the form of performance share units have ultimate value based on our relative total shareholder return against our peer group
| | 30-50% | Severance | | Provide temporary income following an executive’s involuntary termination of employment whether or not following a change in control of our Company | | ■ Fixed pay component
■ Payments are formula-driven based on executive’s salary, bonus target and level in the organization
| | |
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Peer Group The Compensation Committee, in consultation with F.W. Cook, has identified a peer group of 1413 publicly-traded companies to be used as a competitive reference point in determining total compensation packages for our management,executive leadership team, including the named executive officers. Our peer group includes consumer products companies, nearly allmost of which are focused on food and beverage in North America and which are similar to Utz with similarrespect to revenue (peer group median revenue $1.1$1.3 billion) and market capitalization (peer group median market capitalization $2.1 billion) to us.$2.6 billion as of September, 2022). Peer group
EXECUTIVE AND DIRECTOR COMPENSATION ∎ COMPENSATION DISCUSSION AND ANALYSIS selection included companies in the Global Industry Classification Standard in the sub-industry categories of packaged foods and meats, personal products, soft drinks, and pharmaceuticals. The remaining companies were evaluated to identify those most similar to us in terms of size, business fit and geographic fit. As of January 3, 2021,1, 2023, our revenue was approximately $964.3$1408.4 million and our market capitalization was approximately $1.3$2.3 billion. Peer Group for Assessing Fiscal Year 2022 Compensation The peer group consists of the following 1413 companies: B&G Foods, Inc. BellRing Brands, Inc. Calavo Growers, Inc. Flowers Foods, Inc. Hostess Brands, Inc. J & J Snack Foods Corp. John B. Sanfilippo & Sons, Inc. Lancaster Colony Corporation TreeHouse Foods, Inc. Prestige Consumer Healthcare Inc. The Hain Celestial Group, Inc. The Simply Good Foods Company Tootsie Roll Industries, Inc. | | | | | | | | | 2023 PROXY STATEMENT 29 |
EXECUTIVE AND DIRECTOR COMPENSATION ∎ COMPENSATION DISCUSSION AND ANALYSIS Elements of Compensation The four major compensation elements for our Executive Leadership Team include (i) Base Salary, (ii) Annual Cash Short-Term Incentive Awards Program, (iii) Long-Term Incentive Awards, and (iv) Severance. The table below lists the key elements of our 2022 compensation program for our Executive Leadership Team and outlines the objectives and key features of these elements, as well as the percentage range for each element in our Executive Leadership Team compensation package. We generally construct this program with consideration of the median compensation package for our peer group. | | | | | | | ELEMENT OF COMPENSATION | | | B&G Foods, Inc. | J & J Snack Foods Corp. | Prestige Consumer Healthcare Inc. | BellRing Brands, Inc. | John B. Sanfilippo & Sons, Inc. | The Hain Celestial Group, Inc. | Calavo Growers, Inc. | Lancaster Colony Corporation | The Simply Good Foods Company | Flowers Foods, Inc. | Lassonde Industries Inc. | Tootsie Roll Industries, Inc. | Hostess Brands, Inc. | National Beverage Corp | | | OBJECTIVE | | KEY FEATURES | | % OF TARGET TOTAL DIRECT COMPENSATION | | | | | Base Salary | | Provide a competitive level of fixed compensation | | ∎ Fixed pay component based on level of responsibility of position held ∎ Adjustments based on individual performance and external benchmarking against peer group companies | | 22-42% | | | | | Annual Cash Short-Term Incentive Award Program | | Motivate and reward executive contributions in achieving annual performance goals | | ∎ Variable pay component ∎ Payouts are based on a formula that includes Company performance against Adjusted EBITDA, Net Sales, and Company Objectives, as well as individual performance against pre-determined individual objectives | | 24-27% | | | | | Long-Term Incentive Awards | | Motivate and reward executive contributions in achieving long-term objectives that align with the interests of our stockholders | | ∎ Variable pay component ∎ Awards to senior management are issued as performance share units, restricted stock units and stock options and have a multi-year vesting period ∎ Option award value is fixed at grant, and ultimate value to the executive is based on stock performance ∎ Awards in the form of performance share units have ultimate value based on our relative total stockholder return against our peer group | | 31-54% | | | | | Severance | | Provide temporary income following an executive’s involuntary termination of employment (unless termination is for cause) whether or not following a change in control of our Company | | ∎ Fixed pay component ∎ Payments are formula-driven based on executive’s salary, bonus target and level in the organization | | |
Direct Compensation Components
Base Salary Base salaries are intended to compensate the executive officers and all other salaried associates for their basic services performed for usthe Company on an annual basis. In setting base salaries, we take into account the associate’s experience, the functions and responsibilities of the job, salaries for similar positions within our peer group and for competitive positions in the food industry generally and any other factor relevant to that particular job. Generally, we attempt to pay at the median of our peer group for each jobposition but do not confine ourselves to this practice if other factors such as experience warrant a lower or higher base salary. Base salaries may be adjusted annually based on executive officer performance and, in some circumstances, adjusted throughout the year
EXECUTIVE AND DIRECTOR COMPENSATION ∎ COMPENSATION DISCUSSION AND ANALYSIS to address competitive pressures or changes in job responsibilities. Our Chief Executive Officer recommends to the Compensation Committee the base salaries for executives reporting directly to him.him/her. The Chief Executive Officer’s base salary and annual merit adjustment, if any, is approved by the Compensation Committee, subject to such further action of the Board of Directors as the Board of Directors shall determine. Adjustments for all other executivesexecutive leadership team officers are recommended by the Chief Executive Officer and approved by the Compensation Committee. Base Salary Changes Adjustments In February 2021,January 2023, each of Messrs. Lissette, Devore, Kataria, and Schreiber, and Ms. Shea were eligible to receive a merit increase to his or her base salary based on his or her respective performance in the preceding year. Our merit increase mayincreases range from 0% to 6%10.5% of base salary based on individual performance. In orderThe merit increases are consistent with our effort to demonstrate commitment to achievingmaintain compensation at approximately the median level of our 2021 Plan goals,peer group, with these adjustments taking into consideration certain factors that may influence our standard practice of paying base salaries slightly above or below the names executive officers requested that the Board of Directors50th percentile mark among our peers. Because Messrs. Lissette and Compensation Committee, respectively, forego or minimize any merit increase toFriedman entered new roles effective December 15, 2022 and their base salary. Mr. Lissette’s compensation was restructured in connection with the consummation of the Business Combination, includingrates were set at that time, they were not subject to a reduction in his base pay. Beginning on August 28, 2020, Mr. Lissette’s2023 annual base pay was reduced to $750,000.00.salary merit increase. | 2021 PROXY STATEMENT 31 |
The table below reflects the base amounts that were prescribed for fiscal year 2020,2022 and not actual base pay received. | NAMED EXECUTIVE OFFICER | 2020 ANNUAL BASE
SALARY(1) | 2021 ANNUAL BASE
SALARY MERIT
INCREASE | 2021 ADDITIONAL
ANNUAL BASE SALARY
ADJUSTMENTS | 2021 BASE SALARY | | 2022 ANNUAL BASE
SALARY | | 2023 ANNUAL BASE
SALARY MERIT
INCREASE | | 2023 BASE SALARY | | | Dylan B. Lissette | $750,000 | 0.0% | N/A | $750,000 | | Dylan Lissette | | | $ | 805,000 | (1) | | N/A | | $ | 600,000 | (2) | Howard Friedman | | | $ | 850,000 | (1) | | N/A | | $ | 850,000 | | | Cary Devore | 500,000 | 0.0% | N/A | 500,000 | | $ | 535,000 | | | 3.5% | | $ | 553,500 | | Ajay Kataria | | | $ | 475,000 | | | 10.5% | | $ | 525,000 | | | Mark Schreiber | 414,105 | 1.5% | N/A | 418,246 | | $ | 450,000 | | | 3.5% | | $ | 465,500 | | Theresa Shea | | | $ | 435,000 | | | 5.7% | | $ | 460,000 | |
(1)Amounts reflect annualized salaries following consummation of the Business Combination.
| (1) | Reflects annualized base salary in their capacity as Chief Executive Officer. Actual base salary was prorated for the number of days actually served in the role. Mr. Lissette served in this capacity from January 1, 2022 through December 15, 2022. Mr. Friedman served in this capacity from December 15, 2022 through January 1, 2023 (the last day of our fiscal year). |
| (2) | Mr. Lissette’s annual base salary for fiscal year 2023 was adjusted to $600,000 on December 15, 2022 upon assuming the position of Executive Chairperson. Mr. Lissette’s annualized base salary is $600,000 subject to our standard payroll practices. Mr. Lissette will receive a $200,000 bonus payment on May 4, 2023 upon completion of his service as Executive Chairperson. Thereafter, as non-executive Chairperson of the Board, Mr. Lissette will participate in the Company’s standard non-employee director compensation program and will be entitled to receive an annual cash retainer of $75,000 as a Board Member, an annual cash retainer of $90,000 as Chairperson of the Board, and an annual equity retainer with a value of $125,000 in restricted stock units. See “Employment Arrangements – Dylan Lissette Offer Letter” for further discussion of Mr. Lissette’s compensation arrangement as Executive Chairperson. When Mr. Lissette becomes a non-management Director, which transition is scheduled to occur as of May 4, 2023, he will no longer receive a Base Salary. |
Annual Cash Short-Term Incentive Award Program (“Annual Bonus Plan” or “ABP”) 20202022 ABP Design
In 2020, we adopted ourOur 2022 ABP which provides for a cash bonus to our management team, including our named executive officers, upon achievement of specific performance milestones for usthe 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 operational goals.
company objectives. Awards under the ABP were calculated by multiplying a participant’s base salary for fiscal 2020year 2022 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 individual performanceObjectives, Goals, Strategies, and Metrics (“OGSMs”) score and multiplying the total by the Individual Performance Factor (“IPS”IPF”), as follows: Annual Bonus = ANNUAL BONUS = BASE SALARY X TARGET %
X ((50% ADJUSTED EBITDA SCORE) + (30% NET SALES SCORE) + (20% IPS)OGSMs SCORE)) X IPF | | | | | | | | | 2023 PROXY STATEMENT 31 |
EXECUTIVE AND DIRECTOR COMPENSATION ∎ COMPENSATION DISCUSSION AND ANALYSIS 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 2020year 2022 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.bonus, but could not exceed 200% of bonus target. TheAs part of our annual budget, the Board of Directors approves the pool for the ABP, contained in our annual budget;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 Factors:Factors for the Annual Bonus Plan: Adjusted EBITDA, and Net Sales, and OGSMs For fiscal year 2020,2022, the Board of Managers of UBH prior to the Business Combination selected, and our Compensation Committee confirmed followingthat the Business Combination,factors for the ABP would be Adjusted EBITDA, and Net Sales, asand defined annual goals through the company performance measures because theseOGSM system. These performance measures most directly align with our growththe Company‘s operational strategy and generally have the best correlation with shareholderstockholder value. The Adjusted EBITDA and Net Sales goals and results for fiscal 2020year 2022 are set forth below: | | FISCAL 2020 GOALS ($ MILLIONS) | | | | | THRESHOLD | TARGET | MAXIMUM | | FISCAL 2020 RESULTS
($ MILLIONS) | Adjusted EBITDA | $112.8 (95% of Target) | $119.0 | $132.0 (111% of Target) | | $133.9 | Net Sales | 880.7 (97% of Target) | 906.7 | 943.1 (104% of Target) | | 964.3 |
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| | | | | | | | | FISCAL YEAR 2022 GOALS ($ MILLIONS) | | | THRESHOLD | | TARGET | | MAXIMUM | | | | | Adjusted EBITDA | | $158.7
(95% of Target) | | $167.0 | | $183.7
(110% of Target) | | | | | Net Sales | | $1,262.4
(96% of Target) | | $1,315.0 | | $1,367.6
(104% of Target) |
The Adjusted EBITDA and Net Sales goals and results were calculated for purposes of the ABP in accordance with pre- establishedpre-established rules established by the our Board of Managers prior to the Business Combination selected and confirmed by our Compensation Committee following the Business Combination. Committee. Net Sales was our combined revenue for the Successor period from August 29, 2020 through January 3, 2021 and the Predecessor period from December 30, 2019 through August 28, 2020,GAAP sales excluding the effects of the impact of changes in GAAP and the effects of business combinations and divestitures subject to pre- establishedpre-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 also excludes the effects of the impact of changes in GAAP and the effects of business combinations and divestitures subject to pre-established criteria and thresholds. We did not make any subsequent adjustmentsthresholds, where applicable. Further, to evaluate the business and management for the ABP, the Compensation Committee excluded ABP expense in response toexcess of Target from Adjusted EBITDA. In 2022, we set forth the COVID-19 pandemic.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: | ∎ | | Expand margins and cash flow |
| ∎ | | Reinvest to accelerate revenue growth |
| ∎ | | Continue strategic acquisitions |
| ∎ | | Build out ESG capabilities |
EXECUTIVE AND DIRECTOR COMPENSATION ∎ COMPENSATION DISCUSSION AND ANALYSIS 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: | | | ASSESSMENT | | PAYOUT FOR OGSM COMPONENT | | | Significantly Exceeds Expectations | | 150-200% | | | Exceeded Expectations | | 120-150% | | | Met Expectations | | 80-120% | | | Below Expectations | | 50-80% | | | Unsatisfactory | | 0-50% |
Individual Performance Score (IPS) Factor (IPF) Each executive officer has individual objectives set at the beginning of theeach year, as shown below, which are reflective of his or her responsibilities based on his or her role. The Compensation Committee determines an IPSIPF 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 IPSIPF at the end of the performance year based on the achievement against the individual objectives, and the IPSIPFs are reviewed and approved by the Compensation Committee. IPS RATING | IPS | | IPF RATING | | IPF | | | Significantly Exceeded Expectations(5) | 150-200% | | 125-150% | | | Exceeded Expectations(4) | 120-150% | | 115-125% | | | Met Expectations(3) | 80-120% | | 80-115% | | | Below Expectations(2) | 50-80% | | 50-80% | | | Unsatisfactory(1) | | 0% | |
20202022 ABP Results
OurThe actual Net Sales performance of $964.3for ABP was $1408.4 million, which resulted in aan 200% payout for this component of the ABP.
Our The actual Adjusted EBITDA performance was $170.5 million (and $181.0M including ABP expense at Target but excluding the ABP expense in excess of $133.9 million,Target), which resulted in a 200%182% payout for this component of the ABP.
Our actual OGSM percentage, awarded by the Board of Directors, resulted in a 125% payout for this component of the ABP based on a review of the overall performance of the Company against the OGSM goals. The Compensation Committee assigned this payout component because of the strategy and goal work completed that supported the objectives of expanding margin and cash flow, accelerating revenue growth, continuing work around strategic acquisitions, and building out our ESG capability. This assessment is consistent with our pay-for-performance philosophy. The Compensation Committee evaluated the individual contributions of our Chief Executive Officer, our Chief Financial Officer, and the contributions of our remaining named executive officers, with the exception of Mr. Friedman who was not eligible for a 2022 ABP, in addition to their efforts in delivering our overall results and operational goals. In evaluating the individual performance of our named executive officers, the following scores were determined based on performance against individual objectives: ■∎ | | Mr. Lissette received a 165%125% score for his individual objectives with performance highlights including leading the navigationbusiness through inflationary pressures while delivering record revenue results. Mr. Lissette has continued to develop the organization’s talent while improving organizational capabilities in many areas. Mr. Lissette, along with the Board of theDirectors, led a successful Business Combination, successful navigation through the COVID pandemic, while significantly over-delivering versus targets,CEO search and acquisitions of the HK Anderson business and Truco Holdco Inc.transition. |
■∎ | | Mr. Devore received a 185%125% score for his individual objectives, with performance highlights including strong financialleading the strategic planning process and M&A execution and development, among other important initiatives. Mr. Devore continued to introduce talent and build processes with our supply chain, including management systems which will be fundamental to enhancing organizational talent, successful transition of Utz as a public company followingour capabilities in the Business Combination, as well as successful integrations of Tim’s Cascade and Snyder of Berlin teams into Utz, among others.future. |
■∎ | | Mr. SchreiberKataria received a 150%140% score for his individual objectives, with performance highlights including record company salesa successful transition to the Chief Financial Officer duties and greatly improving our financial planning and analysis capabilities for internal and external reporting purposes. Mr. Kataria led the Company to financial results in fiscal 2020, as well as strengtheningexcess of the salesCompany’s plan, and marketing team which we believe will produce future growth ofalso implemented and stabilized our business, among others.ERP system and invested appropriately in our IT capabilities for the future. |
| 2021 | | | | | | | | 2023 PROXY STATEMENT 33 |
EXECUTIVE AND DIRECTOR COMPENSATION(CONT.) ∎ COMPENSATION DISCUSSION AND ANALYSIS | ∎ | | Mr. Schreiber received a 135% score for his individual objectives, with performance highlights including exceeding revenue targets by over 7% while driving our strategic geographic expansion. Mr. Schreiber continues to build internal support capabilities to ensure continued growth and led exceptional trade revenue and the pricing efforts which were key in face of inflationary headwinds. |
| ∎ | | Ms. Shea received a 125% score for her individual objectives, with performance highlights including establishing the company’s first legal office and developing significant governance infrastructure throughout the organization. Ms. Shea also is leading many of the ESG initiatives that are underway, including important DEI programs and company governance initiatives. |
Based upon the Company score and the individual scores, the 20202022 ABP Awards were calculated as follows: | NAMED
EXECUTIVE
OFFICER | BASE SALARY | TARGET % | ADJUSTED EBITDA
SCORE | NET SALES SCORE | IPS | 2020 ANNUAL
BONUS | | BASE SALARY ($) | | TARGET (%) | | | ADJUSTED
EBITDA
SCORE (%) | | | NET SALES
SCORE (%) | | | OGSM (%) | | | IPF (%) | | | 2022 ANNUAL
BONUS ($) | | | Dylan B. Lissette | $ 1,295,844(1) | 100% | 200% | 165% | $ 2,500,979 | | | Dylan Lissette | | | | 794,750 | (1) | | | 110 | | | | 182 | | | | 200 | | | | 125 | | | | 125 | | | | 1,748,450 | | | Howard Friedman | | | | | | | | | | | | | | | | | Cary Devore | 500,000 | 75% | 200% | 185% | 738,750 | | | 535,000 | | | | 85 | | | | 182 | | | | 200 | | | | 125 | | | | 125 | | | | 909,500 | | | Ajay Kataria | | | | 475,000 | | | | 75 | | | | 182 | | | | 200 | | | | 125 | | | | 140 | | | | 712,500 | | | | Mark Schreiber | 414,105 | 60% | 200% | 150% | 472,080 | | | 450,000 | | | | 65 | | | | 182 | | | | 200 | | | | 125 | | | | 135 | | | | 585,000 | | | Theresa Shea | | | | 435,000 | | | | 60 | | | | 182 | | | | 200 | | | | 125 | | | | 125 | | | | 522,000 | |
| (1) | Reflects actualBecause of Mr. Lissette’s transition from Chief Executive Officer to Executive Chairman on December 15, 2022, Mr. Lissette’s base salary paid to Mr. Lissette duringamount reflects $805,000 prorated base salary for the period from January 1, 2022 through December 15, 2022 and $600,000 prorated base salary for the period from December 15, 2022 through January 1, 2023 (the last day of our fiscal 2020, based on an annualized salary of $1,500,000 prior to the consummation of the Business Combination and $750,000 following the consummation of the Business Combination.year). |
Annual bonuses for 20202022 were approved by the Committee in February 2023 and payments will be paid to the participants on March 18, 2021.in April 2023. Long-Term Incentives 2020 Omnibus Equity Incentive Plan In connection with the consummation of the Business Combination, we adopted, with stockholder approval, the Utz Brand Inc. 2020 Omnibus Equity Incentive Plan (as amended, the “2020 Omnibus Equity Incentive Plan”), so that we can provide our named executive officers and other key associates with equity- basedequity-based, long-term incentives. The equity awards are also subject to service conditions, which are more fully described below, that are meant to serve as a retention tool. 2020See “Grant of Plan Based Awards
On August 29, 2020, we — Fiscal 2022” for a discussion of the fiscal year 2022 awards granted nonqualified stock options, and on November 2, 2020 we granted performance share units, to Messrs. Lissette, Devore, and Schreiber (along with other members of our management team) undernamed executive officers pursuant to the 2020 Omnibus Equity Incentive Plan.
Performance Share Units Our performance share units (“PSUs”) provide the participant with the opportunity to earn shares of our Class A Common Stock Optionsif we achieve certain thresholds with respect to relative total stockholder return. The number of shares subject to the performance share units that vest and are settled at the end of each performance period is based on the Company’s cumulative total stockholder return relative to the total stockholder returns of members of a performance peer group. In connection with PSU awards, the Compensation Committee approves a performance peer group, which is generally our peer group at the time of award, as a means of establishing performance targets for such awards. At the end of the performance period, the Company’s total stockholder return position will be ranked relative to the total stockholder returns of each member of the performance peer group. Our performance is measured against the companies in the performance peer group that remain within the performance peer group for the entire performance period. The total number of performance share units that vest is based on the ranking of our total stockholder return relative to the total stockholder return of each of our peer companies, and ranges from a 200% payout for ranking in the 90th percentile or above, to 100% payout for ranking at the 50th percentile, 50% payout for ranking at the 30th percentile, and 0% payout for ranking below the 30th percentile with percentiles interpolated between these payouts.
EXECUTIVE AND DIRECTOR COMPENSATION ∎ COMPENSATION DISCUSSION AND ANALYSIS Performance share units 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 performance share units are settled (or such accrued dividend equivalents will be forfeited to the extent the performance share units are forfeited). Restricted Stock Units Our restricted stock units (“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. 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 performance share units are settled (or such accrued dividend equivalents will be forfeited to the extent the performance share units are forfeited). Stock Options We granthave previously granted stock options to our named executive officers because we believebelieved that they provideprovided executives with a strong incentive to continue employment with us and focus on creating long-term shareholderstockholder 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. On August 29, 2020, the Compensation Committee granted nonqualified stock options to purchase shares of our Class A Common Stock at a per share exercise price of $16.34 to the following executives in the following amounts:
NAMED EXECUTIVE OFFICER
| NUMBER OF SHARES OF CLASS A
COMMON STOCK SUBJECT TO OPTION
| Dylan B. Lissette | 149,204 | Cary Devore | 37,301 | Mark Schreiber | 30,893 |
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Performance Share Units
Our performance share units provide the participant with the opportunity to earn shares of our Class A Common Stock if we achieve certain thresholds with respect to relative total shareholder return. The performance share units granted on November 2, 2020 consist of two performance periods, each with respect to 50% of the target shares subject to the performance share unit. The first performance period is from August 31, 2020 through December 31, 2022 and the second performance period is from August 31, 2020 to December 31, 2023. The number of shares subject to the performance share units that vest and are settled at the end of each performance period is based on the Company’s cumulative total shareholder return relative to the total shareholder returns of members of a performance peer group.
The Compensation Committee approved a performance peer group as a means of establishing performance targets for the 2020decided to replace stock option grants ofto our performance share units. At the end of the performance period, the Company’s total shareholder return position will be ranked relative to the total shareholder returns of each member of the performance peer group. Our performance is measured against the companies in the performance peer group that remain within the performance peer group for the entire performance period. The companies in the performance peer group consist of the same fourteen other consumer products companiesexecutive leadership team in our peer group for overall compensation purposes, nearly all of which are focused on food and beverageannual long-term incentive awards with restricted stock unit awards beginning in North America. The companies in the performance peer group for the performance period noted above are: | | | B&G Foods, Inc. | J & J Snack Foods Corp. | Prestige Consumer Healthcare Inc. | BellRing Brands, Inc. | John B. Sanfilippo & Sons, Inc. | The Hain Celestial Group, Inc. | Calavo Growers, Inc. | Lancaster Colony Corporation | The Simply Good Foods Company | Flowers Foods, Inc. | Lassonde Industries Inc. | Tootsie Roll Industries, Inc. | Hostess Brands, Inc. | National Beverage Corp | | | | |
The total number of performance share units that vest isfiscal year 2023, based on the ranking of our total shareholder return relative to the total shareholder return of eacha review of our peer companies,group’s practices. We believe that this serves as a stronger retention tool and ranges from a 200% payout for ranking in the 90th percentile or above, to 100% payout for ranking at the 50th percentile, 50% payout for ranking at the 30th percentile, and 0% payout for ranking below the 30th percentilealigns competitively with percentiles interpolated between these payouts.peer practices.
Performance share units 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 performance share units are settled (or such accrued dividend equivalents will be forfeited to the extent the performance share units are forfeited).
On November 2, 2020, the Board granted performance shares to the following executives in the following amounts, and such amounts assume that 50th percentile level of performance is achieved (with the actual number of shares to be earned based on the performance criteria described above):
NAMED EXECUTIVE OFFICER
| NUMBER OF SHARES OF CLASS A COMMON STOCK SUBJECT TO PERFORMANCE
SHARE UNITS ASSUMING 100% PAYOUT AT 50% PERFORMANCE | Dylan B. Lissette | 49,735 | Cary Devore | 12,434 | Mark Schreiber | 10,298 |
| 2021 PROXY STATEMENT 35 |
EXECUTIVE AND DIRECTOR COMPENSATION(CONT.)
2020 Long-Term Incentive Plan (“2020 LTIP”) Prior to the Business Combination, Utz Quality Foods, LLC (“Utz Quality Foods”) maintained a 2018 Long-Term Incentive Plan (the “2018 LTIP”). In connection with the Business Combination, each participant in the 2018 LTIP was offered the opportunity to, and ultimately elected to convert his or her 2018 LTIP awards into restricted stock units under the 2020Long-Term Incentive Plan (the “2020 LTIP, (the” and such awards the “2020 LTIP RSUs”). Participants in the 2018 LTIP who elected to convert their Phantom Units into restricted stock units under the 2020 LTIP also had their restricted stock units vest in full, provided that any participant in the 2020 LTIP forfeited the vested and unvested portion of his or her 2020 LTIP RSUs upon his or her termination by us for cause or voluntary termination by the participant without our consent other than for good reason, or violation of certain restrictive covenants by the participant. The conversion of the 2018 LTIP Phantom Units was accounted for as a modification under ASC 718. The 2020 LTIP RSUs are equity-classified due to settlement being in shares. All 2020 LTIP RSUs settled January 3, 2022. 2018 LTIP: LTIP The 2018 LTIP was intended to reward participants based on appreciation in the equity values of our business through the issuance of Phantom Units to participants. The Phantom Units represent an award of an unfunded, unsecured promise by us to pay to each participant a value equal to one ten thousandth of (x) the fair market value of the equity interests of our business plus $300,000,000, less (y) a specified hurdle value determined by the administrator of the 2018 LTIP, subject to certain automatic adjustments. The value represented by the portion of each Phantom Unit that has become vested under each Phantom Unit award will be paid no later than 30 days following a distribution event, which occurs upon the earlier of a change in control of Utz Quality Foods or December 31, 2021. The consummation of the Business Combination was not a change in control of Utz Quality Food under the 2018 LTIP. Prior to the conversion of the Phantom Units into 2020 LTIP RSUs (as described further below), each award of Phantom Units granted to the named executive officers vested 20% on December 31 of each calendar year and becomes fully vested on December 31, 2021, provided that any participant in the 2018 LTIP will forfeitforfeited the vested and unvested portion of his or her Phantom Unit award upon his or her termination by us for cause (as defined in the 2018 LTIP) or voluntarily by the participant without our consent other than for good reason (as defined in the 2018 LTIP), or violation of certain restrictive covenants by the participant as set forth more fully in the 2018 LTIP. If a change in control of Utz Quality Foods were to occur prior to December 31, 2021, and either (i) the participant iswas an employee as of the date of such change in control or (ii) the participant | | | | | | | | | 2023 PROXY STATEMENT 35 |
EXECUTIVE AND DIRECTOR COMPENSATION ∎ COMPENSATION DISCUSSION AND ANALYSIS was an employee within 180 days prior to the date of such change in control and the participant’s employment was terminated for any reason before the date of such change in control, other than termination by us for cause or voluntary termination by the participant without our written consent other than for good reason, then such participant’s Phantom Units would have become 100% vested. The value, if any, that would have been required to be paid by us following a distribution event would have been paid in cash or, in the event the distribution event was a change in control and a portion of the consideration paid pursuant to such change in control is stock listed on a public securities exchange, we would have been entitled to elect to pay a proportionate percentage of the aggregate consideration that is paid for a Phantom Unit in the form of such stock. Pursuant to an amendment to and restatement of the 2018 LTIP into the 2020 Long-Term Incentive Plan (the “2020 LTIP”) that became effective upon the consummation of the Business Combination, the value, if any, to be paid by us following a distribution event, may be paid in the form of cash, publicly traded stock that is listed on a securities exchange, or partly in cash and partly in publicly traded stock that is listed on a securities exchange. 2020 LTIP RSUs:
In connection with the Business Combination, each participant in the 2018 LTIP was offered the opportunity to, and ultimately elected to, convert his or her Phantom Units into 2020 LTIP RSUs. Participants in the 2018 LTIP who elected to convert their Phantom Units into restricted stock units under the 2020 LTIP will also have their restricted stock units vested in full, provided that any participant in the 2020 LTIP will forfeit the vested and unvested portion of his or her 2020 LTIP RSUs upon his or her termination by us for cause or voluntary termination by the participant without our consent other than for good reason, or violation of certain restrictive covenants by the participant. The conversion of the 2018 LTIP Phantom Units was accounted for as a modification under ASC 718. The 2020 LTIP RSUs are equity-classified due to settlement being in shares.
The following table describes outstanding 2020 LTIP RSUs issued to our named executive officers during fiscal year 2020 and outstanding as of January 3, 2021, the last day of fiscal year 2020. The first column reflects the conversion of Phantom Units that were outstanding as of December 29, 2019, the last day of fiscal year 2019, into 2020 LTIP RSUs at the consummation of the Business Combination. Each of these 2020 LTIP RSUs awarded to our named executive officers provides for the payment of an additional amount equal to the difference between the amount of local, state and federal taxes with respect to the named executive officer’s receipt of a payment in connection with the 2020 LTIP RSUs and the amount to which the named executive officer would have been paid if the 2020 LTIP RSUs received long-term capital gains treatment rather than ordinary income tax treatment. The second column reflects additional Phantom Units issued during fiscal year 2020, which were converted into 2020 LTIP RSUs upon the consummation of the Business Combination. Such 2020 LTIP RSUs do not provide any additional payment with respect to tax incurred by the participant.
36
NAMED EXECUTIVE OFFICER | NUMBER OF SHARES OF CLASS A COMMON
STOCK SUBJECT TO 2020 LTIP RSUs
FROM CONVERSION OF PHANTOM UNITS
OUTSTANDING AS OF DECEMBER 29, 2019 | NUMBER OF SHARES OF CLASS A COMMON
STOCK SUBJECT TO 2020 LTIP RSUs FROM
CONVERSION OF PHANTOM UNITS ISSUED
DURING FISCAL YEAR 2020 | TOTAL | | Dylan B. Lissette | 119,454 | — | 119,454 | | Cary Devore | 119,454 | 14,557 | 134,011 | | Mark Schreiber | 119,454 | — | 119,454 |
2021 Employee Stock Purchase Plan On December 10, 2020, our BoardDuring fiscal year 2021, we adopted, with stockholder approval, the Utz Brands, Inc. 2021 Employee Stock Purchase Plan (the “ESPP”), subject so that we can provide eligible employees of Utz (and certain designated affiliates) with an opportunity to approval bypurchase shares of our stockholders.Class A descriptionCommon Stock. In fiscal year 2022 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, is includedwe seek to retain the services of our associates, including our officers and certain directors, 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 Proposal No. 2the ESPP, 138,096 of which were sold to eligible employees during fiscal year 2022 and 1,233,310 of which remain available for the approvalissuance as of the last day of fiscal year 2022. 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 2021 was set at 90% and in 2022 was set at 92.5%. 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- competitionnon-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 in good faith 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. 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,“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 January 3, 2021.1, 2023. Dylan Lissette Offer Letter Upon the consummation of the Business Combination, Mr. Lissette accepted an offer letter to serve as our Chief Executive Officer (the “Lissette Offer Letter”). Following the Closing of the Business Combination, Mr. Lissette’s service to us commenced
EXECUTIVE AND DIRECTOR COMPENSATION ∎ COMPENSATION DISCUSSION AND ANALYSIS on an at-will basis, subject to the terms and conditions set forth in the Lissette Offer Letter. Mr. Lissette’s initial base salary following the Business Combination iswas $750,000 and subject to annual review by the Compensation Committee. Mr. Lissette iswas also eligible to participate in our ABP, subject to the terms and conditions approved by the Compensation Committee. The target bonus is 100% of Mr. Lissette’s annual base salary, with a maximum bonus equal to 200% of his annual base salary. Mr. Lissette iswas also eligible to participate in the 2020 Omnibus Equity Incentive Plan.Plan (and following his transition to Chairperson, Mr. Lissette will continue to be eligible to participate in the 2020 Omnibus Equity Incentive Plan as a director). Mr. Lissette’s initial grant under the 2020 Omnibus Equity Incentive Plan consisted of a stock option to purchase up to 149,204 shares of Class A Common Stock and performance share units, which settle into 49,735 shares of Class A Common Stock at 50th percentile performance. See “—Long“Long Term Incentives—Incentives — 2020 Omnibus Equity Incentive Plan.” In addition, Mr. Lissette 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,“Severance, Change of Control and Other Termination-Related Programs — Change in Control, Severance and Retirement Benefits.” Mr. Lissette is also able to participate in other Utz benefit programs consistent with other associates. In connection with the appointment of Mr. Friedman to the office of Chief Executive Officer on December 15, 2022, Mr. Lissette, our former Chief Executive Officer, was appointed to serve as the Executive Chairperson, until the second quarter of 2023 when he will transition to the role of non-executive Chairperson. As Executive Chairperson, Mr. Lissette’s annualized base salary is $600,000 subject to our standard payroll practices. Mr. Lissette was granted an award of 56,022 restricted stock units with an aggregate value equal to $1,000,000 based on the 10-day VWAP as of December 15, 2022. 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 Chairperson. Thereafter, as non-executive Chairperson of the Board, Mr. Lissette will participate in a prorated portion of the Company’s standard non-employee director compensation program for fiscal 2023, including an annual cash retainer of $75,000 as a Board Member, an annual cash retainer of $90,000 as Chairperson of the Board, and an annual equity retainer with a value of $125,000 in restricted stock units. Howard Friedman Offer Letter Pursuant to an offer letter dated September 30, 2022, 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 is $850,000, subject to annual review for increases by the Compensation Committee, plus a lump sum annual stipend of $50,000 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. Mr. Friedman’s initial grant under the 2020 Omnibus Equity Incentive Plan consisted of 224,089 shares, or a an aggregate value equal to $4,000,000 based on a price of a share of $17.85, representing the weighted average price of the Company’s Class A Common Stock on the New York Stock Exchange for the ten consecutive trading day window ending on the trading day (“10-day VWAP”) prior to December 15, 2022, with 50% in the form of restricted stock units and 50% in the form of performance stock units. 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 2018 LTIP. See “Long Term Incentives — 2020 Long-Term Incentive Plan” for a description of awards initially granted under the 2018 LTIP. 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. | 2021 | | | | | | | | 2023 PROXY STATEMENT 37 |
EXECUTIVE AND DIRECTOR COMPENSATION(CONT.) ∎ COMPENSATION DISCUSSION AND ANALYSIS 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 2020.2020 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 is eligible to participate in the 2018 LTIP. See “—Long“Long Term Incentives—Incentives — 2020 Long-Term Incentive Plan” for a description of awards initially granted under the 2018 LTIP. Mr. Schreiber is also eligible to receive severance in certain circumstances. See “— Severance,“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,“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 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 and stock options 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 non-qualifiednonqualified 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. We may, in our sole discretion, make contributions to a participant’s deferred compensation account. We may make contributions to the plan to the extent contributions to our profit sharing/ 401(k) plan exceed the limits set forth in Section 401(a)(17) of the Internal Revenue Code, see “— Severance, Change of Control and Other Programs — Profit Sharing/401(k) Plan.” During fiscal year 2020, we did not make any excess contributions to the plan for our named executive officers. Amounts contributed to the plan by either the participant or us 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 October 16, 2019.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 2020,2022, 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 20202022 were $7.8$7.94 million, of which $1.6$1.94 million represented matching contributions and $6.2$6.0 million represented discretionary contributions.
EXECUTIVE AND DIRECTOR COMPENSATION ∎ COMPENSATION DISCUSSION AND ANALYSIS 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 competitor companies of comparable size 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 January 3, 2021.1, 2023. 38
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. 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, 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 Internal Revenue Code of 1986, as amended (the “Code”(“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,” which everwhichever 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 each other member 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 satisfaction of each of the other conditions set | | | | | | | | | 2023 PROXY STATEMENT 39 |
EXECUTIVE AND DIRECTOR COMPENSATION ∎ COMPENSATION DISCUSSION AND ANALYSIS 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 | 2021 PROXY STATEMENT 39 |
EXECUTIVE AND DIRECTOR COMPENSATION(CONT.)
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 a good reason termination 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 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 the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, for up to 18 months following the termination date. 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,” which everwhichever 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. Oversight of Risks Related to Compensation Policies and Practices The Compensation Committee oversees risks related to the Company’s compensation policies and practices. The Compensation Committee annually reviews (a) the Company’s compensation policies and practices for executives, management associates and associates generally to assess whether such policies and practices could lead to excessive risk taking behavior and (b) the manner in which any risks arising out of the Company’s compensation policies and practices are monitored and mitigated and adjustments necessary to address changes in the Company’s risk profile. The Compensation Committee found that our incentive programs mitigate excessive risk-taking by our executives, management associates and associates by prioritizing the Company’s long-term strategic goal of creating and enhancing enduring value over short-term market changes. Additional findings are detailed below: | ∎ | | Short-term incentive measures that are balanced among different financial measures, with targets that are intended to be achievable upon realistic levels of performance; |
| ∎ | | Company-defined annual goals through an Objectives, Goals, Strategies, Metrics (OGSM) system that cascades to all levels of leadership and supports our pay-for-performance philosophy on the Annual Bonus Program and on annual merit increases; |
| ∎ | | Maximum bonus payouts that are capped at levels that do not reward excessive risk-taking; |
| ∎ | | Significant weighting towards long-term incentive compensation that promotes long-term decision-making and discourages short-term risk-taking; |
| ∎ | | Our clawback policy that allows us to recover compensation if participant has breached or threatened to breach any restrictive covenant; and |
| ∎ | | Our stock ownership guidelines that encourage a long-term perspective. |
As a result of this review, the Compensation Committee concluded that the Company’s compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.
EXECUTIVE AND DIRECTOR COMPENSATION ∎ COMPENSATION DISCUSSION AND ANALYSIS Stock Ownership One of the key objectives of our executive compensation program is to align the interests of our directors, and our executive officers including our Chief Executive Officer, with the long-term interests of our stockholders. We believe that an effective way of achieving this alignment is to ensure that each of our directors and executive officers is a stockholder and has a significant financial interest in our business. OurIn order to ensure that directors and executive officers have a significant financial interest in our business, our Board of Directors adopted Stock Ownership Guidelines, which require our Chief Executive Officer, executive officers, and our directors, to own securities having a certain value equal to their base salary or Board retainer, as applicable. In setting stock ownership guidelines for our executive officers, we have implemented separate guidelines for our Chief Executive Officer, our Executive Leadership Team (meaning any employee with a title of “Executive Vice President,” or above (excluding the Chief Executive Officer), and any other employee designated by the Compensation Committee of the Company from time to time), and our Executive Officer Team (meaning any employee with a title of “Senior Vice President,” and any other employee designated by the Compensation Committee of the Company from time to time). Our Stock Ownership Guidelines require our Chief Executive Officer, Executive Leadership Team, Executive Officer Team, our Chairperson and our non-employee directors to own our securities having a value equal to the amounts set forth below: | | | | | Chief Executive Officer / Executive Chairperson | | 6 times the CEO’shis or her annual base salary | Chairman | | Members of the Company’s Executive Leadership Team | | 3 times his or her annual base salary | | | Members of the Company’s Executive Officer Team | | 1 time his or her annual base salary | | | Non-Executive Chairperson / Lead Independent Director | | 6 times the annual Board retainer | | | Chairman Emeritus | | 5 times the annual salary or Board retainer | | | Non-employee Director Directors | | 5 times the annual Board retainer |
If the Chief Executive Officer 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 Company Restricted Stock Unit or Performance Stock Unit award (or any other similar awards) after required tax withholding obligations. InIf a member of the eventExecutive Leadership Team or Executive Officer Team is below the annual Minimum Ownership Guidelines in any given review year, he/she shall retain (and not sell) at least 50% of any eligible shares provided to them pursuant to any Company Restricted Stock Unit or Performance Stock Unit award (or any other similar awards) after required tax withholding obligations.
If a director hasDirector, Chairperson or Chairman Emeritus is below the annual Minimum Ownership Guidelines in any given review year, he/she shall retain (and not reached hissell) 100% of any eligible shares provided to him/her pursuant to any Company Restricted Stock Unit or herPerformance Stock Unit award (or any other similar awards). Annual review of compliance with the above guidelines will occur annually 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 heand 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 she will be required to retain 100%their Affiliates, as defined in the Guidelines. Unvested or unearned performance stock units and unexercised stock options are not considered eligible shares and do not count towards the ownership guidelines. During fiscal year 2022, each of net shares realized uponour Directors and members of the vesting of equity awards until he or she has reached the required ownership level.Executive Leadership Team and Executive Officer Team are in compliance with our Minimum Ownership Guidelines. 40
Restrictions on Short Sales or Speculative Transactions by All Directors and Associates. 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. | | | | | | | | | 2023 PROXY STATEMENT 41 |
EXECUTIVE AND DIRECTOR COMPENSATION ∎ REPORT OF COMPENSATION COMMITTEE 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 2022 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 2022 were Jason Giordano, John Altmeyer, Craig Steeneck and Pamela Stewart, each of whom served for all of fiscal 2022. No member of this committee was at any time during fiscal 2022, 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 2022.
EXECUTIVE AND DIRECTOR COMPENSATION ∎SUMMARY COMPENSATION TABLE SUMMARY COMPENSATION TABLE The following table sets forth information concerning the annual and long-term compensation awarded to, earned by, or paid to our named executive officers for all services rendered in all capacities to the Company, or any of our subsidiaries, for the last twothree completed fiscal years. NAME AND
PRINCIPAL
POSITION | | FISCAL
YEAR | | SALARY | | BONUS(1) | | STOCK AWARDS(2) | | NON-EQUITY
INCENTIVE PLAN COMPENSATION(3) | | ALL OTHER
COMPENSATION(4) | | TOTAL | | Dylan B. Lissette Chief Executive Officer | | 2020 | | $ | 1,295,844(5) | | $ | 365 | | $ | 2,999,856 | | $ | 2,383,056 | | $ | 16,620 | | $ | 6,695,741 | | | 2019 | | 1,512,469(5) | | 625,030 | | — | | — | | 98,844 | | 2,236,343 | | Cary Devore Executive Vice President, Chief Financial Officer | | 2020 | | 501,923 | | 365 | | 1,528,959 | | 738,750 | | 11,400 | | 2,781,397 | | | 2019 | | 387,366 | | 481,610 | | 843,955 | | — | | 33,673 | | 1,746,604 | | Mark Schreiber Executive Vice President, Chief Customer Officer, Sales & Marketing | | 2020 | | 421,597 | | 365 | | 1,193,247 | | 472,079 | | 19,361 | | 2,106,649 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | NAME AND PRINCIPAL POSITION | | FISCAL
YEAR | | | SALARY ($)(1) | | | BONUS ($)(2) | | | STOCK
AWARDS ($)(3) | | | OPTION
AWARDS ($)(4) | | | NON-EQUITY
INCENTIVE PLAN
COMPENSATION ($)(5) | | | ALL OTHER
COMPENSATION ($)(6) | | | TOTAL ($) | | | | | | | | | | | Dylan Lissette Executive Chairman | | | 2022 | | | | 796,307 | | | | — | | | | 2,168,017 | | | | 1,130,128 | | | | 1,748,450 | | | | 27,141 | | | | 5,870,043 | | | | | 2021 | | | | 769,503 | | | | 195 | | | | — | | | | — | | | | 236,400 | | | | 6,211 | | | | 1,012,309 | | | | | 2020 | | | | 1,295,844 | | | | 365 | | | | 1,898,730 | | | | 1,101,126 | | | | 2,383,056 | | | | 16,620 | | | | 6,695,741 | | | | | | | | | | | Howard Friedman Chief Executive Officer | | | 2022 | | | | 22,885 | | | | — | | | | 4,229,682 | | | | — | | | | — | | | | — | | | | 4,252,567 | | | | | | | | | | | Cary Devore Executive Vice President, Chief Operating Officer | | | 2022 | | | | 532,981 | | | | — | | | | 4,305,394 | | | | 375,533 | | | $ | 909,500 | | | | 9,150 | | | | 6,132,558 | | | | | 2021 | | | | 500,000 | | | | 195 | | | | — | | | | | | | | 147,750 | | | | 4,000 | | | | 651,945 | | | | | 2020 | | | | 501,923 | | | | 365 | | | | 1,253,678 | | | | 275,281 | | | | 738,750 | | | | 11,400 | | | | 2,781,397 | | | | | | | | | | | Ajay Kataria Executive Vice President, Chief Financial Officer | | | 2022 | | | | 473,558 | | | | — | | | | 1,186,946 | | | | 266,745 | | | | 712,500 | | | | 11,608 | | | | 2,651,357 | | | | | 2021 | | | | 395,777 | | | | 195 | | | | — | | | | | | | | 132,975 | | | | 6,939 | | | | 535,886 | | | | | | | | | | | Mark Schreiber, Executive Vice President, Sales and Chief Customer Officer | | | 2022 | | | | 448,168 | | | | — | | | | 733,451 | | | | 189,521 | | | | 585,000 | | | | 12,787 | | | | 1,968,927 | | | | | 2021 | | | | 421,364 | | | | 195 | | | | — | | | | | | | | 98,873 | | | | 7,194 | | | | 527,626 | | | | | 2020 | | | | 421,597 | | | | 365 | | | | 965,257 | | | | 227,990 | | | | 472,079 | | | | 19,361 | | | | 2,106,649 | | | | | | | | | | | Theresa Shea Executive Vice President, General Counsel & Corporate Secretary | | | 2022 | | | | 431,827 | | | | — | | | | 726,636 | | | | 183,212 | | | | 522,000 | | | | 12,810 | | | | 1,876,485 | |
| (1) | The amounts disclosed in this column reflect the dollar amount of the salaries actually paid in the reported fiscal year. |
| (2) | In accordance with the SEC’s rules, the amount disclosed reflects bonus compensation earned with respect to such fiscal year, whether or not actually paid in such fiscal year. The bonus amountamounts listed in the bonus column for fiscal yearyears 2021 and 2020 with respect to each named executive officer reflects a broad-based bonusreflect holiday bonuses paid to ourall associates episodically acrossin fiscal years 2021 and 2020. These holiday bonuses were discontinued for executive officers in fiscal year 2020. The bonus amount listed in the bonus column for fiscal year 2019 with respect to each named executive officer for 2019 includes (i) a bonus paid in the discretion of our management team in recognition of the named executive officer’s contribution to several company factors, including our annual Adjusted EBITDA, Adjusted Net Sales, and acquisition and integration efforts, and personal performance factors, including leadership, strategic planning, execution and contribution to financial goals, (ii) a discretionary bonus paid to each such named executive officer in recognition of consummating the acquisition of each of Kennedy and Kitchen Cooked and (iii) a broad-based bonus paid to our associates episodically across fiscal year 2019.2022. |
| (3) | (2) | Amounts set forth in this column represent the aggregate grant date fair value of equitystock awards granted to each named executive officer, in accordance with Accounting Standards Codification Topic No. 718. For fiscal year 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 column, with respect to fiscal year 2020, see Note 1 “Operations and Summary of Significant Accounting Policies” to our audited financial statements for the fiscal year ended January 3, 2021,1, 2023, included in our Annual Report on Form 10-K. The assumptions used in calculating the aggregate grant date fair value of the equity awards reported in this column with respect to fiscal year 2019 are set forth under the heading “ — Valuation of Phantom Units.”10-K. For details regarding the vesting conditions of these equity awards, see the “— Outstanding Equity Awards at Fiscal Year-End” table below. In fiscal year 2021 we did not grant awards under the 2020 Omnibus Equity Incentive Plan to our named executive officers due to the timing of awards following the Business Combination and in order to provide the Company an opportunity to implement a regular grant schedule. |
| (4) | Amounts set forth in this column represent the aggregate grant date fair value of option awards granted to each named executive officer, in accordance with Accounting Standards Codification Topic No. 718. |
(3)(5) | Represents annual performance-based cash incentives. For a discussion of the determination of these amounts, please see the section below entitled “— Annual“Annual Cash Short-Term Incentive Award Program (“Annual Bonus Plan” or “ABP”).” |
| (6) | (4) | The amounts listed under “All otherOther Compensation” column for fiscal 2020year 2022 include: (i) matching contributions by us under the Utz Quality Foods, LLC Profit Sharing/401(k) Plan and (ii) other perquisites and personal benefits and details about these amounts are set forth in the table below: |
NAME | CONTRIBUTIONS UNDER PROFIT
SHARING/401(K) PLAN ($)(a) | OTHER ($) | TOTAL ($) | | Dylan B. Lissette | $15,292 | $1,328(b) | $16,620 | | Cary Devore | 11,400 | — | 11,400 | | Mark Schreiber | 15.302 | 4,059(c) | 19,361 |
| 2021 | | | | | | | | 2023 PROXY STATEMENT 41 43 |
EXECUTIVE AND DIRECTOR COMPENSATION(CONT.) ∎ SUMMARY COMPENSATION TABLE | | | | | | | | | | | | | NAME | | CONTRIBUTIONS UNDER PROFIT
SHARING/401(K) PLAN ($)(a) | | | OTHER ($) | | | TOTAL ($) | | | | | | Dylan Lissette | | $ | 10,888 | | | $ | 16,253 | (b) | | $ | 27,141 | | | | | | Howard Friedman | | | — | | | | — | | | | — | | | | | | Cary Devore | | $ | 9,150 | | | | — | | | $ | 9,150 | | | | | | Ajay Kataria | | $ | 11,608 | | | | — | | | $ | 11,608 | | | | | | Mark Schreiber | | $ | 11,665 | | | $ | 1,122 | (c) | | $ | 12,787 | | | | | | Theresa Shea | | $ | 12,810 | | | | — | | | $ | 12,810 | |
| (a) | Amounts listed in this column reflect matching contributions by us under the Utz Quality Foods, LLC Profit Sharing/401(k) Plan. |
| (b) | Goods or services providedThis amount represents taxable income attributed to Mr. Lissette for the named executive officers are perquisites or personal benefits only if they confer a personal benefit on the executive; however, goods or services that are directly and integrally related to the executive’s job duties, or are offered generally to all employees, or for which the executive fully reimburses Utz, are not perquisites or personal benefits. Generally it has been our historical practice that goods or services that provide personal benefit that are not directly and integrally related to the executive’s job duties, and not offered generally to all employees, have been fully reimbursed to usportion of Mr. Lissette’s shareholder health plan payable by the executive. If they exist, perquisites and other personal benefits are reported at Utz’s aggregate incremental cost. Oxford Hill, LLC, an entity controlled by Michael W. Rice, a member of the Company Board, and owns an aircraft. In fiscal 2020, occasionally Mr. Lissette and guests were permitted to use for non-business travel aircraft leased by us from Oxford Hill. Such use was subject to availability and Mr. Lissette reimbursing us for the aggregate incremental cost of such flights. Nevertheless on such occasions, Mr. Lissette was imputed income for such use at the rates applicable under the standard industry fare level (“SIFL”) rules for any such fringe-benefit flights of $1,328. We do not provide tax gross-ups for such imputed income. Except for imputed income under SIFL rules, Mr. Lissette fully reimbursed us for personal use of any aircraft leased by us. After the Business Combination, Mr. Lissette no longer uses the aircraft for personal use through the Company. |
| (c) | Mr. Schreiber was subject to income recognition for personal use of a company automobile. |
(5) | Reflects (a) annual base salary of $1,500,000 through the Closing Date of the Business Combination and an annual base salary of $750,000 following the Closing Date of the Business Combination, and (b) aggregate cash fees of $2,400 and $4,800 per annum paid by us prior to the Business Combination to each member of the Boards of Managers of the Continuing Members as total combined fees for service on both boards of managers during fiscal years 2020 and 2019, respectively. |
Valuation of Phantom Units In the absence of a public trading market for our securities prior to the consummation of the Business Combination, the administrator of the 2018 LTIP determined the estimated fair value of the equity-based compensation awards at the date of grant based upon several factors, including its consideration of input from management and contemporaneous third-party valuations. The assumptions we used in the valuation models are highly complex and subjective. We base our assumptions on future expectations combined with management judgment and considered numerous objective and subjective factors to determine the fair value of the Phantom Units as of the grant date including, but not limited to, the following factors: ■∎ | | Our actual operating and financial performance; |
■∎ | | Current business conditions and projections; |
■∎ | | The U.S. capital market conditions; and |
■∎ | | Likelihood of achieving a liquidity event, such as the Business Combination, given prevailing market conditions. |
The valuation of the equity-based compensation awards involved a two-step process. First, we determined our business enterprise value using a total enterprise value based on the income approach, specifically a discounted cash flow, or DCF, analysis, and two variations of the market approach, specifically the guideline publicly traded company method and the merged and acquired company method. The values determined by the income and the market approaches were comparable and were accorded weights of 45%, 45% and 10%, respectively. Second, the business total equity value was allocated among the securities that comprised our capital structure using the Option-Pricing Method, or “OPM”. See below for a description of the valuation and allocation methods. The DCF analysis required the development of forecasted future cash flows, including our sales, expenses, depreciation, capital expenditure and working capital needs. Since prior to the Closing of the Business Combination we did not pay corporate level income tax, we valued the business from an exit perspective of a market participant and applied a 30.0% effective cash tax rate in the analysis. The discrete forecast period analyzed extends to the point at which we will be expected to have an annual long- term growth rate of 2.0%, roughly commensurate with analyst U.S. gross domestic product growth expectations. We computed the debt-free cash flow for each projected fiscal year by adjusting the projected financial information for depreciation, capital expenditures and incremental working capital. The projected cash flows of the discrete forecast period are discounted to a present value employing a discount rate that properly accounts for the estimated market weighted average cost of capital. Finally, an assumption is made regarding the sustainable long-term rate of growth beyond the discrete forecast period, and a residual value is estimated and discounted to a present value. The sum of the present value of the discrete cash flows and the residual, or “terminal” value represents the estimated fair value of our total enterprise value. This value is then adjusted for non-operational assets, liabilities and interest bearinginterest-bearing debt to conclude our total equity value. The financial forecasts prepared took into account our past results and expected future financial performance. There is inherent uncertainty in these estimates as the assumptions used are highly subjective and may change as a result of new operating data and economic and other conditions that may impact our business. 42
EXECUTIVE AND DIRECTOR COMPENSATION ∎ SUMMARY COMPENSATION TABLE Once our total equity value is estimated, it is then allocated among our various classes of securities to arrive at the fair value of the awards. For this allocation, the OPM was used for all grants of Phantom Units. The OPM entails allocating the total equity value to the various equity classes based upon their respective claims on a series of call options with strike prices at various value levels depending upon the rights and preferences of each class. A Black-Scholes option pricing model is employed to value the call options. The following table summarizes the key assumptions used in the OPM allocation as of December 29, 2019: | | | ASSUMPTIONS: | | | | | Time to liquidity event | | 2 years | | | Volatility | | 35.00% | | | Risk-free rate | | 1.60% | | | Dividend yield | | 0.00% | | | Lack of marketability discount | | 10.00% |
The expected term of two years represents management’s expected time to a liquidity event as of the valuation date. The volatility assumption is based on the estimated stock price volatility of a peer group of comparable public companies over a similar term. The risk-free rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term. As of December 29, 2019, we used an expected dividend yield of zero, as we did not plan to pay cash dividends with respect to the Phantom Units in the foreseeable future. The value derived from the OPM model was reduced by a 10.00% lack of marketability discount in the determination of fair values of the awards at the grant date. A discount for lack of marketability was applied to reflect the increased risk arising from the inability to readily sell the equity awards. | | | | | | | | | 2023 PROXY STATEMENT 45 |
EXECUTIVE AND DIRECTOR COMPENSATION ∎ GRANT OF PLAN BASED AWARDS — FISCAL 2022 GRANT OF PLAN BASED AWARDS — FISCAL 2022 The following table and explanatory footnotes provide information with regard to the award that each named executive officer had the opportunity to earn during 2022 under the 2020 Omnibus Equity Incentive Plan and with regard to PSUs, RSUs and stock options awarded to each named executive officer during 2022, as applicable. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ESTIMATED FUTURE PAYOUTS
UNDER NON-EQUITY INCENTIVE
PLAN AWARDS(1) | | | ESTIMATED FUTURE PAYOUTS
UNDER EQUITY INCENTIVE PLAN
AWARDS(2) | | | ALL OTHER
STOCK
AWARDS:
NUMBER
OF SHARES OF STOCK | | | ALL OTHER
OPTION
AWARDS:
NUMBER OF
SECURITIES | | | EXERCISE
OR BASE
PRICE OF
OPTION | | | GRANT DATE FAIR VALUE OF STOCK AND | | | | | | | | | | | | | | | NAME | | AWARD
DESCRIPTION | | GRANT DATE | | | THRESHOLD
($) | | | TARGET ($) | | | MAXIMUM ($) | | | THRESHOLD
(#) | | | TARGET
(#) | | | MAXIMUM
(#) | | | OR UNITS
(#) | | | UNDERLYING
OPTIONS (#) | | | AWARDS
($) | | | OPTION
AWARDS | | | | | | | | | | | | | | | Dylan Lissette | | Stock Option | | | 01/28/2022 | (3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 186,459 | | | | 15.51 | | | $ | 1,130,128 | | | | | | | | | | | | | | | | | PSU | | | 01/31/2022 | (4) | | | | | | | | | | | | | | | 31,077 | | | | 62,153 | | | | 124,306 | | | | | | | | | | | | | | | $ | 1,220,685 | | | | | | | | | | | | | | | | | RSU | | | 12/15/2022 | (5) | | | | | | | | | | | | | | | | | | | | | | | | | | | 56,022 | | | | | | | | | | | $ | 947,332 | | | | | | | | | | | | | | | | | | ABP | | | | | | | 437,113 | | | | 874,225 | | | | 1,748,450 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Howard Friedman | | PSU | | | 12/15/2022 | (6) | | | | | | | | | | | | | | | 56,023 | | | | 112,045 | | | | 224,090 | | | | | | | | | | | | | | | $ | 2,335,018 | | | | | | | | | | | | | | | | | RSU | | | 12/15/2022 | (6) | | | | | | | | | | | | | | | | | | | | | | | | | | | 112,045 | | | | | | | | | | | $ | 1,894,664 | | | | | | | | | | | | | | | | | | ABP | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cary Devore | | Stock Option | | | 01/28/2022 | (3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 61,959 | | | | 15.51 | | | $ | 375,533 | | | | | | | | | | | | | | | | | PSU | | | 01/31/2022 | (4) | | | | | | | | | | | | | | | 41,210 | | | | 82,420 | | | | 164,840 | | | | | | | | | | | | | | | $ | 1,618,729 | | | | | | | | | | | | | | | | | RSU | | | 01/31/2022 | (7) | | | | | | | | | | | | | | | | | | | | | | | | | | | 166,770 | | | | | | | | | | | $ | 2,686,665 | | | | | | | | | | | | | | | | | | ABP | | | | | | | 227,375 | | | | 454,750 | | | | 909,500 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Ajay Kataria | | Stock Option | | | 01/28/2022 | (3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 44,010 | | | | 15.51 | | | $ | 266,745 | | | | | | | | | | | | | | | | | PSU | | | 01/31/2022 | (4) | | | | | | | | | | | | | | | 7,335 | | | | 14,670 | | | | 29,340 | | | | | | | | | | | | | | | $ | 288,119 | | | | | | | | | | | | | | | | | PSU | | | 12/15/2022 | (8) | | | | | | | | | | | | | | | 11,905 | | | | 23,810 | | | | 47,620 | | | | | | | | | | | | | | | $ | 496,200 | | | | | | | | | | | | | | | | | RSU | | | 12/15/2022 | (9) | | | | | | | | | | | | | | | | | | | | | | | | | | | 23,810 | | | | | | | | | | | $ | 402,627 | | | | | | | | | | | | | | | | | | ABP | | | | | | | 178,125 | | | | 356,250 | | | | 712,500 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Mark Schreiber | | Stock Option | | | 01/28/2022 | (3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 31,269 | | | | 15.51 | | | $ | 189,521 | | | | | | | | | | | | | | | | | PSU | | | 01/31/2022 | (4) | | | | | | | | | | | | | | | 5,212 | | | | 10,423 | | | | 20,846 | | | | | | | | | | | | | | | $ | 204,708 | | | | | | | | | | | | | | | | | PSU | | | 12/15/2022 | (8) | | | | | | | | | | | | | | | 7,004 | | | | 14,007 | | | | 28,014 | | | | | | | | | | | | | | | $ | 291,885 | | | | | | | | | | | | | | | | | RSU | | | 12/15/2022 | (9) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 14,007 | | | | | | | | — | | | $ | 236,858 | | | | | | | | | | | | | | | | | | ABP | | | | | | | 146,250 | | | | 292,500 | | | | 585,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Theresa Shea | | Stock Option | | | 01/28/2022 | (3) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 30,228 | | | | 15.51 | | | $ | 183,212 | | | | | | | | | | | | | | | | | PSU | | | 01/31/2022 | (4) | | | | | | | | | | | | | | | 5,038 | | | | 10,076 | | | | 20,152 | | | | | | | | | | | | | | | $ | 197,893 | | | | | | | | | | | | | | | | | PSU | | | 12/15/2022 | (8) | | | | | | | | | | | | | | | 7,004 | | | | 14,007 | | | | 28,014 | | | | | | | | | | | | | | | $ | 291,885 | | | | | | | | | | | | | | | | | RSU | | | 12/15/2022 | (9) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 14,007 | | | | — | | | | — | | | $ | 236,858 | | | | | | | | | | | | | | | | | | ABP | | | | | | | 130,500 | | | | 261,000 | | | | 522,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Represents the threshold, target and maximum potential amounts each NEO had the opportunity to earn for 2022 payable pursuant to the ABP. See “Compensation Discussion and Analysis — Annual Cash Short-Term Incentive Award Program (“Annual Bonus Plan” or “ABP”)” for a description of the ABP and “Summary Compensation Table” above. |
| (2) | The columns under “Estimated Future Payouts Under Equity Incentive Plan Awards” represent the PSUs granted in fiscal year 2022 that will vest on December 31, 2024 based upon achievement of Company performance metrics. Earned payments may range from 0% to 200% of target based on performance. See “Compensation Discussion and Analysis — Long-Term Incentives — 2020 Omnibus Equity Incentive Plan — Performance Share Units” above. The grant date fair value reported above is based upon the Company’s determination of the probable outcome of the Company’s satisfaction of the performance conditions as of the grant date, computed in accordance with FASB ASC Topic 718. |
| (3) | Consists of shares subject to the stock option that vest and become exercisable on December 31, 2024, subject to the participant’s Continuous Service (as defined in the 2020 Omnibus Equity Incentive Plan) through such dates and subject to certain conditions as detailed in the Plan. The grant date fair value reported above is based upon the closing stock price on the date of grant which was $15.51. |
| (4) | Consists of an award of PSUs granted on January 31, 2022. The PSUs are subject to vesting on December 31, 2024, based on the Company’s total shareholder return (“TSR”) achievement for the performance period beginning on January 1, 2022 and ending on December 31, 2024, subject to the Compensation Committee’s certification following the performance period of the extent to which the performance goal has been satisfied, assuming continued employment through the vesting date. |
EXECUTIVE AND DIRECTOR COMPENSATION ∎ GRANT OF PLAN BASED AWARDS — FISCAL 2022 | (5) | Consists of an award of RSUs granted on December 15, 2022. The RSUs vest under the following schedule: Subject to the terms of the restricted stock unit award agreement, 100% of the shares of Issuer’s Class A Common Stock vest on December 31, 2025, subject to the participant’s Continuous Service (as defined in the 2020 Omnibus Equity Incentive Plan) to the Company through such dates and subject to certain conditions detailed in the 2020 Omnibus Equity Incentive Plan. |
| (6) | Consists of an award of RSUs and PSUs granted on December 15, 2022. The restricted stock units vest under the following schedule: 50% of the shares of Class A Common Stock subject to the restricted stock units vest on December 31, 2023 and 50% of the shares of Class A Common Stock subject to the restricted stock units vest on December 31, 2024 for so long as the participant remains in Continuous Service to the Company and subject to certain conditions detailed in the 2020 Omnibus Equity Incentive Plan. The PSUs are subject to vesting on December 31, 2025, based on the Company’s TSR achievement for the performance period beginning on December 15, 2022 and ending on December 31, 2025, subject to the Compensation Committee’s certification following the performance period of the extent to which the performance goal has been satisfied, assuming participant’s Continuous Service through the vesting date. |
| (7) | Consists of an award of RSUs granted on January 31, 2022. Pursuant to the terms of the RSU Award Agreement, 50% of the shares of Class A Common Stock subject to the restricted stock units vest on December 31, 2022, and the remaining 50% of the shares of Class A Common Stock subject to the restricted stock units vest on December 31, 2023, subject to the participant’s Continuous Service to the Company through such dates and subject to certain conditions detailed in the Plan. |
| (8) | Consists of an award of PSUs granted on December 15, 2022. The PSUs are subject to vesting on December 31, 2025, based on the Company’s TSR achievement for the performance period beginning on December 15, 2022 and ending on December 31, 2025, subject to the Compensation Committee’s certification following the performance period of the extent to which the performance goal has been satisfied, assuming participant’s Continuous Service through the vesting date. |
| (9) | Consists of an award of RSUs granted on December 15, 2022. Subject to the terms of the restricted stock unit award agreement, 33.33% of the shares of Issuer’s Class A Common Stock subject to the restricted stock units vest on December 31, 2023, 33.33% of the shares of Issuer’s Class A Common Stock subject to the restricted stock units vest on December 31, 2024, and 33.34% shares of Issuer’s Class A Common Stock subject to the restricted stock units vest on December 31, 2025, subject to the participant’s Continuous Service to the Company through such dates and subject to certain conditions detailed in the 2020 Omnibus Equity Incentive Plan. |
| | | | | | | | | 2023 PROXY STATEMENT 47 |
EXECUTIVE AND DIRECTOR COMPENSATION ∎OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END The following table provides information regarding outstanding awards made to our named executive officers as of our most recent fiscal year end. | | | | | OPTION AWARDS | | OPTION AWARDS | STOCK AWARDS | | | | | | NAME | GRANT DATE
FOR OPTIONS | | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) EXERCISABLE | | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) UNEXERCISABLE | | EQUITY INCENTIVE PLAN AWARDS: NUMBER OF SECURITIES UNDERLYING UNEXERCISED UNEARNED OPTIONS (#) | | OPTION
EXERCISE
PRICE
($/SHARE) | | OPTION
EXPIRATION
DATE | NUMBER OF
SHARES OR
UNITS OF STOCK
THAT HAVE NOT
VESTED (#)(2) | | MARKET VALUE
OF SHARES OF
UNITS OF STOCK
THAT HAVE NOT
VESTED ($)(3) | | EQUITY
INCENTIVE
PLAN AWARDS:
NUMBER OF
UNEARNED
SHARES, UNITS
OR OTHER
RIGHTS THAT
HAVE NOT
VESTED(#) | | EQUITY
INCENTIVE
PLAN AWARDS:
MARKET OR
PAYOUT VALUE
SHARES, UNITS
OR OTHER
RIGHTS THAT
HAVE NOT
VESTED($)(3) | | | GRANT
DATE FOR
OPTIONS | | NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS (#)
EXERCISABLE | | NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS (#)
UNEXERCISABLE | | EQUITY
INCENTIVE
PLAN
AWARDS:
NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
UNEARNED
OPTIONS (#) | | OPTION
EXERCISE
PRICE ($/
SHARE) | | OPTION
EXPIRATION
DATE | | | | NUMBER OF
SHARES OR
UNITS OF
STOCK
THAT HAVE
NOT
VESTED
(#) | | MARKET
VALUE OF
SHARES OR
UNITS OF
STOCK THAT
HAVE NOT
VESTED
($) | | EQUITY
INCENTIVE
PLAN AWARDS:
NUMBER OF
UNEARNED
SHARES, UNITS OR OTHER RIGHTS
THAT HAVE
NOT VESTED(#)(1) | | EQUITY
INCENTIVE
PLAN AWARDS:
MARKET OR
PAYOUT VALUE
SHARES, UNITS OR
OTHER RIGHTS
THAT HAVE
NOT VESTED($)(2) | | Dylan B. Lissette | 8 /29/2020(1) | | — | | 149,204 | | — | | $ | 16.34 | | 8/28/2030 | | 119,454 | | $ | 2,635,155 | | 49,735 | | $ | 1,097,154 | | | | | | | | Dylan Lissette | | | | 8/29/2020 | (3) | | | 74,602 | | | | 74,602 | | | | — | | | | 16.34 | | | | 08/28/2030 | | | | | | | | | | | | | | | | | | | | | | 1/28/2022 | (4) | | | | | 186,459 | | | | — | | | | 15.51 | | | | 01/28/2032 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 56,022 | (5) | | | 943,971 | (6) | | | 87,021 | | | | — | | | | | | | Total | | | | 74,602 | | | | 261,061 | | | | | | 56,022 | | | | 943,971 | | | | 87,021 | | | | — | | | | | | | Howard Friedman | | | | | | | | | | | | | | | | | | | 112,045 | (7) | | | 1,887,958 | (8) | | | 112,045 | | | | — | | | | | | | Total | | | | | | 112,045 | | | | 1,887,958 | | | | 112,045 | | | | — | | | | | | | | Cary Devore | 8 /29/2020(1) | | — | | 37,301 | | — | | $ | 16.34 | | 8/28/2030 | | 134,011 | | $ | 2,956,283 | | 12,434 | | $ | 274,294 | | | | 8/29/2020 | (3) | | | 18,650 | | | | 18,650 | | | | — | | | | 16.34 | | | | 08/28/2030 | | | | | | | | | | | | | | | | | | | | | | 1/28/2022 | (4) | | | | | 61,959 | | | | — | | | | 15.51 | | | | 01/28/2032 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 83,385 | (9) | | | 1,389,194 | (10) | | | 88,637 | | | | — | | | | | | | Total | | | | 18,650 | | | | 80,609 | | | | | | 83,385 | | | | 1,389,194 | | | | 88,637 | | | | — | | | | | | | Ajay Kataria | | | | 8/29/2020 | (3) | | | 9,325 | | | | 9,325 | | | | — | | | | 16.34 | | | | 08/28/2030 | | | | | | | | | | | | | | | | | | | | | | 1/28/2022 | (4) | | | | | 44,010 | | | | — | | | | 15.51 | | | | 01/28/2032 | | | | | | | | | | | | | | | | | | Total | | | | | | 9,325 | | | | 53,335 | | | | | | | | | | | | | 23,810 | (11) | | | 401,199 | (12) | | | 41,589 | | | | — | | | | | | | | | | | | | | 23,810 | | | | 401,199 | | | | 41,589 | | | | — | | | | | | | | Mark Schreiber | 8 /29/2020(1) | | — | | 30,893 | | — | | $ | 16.34 | | 8/28/2030 | | 119,454 | | $ | 2,635,155 | | 10,298 | | $ | 227,174 | | | | 8/29/2020 | (3) | | | 15,446 | | | | 15,446 | | | | — | | | | 16.34 | | | | 08/28/2030 | | | | | | | | | | | | | | | | | | | | | | 1/28/2022 | (4) | | | | | 31,269 | | | | — | | | | 15.51 | | | | 01/28/2032 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 14,007 | (11) | | | 236,018 | (12) | | | 29,578 | | | | — | | | | | | | Total | | | | 15,446 | | | | 46,715 | | | | | | 14,007 | | | | 236,018 | | | | 29,578 | | | | — | | | | | | | Theresa Shea | | | | 1/28/2020 | (4) | | | — | | | | 30,228 | | | | — | | | | 15.51 | | | | 01/28/2032 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 16,325 | (13) | | | 287,176 | (14) | | | 24,082 | | | | — | | | | | | | Total | | | | — | | | | 30,228 | | | | | | 16,325 | | | | 24,082 | | |
| (1) | TheReflects performance share units that have been granted but not yet vested. Our performance share units provide the participant with the opportunity to earn shares of our Class A Common Stock subjectif we achieve certain thresholds with respect to the stock options granted on August 29, 2020 vest and become exercisable under the following schedule: 50%relative total stockholder return. The vesting percentage of the shares subject totarget PSUs for the stock option vest and become exercisableapplicable Performance Period will be determined based on December 31, 2022 and 50%TSR Percentile Rank. The portion of the shares subject to the stock optionPSUs that vest will be determined on a straight-line basis, as follows: 90th percentile or above equaling 200% vested, 70th percentile or above equaling 150% vested, 50th percentile or above equaling 100% vested, 30th percentile or above equaling 50% vested, Lower than 30th percentile or above equaling 0% vested. See “Compensation Discussion and become exercisable on December 31, 2023, subject to the participant’s continuous employment through such dates and subject to certain conditions as detailed in ourAnalysis — Long-Term Incentives — 2020 Omnibus Equity Incentive Plan.Plan — Performance Share Units” for further information. |
| (2) | Each 2020 LTIP RSUEquity Awards granted to the named executive officers will be forfeited upon his or her termination by us for cause or voluntarily by the participant without our consent other than for good reason, or violationfor cause termination. |
| (3) | The remaining shares of Class A Common Stock subject to the stock options granted on August 29, 2020 vest and become exercisable on December 31, 2023, subject to the participant’s continuous employment through such dates and subject to certain restrictive covenants byconditions as detailed in our 2020 Omnibus Equity Incentive Plan. |
| (4) | The shares of Class A Common Stock subject to the participant. If a changestock options granted on January 28, 2022 vest and become exercisable under the following schedule: The shares subject to the stock option vest and become exercisable on December 31, 2024, subject to the reporting person’s continuous service through such dates and subject to certain conditions as detailed in control of Utz Quality Foodsthe 2020 Omnibus Equity Incentive Plan. |
| (5) | Reflects restricted stock units that vest under the following schedule: Subject to the terms of the 2020 LTIP occurs prior torestricted stock unit award agreement, 100% of the shares of Issuer’s Class A Common Stock vest on December 31, 2021,2025, subject to the reporting person’s Continuous Service (as defined in the Plan) to the Company through such dates and subject to certain conditions detailed in the 2020 LTIP RSUs will become 100% vested, subject to forfeiture as described above.Omnibus Equity Incentive Plan. |
| (6) | (3) | Market value is based upon the closing market price of $16.85 of our Class A Common Stock on December 31, 2020,15, 2022. |
| (7) | Reflects one award of restricted stock units that vest under the last trading day priorfollowing schedule: 50% of the shares of Class A Common Stock subject to the last dayrestricted stock units vest on December 31, 2023 and 50% of fiscal year 2020.the shares of Class A Common Stock subject to the restricted stock units vest on December 31, 2024 for so long as the participant remains in Continuous Service (as defined in the Plan) to the Company and subject to certain conditions detailed in the Plan. |
| (8) | (4) | Reflects performance share units granted on November 2, 2020. Our performance share units provideMarket value based upon the participant with the opportunity to earn sharesclosing market price of $16.85 of our Class A Common Stock if we achieve certain thresholds with respect to relative total shareholder return. The performance shareon December 15, 2022. |
| (9) | Reflects restricted stock units granted on November 2, 2020 consistthat vest under the following schedule: the shares of two performance periods, each with respect to 50% of the target sharesClass A Common Stock subject to the performance share unit. The first performance period is from August 31, 2020 throughrestricted stock units vest on December 31, 20222023, subject to the reporting person’s Continuous Service (as defined in the Plan) to the Company as of that date, and subject to certain conditions detailed in the second performance period is from AugustPlan. |
EXECUTIVE AND DIRECTOR COMPENSATION ∎ OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END | (10) | Market value based upon the closing market price of $16.66 of our Class A Common Stock on January 31, 20202022. |
| (11) | Reflects one award of restricted stock units that vest under the following schedule: Subject to the terms of the restricted stock unit award agreement, 33.33% of the shares of Issuer’s Class A Common Stock subject to the restricted stock units vest on December 31, 2023. See “Compensation Discussion and Analysis (Narrative2023, 33.33% of the shares of Issuer’s Class A Common Stock subject to the Summary Compensation Table)—Long-Term Incentives—restricted stock units vest on December 31, 2024, and 33.34% shares of Issuer’s Class A Common Stock subject to the restricted stock units vest on December 31, 2025, subject to the reporting person’s Continuous Service (as defined in the Plan) to the Company through such dates and subject to certain conditions detailed in the Utz Brands, Inc. 2020 Omnibus Equity Incentive Plan—Performance Share Units” for further information.Plan. |
| (12) | Market value based upon the closing market price of $16.85 of our Class A Common Stock on December 15, 2022. |
| Reflects two awards of restricted stock units that vest under the following schedules: (1) 2317 of the shares of Class A Common Stock subject to the restricted stock units vest on December 31, 2023 for so long as the participant remains in Continuous Service (as defined in the Plan) to the Company and subject to certain conditions detailed in the Plan; (2) 14,007 vest as follows: subject to the terms of the restricted stock unit award agreement, 33.33% of the shares of Issuer’s Class A Common Stock subject to the restricted stock units vest on December 31, 2023, 33.33% of the shares of Issuer’s Class A Common Stock subject to the restricted stock units vest on December 31, 2024, and 33.34% shares of Issuer’s Class A Common Stock subject to the restricted stock units vest on December 31, 2025. |
| (14) | Market value based upon (i) the closing market price of $16.85 of our Class A Common Stock on December 15, 2022 with respect to 14,007 shares and (ii) the closing market price of $22.07 of our Class A Common Stock on July 6, 2021 with respect to 2,318 shares. |
Option Exercises and Stock Vested — Fiscal Year 2022 The following table shows the number of shares acquired by each of the named executive officers during fiscal year 2022 through vesting of restricted stock units. No stock options were exercised by and no performance stocks units were vested with respect to named executive officers. The table also presents the value realized upon such vesting, as calculated based on the closing share price of our Class A Common Stock on the NYSE on the vesting date. | | | | | | | | | | | | STOCK AWARDS | | | | | NAME | | NUMBER OF
SHARES
ACQUIRED ON
VESTING (#) | | | VALUE
REALIZED ON
VESTING ($) | | | | | Dylan Lissette | | | 14,423 | | | $ | 228,749 | | | | | Howard Friedman | | | — | | | | — | | | | | Cary Devore | | | 86,991 | | | $ | 1,379,677 | | | | | Ajay Kataria | | | 1,803 | | | $ | 28,596 | | | | | Mark Schreiber | | | 2,986 | | | $ | 47,358 | | | | | Theresa Shea | | | 2,317 | | | $ | 36,748 | |
NONQUALIFIED DEFERRED COMPENSATION — FISCAL 2022 The following table shows the contributions and earnings during fiscal 2022, and account balance as of January 1, 2023, for named executive officers under the Utz Quality Foods, Inc. Nonqualified Deferred Compensation Plan. | | | | | | | | | | | | | | | | | | | | | NAME | | EXECUTIVE
CONTRIBUTIONS
IN LAST FISCAL
YEAR
($)(1) | | | REGISTRANT
CONTRIBUTIONS
IN LAST FISCAL
YEAR
($)(2) | | | AGGREGATE
EARNINGS
IN LAST
FISCAL
YEAR
($)(3) | | | AGGREGATE
WITHDRAWALS/
DISTRIBUTIONS
($) | | | AGGREGATE
BALANCE
AT
LAST
FISCAL
YEAR-END
($)(4) | | | | | | | | Dylan Lissette | | | 0 | | | | 0 | | | | (89,596) | | | | 0 | | | | 230,543 | | | | | | | | Howard Friedman | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | Cary Devore | | | 0 | | | | 0 | | | | (8,837) | | | | 0 | | | | 41,455 | | | | | | | | Ajay Kataria | | | 0 | | | | 0 | | | | (2,810) | | | | 0 | | | | 12,653 | | | | | | | | Mark Schreiber | | | 65,927 | | | | 0 | | | | (30,230) | | | | 0 | | | | 210,515 | | | | | | | | Theresa Shea | | | 12,704 | | | | 0 | | | | (532 | ) | | | 0 | | | | 12,172 | |
| (1) | The executive contribution amounts under the Deferred Compensation Plan were included in fiscal year 2022 compensation in the “Salary” and “Non-Equity Incentive Plan Compensation” columns of the Summary Compensation Table, as applicable. |
| (2) | These amounts were included in the “All Other Compensation” column of the Summary Compensation Table. Matching contributions under the Deferred Compensation Plan are made to eligible participants following the end of each calendar year. |
| (3) | None of the amounts in this column are included in the Summary Compensation Table because plan earnings were not preferential or above-market. |
| (4) | The following amounts included in this column for the Deferred Compensation Plan also have been reported in the Summary Compensation Table as compensation for fiscal year 2022 or a prior fiscal year: Mr. Lissette, $230,543, Mr. Devore, $41,455, Mr. Kataria $12,653, Mr. Schreiber $210,515, and Ms. Shea $12,172. |
| | | | | | | | | 2023 PROXY STATEMENT 43 49 |
EXECUTIVE AND DIRECTOR COMPENSATION(CONT.)∎ NONQUALIFIED DEFERRED COMPENSATION — FISCAL 2022 EQUITY COMPENSATION PLAN INFORMATION The following table provides information as of January 1, 2023, the last day of fiscal year 2022, with respect to the shares of our Class A Common Stock that may be issued under existing equity compensation plans. The category “Equity compensation plans approved by security holders” in the table below consists of the Utz Brands, Inc. 2020 Omnibus Equity Incentive Plan and the ESPP. | | | | | | | | | | | | | PLAN CATEGORY | | NUMBER OF SECURITIES TO
BE ISSUED UPON EXERCISE
OF OUTSTANDING OPTIONS,
WARRANTS AND RIGHTS(1) | | | WEIGHTED AVERAGE
EXERCISE PRICE OF
OUTSTANDING OPTIONS,
WARRANTS AND RIGHTS ($) | | | NUMBER OF SECURITIES REMAINING
AVAILABLE FOR FUTURE ISSUANCE
UNDER EQUITY COMPENSATION
PLANS (EXCLUDING SECURITIES
REFLECTED IN COLUMN (a)) | | | | | (a) | | | (b) | | | (c) | | | | | | Equity compensation plans approved by security holders | | | 1,872,645 | (2) | | | 15.77 | (3) | | | 8,778,353 | (4) | | | | | Equity compensation plans not approved by security holders | | | — | | | | — | | | | — | | | | | | Total | | | 1,872,645 | | | | — | | | | 8,778,353 | (5) |
| (1) | Excludes purchase rights accruing as of January 1, 2023 under the ESPP. |
| (2) | Includes 649,930 shares subject to outstanding stock options, 726,021 shares subject to outstanding RSUs and 496,694 shares issuable under outstanding performance shares units based on an assumed target performance, unless performance is otherwise known. |
| (3) | The weighted average exercise price relates solely to outstanding stock option shares since shares subject to restricted stock units and performance share units have no exercise price. |
| (4) | Includes shares available for future issuance under the ESPP. As of January 1, 2023, an aggregate of 1,233,310 shares of Class A Common Stock were available for future issuance under the ESPP, including shares subject to purchase during the current purchase period. |
| (5) | As of January 1, 2023, 7,545,043 shares and 1,233,310 shares were available for future issuance under the 2020 Omnibus Equity Incentive Plan and the ESPP, respectively. |
DIRECTOR COMPENSATION IN FISCAL 2020 2022 In fiscal year 2020,2022, we adoptedmaintained a new board of directors compensation program which iswas designed to provide competitive compensation necessary to attract and retain high quality non-employee directors and to encourage ownership of our securities to further align their interests with those of our stockholders. The new program provides the following compensation for non- employeenon-employee directors: ■∎ | | An annual cash retainer of $75,000;$75,000 for non-employee Directors of the Board; |
■∎ | | An additional cash retainer of $90,000 for Chairperson of the Board, and additional annual cash retainerretainers of $40,000 for the chairChairperson of the Audit Committee, $15,000 for the chairChairperson of the Compensation Committee and $10,000 for the chairChairperson of the Nominating and Corporate Governance Committee; and |
■∎ | | An equity retainer with a value of $125,000 upon such director’s election to office, payable in the form of restricted stock units, granted in connection with each annual meeting of stockholders that vests on the earlier of the one-year anniversary of the grant andor the next annual meeting of stockholders. Employee directors receive any equity compensation in connection with their employment and not as a Director. |
All cash retainers will be payable quarterly in arrears. For 2020 and 2021, Messrs. Deromedi and Giordano have agreed to waive their director compensation with respect to their service as non-employee directors. As our employees, Messrs. Rice and LissetteFriedman will not be eligible for such retainer and other compensation paid to non-employee directors so long as they remain employed by us. For Fiscal Year 2022, Mr. Lissette was not eligible for such retainer and other compensation paid to non-employee directors. Mr. Lissette will receive a $200,000 bonus payment on May 4, 2023 upon completion of his service as Executive Chairperson. Thereafter, as non-executive Chairperson of the Board, Mr. Lissette will participate in a pro-rated portion of the Company’s standard non-employee director compensation program for fiscal year 2023.
EXECUTIVE AND DIRECTOR COMPENSATION ∎ DIRECTOR COMPENSATION IN FISCAL 2022 The table below sets forth information regarding director compensation for the fiscal year ended January 3, 2021.1, 2023. NAME | | FEES EARNED OR PAID
IN CASH ($) | | | STOCK AWARDS ($)(1) | | | ALL OTHER
COMPENSATION ($) | | | TOTAL ($) | | | Roger K. Deromedi | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | Michael W. Rice | | | 206,246(2) | | | | — | | | | 13,137 | | | | 219,383 | | | John W. Altmeyer | | | 29,247 | | | | 86,000 | | | | — | | | | 115,247 | | | Timothy P. Brown | | | 28,206(3) | | | | 86,000 | | | | — | | | | 114,206 | | | Christina Choi | | | 25,806 | | | | 86,000 | | | | — | | | | 111,806 | | | Antonio F. Fernandez | | | 25,806 | | | | 86,000 | | | | — | | | | 111,806 | | | Jason K. Giordano | | | — | | | | — | | | | — | | | | — | | | B. John Lindeman | | | 25,806 | | | | 86,000 | | | | — | | | | 111,806 | | | Craig D. Steeneck | | | 39,570 | | | | 86,000 | | | | — | | | | 125,570 | |
| | | | | | | | | | | | | NAME | | FEES EARNED OR PAID
IN CASH ($)(1) | | | STOCK AWARDS ($)(2) | | | TOTAL ($) | | | | | | Roger Deromedi | | | 123,750 | (3) | | | 166,667 | (4) | | | 290,417 | | | | | | Michael Rice | | | 150,000 | (5) | | | — | | | | 150,000 | | | | | | John Altmeyer | | | 85,000 | | | | 125,000 | | | | 210,000 | | | | | | Timothy Brown | | | 75,000 | | | | 125,000 | | | | 200,000 | | | | | | Christina Choi | | | 75,000 | | | | 125,000 | | | | 200,000 | | | | | | Antonio Fernandez | | | 75,000 | | | | 125,000 | | | | 200,000 | | | | | | Jason Giordano | | | 67,500 | (3) | | | 166,667 | (4) | | | 234,167 | | | | | | B. John Lindeman | | | 75,000 | | | | 125,000 | | | | 200,000 | | | | | | Craig Steeneck | | | 115,000 | | | | 125,000 | | | | 240,000 | | | | | | Pamela Stewart | | | 56,250 | (3) | | | 166,667 | (4) | | | 222,917 | |
| (1) | Director compensation is payable in arrears on a quarterly basis. |
| (2) | Amounts set forth in this column represent the aggregate grant date fair value of equity awards granted to each director, in accordance with Accounting Standards Codification Topic No. 718. For a discussion of the assumptions made in such valuation of the equity awards reported in this column with respect to fiscal year 2020,2021, see Note 1 “Operations and Summary of Significant Accounting Policies” to our audited financial statements for the fiscal year ended January 3, 2021,1, 2023, included in our Annual Report on Form 10-K.10-K. |
(2)(3) | Each of Messrs. Deromedi and Giordano and Ms. Stewart became eligible to receive fees in January 2022, their compensation represents directors fees for three of the four quarters in fiscal year 2022. Notwithstanding, Mr. Deromedi’s transition from Chairperson to Lead Independent Director on December 15, 2022, he received the retainer for Chairperson of the Board through the end of fiscal year 2022. |
| (4) | Includes initial restricted stock unit award equal to $41,667 granted on January 31, 2022 equal to $41,667 for the pro rata period January 1, 2022 to May 4, 2022 and the annual restricted stock award of $125,000 granted on May 5, 2022. |
| (5) | Mr. Rice received an annual salary of $203,846$150,000 for his service as Executive Chairman and special advisor to Utz during the period before the Closing Date of the Business Combination, and as Chairman Emeritus and Special Advisor of the CompanyCompany. Mr. Rice’s annual salary will be adjusted to $125,000 in fiscal year 2023. |
CEO PAY RATIO As required by SEC rules, we are providing the following information about the ratio of the total annual compensation of our Chief Executive Officer and the total annual compensation of our median employee. We believe our Chief Executive Officer pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. For fiscal year 2022, our last completed fiscal year: | ∎ | | Total Annual Compensation of our Chief Executive Officer was $5,102,567. |
| ∎ | | Total Annual Compensation of our Median Employee was $44,245. |
Based on this information, for fiscal year 2022, the estimated ratio of the compensation of our Chief Executive Officer, and the Median Employee was approximately 115 to 1. This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on the methodology described below. The SEC rules for identifying the median compensated employee and calculating the pay ratio allow companies to adopt a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may utilize different methodologies, exclusions, estimates, and assumptions in calculating their own pay ratios. Chief Executive Officer Mr. Friedman became Chief Executive Officer of Utz Brands, Inc. on December 15, 2022. As permitted by SEC rules, in calculating this pay ratio, we annualized Mr. Friedman’s fiscal 2022 compensation by utilizing his annual base salary and target short-term and long-term incentives. Median Employee As permitted under SEC rules, we may identify our median employee for purposes of providing disclosure once every three years, provided that there has been no change in our employee population or employee compensation arrangements that we reasonably believe would result in significant change in our pay ratio disclosure. We believe during fiscal 2022 there has been no change to our employee population or employee compensation arrangements that would result in a significant change to our | | | | | | | | | 2023 PROXY STATEMENT 51 |
EXECUTIVE AND DIRECTOR COMPENSATION ∎ CEO PAY RATIO pay ratio disclosure. Accordingly, as permitted under SEC rules, we are using the same median employee identified in 2021 to calculate our fiscal 2022 CEO pay ratio. For fiscal year 2022, the annual total compensation of such previously identified median employee was $44,245, calculated in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K. As previously disclosed, in fiscal year 2021, to identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of our median employee, we took the following steps: | 1. | We determined that as of December 31, 2021 we had 3,717 full-time, part-time, and seasonal employees excluding Mr. Lissette, our former Chief Executive Officer. In determining the Closing Dateidentity of our median employee, we excluded 173 employees employed by our recent acquisition, R.W. Garcia, as this company was acquired in early December. Removal of those employees netted a remaining population of 3,544 from which to choose the median employee. We selected December 31, 2021, which is within the last three months of fiscal year 2021, as the date upon which we would identify the “median employee” because it enabled us to make such identification in a reasonably efficient and economical manner. |
| 2. | To determine the median employee, we used base salary and wages paid to our employee population as our consistently applied compensation measure. We annualized compensation for any full or part-time employees who were employed at year-end but did not work during the entire year. No cost-of-living or other adjustments were made to compensation. Using this methodology, we determined that the median employee was a non-exempt, full-time associate. |
| 3. | We identified our median employee using this compensation measure, which was consistently applied to all our employees included in the calculation. Since all our employees are located in the United States, as is our Chief Executive Officer, we did not make any cost-of- living adjustments in identifying the “median employee.” |
| 4. | Once we identified our median employee, we combined all of the elements of such employee’s compensation in accordance with the requirements of Item 402(c)(2) of Regulation S-K. |
PAY VS. PERFORMANCE Pay vs. Performance Tabular Disclosure | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pay vs. Performance Disclosure | | | Summary Compensation Table Total for First PEO ($) (2) | | Summary Compensation Table Total for Second PEO ($) (3) | | | | Compensation Actually Paid to Second PEO ($) (3) (4) | | Average Summary Compensation Table Total for Non-PEO NEOs ($) (5) | | Average Compensation Actually Paid for Non-PEO NEOs ($) (5) (6) | | Value of Fixed $100
Investment Based on: | | | | | | | Utz Brands, Inc. Total Shareholder Return ($) (7) | | S&P 1500 Composite Packaged Foods & Meats Index Total Shareholder Return ($) (8) | | | | | | | | | | | | | | | | | 5,870,043 | | | | | 4,252,567 | | | | | 5,856,068 | | | | | 4,134,920 | | | | | 3,157,332 | | | | | 3,215,423 | | | | | 159 | | | | | 101 | | | | ( | 14,041,000 | ) | | 170,500,000 | | | | | | | | | | | | | | | | | | 1,012,309 | | | | | — | | | | | (1,572,541 | ) | | | | — | | | | | 605,171 | | | | | (377,493 | ) | | | | 158 | | | | | 112 | | | | | 7,998,000 | | | 156,200,000 | | | | | | | | | | | | | | | | | | 6,695,741 | | | | | — | | | | | 7,728,482 | | | | | — | | | | | 2,444,023 | | | | | 2,834,026 | | | | | 216 | | | | | 118 | | | |
| Predecessor -
3,420,000
Successor -
(107,901,000) |
| | Predecessor -
86,300,000
Successor -
47,600,000 |
| (1) | Equity compensation fairvalue calculated based on the assumptions determined in accordance with FASB ASC Topic 718. For fiscal year 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 January 1, 2023 , included in our Annual Report on Form10-K. |
| (2) | The Company’s principal executive officer (“First PEO”) for fiscal year 2020 until December of fiscal year 2022 was Dylan Lissette, at which point he transitioned to Executive Chairman upon commencement of Howard Friedman’s employment as Chief Executive Officer. |
| (3) | The Company’s principal executive officer (“Second PEO”) as of December of fiscal year 2022 was Howard Friedman. |
| | | | | | | | | | | | | | | | | | | | | | PEO “CAP” Calculation Detail | | | | | | | | | | | | | | | | | | First PEO - Dylan Lissette | | | Second PEO -
Howard Friedman | | | | | | | | | | | | | | | | | | | | | | | | | | | | Reported Total Compensation in Summary Compensation Table (“SCT) | | | 6,695,741 | | | | 1,012,309 | | | | 5,870,043 | | | | 4,252,567 | | | | | | | | | | | | Aggregate SCT Reported Equity Compensation (-) | | | (2,999,856 | ) | | | 0 | | | | (3,298,145 | ) | | | (4,229,682 | ) | | | | | | | | | | | Year-End Fair Value of Awards Granted During the Fiscal Year & Outstanding (+) | | | 3,149,458 | | | | 0 | | | | 3,313,719 | | | | 4,112,036 | | | | | | | | | | | | Year-Over-Year Change in Fair Value of Awards Granted During Prior Fiscal Year & Outstanding (+/-) | | | 883,139 | | | | (1,641,497 | ) | | | (52,845 | ) | | | 0 | | | | | | | | | | | | Vesting Date Fair Value of Awards Granted & Vested During the Covered Fiscal Year (+) | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | Year-Over-Year Change in Fair Value of Awards Granted During Prior Fiscal Year & Vesting During Covered Fiscal Year (+/-) | | | 0 | | | | (943,353 | ) | | | 11,285 | | | | 0 | | | | | | | | | | | | Value of Dividends Payable not Otherwise Reflected in Fair Value Determination or Total Compensation (+) | | | 0 | | | | 0 | | | | 12,011 | | | | 0 | | | | | | | | | | | | “Compensation Actually Paid” Determination | | | 7,728,482 | | | | (1,572,541 | ) | | | 5,856,068 | | | | 4,134,920 | |
| The Company’s other,non-PEO, named executive officers (“NEOs”) for each fiscal year set forth in the table above were: |
| | | | | | | | | | Cary Devore and Mark Schreiber | | | | | Cary Devore, Ajay Kataria, Mark Schreiber, Shane Chambers, and Tucker Lawrence | | | | | Cary Devore, Ajay Kataria, Mark Schreiber, and Theresa Shea |
| | | | | | | | | | | | | | | | | | Average Non-PEO NEOs “CAP” Calculation Detail | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | SCT Reported Total Compensation | | | 2,444,023 | | | | 605,171 | | | | 3,157,332 | | | | | | | | | | | Aggregate SCT Reported Equity Compensation (-) | | | (1,361,103 | ) | | | 0 | | | | (1,894,898 | ) | | | | | | | | | | Year-End Fair Value of Awards Granted During the FY & Outstanding (+) | | | 880,305 | | | | 0 | | | | 1,626,584 | | | | | | | | | | | Year-Over-Year Change in Fair Value of Awards Granted During Prior FY & Outstanding (+/-) | | | 870,801 | | | | (258,883 | ) | | | (7,742 | ) | | | | | | | | | | Vesting Date Fair Value of Awards Granted & Vested During the Covered FY (+) | | | 0 | | | | 0 | | | | 330,622 | | | | | | | | | | | Year-Over-Year Change in Fair Value of Awards Granted During Prior FY & Vesting During Covered FY (+/-) | | | 0 | | | | (723,781 | ) | | | 1,590 | | | | | | | | | | | Value of Dividends Payable not Otherwise Reflected in Fair Value Determination or Total Compensation (+) | | | 0 | | | | 0 | | | | 1,935 | | | | | | | | | | | “Compensation Actually Paid” Determination | | | 2,834,026 | | | | (377,493 | ) | | | 3,215,423 | |
| (7) | Total shareholder return calculated based on an assumed $100 investment as of December 29, 2019, the last day of the Predecessor fiscal period prior to fiscal year 2020, and the reinvestment of any issued dividends, including period prior to the Business Combination. In connection with |
| (8) | Peer total shareholder return calculated for the S&P 1500 Composite Packaged Foods & Meet Index based on an assumed $100 investment as of December 29, 2019 and the reinvestment of any issued dividends. |
| (9) | Fiscal Year 2020 financial performance reflects financial performance for the Company during the Successor period following the Business Combination, Mr. Rice retired as Executive Chairman and became a member ofwell as during the Company Board, Chairman Emeritus and Special Advisor. In addition, during fiscal 2020, Mr. Rice received a $2,400 fee in connection with his services as a manager of the Continuing Members. Goods or services provided to Mr. Rice are perquisites or personal benefits only if they confer a personal benefit on him; however, goods or services that are directly and integrally related to his job duties, or are offered generally to all employees, or for which Mr. Rice fully reimburses us, are not perquisites or personal benefits. Generally it has been our historical practice that goods or services that provide personal benefit that are not directly and integrally related to Mr. Rice’s job duties, and not offered generally to all employees, have been fully reimbursed to us by him or entities he controls. If they exist, perquisites and other personal benefits are reported at our aggregate incremental cost. Oxford Hill, LLC, an entity controlled by Mr. Rice, owns certain aircraft. In fiscal 2020, occasionally Mr. Rice and guests were permitted to use for non-business travel aircrafts leased by us from Oxford Hill. Such use was subject to availability and Mr. Rice reimbursing us for the aggregate incremental cost of such flights. Nevertheless on such occasions, Mr. Rice was imputed income for such use subject to income at the SIFL rates for any such fringe-benefit flights of $4,492. In addition we made profit sharing contributions of $8,645Predecessor period prior to the Utz Quality Foods, LLC Profit Sharing/401(k) Plan on behalfBusiness Combination. |
| (10) | See Annex A for reconciliation of Mr. Rice. We do not provide tax gross-ups for such imputed income. Except for imputed income under SIFL rules, Mr. Rice fully reimbursed us for personal use of any aircraft leased by us. After the Business Combination, Mr. Rice no longer uses the aircraft for personal use through the Company.Adjusted EBITDA performance in accordance with GAAP tonon-GAAP financial results. |
Description of Pay vs Performance The Compensation Committee reviews a variety of Company-wide and individual factors to link executive compensation actually paid with Company and executive performance. To promote strong pay-for-performance orientation when setting executive pay levels, the Compensation Committee considers the Company’s absolute and relative total shareholder return, short and long-term business outlook, sales growth and its future potential, financial results and their outlook including net income and adjusted EBITDA, the broader business environment, and peer company compensation practices. The Compensation Committee also assesses target compensation and potentially realizable compensation in addition to compensation actually paid to maintain a holistic understanding of executive total compensation packages. Fiscal year 2020 compensation actually paid generally exceeded fiscal year 2021 and fiscal year 2022 levels for the Company’s first PEO; comparatively, fiscal year 2020 compensation actually paid fell above fiscal year 2021 but below fiscal 2022 levels for the Company’s average non-PEO NEO. As is reflected in the tabular disclosure above, compensation actually paid to our First PEO decreased from $7,728,482 in fiscal year 2020 to ($1,572,541) in fiscal year 2021. Over the three year span from 2020 to 2022, compensation actually paid to our First PEO decreased from in fiscal year 2022, and average compensation actually paid to our non-PEO NEOs increased from $2,834,026 to $3,215,423during the three year period from fiscal year 2020 to fiscal year 2022. Comparatively, the Company’s TSR performance generally exceeded the S&P 1500 Packaged Foods & Meats Index based on an assumed $100 investment as of December 29, 2019. In addition, the Company’s adjusted EBITDA performance for the Business Combination Successor increased from $47,600,000 in fiscal year 2020 to 156,200,000 in fiscal year 2021 and 170,500,000 in fiscal year 2022, compared to the aforementioned decrease in compensation actually paid to our First PEO. Further, the Business Combination Successor net income increased to ($14,041,000) in fiscal year 2022 from (107,901,000) in fiscal year 2020, with fiscal year 2021 net income at 7,998,000, representing an increase when compared to fiscal year 2020. As our Second PEO was not an employee of the Company until December of fiscal year 2022, compensation actually paid for our Second PEO is only reflected for fiscal year 2022. (3) | Includes a $2,400, total combined director fee paid to Mr. Brown in connection with his services on both Boards of Managers of the Continuing Members. | | | | | | | | |
PAY VS. PERFORMANCE Performance Metrics to Link Executive Compensation Actually Paid with Company Performance 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 |
See the “Compensation Discussion and Analysis” above and included in the Company’s historical proxy statements for additional detail on executive compensation actions. Note, the compensation value ultimately realized by the Company’s executive officers remains subject to significant variation over time due to factors, including without limitation, forfeiture of unvested awards prior to vesting and variation in stock price prior to vesting of an award. 44
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ∎ BENEFICIAL OWNERSHIP TABLE SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Beneficial Ownership Table The following table sets forth certain information regarding the beneficial ownership of our Class A Common Stock and our Class V Common Stock as of March 15, 2021. 13, 2023. The information is provided with respect to (1) each person who is known by us to own beneficially more than 5% of the outstanding shares of any class of our Common Stock, (2) each of our named executive officers and directors and (3) all of our executive officers and directors, as a group. Beneficial ownership is determined in accordance with the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including any additional securities obtainable within 60 days through the exercise of options, warrants or other purchase rights. The beneficial ownership of shares of our Common Stock is based on the following outstanding shares as of March 15, 2021:13, 2023: (i) an aggregate of 76,481,83381,012,868 shares of Class A Common Stock and (ii) 60,349,00059,349,000 shares of our Class V Common Stock. Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares beneficially owned by them. No director or executive officer has pledged any of the shares or units disclosed below. Unless otherwise noted, the business address of each of the following entities or individuals is 900 High Street, Hanover, PA 17331. NAME | | CLASS A
COMMON STOCK | | % OF CLASS A
COMMON STOCK | | CLASS V
COMMON STOCK(1) | | % OF CLASS V
COMMON STOCK | | % OF TOTAL
VOTING POWER(2) | | DIRECTORS AND NAMED EXECUTIVE OFFICERS | | | | | | | | | | | | John Altmeyer(3) | | 20,703 | | * | | — | | — | | * | | Timothy P. Brown(4) | | 15,703 | | * | | — | | — | | * | | Christina Choi(5) | | 5,703 | | * | | — | | — | | * | | Roger K. Deromedi(6) | | 7,003,666 | | 8.88% | | — | | — | | 5.03% | | Antonio F. Fernandez(7) | | 184,036 | | * | | — | | — | | * | | Jason K. Giordano(8) | | 5,602,934 | | 7.15% | | — | | — | | 4.04% | | B. John Lindeman(9) | | 11,283 | | * | | — | | — | | * | | Dylan B. Lissette(10) | | 900,000 | | 1.18% | | — | | — | | * | | Michael W. Rice | | — | | * | | — | | — | | * | | Craig D. Steeneck(11) | | 258,203 | | * | | — | | — | | * | | Cary Devore | | — | | * | | — | | — | | * | | Mark Schreiber | | — | | * | | — | | — | | * | | All Directors and Executive Officers as a Group (17 persons)(12) | | 14,003,731 | | 17.32% | | — | | — | | 9.92% | | 5% OWNERS | | | | | | | | | | | | CC Collier Holdings, LLC(13) | | 8,404,400 | | 10.59% | | — | | — | | 8.08% | | Morgan Stanley(14) | | 4,284,777 | | 5.60% | | — | | — | | 3.13% | | T. Rowe Price Associates, Inc.(15) | | 8,042,340 | | 10.52% | | — | | — | | 5.88% | | Neuberger Berman Group, LLC(16) | | 4,891,714 | | 6.40% | | — | | — | | 3.58% | | Series R of UM Partners, LLC(17) | | — | | — | | 9,052,350 | | 15.00% | | 6.62% | | Series U of UM Partners, LLC(17) | | — | | — | | 51,296,650 | | 85.00% | | 37.49% | | The Vanguard Group(18) | | 4,077,104 | | 5.33% | | — | | — | | 2.98% |
| | | | | | | | | | | | | | | | | | | | | | | | | NAME | | CLASS A
COMMON STOCK | | | CLASS A
COMMON
STOCK
SUBJECT TO
OPTION | | | % OF
CLASS A
COMMON
STOCK | | | CLASS V
COMMON
STOCK(1) | | | % OF
CLASS V
COMMON
STOCK | | | % OF
TOTAL
VOTING
POWER(2) | | | | | | | | | DIRECTORS AND NAMED EXECUTIVE OFFICERS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | John Altmeyer(3) | | | 43,464 | | | | — | | | | * | | | | — | | | | — | | | | * | | | | | | | | | Timothy Brown(4) | | | 38,464 | | | | — | | | | * | | | | — | | | | — | | | | * | | | | | | | | | Christina Choi(5) | | | 18,464 | | | | — | | | | * | | | | — | | | | — | | | | * | | | | | | | | | Roger Deromedi(6) | | | 6,992,756 | | | | — | | | | 8.38 | % | | | — | | | | — | | | | 4.90 | % | | | | | | | | Antonio F. Fernandez(7) | | | 222,497 | | | | — | | | | * | | | | — | | | | — | | | | * | | | | | | | | | Howard Friedman | | | — | | | | — | | | | * | | | | — | | | | — | | | | * | | | | | | | | | Jason Giordano(8) | | | 5,369,447 | | | | — | | | | 6.47 | % | | | — | | | | — | | | | 3.77 | % | | | | | | | | B. John Lindeman(9) | | | 24,044 | | | | — | | | | * | | | | — | | | | — | | | | * | | | | | | | | | Dylan Lissette(10) | | | 910,003 | | | | 74,602 | | | | 1.21 | % | | | — | | | | — | | | | * | | | | | | | | | Michael Rice | | | — | | | | — | | | | * | | | | — | | | | — | | | | * | | | | | | | | | Craig Steeneck(11) | | | 270,964 | | | | — | | | | * | | | | — | | | | — | | | | * | | | | | | | | | Pamela Stewart(12) | | | 12,640 | | | | — | | | | * | | | | — | | | | — | | | | * | | | | | | | | | Cary Devore(13) | | | 175,024 | | | | 18,650 | | | | * | | | | — | | | | — | | | | * | | | | | | | | | Ajay Kataria(14) | | | 75,705 | | | | 9,325 | | | | * | | | | — | | | | — | | | | * | | | | | | | | | Mark Schreiber(15) | | | 90,765 | | | | 15,446 | | | | * | | | | — | | | | — | | | | * | | | | | | | | | Theresa Shea | | | 3,273 | | | | — | | | | * | | | | — | | | | — | | | | * | | | | | | | | | All Directors and Executive Officers as a Group (19 persons)(16) | | | 14,282,908 | | | | 118,023 | | | | 16.84 | % | | | — | | | | — | | | | 9.94 | % |
* less than one percent.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ∎ BENEFICIAL OWNERSHIP TABLE | | | | | | | | | | | | | | | | | | | | | | | | | NAME | | CLASS A
COMMON STOCK | | | CLASS A
COMMON
STOCK
SUBJECT TO
OPTION | | | % OF
CLASS A
COMMON
STOCK | | | CLASS V
COMMON
STOCK(1) | | | % OF
CLASS V
COMMON
STOCK | | | % OF
TOTAL
VOTING
POWER(2) | | | | | | | | | 5% OWNERS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Chinh Chu(17) | | | 8,028,380 | | | | — | | | | 9.57 | % | | | — | | | | — | | | | 7.62 | % | | | | | | | | Champlain Investment Partners, LLC(18) | | | 5,425,840 | | | | — | | | | 6.70 | % | | | — | | | | — | | | | 3.87 | % | | | | | | | | JPMorgan Chase & Co.(19) | | | 5,074,645 | | | | — | | | | 6.26 | % | | | — | | | | — | | | | 3.62 | % | | | | | | | | Series R of UM Partners, LLC(20) | | | 150,000 | | | | — | | | | * | | | | 8,902,350 | | | | 15.00 | % | | | 6.95 | % | | | | | | | | Series U of UM Partners, LLC(20) | | | 850,000 | | | | — | | | | * | | | | 50,446,650 | | | | 85.00 | % | | | 36.05 | % | | | | | | | | T. Rowe Price Investment Management, Inc.(21) | | | 5,579,318 | | | | — | | | | 6.89 | % | | | — | | | | — | | | | 3.97 | % | | | | | | | | The Vanguard Group(22) | | | 6,839,761 | | | | — | | | | 8.44 | % | | | — | | | | — | | | | 4.87 | % | | | | | | | | BlackRock, Inc.(23) | | | 4,228,743 | | | | — | | | | 5.22 | % | | | — | | | | — | | | | 3.01 | % |
| 2021 PROXY STATEMENT 45Less than 1% |
| (1) | Class V Common Stock entitles the holder thereof to one vote per share. Subject to the terms of the Third Amended and Restated Limited Liability Company Agreement of UBH, dated August 28, 2020 (the “Third Amended and Restated Limited Liability Company Agreement”), the common units representing limited liability company interests of UBH following the Business Combination (the “Common Company Units”), together with an equal number of shares of Class V Common Stock, are exchangeable for shares of Class A Common Stock on a one-for-one basis. |
| (2) | Represents percentage of voting power of the holders of our Class A Common Stock and Class V Common Stock voting together as a single class. See “Questions and Answers About Our Annual Meeting — Who can vote at the Annual Meeting?” |
| (3) | Represents 15,00035,095 shares of Class A Common Stock and 5,7038,369 shares of Class A Common Stock issuable upon settlement of restricted stock units that vest within 60 days of March 15, 2021.13, 2023. |
| (4) | Represents 10,00030,095 shares of Class A Common Stock and 5,7038,369 shares of Class A Common Stock issuable upon settlement of restricted stock units that vest within 60 days of March 15, 2021.13, 2023. |
| (5) | Represents 5,70310,095 shares of Class A Common Stock and 8,369 shares of Class A Common Stock issuable upon settlement of restricted stock units that vest within 60 days of March 15, 2021.13, 2023. |
| (6) | Represents (i) 4,050,3333,381,291 shares of Class A Common Stock and 2,400,000 shares of Class A Common Stock issuable up exercise of Private Placement Warrants (as defined below) held by the Roger K. Deromedi Revocable Trust Dated 2/11/2000 Amended and Restated 11/9/2011 (the “Revocable Trust”) and, (ii) 360,000 shares of Class A Common Stock held by the Roger K. Deromedi Irrevocable Generation Skipping Trust dated October 1, 2020, Sandra E. Deromedi, Trustee, FBO Sandra E. Deromedi (the “Irrevocable Trust”)., (iii) 840,522 shares of Class A Common Stock held by the Roger K. Deromedi Irrevocable Grantor Retained Annuity Trust dated 11/01/2021 (the “GRAT”), (iv) 2,574 are directly held by Mr. Deromedi, and (v) 8,369 shares of Class A Common Stock issuable upon settlement of restricted stock units that vest within 60 days of March 13, 2023. Mr. Deromedi is the trustee of the Revocable Trust and GRAT and has voting and dispositive power of the securities held by such entityentities and Mr. Deromedi’s spouse is the trustee of the Irrevocable Trust and has voting and dispositive power of the securities held by such entity. Accordingly, Mr. Deromedi may be deemed to have or sharedisclaims beneficial ownership of such securities.the securities held by the Irrevocable Trust, and this is not an admission that he is the beneficial owner of these securities other than to the extent of any pecuniary interest he may have therein, directly or indirectly. |
| (7) | Represents 178,333214,128 shares of Class A Common Stock and 5,7038,369 shares of Class A Common Stock issuable upon settlement of restricted stock units that vest within 60 days of March 15, 2021.13, 2023. |
| (8) | Represents 3,682,934(i) 3,441,078 shares of Class A Common Stock (including 766,067203,567 shares of Class A Common Stock held jointly with his spouse) and 1,920,000 shares of Class A Common Stock issuable upon exercise of Private Placement Warrants. Does not include any indirect interest in securities held by CC Collier Holdings, LLC. |
(9) | Represents 5,580 shares of Class A Common Stock and 5,7038,369 shares of Class A Common Stock issuable upon settlement of restricted stock units that vest within 60 days of March 15, 2021. |
(10) | Represents 900,00013, 2023 (ii) 1,920,000 shares of Class A Common Stock issuable up exercise of Private Placement Warrants. Does not include any indirect interest in securities held by The Rice Family Foundation, a 501(c)(3) nonprofit organization, of which Stacie R. Lissette is the Trustee. Stacie R. Lissette is the spouse of the Mr. Lissette, and is the daughter of Michael W. Rice, a member of the Company Board. The business address of the Rice Family Foundation is P.O. Box 229, Hanover, PA 17331.CC Collier Holdings, LLC. |
(11)(9) | Represents 252,50015,675 shares of Class A Common Stock and 5,7038,369 shares of Class A Common Stock issuable upon settlement of restricted stock units that vest within 60 days of March 15, 2021.13, 2023. |
(12)(10) | Represents 8,749,513Consists of (i) 10,003 shares of Class A Common Stock, 4,320,000(ii) 74,602 shares of Class A Common Stock subject to Private Placement Warrantsissuable upon exercise of vested stock options, and 34,218(iii) 900,000 shares of Class A Common Stock held by the Rice Family Foundation of which Mr. Lissette’s wife is Trustee. |
| (11) | Represents 262,595 shares of Class A Common Stock and 8,369 shares of Class A Common Stock issuable upon settlement of restricted stock units that vest within 60 days of March 15, 2021.13, 2023. |
| (12) | Represents 4,271 shares of Class A Common Stock and 8,369 shares of Class A Common Stock issuable upon settlement of restricted stock units that vest within 60 days of March 13, 2023. |
| (13) | Represents (i) 175,024 shares of Class A Common Stock and (ii) 18,650 shares of Class A Common Stock issuable upon exercise of vested stock options. |
| (14) | Represents (i) 75,705 shares of Class A Common Stock and (ii) 9,325 shares of Class A Common Stock issuable upon exercise of vested stock options. |
| (15) | Represents (i) 90,065 shares of Class A Common Stock, (ii) 15,446 shares of Class A Common Stock issuable upon the exercise of vested stock options, and (iii) 700 shares of Class A Common Stock held in a trust for the benefit of Mr. Schreiber and his spouse. Mr. Schreiber and his spouse are trustees of the trust. Mr. Schreiber disclaims beneficial ownership of the securities held by the trust, and this is not an admission that he is the beneficial owner of these securities other than to the extent of any pecuniary interest he may have therein, directly or indirectly. |
| (16) | Represents 9,887,587 shares of Class A Common Stock, 4,320,000 shares of Class A Common Stock subject to Private Placement Warrants, 118,023 shares of Class A Common Stock issuable upon exercise of vested options, and 75,321 shares of Class A Common Stock issuable upon settlement of restricted stock units that vest within 60 days of March 13, 2023. |
| (17) | Based solely on information reported on a Schedule 13G/A filed with the SEC on February 2, 2023 by Collier Creek Partners LLC, Chinh E. Chu and Jason K. Giordano. Represents (i) 5,148,380 Class A Shares and (ii) 2,880,000 shares of Class A Common Stock issuable up exercise of Private Placement Warrants held by CC Collier Holdings, LLC.LLC as of December 31, 2021. CC Collier Holdings, LLC is the record holder of such securities. Chinh E. Chu has sole voting and investment discretion with respect to the securities held of record by CC Collier Holdings, LLC. Mr. Chu disclaims beneficial ownership over any securities owned by CC Collier Holdings, LLC other than to the extent of any pecuniary interest he may have therein, directly or indirectly. Mr. Chu served as a member of the Board of Directors of Collier Creek until the closing of the Business Combination. The business address of CC Collier Holdings, LLC is 200 Park Avenue, 58th Floor, New York, New York 10166. |
(14) | Represents shares of Class A Common Stock beneficially held by Morgan Stanley, on behalf of itself and certain of its affiliates (collectively, “Morgan Stanley”), based solely on the Schedule 13G filed by Morgan Stanley with the SEC on February 12, 2021, indicating that Morgan Stanley had sole voting power with respect to no shares of Class A Common Stock, shared voting power with respect to 4,284,777 shares of Class A Common Stock, sole dispositive power with respect to no shares of Class A Common Stock, and shared dispositive power with respect to 4,284,777 shares of Class A Common Stock as of December 31, 2020. The business address of Morgan Stanley is 1585 Broadway, New York, NY 10036. | | | | | | | | 2023 PROXY STATEMENT 57 |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ∎ CHANGE IN CONTROL (15)(18) | Represents shares of Class A Common Stock beneficially held by T. Rowe Price Associates, Inc. (“Price Associates”), based solely on the Schedule 13G filed by Price Associates with the SEC on February 16, 2021, indicating that Price Associates had sole voting power with respect to 1,857,819 shares of Class A Common Stock, shared voting power with respect to no shares of Class A Common Stock, sole dispositive power with respect to 8,042,340 shares of Class A Common Stock, and shared dispositive power with respect to no shares of Class A Common Stock as of December 31, 2020. The business address of Price Associates is 100 E. Pratt Street, Baltimore, MD 21202. |
(16) | Represents shares of Class A Common Stock beneficially owned by Neuberger Berman GroupChamplain Investment Partners, LLC on behalf of itself and certain of its affiliates (collectively, “Neuberger Berman”(“Champlain”), based solely on theinformation reported on a Schedule 13G filed by Neuberger BermanChamplain with the SEC on February 11, 2021,13, 2023, indicating that Neuberger Bergeras of December 30, 2022, Champlain had 4,135,820 shares for which Champlain possesses sole voting power with respect to noand 5,425,840 shares for which Champlain possesses sole dispositive power. The business address of Champlain is 180 Battery St., Burlington, Vermont 05401. |
| (19) | Represents shares of Class A Common Stock sharedbeneficially owned by JPMorgan Chase & Co (“JPM”), based solely on information reported on a Schedule 13G filed by JPM with the SEC on January 27, 2023, indicating that as of December 30, 2022, JPM had 4,636,069 shares for which JPM possesses sole voting power, with respect to 4,845,6996,251 shares of Class A Common Stock,which JPM has shared dispositive power and 5,058,278 shares for which JPM possesses sole dispositive power with respect to nopower. The address of JPM is 383 Madison Avenue, New York, New York 10179. |
| (20) | Represents an aggregate of 1,000,000 shares of Class A Common Stock and shared dispositive power with respect to 4,891,714 shares of Class A Common Stock as of December 31, 2020. The business address of Neuberger Berman is 1290 Avenue of the Americas, New York, NY 10104. |
(17) | Represents59,349,000 shares of Class A Common Stock issuable upon the conversion of certain Common Company Units retained by the Continuing Members at the closing of the Business Combination and the surrender and cancellation of a corresponding number of shares of Class V Common Stock. UM Partners, LLC is a series LLC, consisting of two separate protected series, each of which has separate members, managers, ownership interests, assets, debts, liabilities, obligations and expenses. The boards of managers of each of Series U of UM Partners LLC and Series R of UM Partners LLC consist of five members and act by majority approval. Each of the members of the boards of managers of Series U of UM Partners LLC and Series R of UM Partners LLC disclaims beneficial ownership of any of our shares of Class V Common Stock, other than to the extent of any pecuniary interest he or she may have therein, directly or indirectly. |
(18)(21) | Represents shares of Class A Common Stock beneficially owned by T. Rowe Price Investment Management, Inc. (“T. Rowe Price”), based solely on information reported on a Schedule 13G filed by T. Rowe Price with the SEC on February 14, 2023, indicating that as of December 30, 2022, T. Rowe Price had 1,672,050 shares for which T. Rowe Price possesses sole voting power and 5,579,318 shares for which T. Rowe Price possesses sole dispositive power. The address of T. Rowe Price is 101 E. Pratt Street, Baltimore, MD 21201. |
| [22) | Represents shares of Class A Common Stock beneficially owned by The Vanguard Group Inc., on behalf of itself and certain of its affiliates (collectively, “Vanguard”(“Vanguard”), based solely on theinformation reported on a Schedule 13G filed by Vanguard with the SEC on February 10, 2021,9, 2023, indicating that as of December 30, 2022, indicating that as of December 30, 2022, Vanguard had 0 shares for which Vanguard possesses sole voting power, with respect to no105,547 shares for which Vanguard possesses shared voting power, 6,679,960 shares of which Vanguard has sole dispositive power, and 159,801 shares of which Vanguard has shared dispositive power. The address of Vanguard is 100 Vanguard Blvd. Malvern, PA 19355. |
| (23) | Represents shares of Class A Common Stock shared voting powerbeneficially owned by BlackRock, Inc. (“BlackRock”), based solely on information reported on a Schedule 13G filed by BlackRock with respect to 22,338 shares of Class A Common Stock, sole dispositive power with respect to 4,018,934 shares of Class A Common Stock, and shared dispositive power with respect to 58,170 shares of Class A Common Stockthe SEC on February 10, 2023, indicating that as of December 31, 2020.30, 2022, BlackRock had 4,145,796 shares for which BlackRock possesses sole voting power and 4,228,743 shares for which BlackRock possesses sole dispositive power. The business address of VanguardBlackRock is 100 Vanguard Blvd., Malvern, PA 19355.55 East 52nd Street New York, NY 10055. |
Change in Control There are no arrangements, known to us, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in control. Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act requires our executive officers, directors and persons who beneficially own more than 10% of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of our ordinary shares and other equity securities. These executive officers, directors, and greater than 10% beneficial owners are required by SEC regulation to furnish us with copies of all Section 16(a) forms filed by such reporting persons. Based solely on our review of such forms furnished to us and written representations from certain reporting persons, we believe that all filing requirements applicable to our executive officers, directors and greater than 10% beneficial owners were filed in a timely manner during the year ended January 3, 2021,1, 2023, except for the following: Roger K. DeromediPamela Stewart filed a late Form 4 on January 19, 2021May 26, 2022 with respect to the exercisepurchase of Warrants to purchase Class A Common Stock exercisedof the issuer on May 20, 2022. Dylan Lissette filed an amended Form 4 on December 23, 2020. This19, 2022 to report the correct number of shares of the Company’s Class A Common Stock subject to a stock award initially reported on a Form 4 filed on February 1, 2022, and Chad Whyte filed an amended Form 3 on March 15, 2023 to correct the number of shares reported on a Form 3 filed on June 22, 2022. These late filing wasfilings were unintentional and due to administrative oversight. 46
RELATED PARTY TRANSACTIONS ∎ SAGEWORTH TRUST COMPANY PROFIT SHARING/401(K) PLAN ADVISORY SERVICES Transactions with Related PersonsRELATED PARTY TRANSACTIONS
Utz Related Person Transactions
Sageworth Holdings LLC Transaction Advisory Services
On November 22, 2019, Utz Quality Foods entered into a letter agreement with Sageworth Holdings which was modified by the parties on May 29, 2020, for certain advisory services related to the Business Combination. Timothy P. Brown, a member of our Board of Directors and member of the Boards of Managers of the Continuing Members, is the Founder and Chief Executive Officer of Sageworth Holdings. Under the engagement letter, Sageworth Holdings advised UBH with respect to the structure, financial terms and negotiations of the Business Combination. Pursuant to the engagement letter, upon the Closing of the Business Combination, UBH paid Sageworth Holdings a cash transaction fee equal to $5,000,000 (excluding reimbursement for certain expenses incurred on behalf of Utz Quality Foods). Upon the Closing of the Business Combination, the engagement letter terminated by its terms.
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 (the “Profit Sharing Plan”).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 (“CurrentOctober 1, 2019 Engagement Letter”), which became effective October 1, 2019 and replaced a January 1, 2011 engagement letter. Under the CurrentOctober 1, 2019 Engagement Letter, the services provided by Sageworth Trust to the Utz Quality Foods, LLC Profit SharingSharing/401(k) Plan and its sponsor remained substantially the same as under the 2011 engagement letter. Under the CurrentOctober 1, 2019 Engagement Letter, UBH iswas required to pay Sageworth Trust $35,000 each calendar quarter during the term, plus out-of-pocket expenses. The term 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, continues until terminated at will by either party.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 SharingSharing/401(k) Plan during fiscal years 2017, 2018 and 2019,year 2022, Utz paid Sageworth Trust $126,961, $148,920,$94,278.26. Lease Agreement by and $148,260, respectively. Feesbetween Utz Quality Foods, LLC and Oxford Hill, LLC On June 21, 2019, Utz Quality Foods, LLC entered into a Non-Exclusive Aircraft Lease Agreement (the “Aircraft Lease”) with Oxford Hill, LLC for the use by Utz Quality Foods, LLC of an aircraft owned by Oxford Hill, LLC. Oxford Hill, LLC, an entity controlled by Michael W. Rice, a member of the Company Board. Pursuant to the terms of the Aircraft Lease, Utz Quality Foods, LLC may lease Oxford Hill, LLC’s private aircraft (the “Aircraft”) on a non-exclusive basis for travel purposes. In accordance with the terms of the Aircraft Lease, Utz Quality Foods, LLC reimburses Oxford Hill, LLC for the costs associated with business travel on the Aircraft in an amount equal to $1,400 per hour. During Fiscal 2022, Utz Quality Foods, LLC paid approximately $130,900 to Oxford Hill, LLC for business travel under the Aircraft Lease. The hourly rate under the lease for fiscal year 2020 under the Current Engagement Letter were equal2023 has been increased to $161,000, which included out-of-pocket expenses.$1,600 per hour. Collier Creek Related Party Transactions
Class B Ordinary Shares
On May 2, 2018, Collier Creek issued 2,875,000 Class B Ordinary Shares to the Sponsor in exchange for a capital contribution of $25,000. On September 7, 2018, Collier Creek effected a share capitalization resulting in the Sponsor holding an aggregate of 10,937,500 Class B Ordinary Shares. On September 10, 2018, the Sponsor transferred 45,000, 45,000, 52,500 and 52,500 Class B Ordinary Shares to each of its independent directors, Antonio F. Fernandez, Matthew M. Mannelly, William D. Toler and Craig D. Steeneck, respectively. On October 4, 2018, Collier Creek effected a share capitalization resulting in an aggregate of 12,375,000 Class B Ordinary Shares. On October 10, 2018, the underwriters partially exercised the over-allotment option, and an aggregate of 500,000 Class B Ordinary Shares were subsequently surrendered to Collier Creek by the Sponsor for no consideration on October 19, 2018. Of the 11,875,000 shares outstanding as of immediately prior to the Closing of the Business Combination, the Sponsor owned an aggregate of 11,680,000 Class B Ordinary Shares and the independent directors owned an aggregate of 195,000 Class B Ordinary Shares.
Upon the Closing of the Business Combination, the Class B Ordinary Shares automatically converted into shares of Class A Common Stock on a one-for-one basis, after giving effect to the conversion of Class B Common Stock upon the Closing of the Business Combination. Such shares of Class A Common Stock are subject to the Related Agreements. See “— Post-Business Combination Arrangements — Investor Rights Agreement”.
| 2021 PROXY STATEMENT 47 |
RELATED PARTY TRANSACTIONS(CONT.)
Private Placement
Simultaneously with the closing of the initial public offering of Collier Creek (the “IPO”), Collier Creek consummated the private placement of 7,200,000 warrants (the “Private Placement Warrants”) at a price of $1.50 per warrant to the Sponsor, generating gross proceeds of $10.8 million. Each Private Placement Warrant is exercisable for one share of Class A Common Stock at a price of $11.50 per share. A portion of the proceeds from the sale of the Private Placement Warrants were added to the proceeds from the IPO to be held in the trust account of Collier Creek (the “Trust Account”). The Private Placement Warrants are non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees.
Administrative Service Fee
Collier Creek agreed, commencing on the effective date of the IPO through the earlier of Collier Creek’s consummation of a business combination and its liquidation, to pay an affiliate of the Sponsor a monthly fee of $10,000 for office space, and secretarial and administrative services. Collier Creek recorded $120,000 in general and administrative expenses in connection with this administrative services agreement during the year ended December 31, 2019. As of December 31, 2019, Collier Creek had accrued approximately $147,000 for services in connection with such agreement.
Forward Purchase Agreements
On September 7, 2018, Collier Creek entered into forward purchase agreements with the Sponsor and Collier Creek’s independent directors (the “Forward Purchase Agreements”) which provide for the purchase of an aggregate of 3,500,000 Class A Ordinary Shares (the “Forward Purchase Shares”), plus an aggregate of 1,166,666 redeemable warrants (the “Forward Purchase Warrants”) to purchase one Class A Ordinary Share at $11.50 per share, for an aggregate purchase price of $35,000,000, or $10.00 per Class A Ordinary Share, in a private placement to close concurrently with the closing of the initial business combination. The Forward Purchase Warrants had the same terms as the warrants sold by Collier Creek in the IPO. In connection with the Closing of the Business Combination, the Forward Purchase Shares and Forward Purchase Warrants were issued. The proceeds from the sale of forward purchase securities were used as part of the consideration to the Continuing Members in the Business Combination.
Registration Rights
Prior to the Closing of the Business Combination, the holders of the Class B Ordinary Shares of Collier Creek and Private Placement Warrants (and any Class A Ordinary Shares issuable upon the exercise of the Private Placement Warrants) were entitled to registration rights pursuant to the Registration Rights Agreement, dated as of October 4, 2018, by and among Collier Creek, the Sponsor and Collier Creek’s independent directors (the “Original Registration Rights Agreement”). The holders of these securities were entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a business combination. We were required to bear the expenses incurred in connection with the filing of any such registration statements.
Pursuant to the Forward Purchase Agreements, Collier Creek agreed to use its commercially reasonable best efforts (i) to file within 30 days after the closing of a business combination a registration statement with the SEC for a secondary offering of the Forward Purchase Shares and the Forward Purchase Warrants (and underlying Class A Ordinary Shares), (ii) to cause such registration statement to be declared effective promptly thereafter and (iii) to maintain the effectiveness of such registration statement until the earliest of (a) the date on which the Sponsor and all of the independent directors or their respective assignees cease to hold the securities covered thereby and (b) the date all of the securities covered thereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act. In addition, the Forward Purchase Agreements provide these holders will have certain “piggy-back” registration rights to include their securities in other registration statements filed by Collier Creek.
In connection with the Business Combination, the Original Registration Rights Agreement terminated upon the execution of the Investor Rights Agreement. (See the section entitled “— Post-Business Combination Arrangements —Investor Rights Agreement — Registration Rights”).
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Post-Business Combination Arrangements
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. | | | | | | | | | 2023 PROXY STATEMENT 59 |
Distributions
RELATED PARTY TRANSACTIONS ∎ THIRD AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT 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 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. | 2021 PROXY STATEMENT 49 |
RELATED PARTY TRANSACTIONS(CONT.)
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 us;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).
RELATED PARTY TRANSACTIONS ∎ 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 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 under 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.Representative, which was amended on October 21, 2021 (the “2021 Amendment”). 50
Director Appointment Under the Investor Rights Agreement, subject to certain step downstep-down provisions, the Continuing Members have the right to nominate five Continuing Member Nominees to be board members and the Sponsor or Sponsor Representative as applicable, has the right to nominate five Sponsor Nominees to be board members. The five Continuing Members Nominees and the five Sponsor Nominees comprise our Board of Directors appointed in connection with the domestication of Collier Creek. Two Continuing Member NomineesPursuant to the Investor Rights Agreement, in January 2022, one additional independent director was added to the Board and, one Sponsor Nominee were nominated as Class I Directorsin December 2022, another member of the Board was appointed in connection with terms ending at our 2021 Annual Meeting; one Continuing Member Nominee and two Sponsor Nominees were nominated as Class II Directors with terms ending at our 2022 Annual Meeting; and two Continuing Member Nominees and two Sponsor Nominees were nominated as Class III Directors with terms ending at our 2023 Annual Meeting.the appointment of a new Chief Executive Officer. Voting Under the Investor Rights Agreement, the Sponsor and the Continuing Member have agreed to vote all of their respective shares of Class A Common Stock and Class V Common Stock, as applicable, in favor of the nominees of each of the Continuing Members and the Sponsor or the Sponsor Representative, as applicable. Per the October 21, 2021 Amendment to the Investor Rights Agreement, all Board votes must include one member of the Sponsor and one member of the Continuing Member to pass. 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 Continuing Members have a consent right over (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 equityholdersequity 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. Pursuant to the 2021 Amendment, since the Board increased the number of directors above ten, so long as either Founder Holders or Continuing Members beneficially own at least 75% of their economic interests in UBI or UBH, without duplication, held immediately after the Closing (a “Qualified Party”) at least one representative of such Qualified Party serving on the Company Board must approve each action of the Company 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 IPO. | | | | | | | | | 2023 PROXY STATEMENT 61 |
RELATED PARTY TRANSACTIONS ∎ INVESTOR RIGHTS AGREEMENT 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 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. | 2021 PROXY STATEMENT 51 |
RELATED PARTY TRANSACTIONS(CONT.)
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
RELATED PARTY TRANSACTIONS ∎ SPONSOR SIDE LETTER AGREEMENT 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 of Series B-1 Common Stock will automatically convert into shares of Class A Common Stock upon the vesting of the Restricted Company Units held by us which vest upon the achievement of at least a $12.50 3-day VWAP which dollar threshold will be decreased by the aggregate amount of dividends per share paid by us after the Closing (including any vesting of such units in connection with a qualifying change of control or liquidation) and the Restricted Sponsor Shares which are shares of Series B-2 Common Stock will automatically convert into shares of Class A Common Stock upon the vesting of the Restricted Company Units held by us which vest upon the achievement of at least a $15.00 3-day VWAP which dollar threshold will be decreased by the aggregate amount of dividends per share paid by us after the Closing (including any vesting of such units in connection with a qualifying change of control or liquidation). Upon conversion of the Restricted Sponsor Shares, the holder of each such Restricted Share will be entitled to receive a payment equal to the amount of dividends declared on a share of Class A Common Stock beginning at the Closing and ending on the day before the date such Restricted Sponsor Share converts into a share of Class A Common Stock. If any of the Restricted Sponsor Shares do not convert prior to the 10-year anniversary of the Closing Date, such Restricted Sponsor Shares will be canceled for no consideration, and will not be entitled to receive any catch-up payment in respect of such Restricted Sponsor Shares. Our Board of Directors determined that the vesting thresholds applicable to the Restricted Sponsor Shares had been satisfied as of Closing and, accordingly, all of the Restricted Sponsor Shares vested upon Closing and the same number of shares of Class A Common Stock were issued in lieu thereof. 52
Statement of Policy Regarding Transactions with Related Persons Upon the Closing of the Business Combination, we adopted a formal written policy, which provides that our officers, directors, nominees for election as directors, beneficial owners of more than 5% of any class of our capital stock, any member of the immediate family of any of the foregoing persons and any firm, corporation or other entity in which any of the foregoing persons is employed or is a general partner or principal or in a similar position or in which such person has a 5% or greater beneficial ownership interest (“Related Persons”), are not permitted to enter into any transactions, arrangements, or relationships in which (i) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (ii) the Company is a related party transaction with usparticipant and (iii) any Related Person has or will have a direct or indirect interest, without the approval of our Audit Committee, subject to certain exceptions. Indemnification of Directors and Officers The Bylaws provide that we will indemnify our directors and officers to the fullest extent permitted by the DGCL. In addition, our charter provides that our directors and officers will not be liable for monetary damages for breach of fiduciary duty to the fullest extent permitted by the DGCL. There is no pending litigation or proceeding naming any of our directors or officers to which indemnification is being sought, and we are not aware of any pending or threatened litigation that may result in claims for indemnification by any director or officer. | 2021 | | | | | | | | 2023 PROXY STATEMENT 53 63 |
 
We seek stockholder approvalUnder Section 14A of the Utz Brands, Inc. 2021 Employee Stock Purchase Plan (the “ESPP”). On December 10, 2020, our Board adopted the ESPP, subjectExchange Act, Utz’s stockholders are entitled to approval by our stockholders. If approved at the Annual Meeting on May 6, 2021, purchase rights previously granted under the ESPP will become exercisable in accordance with the terms of the ESPP. In the event the stockholders failcast an advisory vote to approve the ESPP by December 10, 2021, all purchase rights granted undercompensation of Utz’s named executive officers, known as a “Say on Pay” vote. The stockholder vote is an advisory vote only and is not binding on Utz or its Board of Directors. Although the ESPPvote is non-binding, the Board of Directors and the Compensation Committee value the opinions of our stockholders and will be canceled and become null and avoid without being exercised. The Board recommends a vote “FOR”consider the approvaloutcome of the ESPP.vote when making future compensation decisions for our named executive officers.
The core of Utz’s executive compensation philosophy and practice continues to align pay with performance. Utz’s executive officers are compensated in a manner consistent with Utz’s business strategy, competitive practice, sound corporate governance principles, and stockholder interests and concerns. We believe our compensation program is strongly aligned with the long-term interests of our stockholders. We urge you to read the “Compensation Discussion and Analysis” (“CD&A”) sections in this Proxy Statement, the compensation tables and the narrative discussion beginning on page 27 for additional details on Utz’s executive compensation program. Below are a few highlights of our pay-for-performance philosophy. | ∎ | | Annual Cash Short-Term Incentive Award program based on the individuals’ contributions, as determined by the Individual Performance Factors (IPF) and our Company’s performance, measured by our Adjusted EBITDA (50%), Net Sales (30%), and our annual goals (20%). |
To be approved
| ∎ | | Equity Incentive Award program for the CEO and Executive Vice Presidents comprised of Performance Stock Units, Stock Options and Restricted Stock Units. |
| ∎ | | Company defined annual goals through an Objectives, Goals, Strategies, Metrics (OGSM) system that cascades to all levels of leadership and supports our pay-for-performance philosophy on the Annual Bonus Program and on annual merit increases. |
At the annual meeting, we are asking stockholders to vote on the following advisory resolution: RESOLVED, that the stockholders approve the compensation of Utz’s named executive officers as disclosed pursuant to the SEC’s compensation disclosure rules, including the CD&A, the compensation tables and adopted, the ESPP requires thenarrative discussion. Vote Required The affirmative vote of the holders of a majority of the sharesvotes properly cast (for the avoidance of voting stock present at the annual meeting, in person or represented by proxy,doubt, abstentions and entitled to vote. As a result, abstentions will have the same practical effectbroker non-votes are not counted as votes cast for or against this proposal. Broker non-votes will have no effectsuch matter) is required for approval, on the outcomean advisory basis, of this proposal. InOur next advisory vote to approve the event stockholder approval is not obtained, the ESPPcompensation of Utz’s named executive officers will not be adopted.at our 2024 Annual Meeting. Board Recommendation Board RecommendationTHE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE NON-BINDING,
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL AND ADOPTION OF THE UTZ BRANDS, INC. 2021 EMPLOYEE STOCK PURCHASE PLAN. |
Description of the ESPP
The ESPP has been established to provide eligible employees of Utz (and certain designated affiliates) with an opportunity to purchase shares of our Class A Common Stock. By means of the ESPP, we seek to retain the services of our employees, including our officers and certain directors, 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.
A copy of the ESPP is attached hereto as Appendix A and is hereby incorporated into this proxy statement by reference. The following summary of key provisions of the ESPP, as well as the other summaries and descriptions relating to the ESPP contained elsewhere in this Proposal No. 2, are each qualified in their entirety by reference to the full text of the ESPP.
Shares Available for Issuance
1,500,000 shares of our Class A Common Stock will be reserved for issuance under the ESPP.
Structure of the ESPP
The ESPP includes two components: (i) a “423 Component”, which generally applies to U.S. employees who are eligible to participate in the ESPP and is intended to satisfy the requirements for favorable tax treatment under Section 423 of the Code (although we make no undertaking nor representation to obtain or maintain qualification under Section 423 of the Code for any subsidiary, individual, offering or grant) and (ii) a “Non-423 Component,” which is not intended to satisfy the requirements for favorable tax treatment under Section 423 of the Code.
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ADVISORY RESOLUTION TO APPROVE EXECUTIVE COMPENSATION. The administrator of the ESPP is authorized to make changes to the features of the ESPP with respect to any Non-423 Component as may be necessary or appropriate to, among other things, achieve a desired tax treatment in any foreign jurisdiction or to comply with the laws applicable to any subsidiaries or affiliates. Therefore, the following is a summary of the principal features of the Non-423 Component and all references to the “ESPP” hereinafter will only refer to the 423 Component. As of the date of this proxy statement, all employees eligible to participate in the ESPP are eligible to participate in the 423 Component. This summary does not purport to be a complete description of all of the provisions of the ESPP, and is qualified in its entirety by reference to the full text of the ESPP.
ESPP TERMS
The ESPP permits eligible our 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 Code and the ESPP. Subject to the preceding limitations, the administrator will determine the actual amount of the discounted purchase price. 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.
Administration
The ESPP is administered by the Compensation Committee of our Board, or one or more subcommittees appointed by the Compensation Committee. Subject to the provisions of the ESPP, the administrator of the ESPP has full authority and discretion to adopt, administer, and interpret such rules and regulations as it deems necessary to administer the ESPP, and its decisions are final, binding and conclusive upon all parties. Generally, the ESPP will be administered in such a manner so as to comply with applicable requirements of Rule 16b-3 of the Exchange Act and Section 423 of the Code.
Eligibility and Participation
The ESPP allows individuals (i) who are employees, including officers and certain directors, of the Participating Companies for at least 30 days ending on the first day of a purchase period (or on such other date determined by the administrator), or such longer period determined by the administrator, not to exceed two years, (ii) who do not, and as a result of their participation in the ESPP would not, own stock or hold options for 5% or more of the total combined voting power or value of all classes of our stock or the stock of a “parent corporation” or “subsidiary corporation” within the meaning of Sections 423(b)(3) and 424(d) of the Code, (iii) who are not employed in a jurisdiction outside the United States in which, as of the offering date, participation in the offering would not be in compliance with applicable laws of the jurisdiction in which such individual resides or is employed, and (iv) whose customary employment with us is not 20 hours per week or less or five months per calendar year or less.
As of March 15, 2021, we estimate that approximately 2,780 persons are eligible to participate in the ESPP.
ESPP participants may authorize payroll deductions as long as payroll deductions do not exceed 15% of the participant’s earnings for such calendar year. All payroll deductions will be applied toward the purchase of our Class A Common Stock. Participants may increase or decrease their participation level at any time, with such change to be effective commencing as of the next purchase period, however participants may decrease their participation level only to zero percent during a purchase period.
Offerings
The ESPP provides for separate offering periods lasting one year in duration. Each offering period is comprised of two six-month purchase periods. The administrator selects the date for an offering period and the corresponding purchase periods. Our initial offering period commenced on January 1, 2021 and consists of two purchase periods from January 1 through June 30, 2021 and from July 1 through December 31, 2021. Notwithstanding the foregoing, the administrator of the ESPP may establish (i) a different term for one or more future offerings and (ii) different commencing and ending dates for such offerings; provided, however, that in no event shall any offering exceed 27 months.
| 2021 PROXY STATEMENT 55 | | | | 64 | | | | |
Payroll Deductions, Purchase Price, and Shares Purchased
An eligible employee generally must authorize a payroll deduction at least seven days prior to the start of a purchase period in which he or she will begin participation. Once an eligible employee becomes a participant, the participant will automatically be enrolled in subsequent purchase periods at the same payroll deduction percentage unless the participant withdraws from the ESPP, changes its contribution level or becomes ineligible to participate.
On the last business day of each purchase period, the participant will be deemed to have exercised the option to purchase as many shares as the employee’s payroll deduction will allow at the applicable purchase price. The purchase price will be established by the administrator in accordance with the ESPP and will not be less than 85% of the lesser of (i) the “fair market value” of a share on the offering date of such 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. The closing price of our Class A Common Stock as reported on the New York Stock Exchange on March 15, 2021 was $25.70. No employee will be permitted to purchase any shares under the ESPP (i) if such employee, immediately after such purchase, owns stock or hold options for 5% or more of the total combined voting power or value of all classes of our stock or the stock of a “parent corporation” or “subsidiary corporation” within the meaning of Sections 423(b)(3) and 424(d) of the Code or (ii) to the extent that his or her rights to purchase stock under all of our employee stock purchase plans accrues at a rate which exceeds $25,000 worth of stock (determined at the fair market value of the shares at the time such purchase right is granted) for each calendar year in which the purchase right is outstanding.
Withdrawal and Termination of Employment
A participant may withdraw from an offering, in whole but not in part, at any time during the offering for which such withdrawal is to be effective, or by any other date specified by the administrator of the ESPP for a future offering. Upon withdrawal, generally the amount in the participant’s account will be refunded. A participant who has withdrawn from or suspended participation in an offering may not participate again in that same offering. In order to participate in a subsequent offering, the participant must re-enroll in the ESPP in accordance with the ESPP’s enrollment procedures. Upon termination of employment for any reason, a participant’s participation in the ESPP will immediately terminate and the payroll deductions credited to the participant’s account will be returned to him or her and such participant’s purchase rights will automatically terminate.
Transferability
No participant is permitted to sell, assign, transfer, pledge, or otherwise dispose of or encumber either the payroll deductions credited to his or her account or any rights granted under the ESPP other than by will or the laws of descent and distribution. During the participant’s lifetime, only the participant can make decisions regarding the participation in or withdrawal from an offering under the ESPP.
Change of Control, Dissolution or Liquidation; Adjustments upon Changes in Capitalization
If we issue additional securities to raise capital, no adjustments will be made to rights to purchase stock under the ESPP. However, if a change is made in our capital structure, such as a stock split or a stock dividend, that results in an increase or decrease in the number of shares of Class A Common Stock outstanding without receipt of additional consideration by us, appropriate adjustment will be made in the number of shares available under the ESPP, the number of shares subject to outstanding rights to purchase stock at the next purchase date, and in the purchase price per share, subject to any required action by our Board of Directors, the administrator or stockholders.
In the event of a proposed dissolution or liquidation, ten business days prior to such dissolution or liquidation each participant’s accumulated contributions will be used to purchase shares of Class A Common Stock and the offering period will terminate immediately following such purchase.
In the event of a change in control, either (a) any surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) may assume or continue purchase rights outstanding under the ESPP or may substitute similar rights (including a right to acquire the same consideration paid to the stockholders in the change in control) for those outstanding under the ESPP, or (b) if any surviving or acquiring corporation (or its parent company) does not assume or continue such purchase rights or does not substitute similar rights for purchase rights outstanding under the ESPP, then each participant’s accumulated contributions shall be used to purchase shares of Class A Common Stock within ten business days prior to the change in control under any ongoing offerings, and each participant’s purchase rights under the ongoing offerings shall terminate immediately after such purchase.
A change in control will be deemed not to have occurred if any Family Member or any of their respective affiliates beneficially own
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or acquire more than 50% of our total combined voting power (or any successor to substantially all of our assets and the assets of our subsidiaries) or any direct or indirect parent company. “Family Member” means any of (a) Michael Rice, (b) the spouse and lineal descendants (whether natural or adopted) of Michael Rice, (c) any spouse of any lineal descendants of Michael Rice, (d) a trust solely for the benefit of any individuals described in the foregoing clauses (a) through (c), and (e) any entity in which the persons described in the foregoing clauses (a) through (d) own more than 50% of the voting interests.
The administrator will have full and final authority, which may be exercised in its discretion, to determine conclusively whether a change in control has occurred pursuant to the above definition, the date of the occurrence of such change in control and any incidental matters relating thereto.
Amendment and Termination of the ESPP
Our Compensation Committee of the Board of Directors may amend the ESPP in such respects as it shall deem advisable; provided, however, that, to the extent required for compliance with Code Section 423 or any applicable law or regulation, stockholder approval will be required for any amendment that (i) materially increases the number of shares of Class A Common Stock available for issuance under the ESPP, (ii) materially expands the class of individuals eligible to become participants and receive purchase rights under the ESPP, (iii) materially increases the benefits accruing to participants under the ESPP or materially reduces the price at which shares of Class A Common Stock may be purchased under the ESPP, (iv) materially extends the term of the ESPP, or (v) expands the types of awards available for issuance under the ESPP.
The administrator may at any time and for any reason suspend or terminate the ESPP. During any period of suspension or upon termination of the ESPP, no purchase rights may be granted.
Except as provided above in the event of any change in the structure of our Class A Common Stock, no such termination of the ESPP may impair purchase rights previously granted except (i) with the consent of the person to whom such purchase rights were granted, (ii) as necessary to comply with the laws, listing requirements, or governmental regulations, or (iii) as necessary to obtain or maintain favorable, tax, listing or regulatory treatment.
Federal Income Tax Consequences
The following discussion is a summary of the general U.S. federal income tax rules applicable to purchases offered by us and certain of its designated subsidiaries under the ESPP offerings that are intended to comply with Section 423 of the Code. Employees should consult their own tax advisors since a taxpayer’s particular situation may be such that some variation of the rules described below will apply. The ESPP and the right of participants to make purchases under it are intended to qualify under the provisions of Code Sections 421 and 423. Under those provisions, no income will be taxable to a participant at the time of grant of the purchase right or purchase of shares. However, a participant may become liable for tax upon dispositions of shares acquired under the ESPP, and the tax consequences will depend on how long a participant has held the shares prior to disposition. If the shares are disposed of (a) more than two years after the date of the beginning of the offering period and (b) more than one year after the stock is purchased in accordance with the ESPP (or if the employee dies while holding the shares), the following tax consequences will apply. The lesser of (a) the excess of fair market value of the shares at the time of such disposition over the purchase price of the shares (the “purchase price”), or (b) the excess of the fair market value of the shares at the time the purchase right was granted over the purchase price (which purchase price will be computed as of the offering date) will be taxed as ordinary income to the participant. Any further gain upon disposition generally will be taxed at capital gain rates. If the shares are sold and the sales price is less than the purchase price, there is no ordinary income and the participant has a capital loss equal to the difference. If an employee holds the shares for the holding periods described above, no deduction in respect of the disposition of such shares will be allowed to us.
If the shares are sold or disposed of (including by way of gift but not death, bequest or inheritance) before the expiration of either the two year or the one year holding periods described above, the following tax consequences will apply. The amount by which the fair market value of the shares on the date the purchase right is exercised (which is the last business day of the offering period and which is hereafter referred to as the “termination date”) exceeds the purchase price will be taxed as ordinary income to the participant. This excess will constitute ordinary income in the year of sale or other disposition even if no gain is realized on the sale or a gratuitous transfer of the shares is made. The balance of any gain will be taxed as capital gain and will qualify for long-term capital gain treatment if the shares have been held for more than one year following the exercise of the purchase right. If the shares are sold for an amount that is less than their fair market value as of the termination date, the participant recognizes ordinary income equal to the excess of the fair market value of the shares on the termination date over the purchase price, and the participant may recognize a capital loss equal to the difference between the sales price and the value of such shares on the termination date. We, in the event of an early disposition, will be allowed a deduction for federal income tax purposes equal to the ordinary income realized by the disposing employee.
New Plan Benefits
The amounts of future purchases under the ESPP are not determinable because participation is voluntary, participation levels depend on each participant’s elections and the restrictions of Code Section 423 and the ESPP, and the per-share purchase price depends on the future value of our Class A Common Stock.
| 2021 PROXY STATEMENT 57 |
 
We are asking our stockholders to ratify the Audit Committee’s selection of Grant Thornton LLP (“Grant Thornton”) as our independent registered public accounting firm for the fiscal year ending January 2, 2022.December 31, 2023. Grant Thornton has served as the independent registered public accounting firm for Utz since 2011. Vote Required The affirmative vote of the holders of a majority of the votes cast either virtually during the annual meeting or represented by proxy at the annual meeting will be required to ratify the selection by our audit committeeAudit Committee of Grant Thornton for our fiscal year ending January 2, 2022.December 31, 2023. Abstentions will not be counted as votes cast on this proposal. No broker non-votes are expected to exist in connection with this proposal. THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE SELECTION BY OUR AUDIT COMMITTEE OF GRANT THORNTON LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. |
The Audit Committee annually reviews the independent registered public accounting firm’s independence, including reviewing all relationships between the independent registered public accounting firm and us and any disclosed relationships or services that may impact the objectivity and independence of the independent registered public accounting firm, and the independent registered public accounting firm’s performance. Although ratification is not required by our Bylaws or otherwise, the Board is submitting the selection of Grant Thornton to our stockholders for ratification as a matter of good corporate practice. If the selection is not ratified, the Audit Committee will consider whether it is appropriate to select another independent registered public accounting firm. Even if the selection is ratified, the Audit Committee in its discretion may select a different registered public accounting firm at any time during the year if the committee determines that such a change would be in the best interests of the Company and our stockholders. We expect that a representative of Grant Thornton will attend the Annual Meeting and the representative will have an opportunity to make a statement if he or she so chooses. The representative will also be available to respond to appropriate questions from stockholders.
Change in Auditor
On August 28, 2020, the Audit Committee of the Board of Directors of the Company approved the appointment of Grant Thornton as the Company’s independent registered public accounting firm to audit the Company’s consolidated financial statements for the year ended January 3, 2021. Grant Thornton served as the independent registered public accounting firm of Utz prior to the Business Combination. Accordingly, WithumSmith+Brown, PC (“Withum”), the independent registered public accounting firm of Collier Creek, the name of the Company prior to the Business Combination, was informed on August 28, 2020 that it would be replaced by Grant Thornton as the Company’s independent registered public accounting firm following its completion of the Company’s review of the quarter ended June 30, 2020, which consist only of the accounts of the pre-Business Combination special purpose acquisition company, Collier Creek.
The reports of Withum on Collier Creek’s balance sheet as of December 31, 2019 and 2018 and the consolidated statements of operations, changes in shareholders’ equity and cash flows for the year ended December 31, 2019 and for the period from April 30, 2018 (inception) through December 31, 2018, did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainties, audit scope or accounting principles.
During the period from April 30, 2018 (inception) through December 31, 2018, the fiscal year ended December 31, 2019, and the subsequent interim period through the date of Withum’s dismissal, there were no “disagreements” (as defined in Item 304(a) (1)(iv) of Regulation S-K under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) between the Company and Withum on any matter of accounting principles or practices, financial disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Withum would have caused it to make reference to the subject matter of the disagreements in its reports on the Company’s financial statements for such periods.
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During the period from April 30, 2018 (inception) through December 31, 2018, the fiscal year ended December 31, 2019, and the subsequent interim period through the date of Withum’s dismissal, there were no “reportable events” (as defined in Item 304(a)(1) (v) of Regulation S-K under the Exchange Act).
During the period from April 30, 2018 (inception) through December 31, 2018, the fiscal year ended December 31, 2019, and the subsequent interim period through the date of Withum’s dismissal, Collier Creek and the Company did not consult with Grant Thornton regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the financial statements of Collier Creek or the Company, and no written report or oral advice was provided that Grant Thornton concluded was an important factor considered by us in reaching a decision as to the accounting, auditing, or financial reporting issue; or (ii) any matter that was either the subject of a “disagreement” (as defined in Item 304(a)(1)(iv) of Regulation S-K under the Exchange Act) or a “reportable event” (as defined in Item 304(a)(1)(v) of Regulation S-K under the Exchange Act).
The Company has provided Withum with a copy of the foregoing disclosures and has requested that Withum furnish the Company with a letter addressed to the Commission stating whether it agrees with the statements made by the Company set forth above. A copy of Withum’s letter, dated September 3, 2020, is incorporated as Exhibit 16.1 to the Company’s Annual Report on Form 10-K by reference to the Company’s Current Report on Form 8-K, filed with the SEC on September 3, 2020.
Audit, Audit-Related, Tax and All Other Fees Grant Thornton, and Withum, which served as our independent registered public accounting firm for the fiscal years ended January 3, 20211, 2023 and December 31, 2019, respectively,January 2, 2022, provided audit and tax services to us during those fiscal years. The December 31, 2019 consolidated financial statements did not include the impact of the Business Combination, which closed on August 28, 2020. The following table presents fees for professional services rendered by our independent registered public accounting firms:firms during fiscal year 2022 and fiscal year 2021: | | | | | Fiscal Year
2022 ($) | | | Fiscal Year
2021 ($) | | | | 2020 | 2019 | | | Audit Fees(1) | $ 1,537,707 | $ 138,300 | | | 1,818,873 | | | | 1,932,836 | | | | Audit-Related Fees(2) | 288,581 | — | | | 70,613 | | | | 371,561 | | | | Tax Fees(3) | 2,058,726 | — | | | 593,096 | | | | 643,411 | | | | All Other Fees(4) | — | — | | | — | | | | — | | | | Total | $ 3,885,014 | $ 138,300 | | | 2,482,582 | | | | 2,947,808 | |
| (1) | Audit Fees. Audit Fees include for the year ended December 31, 2019, fees for professional services rendered for the audit of CCH’s year-end financial statements and services that are normally provided by Withum in connection with regulatory filings, including services in connection with the audit of CCH’s annual financial statements included in CCH’s Form 10-K for the period ended December 31, 2018, review of the quarterly financial information included in CCH’s subsequent Exchange Act filing in 2019, as well as attendance at audit committee meetings. Audit fees include for the fiscal year ended December 31, 2019, fees of $138,300 for professional services rendered for the audit of CCH’s year-end financial statements and services that are normally provided by Withum in connection with regulatory filings, including services in connection with the audit of CCH’s annual financial statements included in CCH’s Form 10-K for the period ended December 31, 2019, review of the quarterly financial information included in CCH’s subsequent Exchange Act filings in 2020 (relating to periods prior to the Closing of the Business Combination), attendance at audit committee meetings, and comfort letters, consents and other items related to SEC matters. Audit fees include for the fiscal year ended January 3, 2021,1, 2023 and January 2, 2022, fees of $1,537,707$1,818,973 and $1,932,836, respectively, for professional services rendered forperformed to comply with the standards established by the Public Company Accounting Oversight Board, including the audit of UBH’s year-endour consolidated financial statements, services that are normallythe review of quarterly financial information and the audit of internal controls over financial reporting required by the Sarbanes Oxley Act of 2002. This category also includes fees for audits provided by Grant Thornton in connection with regulatorystatutory filings includingor services in connectionthat generally only the principal independent auditor reasonably can provide, such as consent and assistance with theand review of the quarterly financial information included in the Company’s Exchange Act filings in 2020 following the Closing of the Business Combination, attendance at audit committee meetings, consents and other items related toour SEC matters. Audit fees increased substantially from 2019 to 2020 due to the transition of the company from a special purpose acquisition company (which had no operations and primarily held cash in a trust for potential future acquisitions) to a fully operating business, as well as the audit of the Business Combination and necessary reporting. filings. |
| (2) | Audit-Related Fees. Audit-Related Fees consist of fees for professional services that are related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees,” including the employee benefit plan audit and due diligence services provided in connection with the Business Combination. potential and consummated acquisitions. |
| (3) | Tax Fees. Tax Fees consist of fees for professional services rendered with respect to federal and state tax compliance and tax advice. This can include preparation of tax returns, claims for refunds, payment planning, and tax law interpretation. Also, Tax Fees include amounts for tax consulting services related to the Business Combination. Combination and other consummated acquisitions. |
| (4) | All Other Fees. All Other Fees consist of fees for professional services or costs not otherwise reported in Audit Fees, Audit-Related Fees or Tax Fees. |
| | | | | | | | | 2023 PROXY STATEMENT 65 |
PROPOSAL NO. 3: RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM All audit-related services, tax services and other non-audit services were pre-approved by the Audit Committee, which concluded that the provision of such services by Grant Thornton was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions. The Audit Committee’s outside auditor independence policy provides for pre-approval of audit, audit-related and tax services specifically described by the committee on an annual basis and, in addition, individual engagements anticipated to exceed pre-established thresholds must be separately approved. Board Recommendation THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE SELECTION BY OUR AUDIT COMMITTEE OF GRANT THORNTON LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. | 2021 PROXY STATEMENT 59 | | | | 66 | | | | |
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 investors.utzsnacks.comhttp://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 20202022 and particularly with regard to the audited consolidated financial statements as of January 3, 2021 and December 29, 2019 and for the three years ended January 3, 2021. 1, 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, prior to the Closing of the Business Combination, the Audit Committee of the CCH Board of Directors met three times during 2020. Following the Business Combination and through the end of our fiscal year ended January 3, 2021, the Audit Committee of our Board of Directors met twice. In 2021, the Audit Committee met eight times. In 2022, the Audit Committee met seven 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 January 3, 2021,1, 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 the auditor’sauditor judgement, where such judgment was especially challenging, subjective or complex judgments.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 January 3, 20211, 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 year ended January 3, 20211, 2023 for filing with the SEC. Craig D. Steeneck (Chair)
Roger Deromedi Antonio F. Fernandez B. John Lindeman | | | | | | | | | 2023 PROXY STATEMENT 67 |
REPORT OF AUDIT COMMITTEE ∎ STOCKHOLDER PROPOSALS 60
STOCKHOLDER PROPOSALS The 20222024 Annual Meeting of Stockholders is anticipated to be held in May 2022.2024. Under Rule 14a-8 promulgated by the SEC under the Exchange Act, any proposal that a stockholder intends to be presented at the 20222024 Annual Meeting via the proxy statementProxy Statement and form of proxy to be distributed by us in connection with the 20222024 Annual Meeting, must be received by our Corporate Secretary at our principal executive offices no later than November 24, 2021.23, 2023. However, if the 20222024 Annual Meeting is held on a date more than 30 days before or after May 6, 20224, 2024 (the anniversary date of the 20212023 Annual Meeting), stockholder proposals for the 20222024 Annual Meeting must be submitted at a reasonable time before we begin to print and send our proxy materials. Stockholder proposals received after this date will be considered untimely under Rule 14a-8. If a stockholder desires to bring a matter before the meeting that is not the subject of a proposal meetingwhich meets the SEC proxy rule requirements for inclusion in the proxy statement, the stockholder must follow procedures outlined in our Bylaws in order to personally present the proposal at the meeting. One of the procedural requirements is timely notice in writing of the business the stockholder proposes to bring before the meeting. Written notice must be received by our Corporate Secretary no earlier than January 6, 20225, 2024 and no later than February 5, 2022.4, 2024. In the event that our 20222024 Annual Meeting is more than 30 days before or more than 70 days after May 6, 20224, 2024 (the anniversary date of the 20212023 Annual Meeting), the written notice must be delivered or received no later than the tenth day following the day on which public announcement of the date of such meeting is first made. We reserve the right to decline to include in our proxy materials any stockholder’s proposal that does not comply with the rules of the SEC for inclusion therein. Any notice of director nomination submitted to the Company must include the information required by Rule 14a-19(b) under the Exchange Act. We will furnish copies of the applicable Bylaw provisions that set forth the requirements for a stockholder’s written notice upon written request to our Corporate Secretary at 900 High Street, Hanover, PA 17331, Attn: Corporate Secretary. | 2021 PROXY STATEMENT 61 | | | | 68 | | | | |
QUESTIONS AND ANSWERS ABOUT OUR ANNUAL MEETING QUESTIONS AND ANSWERS ABOUT OUR ANNUAL MEETING What is the purpose of the Annual Meeting? Our 20212023 Annual Meeting will be held for the following purposes: | 1. | To elect threefour directors to serve as the Class IIII directors on the Board until the 20242026 annual meeting of stockholders or until their successors are elected and qualified; |
| 2. | To vote on an advisory recommendation to the Board of Directors to approve and adopt the Utz Brands, Inc. 2021 Employee Stock Purchase Plan;executive compensation; |
| 3. | To ratify the selection by our audit committeeAudit Committee of Grant Thornton LLP to serve as our independent registered public accounting firm for the year ending January 2, 2022;December 31, 2023; and |
| 4. | 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 15, 202113, 2023 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 76,481,83381,012,868 shares of Class A Common Stock and 60,349,00059,349,000 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 15, 2021,13, 2023, the record date, shares representing 68,415,41770,180,935 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. A “broker non-vote,” however, does not count as a vote in favor of or against a particular proposal for which the broker has no discretionary voting authority. “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, Continental Stock Transfer &Equiniti Trust Company, on March 15, 2021,13, 2023, 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.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. 62
QUESTIONS AND ANSWERS ABOUT OUR ANNUAL MEETING | | | | | | | | | | | | |  | |  | | |  | | | |  | | | |  | | 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. | | | | To vote through the internet, go to www.proxyvote.comhttp://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 May 5, 2021.3, 2023. | | | | To vote by telephone, dial toll- free 1-800-690-69031-866-883-3382 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 May 5, 2021.3, 2023. | | | | To vote in person, attend and vote at the virtual Annual Meeting by registering at www. virtualshareholdermeeting. com/Utz2021 (you http://register.proxypush.com/utz. You will need the virtual control number included on your proxy card to vote duringregister. Registered attendees will receive a meeting link an hour before the meeting).meeting begins. |
—————————————————————————————————————————————————————————— 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 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? 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 statementProxy Statement and annual report on Form 10-K, and 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. | 2021 PROXY STATEMENT 63 |
QUESTIONS AND ANSWERS ABOUT OUR ANNUAL MEETING (CONT.)
How may I participate in the virtual Annual Meeting? The Annual Meeting will be conducted completely online via the internet.Internet. Stockholders may attend and participate in the meeting by visiting www.virtualshareholdermeeting.com/Utz2021. 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 holder of record and you have misplaced your virtual control number, please email the Company at kpowers@utzsnacks.com tshea@utzsnacks.com We encourage you to access the Annual Meeting before the start time of 9:00 a.m., Eastern Time, on May 6, 2021. Please allow ample time for online check-in, which4, 2023. If you check in prior to 8:45 a.m., you will begin at 8:30 a.m., Eastern Time,be placed on May 6, 2021.hold until the meeting site opens.
QUESTIONS AND ANSWERS ABOUT OUR ANNUAL MEETING 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. By conducting our Annual Meeting completely online via the internet,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 especially in light of the ongoing COVID-19 pandemic and related social distancing requirements and recommendations, and improveimproves 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 threefour Class IIII directors for terms expiring at the 20242026 Annual Meeting of Stockholders, (2) an advisory recommendation to the approval and adoptionBoard of the Utz Brands, Inc. 2021 Employee Stock Purchase Plan,Directors to approve executive compensation, (3) the ratification of the selection by our audit committeeAudit Committee of Grant Thornton LLP as our Independent Registered Public Accounting Firm for the fiscal year ending January 2, 2022;December 31, 2023, and (4) 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 threefour 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 One. With regard to Proposal No. 2 (Approval and Adoption of 2021 Employee Stock Purchase Plan), the affirmative vote of a majority of the votes cast is required to approve and adopt the Utz Brands, Inc. 2021 Employee Stock Purchase Plan. Votes that are withheld and broker non-votes are not considered “votes cast” and therefore will have no effect on the outcome of Proposal Two.
2. With regard to Proposal No. 3 (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 committeeAudit 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 January 2, 2022,December 31, 2023, 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 and adoption of the 2021 Employee Stock Purchase Planadvisory recommendation to the Board of Directors to approve executive compensation in Proposal No. 22; and “FOR” the ratification of the selection by our audit committeeAudit Committee of Grant Thornton LLP as our Independent Registered Public Accounting Firm for the year ending January 2, 2022December 31, 2023 in Proposal No. 3 and in accordance with the discretion of the named proxies on other matters brought before the Annual Meeting. 64
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 committeeAudit Committee of Grant Thornton LLP as our independent registered public accounting firm for the year ending January 2, 2022December 31, 2023 in Proposal No. 3 and such other business as may properly come before the Annual Meeting and any postponement or adjournment thereof. The Board is not 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. | | | | | | | | | 2023 PROXY STATEMENT 71 |
QUESTIONS AND ANSWERS ABOUT OUR ANNUAL MEETING 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 No.Nos. 1 and Proposal No. 2. 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 internetInternet 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 youyour broker, trustee, or other nominee that holds your shares giving you the right to vote the shares and you have your sixteen digitsixteen-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, yourin-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 May 3, 2023. If you are the beneficial owner of shares, please follow the voting instructions provided by your broker, trustee or other nominee. Why is the Company seeking stockholder approval with respect to the 2021 Employee Stock Purchase Plan?
Because the 2021 Employee Stock Purchase Plan is intended to qualify under Section 423 of the Code, stockholder approval must be obtained within 12 months after the date such plan is adopted. Our Board of Directors approved the 2021 Employee Stock Purchase Plan on December 10, 2020.
What will happen if stockholder approval is not obtained with respect to the 2021 Employee Stock Purchase Plan?
If stockholder approval is not obtained with respect to the 2021 Employee Stock Purchase Plan, we may not issue the 1,500,000 shares of Class A Common Stock reserved for issuance under such plan and we will terminate any offerings under such plan. We believe that our ability to issue rights under the 2021 Employee Stock Purchase Plan will help us attract, motivate and retain qualified officers and employees.
| 2021 PROXY STATEMENT 65 |
QUESTIONS AND ANSWERS ABOUT OUR ANNUAL MEETING (CONT.)
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 our website, investors.utzsnacks.com.http://investors.utzsnacks.com/investors. Who will pay for the cost of soliciting proxies? We will bear the expense of preparing this Proxy Statement and soliciting the proxies it is seeking. In addition to the use of the mails,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 statementProxy 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 statementProxy 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, Pennsylvania 17331, Attn.: Corporate Secretary or by contacting our Corporate Secretary by email at tshea@utzsnacks.com or by telephone at (717) 637-6644.312.933.9348. 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. What is the impact of the Company qualifying as an Emerging Growth Company on this Proxy Statement?
We are an “emerging growth company” under applicable federal securities laws and therefore are permitted to take advantage of certain reduced public company reporting requirements. As an emerging growth company, we provide in this Proxy Statement the scaled disclosure permitted under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), including the compensation disclosures required of a “smaller reporting company,” as that term is defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, as an emerging growth company, we are not required to conduct votes seeking approval, on an advisory basis, of the compensation of our named executive officers or the frequency with which such votes must be conducted. We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii) December 31, 2023; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.
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| | | | | 72 BROADRIDGE CORPORATE ISSUER SOLUTIONS
C/O UTZ BRANDS, INC.
P.O. BOX 1342
BRENTWOOD, NY 11717
| VOTE BY INTERNET
Before The Meeting - Go to www.proxyvote.com
Use the internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on May 5, 2021. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go to www.virtualshareholdermeeting.com/UTZ2021
You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on May 5, 2021. Have your proxy card in hand when you call and then follow the instructions.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the environmental impact and the costs incurred by Utz Brands, Inc. in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the internet. To sign up for electronic delivery, please follow the instructions above to vote using the internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in the future.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Utz Brands, Inc. c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
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| | | TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | | | D42588-P52508 | KEEP THIS PORTION FOR YOUR RECORDS | | THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | DETACH AND RETURN THIS PORTION ONLY |
| | | | | | | | | | | | | | | | | UTZ BRANDS, INC. | | | | | | | | | | | | | The Board of Directors recommends a vote FOR the following: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1. | Election of Class I Director Nominees: | For | Against | Abstain | | | | | | | | | | | | | | | | | | | | | | | | | | 1a. John W. Altmeyer | | ☐ | ☐ | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | 1b. Jason K. Giordano | | ☐ | ☐ | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | 1c. B. John Lindeman | | ☐ | ☐ | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | The Board of Directors recommends a vote FOR the following proposals: | | | | For | Against | Abstain | | | | | | | | | | | | | 2. | Approval and adoption of the Utz Brands, Inc. 2021 Employee Stock Purchase Plan | ☐ | ☐ | ☐ | | | | | | | | | | | | | 3. | Ratification of the selection by our audit committee of Grant Thornton, LLP to serve as our independent registered public accounting firm for the year ending January 2, 2022 | ☐ | ☐ | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | Sign exactly as your name(s) appear(s) on the stock certificate. If shares of stock stand of record in the names of two or more persons, or in the name of husband and wife, whether as joint tenants or otherwise, both or all of such persons should sign the proxy card. If shares of stock are held of record by a corporation, the proxy card should be executed by the President or Vice President and the Secretary or Assistant Secretary. Executors or administrators or other fiduciaries who execute the proxy card for a deceased stockholder should give their full title. Please date the proxy card. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Signature [PLEASE SIGN WITHIN BOX] | Date | | | | | Signature (Joint Owners) | Date | | | | | | | | | | | | | | | | | | | | |
ANNEX A ∎ RECONCILIATION OF NON-GAAP FINANCIAL MEASURES ANNEX A Reconciliation of Non-GAAP Financial Measures Important Notice Regarding the Internet Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report on Form 10-K are available at www.proxyvote.com.
| | | | | | | | | ($ IN MILLIONS) | | For the fiscal
year ended
January 1, 2023 | | | For the fiscal
year ended
January 2, 2022 | | | | | Net (Loss) Income | | $ | (14.0 | ) | | $ | 8.0 | | | | | Plus non-GAAP adjustments: | | | | | | | | | | | | Income Tax Expense | | | (23.9 | ) | | | 8.1 | | | | | Depreciation and Amortization | | | 86.8 | | | | 80.7 | | | | | Interest Expense, Net | | | 44.4 | | | | 34.7 | | | | | Interest Income (IO loans)(1) | | | (1.6 | ) | | | (2.4 | ) | | | | EBITDA | | | 91.7 | | | | 129.1 | | | | | Certain Non-Cash Adjustments(2) | | | 11.3 | | | | 11.6 | | | | | Acquisition and Integration(3) | | | 45.8 | | | | 27.0 | | | | | Business Transformation Initiatives(4) | | | 22.1 | | | | 24.5 | | | | | Financing-Related Costs(5) | | | 0.3 | | | | 0.7 | | | | | (Gain) loss on remeasurement of warrant liability(6) | | | (0.7 | ) | | | (36.7 | ) | | | | Adjusted EBITDA | | | 170.5 | | | | 156.2 | |
| (1) | | | | | | | | | | UTZ BRANDS, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
| | | | | | | | The undersigned hereby appoints each of Dylan B. Lissette and Cary Devore with full power of substitution, to represent the undersigned and to vote all of the shares of stock in Utz Brands, Inc. (the “Company”) which the undersigned is entitled to vote at the Annual Meeting of Stockholders of the Company, to be held virtually at www.virtualshareholdermeeting.com/UTZ2021 on Thursday, May 6, 2021 at 9:00 A.M. Eastern Time and at any adjournment or postponement thereof: (1) as hereinafter specified upon the proposals listed on the reverse side and as more particularly described in the Company’s Proxy Statement, receipt of which is hereby acknowledged, and (2) in their best judgment upon such other matters as may properly come before the meeting.
The shares represented hereby shall be voted as specified. If no specification is made, such shares shall be voted FOR the election of the nominees listed on the reverse side for the Board of Directors, FOR Proposal 2 and FOR Proposal 3. Whether or not you are able to attend the meeting, you are urged to sign and mail the proxy card in the return envelope so that the stock may be represented at the meeting.
IF YOU ELECT TO VOTE BY MAIL, PLEASE SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
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| 2021 PROXY STATEMENT 69 |
UTZ BRANDS, INC. 2021 EMPLOYEE STOCK PURCHASE PLAN
| 1.1 | The purpose of the Plan is to provide a means by which Eligible Employees of the Company and certain designated Affiliates may be given an opportunity to purchase shares of Common Stock. The Plan is intended to permit the Company to grant a series of Purchase Rights to Eligible Employees under an Employee Stock Purchase Plan. |
| 1.2 | The Company, by means of the Plan, seeks to retain the services of such Employees, to secure and retain the services of new Employees, and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Affiliates. |
As used in the Plan, the following definitions shall apply to the capitalized terms indicated below:
| 2.1 | “Affiliates” means any “parent corporation” or “subsidiary corporation” of the Company whether now or subsequently established, as those terms are defined in Sections 424(e) and (f), respectively, of the Code. In the event of a Non-423 Plan, a non-subsidiary can be deemed to be an Affiliate and shall be designated for participation in a Non-423 Plan. |
| 2.2 | “Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular Person, such Person shall be deemed to have beneficial ownership of all securities that such Person has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The terms “Beneficially Owned” and “Beneficial Ownership” have a corresponding meaning. |
| 2.3 | “Board” means the Board of Directors of the Company. |
| 2.4 | “Capitalization Adjustment” means any change that is made in, or other event that occurs with respect to, the Common Stock subject to the Plan or subject to any Purchase Right after the Effective Date without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure, or other similar transaction). Notwithstanding the foregoing, the conversion of any convertible securities of the Company shall not be treated as a Capitalization Adjustment. |
| 2.5 | “Code” means the Internal Revenue Code of 1986, as amended, including any applicable regulations and other guidance thereunder. |
| 2.6 | “Committee” means the Compensation Committee of the Board or one or more subcommittees appointed by the Committee to administer the Plan. |
| 2.7 | “Common Stock” means the Class A common stock, $0.0001 par value per share, of the Company, or such other securities of the Company as may be designated by the Board from time to time in substitution thereof. |
| 2.8 | “Company” means Utz Brands, Inc., a Delaware corporation, and any successor thereto. |
| 2.9 | “Contributions” means the payroll deductions specifically provided for in the Offering, that a Participant contributes to fund the exercise of a Purchase Right. |
| 2.10 | “Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events: |
| (a) | A transaction or series of transactions (other than an offering of shares of Common Stock to the general public through a registration statement filed with the Securities and Exchange Commission or a transaction or series of transactions that meets the requirements of clauses (i) and (ii) of subsection (d) below) whereby any Person (other than the Company, any of its subsidiaries, an employee benefit plan maintained by the Company or any of its subsidiaries or a Person that, prior to such transaction, directly or indirectly controls, is controlled by, or is |
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under common control with, the Company) directly or indirectly acquires Beneficial Ownership of securities of the Company possessing more than 50% of the total combined voting power of the Company’s securities that are outstanding immediately after such acquisition; or
| (b) | During any period of 24 months, individuals who, at the beginning of such period, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board; provided, that any Person becoming a Director subsequent to the Effective Date, whose election or nomination for election was approved by a vote of at least two-thirds of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such Person is named as a nominee for Director, without written objection to such nomination) shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a Director during such period as a result of an actual or threatened election contest, as such terms are used in Rule 14a-12 of Regulation 14A promulgated under the Exchange Act, with respect to Directors or as a result of any other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board shall be deemed to be an Incumbent Director; or |
| (c) | The date that is ten (10) business days prior to the complete liquidation or dissolution of the Company; or |
| (d) | The consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more subsidiaries) of (x) a merger, consolidation, reorganization, or business combination, (y) a sale or other disposition of all or substantially all of the Company’s assets in any single transaction or series of related transactions, or (z) the acquisition of assets or shares of another entity, in each case other than a transaction: |
| (i) | which results in or immediately following which the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the Person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or such Person, the “Successor Entity”)) directly or indirectly, more than 50% of the total combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and |
| (ii) | after which no Person Beneficially Owns securities representing 50% or more of the total combined voting power of the Successor Entity; provided, however, that no Person shall be treated for purposes of this clause (ii) as Beneficially Owning 50% or more of the total combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction. |
A Change in Control shall not be deemed to have occurred if any Family Member or any of their respective affiliates Beneficially Own or acquire more than 50% of the total combined voting power of the Company (or any successor to substantially all of the assets of the Company and its subsidiaries) or any direct or indirect parent company.
The Committee shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change in Control has occurred pursuant to the above definition, the date of the occurrence of such Change in Control and any incidental matters relating thereto.
| 2.11 | “Director” means a member of the Board. |
| 2.12 | “Eligible Employee” means an Employee who meets the requirements set forth in the Offering for eligibility to participate in an Offering, provided that such Employee also meets the requirements for eligibility to participate set forth in the Plan. |
| 2.13 | “Employee” means any person, including Officers and Directors, who is employed for purposes of Section 423(b)(4) of the Code by the Company or an Affiliate. However, service solely as a Director, or payment of a fee for such services, shall not cause a Director to be considered an “Employee” for purposes of the Plan. For a Non-423 Plan, Employee shall mean an employee of the Company or its deemed Affiliate on any other basis as determined by the Company (if required under applicable local law). |
| 2.14 | “Employee Stock Purchase Plan” means a plan that grants Purchase Rights intended to be options issued under an “employee stock purchase plan,” as that term is defined in Section 423(b) of the Code. In addition, this Plan authorizes the grant of Purchase Rights under a non-423 Plan which do not qualify under Section 423 of the Code pursuant to rules, procedures or sub-plans adopted by the Board (or its designate) designed to achieve desired tax or other objectives. |
| 2021 PROXY STATEMENT 71 |
UTZ BRANDS, INC. 2021 EMPLOYEE STOCK PURCHASE PLAN(CONT.)
| 2.15 | “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. |
| 2.16 | “Fair Market Value” shall be the closing sales price for the Common Stock (or the closing bid, if no sales were reported) as quoted on the New York Stock Exchange on the date of determination if that date is a Trading Day, or if the date of determination is not a Trading Day, the last market Trading Day prior to the date of determination, as reported in The Wall Street Journal (Eastern Edition) or such other source as the Committee deems reliable. |
| 2.17 | “Family Member” means any of (a) Michael Rice, (b) the spouse and lineal descendants (whether natural or adopted) of Michael Rice, (c) any spouse of any lineal descendants of Michael Rice, (d) a trust solely for the benefit of any individuals described in the foregoing clauses (a) through (c), and (e) any entity in which the Persons described in the foregoing clauses (a) through (d) own more than 50% of the voting interests. |
| 2.18 | “Offering” means the grant of Purchase Rights to purchase shares of Common Stock under the Plan to Eligible Employees. |
| 2.19 | “Offering Date” means a date selected by the Committee for an Offering to commence. |
| 2.20 | “Officer” means a person who is an officer of the Company as defined in Rule16a-1 under Exchange Act. |
| 2.21 | “Non-423 Plan” shall mean an employee stock purchase plan which does not meet the requirements set forth in Code Section 423. |
| 2.22 | “Participant” means an Eligible Employee who holds an outstanding Purchase Right granted pursuant to the Plan. |
| 2.23 | “Plan” means this Utz Brands, Inc. 2021 Employee Stock Purchase Plan, as the same may be amended from time-to- time, including any Non-423 Plan adopted as a sub-plan hereunder. |
| 2.24 | “Purchase Date” means one or more dates during an Offering established by the Committee on which Purchase Rights shall be exercised and as of which purchases of shares of Common Stock shall be carried out in accordance with such Offering. |
| 2.25 | “Purchase Period” means a period of time specified within an Offering beginning on the Offering Date or on the next day following a Purchase Date within an Offering and ending on a Purchase Date. An Offering may consist of one or more Purchase Periods. |
| 2.26 | “Purchase Right” means an option to purchase shares of Common Stock granted pursuant to the Plan. |
| 2.27 | “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. |
| 2.28 | “Trading Day” means any day on which the exchange(s) or market(s) on which shares of Common Stock are listed, including the New York Stock Exchange or on such other principal exchange or market on which the Common Stock is traded. |
| 3.1 | The Committee shall administer the Plan unless and until the Board delegates administration of the Plan to a Committee or Committees, as provided in Section 3.3. |
| 3.2 | The Committee shall have the power, subject to, and within the limitations of, the express provisions of the Plan: |
| (a) | To determine how and when Purchase Rights to purchase shares of Common Stock shall be granted and the provisions of each Offering of such Purchase Rights (which need not be identical). |
| (b) | To designate from time to time which Affiliates of the Company whose Employees shall be eligible to participate in the Plan, provided that as of the Effective Date, Employees of all Affiliates of the Company shall be eligible to participate in the Plan. |
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| (c) | To construe and interpret, and make all determinations with respect to, the Plan and Purchase Rights, and to establish, amend and revoke rules and regulations for its administration. The Committee, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective. |
| (d) | To settle all controversies regarding the Plan and Purchase Rights granted under it. |
| (e) | To suspend or terminate the Plan at any time as provided in Section 13. |
| (f) | To amend the Plan at any time as provided in Section 13. |
| (g) | Generally, to exercise such powers and to perform such acts as it deems necessary or expedient to promote the best interests of the Company and its Affiliates and to carry out the intent that the Plan be treated as an Employee Stock Purchase Plan. |
| 3.3 | The Committee may delegate some or all of the administration of the Plan to a sub-committees or employees of the Company. If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in the Plan to the Board shall thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated. Whether or not the Board has delegated administration of the Plan to a Committee, the Board shall have the final power to determine all questions of policy and expediency that may arise in the administration of the Plan. |
| 3.4 | All determinations, interpretations and constructions made by the Committee in good faith shall not be subject to review by any person and shall be final, binding, and conclusive on all persons. |
4. | Shares of Common Stock Subject to the Plan. |
| 4.1 | Subject to the provisions of Section 12.1 relating to Capitalization Adjustments, the shares of Common Stock that may be sold pursuant to Purchase Rights shall not exceed in the aggregate one million five hundred thousand (1,500,000) shares of Common Stock. Notwithstanding the foregoing, the Board may act prior to the first day of any calendar year, to provide that there shall be no increase in the share reserve for such calendar year or that the increase in the share reserve for such calendar year shall be a lesser number of shares of Common Stock than would otherwise occur pursuant to the preceding sentence. For avoidance of doubt, the limitation set forth in this Section may be used to satisfy purchases of shares of Common Stock under either the Code Section 423 Plan or the Non-423 Plan. |
| 4.2 | If any Purchase Right granted under the Plan shall for any reason terminate without having been exercised, the shares of Common Stock not purchased under such Purchase Right shall again become available for issuance under the Plan. |
| 4.3 | The Common Stock purchasable under the Plan shall be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Company on the open market. |
5. | Grant of Purchase Rights; Offering. |
| 5.1 | The Committee may from time to time grant or provide for the grant of Purchase Rights to purchase shares of Common Stock under the Plan to Eligible Employees in an Offering (consisting of one or more Purchase Periods) on an Offering Date or Offering Dates selected by the Committee. Each Offering shall be in such form and shall contain such terms and conditions as the Committee shall deem appropriate, which shall comply with the requirement of Section 423(b)(5) of the Code that all Employees granted Purchase Rights shall have the same rights and privileges. The terms and conditions of an Offering shall be incorporated by reference into the Plan and treated as part of the Plan. The provisions of separate Offerings need not be identical, but each Offering shall include (through incorporation of the provisions of the Plan by reference in the document comprising the Offering or otherwise) the period during which the Offering shall be effective, which period shall not exceed twenty-seven (27) months beginning with the Offering Date, and the substance of the provisions contained in Sections 6 through 9. |
| 2021 PROXY STATEMENT 73 |
UTZ BRANDS, INC. 2021 EMPLOYEE STOCK PURCHASE PLAN(CONT.)
| 5.2 | If a Participant has more than one Purchase Right outstanding under the Plan, unless he or she otherwise indicates in agreements or notices delivered hereunder: (i) each agreement or notice delivered by that Participant shall be deemed to apply to all of his or her Purchase Rights under the Plan, and (ii) a Purchase Right with a lower exercise price (or an earlier-granted Purchase Right, if different Purchase Rights have identical exercise prices) shall be exercised to the fullest possible extent before a Purchase Right with a higher exercise price (or a later-granted Purchase Right if different Purchase Rights have identical exercise prices) shall be exercised. |
| 6.1 | Purchase Rights may be granted only to Employees of the Company or, as the Board has or may in the future designate as provided in Section 3.2(b), to Employees of an Affiliate. Except as provided in Section 6.2, an Employee shall not be eligible to be granted Purchase Rights under the Plan unless, on the Offering Date, such Employee has been in the employ of the Company or the Affiliate, as the case may be, for such continuous period preceding such Offering Date as the Committee may require, but in no event shall the required period of continuous employment be greater than two (2) years. In addition, the Committee may provide that no Employee shall be eligible to be granted Purchase Rights under the Plan unless, on the Offering Date, such Employee’s customary employment with the Company or the Affiliate is for more than twenty (20) hours per week and/or for more than five (5) months per calendar year, or such other criteria as the Committee may determine consistent with Section 423 of the Code. |
| 6.2 | The Committee may provide that each person who, during the course of an Offering, first becomes an Eligible Employee shall, on a date or dates specified in the Offering that coincides with the day on which such person becomes an Eligible Employee or that occurs thereafter, receive a Purchase Right under that Offering, which Purchase Right shall thereafter be deemed to be a part of that Offering. Purchase Rights for such Eligible Employees shall have the same characteristics as any Purchase Rights originally granted under that Offering, as described herein, except that: |
| (a) | the date on which such Purchase Right is granted shall be the “Offering Date” of such Purchase Right for all purposes, including determination of the exercise price of such Purchase Right; |
| (b) | the period of the Offering with respect to such Purchase Right shall begin on its Offering Date and end coincident with the end of such Purchase Date; and |
| (c) | the Committee may provide that if such person first becomes an Eligible Employee within a specified period of time before the end of the Offering, he or she shall not receive any Purchase Right under that Offering. |
| 6.3 | No Eligible Employee shall be eligible for the grant of any Purchase Rights under the Plan if, immediately after any such Purchase Rights are granted, such Eligible Employee owns stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or of any Affiliate. For purposes of this Section 6.3, the rules of Section 424(d) of the Code shall apply in determining the stock ownership of any Employee, and stock which such Employee may purchase under all outstanding Purchase Rights shall be treated as stock owned by such Employee. |
| 6.4 | As specified by Section 423(b)(8) of the Code, an Eligible Employee may be granted Purchase Rights under the Plan only if such Purchase Rights, together with any other rights granted under all Employee Stock Purchase Plans of the Company and any Affiliates, do not permit such Eligible Employee’s rights to purchase stock of the Company or any Affiliates to accrue at a rate which exceeds twenty five thousand dollars ($25,000) of Fair Market Value of such stock (determined at the time such rights are granted, and which, with respect to the Plan, shall be determined as of their respective Offering Dates) for each calendar year in which such rights are outstanding at any time. |
| 6.5 | Officers of the Company and any designated Affiliate, if they are otherwise Eligible Employees, shall be eligible to participate in Offerings under the Plan. Notwithstanding the foregoing, the Committee may provide in an Offering that Employees who are highly compensated Employees within the meaning of Section 423(b)(4)(D) of the Code shall not be an Eligible Employee for the Offering. |
| 7. | Purchase Rights; Purchase Price. |
| 7.1 | On each Offering Date, each Eligible Employee, pursuant to an Offering made under the Plan, shall be granted a Purchase Right to purchase up to that number of shares of Common Stock purchasable with a percentage not |
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exceeding fifteen percent (15%) of such Employee’s basic or regular or total compensation (as defined by the Committee in each Offering) during the period that begins on the Offering Date (or such later date as the Committee determines for a particular Offering) and ends on the date stated in the Offering, which date shall be no later than the end of the Offering.
| 7.2 | The Committee shall establish one (1) or more Purchase Dates during an Offering as of which Purchase Rights granted pursuant to that Offering shall be exercised and purchases of shares of Common Stock shall be carried out in accordance with such Offering. |
| 7.3 | In connection with each Offering made under the Plan, the Committee may specify a maximum number of shares of Common Stock that may be purchased by any Participant on any Purchase Date during such Offering. In connection with each Offering made under the Plan, the Committee may specify a maximum aggregate number of shares of Common Stock that may be purchased by all Participants pursuant to such Offering. In addition, in connection with each Offering that contains more than one Purchase Date, the Committee may specify a maximum aggregate number of shares of Common Stock that may be purchased by all Participants on any or each Purchase Date under the Offering. If the aggregate purchase of shares of Common Stock issuable upon exercise of Purchase Rights granted under the Offering would exceed any such maximum aggregate number, then, in the absence of any Committee action otherwise, a pro rata allocation of the shares of Common Stock available shall be made in as nearly a uniform manner as shall be practicable and equitable. |
| 7.4 | The purchase price of shares of Common Stock acquired pursuant to Purchase Rights shall be not less than the lesser of: |
| (a) | an amount equal to eighty-five percent (85%) of the Fair Market Value of the shares of Common Stock on the Offering Date; or |
| (b) | an amount equal to eighty-five percent (85%) of the Fair Market Value of the shares of Common Stock on the applicable Purchase Date. |
| 8. | Participation; Withdrawal; Termination. |
| 8.1 | A Participant may elect to authorize payroll deductions pursuant to an Offering under the Plan by completing and delivering to the Company, within the time specified in the Offering, an enrollment form (in such form as the Company may provide). Each such enrollment form shall authorize an amount of Contributions expressed as a percentage of the submitting Participant’s earnings (as defined in each Offering) during the Offering (not to exceed the maximum percentage specified by the Committee). Each Participant’s Contributions shall be credited to a bookkeeping account for such Participant under the Plan and shall be deposited with the general funds of the Company except where applicable law requires that Contributions be deposited with an independent third party. To the extent provided in the Offering, a Participant may begin such Contributions after the beginning of the Offering. To the extent provided in the Offering, a Participant may thereafter reduce (including to zero) or increase his or her Contributions. To the extent specifically provided in the Offering, in addition to making Contributions by payroll deductions, a Participant may make Contributions through the payment of cash or check prior to each Purchase Date of the Offering. |
| 8.2 | During an Offering, a Participant may cease making Contributions and withdraw from the Offering by delivering to the Company a notice of withdrawal in such form as the Company may provide. Such withdrawal may be elected at any time prior to the end of the Offering, except as provided otherwise in the Offering. A Participant’s withdrawal from an Offering shall have no effect upon such Participant’s eligibility to participate in any other Offerings under the Plan, but such Participant shall be required to deliver a new enrollment form in order to participate in subsequent Offerings. |
| 8.3 | Purchase Rights granted pursuant to any Offering under the Plan shall terminate immediately upon a Participant ceasing to be an Employee or other lack of eligibility. The Company shall distribute to such terminated or otherwise ineligible Employee all of his or her accumulated Contributions (reduced to the extent, if any, such Contributions have been used to acquire shares of Common Stock for the terminated or otherwise ineligible Employee) under the Offering. |
| 8.4 | Purchase Rights shall not be transferable by a Participant except by will, the laws of descent and distribution, or by a beneficiary designation as provided in Section 11. During a Participant’s lifetime, Purchase Rights shall be exercisable only by such Participant. |
| 8.5 | Unless otherwise specified in an Offering, the Company shall have no obligation to pay interest on Contributions. |
| 2021 PROXY STATEMENT 75 |
UTZ BRANDS, INC. 2021 EMPLOYEE STOCK PURCHASE PLAN(CONT.)
| 9. | Exercise of Purchase Rights. |
| 9.1 | On each Purchase Date during an Offering, each Participant’s accumulated Contributions shall be applied to the purchase of shares of Common Stock up to the maximum number of shares of Common Stock permitted pursuant to the terms of the Plan and the applicable Offering, at the purchase price specified in the Offering. No fractional shares shall be issued upon the exercise of Purchase Rights unless specifically provided for in the Offering. |
| 9.2 | If any amount of accumulated Contributions remains in a Participant’s account after the purchase of shares of Common Stock and such remaining amount is less than the amount required to purchase one share of Common Stock on the final Purchase Date of an Offering, then such remaining amount shall be distributed in full to such Participant at the end of the Offering without interest. |
| 9.3 | No Purchase Rights may be exercised to any extent unless the shares of Common Stock to be issued upon such exercise under the Plan are covered by an effective registration statement pursuant to the Securities Act and the Plan is in material compliance with all applicable federal, state, and foreign laws, and any other securities laws and other laws applicable to the Plan. If on a Purchase Date during any Offering hereunder the shares of Common Stock are not so registered or the Plan is not in such compliance, no Purchase Rights or any Offering shall be exercised on such Purchase Date, and the Purchase Date shall be delayed until the shares of Common Stock are subject to such an effective registration statement and the Plan is in such compliance, except that the Purchase Date shall not be delayed more than twelve (12) months and the Purchase Date shall in no event be more than twenty-seven (27) months from the Offering Date. If, on the Purchase Date under any Offering hereunder, as delayed to the maximum extent permissible, the shares of Common Stock are not registered and the Plan is not in such compliance, no Purchase Rights or any Offering shall be exercised and all Contributions accumulated during the Offering (reduced to the extent, if any, such Contributions have been used to acquire shares of Common Stock) shall be distributed to the Participants without interest (unless required by applicable law). |
| 10. | Covenants of the Company. |
| 10.1 | The Company shall seek to obtain from each federal, state, foreign or other regulatory commission or agency having jurisdiction over the Plan such authority as may be required to issue and sell shares of Common Stock upon exercise of the Purchase Rights. If, after commercially reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Purchase Rights unless and until such authority is obtained. |
| 11. | Designation of Beneficiary. |
| 11.1 | A Participant may file a written designation of a beneficiary who is to receive any shares of Common Stock and/ or cash, if any, from the Participant’s account under the Plan in the event of such Participant’s death. Any such designation shall be on a form provided by or otherwise acceptable to the Company. |
| 11.2 | The Participant may change such designation of beneficiary at any time by written notice to the Company. In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant’s death, the Company shall deliver such shares of Common Stock and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its sole discretion, may deliver such shares of Common Stock and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, to the Participant’s estate. |
| 12. | Adjustments upon Changes in Common Stock; Corporate Transactions. |
| 12.1 | In the event of a Capitalization Adjustment, the Committee shall appropriately and proportionately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 4.1; (ii) the class(es) and |
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maximum number of securities by which the share reserve is to increase automatically each year pursuant to Section 4.1; (iii) the class(es) and number of securities subject to, and the purchase price applicable to, outstanding Offerings and Purchase Rights; and (iv) the class(es) and number of securities imposed by purchase limits under each ongoing Offering. The Committee shall make such adjustments, and its determination shall be final, binding, and conclusive.
| 12.2 | In the event of a Change in Control, then: (i) any surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) may assume or continue Purchase Rights outstanding under the Plan or may substitute similar rights (including a right to acquire the same consideration paid to the stockholders in the Change in Control) for those outstanding under the Plan, or (ii) if any surviving or acquiring corporation (or its parent company) does not assume or continue such Purchase Rights or does not substitute similar rights for Purchase Rights outstanding under the Plan, then the Participants’ accumulated Contributions shall be used to purchase shares of Common Stock within ten (10) business days prior to the Change in Control under any ongoing Offerings, and the Participants’ Purchase Rights under the ongoing Offerings shall terminate immediately after such purchase. |
| 13. | Amendment, Termination, or Suspension of the Plan. |
| 13.1 | The Committee may amend the Plan at any time in any respect the Committee deems necessary or advisable. However, except as provided in Section 12.1 relating to Capitalization Adjustments, stockholder approval shall be required for any amendment of the Plan for which stockholder approval is required by applicable law or listing requirements, including any amendment that either: (i) materially increases the number of shares of Common Stock available for issuance under the Plan; (ii) materially expands the class of individuals eligible to become Participants and receive Purchase Rights under the Plan; (iii) materially increases the benefits accruing to Participants under the Plan or materially reduces the price at which shares of Common Stock may be purchased under the Plan; (iv) materially extends the term of the Plan; or (v) expands the types of awards available for issuance under the Plan. |
| 13.2 | The Committee may suspend or terminate the Plan at any time. No Purchase Rights may be granted under the Plan while the Plan is suspended or after it is terminated. |
| 13.3 | Any benefits, privileges, entitlements, and obligations under any outstanding Purchase Rights granted before an amendment, suspension, or termination of the Plan shall not be impaired by any such amendment, suspension, or termination except (i) with the consent of the person to whom such Purchase Rights were granted, (ii) as necessary to comply with any laws, listing requirements, or governmental regulations (including, without limitation, the provisions of Section 423 of the Code), or (iii) as necessary to obtain or maintain favorable tax, listing, or regulatory treatment. |
| 13.4 | In the event the Board or the Committee determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Board or the Committee may, to the extent permitted under Section 423 of the Code with respect to Offerings under the Section 423 of the Code, in its discretion and, to the extent necessary or desirable, modify or amend the Plan to reduce or eliminate such accounting consequence including, but not limited to: |
| (a) | subject to Section 7.4, altering the purchase price for any Offering including an Offering underway at the time of the change in purchase price; |
| (b) | shortening any Offering so that the Offering ends on a new Offering Date, including an Offering underway at the time of the Board of Directors or Committee action; and |
| (c) | reducing the maximum Contribution a Participant may elect to contribute under the Plan; and |
| (d) | reducing the maximum number of shares of Common Stock a Participant may purchase during any Offering. |
Such modifications or amendments shall not require stockholder approval or the consent of any Participant.
| 14. | Effective Date of Plan. |
| 14.1 | The Plan shall become effective as determined by the Board as set forth in a resolution of the Board, or absent such a resolution January 1, 2021 (the “Effective Date”), but no Purchase Rights shall be exercised unless and until the Plan has been approved by the stockholders of the Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by the Board. |
| 2021 PROXY STATEMENT 77 |
UTZ BRANDS, INC. 2021 EMPLOYEE STOCK PURCHASE PLAN(CONT.)
| 14.2 | Notwithstanding the foregoing, the Plan shall be submitted for the approval of the Company’s stockholders within twelve (12) months after the date of the Board’s initial adoption of the Plan. Purchase Rights may be granted under this Plan prior to such stockholder approval, but no Purchase Right granted under this Plan shall be exercised, and no shares of Common Stock shall be issued hereunder, until this Plan shall have been approved by the stockholders of the Company. In the event this Plan shall not have been approved by the stockholders of the Company prior to the end of said twelve (12)-month period, all Purchase Rights granted under this Plan shall be canceled and become null and void without being exercised. |
| 14.3 | The Plan shall terminate upon such date as is determined by the Company in its sole discretion. The Plan shall automatically be suspended on the date on which all shares available for issuance under the Plan shall have been sold pursuant to Options exercised under the Plan pending approval of an increase in the number of shares available for issuance under the Plan. No Option may be granted during any period of suspension of the Plan or after termination of the Plan. |
| 15. | Committee Rules For Foreign Jurisdictions And The Non-423 Plan |
| 15.1 | The Committee may adopt rules or procedures relating to the operation and administration of the Plan to accommodate the specific requirements of local laws and procedures. Without limiting the generality of the foregoing, the Committee is specifically authorized to adopt rules and procedures regarding handling of Contributions, payment of interest, conversion of local currency, payroll tax, withholding procedures and handling of stock certificates which vary with local legal requirements. |
| 15.2 | The Committee may also adopt rules, procedures or sub-plans applicable to particular Affiliates or locations, which rules, procedures or sub-plans may be designed to be outside the scope of Code Section 423. The terms of such rules, procedures or sub-plans may take precedence over other provisions of this Plan, but unless otherwise expressly superseded by the terms of such rule, procedure or sub-plan, the provisions of this Plan shall govern the operation of the Plan. To the extent inconsistent with the requirements of Code Section 423, such rules, procedures or sub-plans shall be considered part of the Non-423 Plan, and the options granted thereunder shall not be considered to comply with Section 423. |
| 15.3 | Employees participating in the Non-423 Plan by means of rules, procedures or sub-plans adopted pursuant to Section 15 need not have the same rights and privileges as Employees participating in the Code Section 423 Plan. |
| 16. | Securities Laws Requirements. |
| 16.1 | The Company shall not be under any obligation to issue Common Stock upon the exercise of any option unless and until the Company has determined that: (i) it and the Participant have taken all actions required to register the Common Stock under the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder or to perfect an exemption from the registration requirements thereof; (ii) any applicable listing requirement of any stock exchange on which the Common Stock is listed has been satisfied; and (iii) all other applicable provisions of state, federal and applicable foreign law have been satisfied. |
| 17.1 | At the time a Participant’s Purchase Right is granted or exercised, in whole or in part, or at the time a Participant disposes of some or all of the shares of Common Stock he or she acquires under the Plan, the Participant shall make adequate provision for the federal, state, local and foreign income, social insurance and other payroll tax, payment on account, withholding obligations and employer social contribution liability due from a Participant, if any, Company or the Affiliate which arise upon the grant or exercise of the Purchase Right or upon such disposition of shares, respectively. The Committee may implement appropriate procedures to ensure that such tax withholding obligations are met. Those procedures may include, without limitation, increased withholding from an employee’s current compensation, cash payments to the Company or another Affiliate by an Employee, or a sale of a portion of the Common Stock purchased under the Plan, which sale may be required and initiated by the Company. |
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| 18. | Notification Of Disposition |
| 18.1 | Each Participant who is a Participant shall give prompt notice to the Company of any disposition or other transfer of any shares of Common Stock purchased upon exercise of a Purchase Right if such disposition or transfer is made (a) within two years from the grant date of the Purchase Right or (b) within one year after the transfer of such shares to such Participant upon exercise of such Purchase Right. Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by the Participant in such disposition or other transfer. |
| 20. | To the extent permitted by applicable law and in the discretion of the Committee, an Eligible Employee may submit any form or notice as set forth herein by means of an electronic form approved by the Committee. |
| 21. | Insider Trading Restrictions/Market Abuse Laws |
| 21.1 | Each Participant may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, including the United States and Participant’s country, if different, which may affect such Participant’s ability to directly or indirectly, for him- or herself or for a third party, acquire or sell, or attempt to sell, shares of Common Stock under the Plan during such times as such Participant is considered to have “inside information” regarding the Company or (as defined by the laws in the applicable jurisdiction) or the trade in shares of Common Stock. Any restrictions under these laws or regulations may be separate and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. It shall be each Participant’s responsibility to comply with any applicable restrictions, and each Participant should speak with a personal advisor on this matter. |
| 22. | No Representations With Respect To Tax Qualification |
| 22.1 | Although the Company may endeavor to (a) qualify Purchase Rights for favorable tax treatment under the laws of the United States or jurisdictions outside of the United States (e.g., options granted under Section 423 of the Code) or (b) avoid adverse tax treatment (e.g., under Section 409A of the Code), the Company makes no representation to that effect and expressly disavows any covenant to maintain favorable or avoid unfavorable tax treatment, anything to the contrary in this Plan. The Company shall be unconstrained in its corporate activities without regard to the potential negative tax impact on Participants under the Plan. |
| 23. | Miscellaneous Provisions. |
| 23.1 | Proceeds from the sale of shares of Common Stock pursuant to Purchase Rights shall constitute general funds of the Company. |
| 23.2 | A Participant shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, shares of Common Stock, including dividends, subject to Purchase Rights unless and until the Participant’s shares of Common Stock acquired upon exercise of Purchase Rights are recorded in the books of the Company (or its transfer agent). |
| 23.3 | The Plan and Offering do not constitute an employment contract. Nothing in the Plan or in the Offering shall in any way (i) alter the at will nature of a Participant’s employment, or (ii) be deemed to create in any way whatsoever any obligation on the part of any Participant to continue in the employment of the Company or an Affiliate, or on the part of the Company or an Affiliate to continue the employment of a Participant. |
| 23.4 | The law of the State of Delaware shall govern (a) all claims or matters related to or arising from the Plan (including any tort or non-contractual claims) and (b) any questions concerning the construction, interpretation, validity and enforcement of the Plan, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Law of any jurisdiction other than the State of Delaware. |
As adopted by the Board of Directors of Utz Brands, Inc. on December 10, 2020.
| 2021 PROXY STATEMENT 79 |
ANNEX B
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
($ IN MILLIONS) | | 53-WKS ENDED 1/3/21 | | | 52-WKS ENDED 12/29/19 | | | Net (Loss) Income | | $ | (12.6 | ) | | $ | (13.4 | ) | | Plus non-GAAP adjustments: | | | | | | | | | | Income Tax Expense | | | 3.7 | | | | 3.2 | | | Depreciation and Amortization | | | 50.5 | | | | 29.3 | | | Interest Expense, Net | | | 40.0 | | | | 48.3 | | | Interest Income (IO loans)(1) | | | (2.4 | ) | | | (3.4 | ) | | EBITDA | | | 79.2 | | | | 64.0 | | | Certain Non-Cash Adjustments(2) | | | 3.2 | | | | 9.4 | | | Acquisition and Integration(3) | | | 40.0 | | | | 3.3 | | | Business Transformation Initiatives(4) | | | 8.8 | | | | 5.1 | | | Financing-Related Costs(5) | | | 2.7 | | | | 4.7 | | | Adjusted EBITDA | | $ | 133.9 | | | $ | 86.5 | |
(1) | Interest Income from independent operatorIndependent Operator (“IO”) loansLoans refers to Interest Income that we earn from IO notes receivable that have resulted from our initiatives to transition from RSPRoute Sales Professional (“RSP”) distribution to IO distribution. (“Business Transformation Initiatives”). There is a Notes Payable recorded that mirrors the IO notes receivable, and the interest expense associated with the Notes Payable is part of the Interest Expense, Net adjustment. |
| (2) | Certain Non-Cash Adjustments are comprised primarily of the following: |
Incentive programs – Utz Quality Foods, LLC, our wholly-owned subsidiary, established the 2018 Long-Term Incentive Plan (the “2018 LTIP”) for employees in February 2018. The Company recorded income of $3.0 million for the Predecessor period from December 30, 2019 to August 28, 2020. The income was the result of the conversion rate of the 2018 LTIP Phantom Units into the 2020 LTIP RSUs. The Company recorded expenses of $6.5 million in 2019. Expenses incurred for the 2018 LTIP are non-operational in nature and are expected to decline upon the vesting of the remaining phantom units from fiscal year 2019 at the end of fiscal year 2021. The phantom units under the 2018 LTIP were converted into the 2020 LTIP RSUs as part of the Business Combination. Additionally, in the Successor period, the Company incurred $6.8 million of share based compensation for the Successor period from August 29, 2020 to January 3, 2021.
Purchase Commitments and Other Adjustments – We have purchased commitments for specific quantities at fixed prices for certain of our products’ key ingredients. To facilitate comparisons of our underlying operating results, this adjustment was made to remove the volatility of purchase commitment related gains and losses. For the year ended January 3, 2021, we recorded a benefit of $0.2 million compared to a benefit of $0.9 million during 2019.
Asset Impairments and Write-Offs — There were no adjustments for impairments recorded in 2020. However, we did record impairments on certain trade name intangible brand assets in fiscal year 2019 totaling $3.8 million. Impairments recorded in fiscal year 2019 were for a brand acquired from Inventure and a brand acquired from Golden Flake.
| ∎ | | Incentive programs — The Company incurred $8.8 million and $10.6 million of share-based compensation that was awarded to associates and directors for the fiscal year ended January 1, 2023 and the fiscal year ended January 2, 2022, respectively. |
| ∎ | | Asset Impairments and Write-Offs — For the fiscal year ended January 1, 2023, the Company recorded an adjustment for an impairment of $2.0 million related to the termination of distribution agreements. There were no adjustments for impairments recorded in fiscal year 2021. |
| ∎ | | Purchase Commitments and Other Adjustments — We have purchase commitments for specific quantities at fixed prices for certain of our products’ key ingredients. To facilitate comparisons of our underlying operating results, this adjustment was made to remove the volatility of purchase commitment related unrealized gains and losses. The adjustment related to Purchase Commitment and Other non-cash adjustments were $0.5 million and $1.0 million for the fiscal year ended January 1, 2023 and the fiscal year ended January 2, 2022, respectively. |
| (3) | Adjustment for Acquisition and Integration Costs –— This is comprised of consulting, transaction services, and legal fees incurred for acquisitions and certain potential acquisitions, in addition to expenses associated with integrating recent acquisitions. In 2020, theThe majority of charges are related to the buyout of multiple distributors, which were accounted for as contract terminations resulting in expense of $23.0 million for the fiscal year ended January 1, 2023 as well as other integration costs. During the fiscal year ended January 1, 2023, we incurred incremental costs incurredof $21.8 million, for the integration of Truco Holdco Inc., R.W. Garcia, Kings Mountain, distributor buyouts, and costs to evaluate other potential acquisitions, as well as $1.0 million for the incremental Tax Receivable Agreement Liability associated with the Business Combination the HK Anderson acquisition, and the Truco acquisition, and related integration expenditures where we incurred costs of $40.0 million in 2020 compared to expenses of $3.3 million for the same period in 2019. Later, in fiscal 2019, we recorded $4.6 million in proceeds from the sale of the facility, included in the 2019 adjustment.fiscal year ended January 1, 2023. In fiscal year 2021, acquisition related costs included $9.5 million of expense related to reclaiming distribution rights through purchases and terminations, in addition to $7.1 million of expense for the three acquired entities and the evaluation of other potential acquisition targets. Additionally in 2021, we incurred $10.4 million of expenses related to restructuring and integration costs related to recent acquisitions.. |
| (4) | Business Transformation Initiatives Adjustment –— This adjustment is related to consultancy, professional, and legal fees incurred for specific initiatives and structural changes to the business that do not reflect the cost of normal business operations. In addition, certain Rice/Lissette family-related costs incurred but not part of normal business operations,gains and gainslosses realized from the sale of distribution rights to IOs and the subsequent disposal of trucks, offset by severance costs associated with the elimination of RSP positions, and ERP transition costs, fall into this category. In 2020, total net cost was $8.8The Company incurred such costs of $22.1 million compared to $5.1 million net cost for the 2019.fiscal year ended January 1, 2023 and $19.3 million for fiscal year 2021. Additionally, in fiscal year 2021, we incurred certain one-time costs of $3.3 million associated with the damage of a manufacturing facility, net of expected proceeds from insurance policies, and one-time expenses as a result of COVID-19 of $1.9 million. |
| (5) | Financing-Related Costs –— These costs include adjustments for various items related to raising debt and preferred equity capital. In fiscal 2020, we incurred $2.5 million of expenses related to a prepayment penalty for the pay-down of debt and $0.2 million of other debt raising and preferred equity capital or debt extinguishment costs. In fiscal 2019, these costs include expenses |
| (6) | Gains and losses related to the salechanges in the remeasurement of preferredwarrant liabilities are not expected to be settled in cash, and common units by Series U, Series R,when exercised would result in a cash inflow to the Company with the Warrants converting to Class A Common Stock with the liability being extinguished and SRS to an outside investor, the repaymentfair value of the Second Lien Term Loan,Warrants at the time of exercise being recorded as an increase to equity. |
| | | | | | | | | 2023 PROXY STATEMENT A-1 |
| | | | | | |  | | Shareowner Services | | | | | | P.O. Box 64945 | | | | | | St. Paul, MN 55164-0945 | | | | | | | | | | | | | | | | |
| | | | | | | | | Vote by Internet, Telephone or Mail 24 Hours a Day, 7 Days a Week Your phone or Internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card. | | | | | |  | | INTERNET/MOBILE – www.proxypush.com/utz Use the issuanceInternet to vote your proxy. Scan code below for mobile voting. | | | | | |  | | PHONE – 1-866-883-3382 Use a touch-tone telephone to vote your proxy. | | | | | |  | | MAIL – Mark, sign and date your proxy card and return it in the postage-paid envelope provided in time to be received by May 3, 2023. | | | | | If you vote your proxy by Internet or by Telephone, you do NOT need to mail back your Proxy Card. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | The Board of Directors Recommends You Vote “FOR” Item 1. | | | | | | | | | | | | | | | | | | | | | | | | | | | 1. Election of four Class III Directors to serve on the Company’s Board of Directors until the 2026 annual meeting of stockholders or until their successors are elected and qualified | | a. Timothy Brown b. Christina Choi | | c. Roger Deromedi d. Dylan Lissette | | ☐ | | Vote FOR all nominees (except as marked) | | ☐ | | Vote WITHHELD from all nominees |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (Instructions: To withhold authority to vote for any indicated nominee, write the letter(s) of the Secured First Lien Note to financenominee(s) in the Kennedy Acquisition. Financing-Related Costs adjustments of $4.7 million were made in fiscal years 2019. The amount in fiscal 2019 includes $4.3 million related to a loss recognized on extinguishment of debt relatedbox provided to the repaymentright.) | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | The Board of Directors Recommends You Vote “FOR” Item 2. 2. Non-binding, advisory vote to approve Executive Compensation | | | | | | | | ☐ | | For | | | | ☐ | | Against | | | | ☐ | | Abstain | | | | | | | | | | | | | | | | | | | | | | The Board of Directors Recommends You Vote “FOR” Item 3. 3. Ratification of the Second Lien Term Loanselection by our audit committee of Grant Thornton, LLP to serve as wellour independent registered public accounting firm for the year ending December 31, 2023 | | | | | | | | ☐ | | For | | | | ☐ | | Against | | | | ☐ | | Abstain |
| | | | | | | | | | | | | | | | | | | | | | | | | | | THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED AS THE BOARD RECOMMENDS. |
| | | | | | | | | | | | | | | | | | | Address Change? Mark box, sign, and indicate changes below: ☐ | | Date | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Signature(s) in Box | | | | | | | | | | | | | | | | | | | | | | | Please sign exactly as $0.4 millionyour name(s) appears on Proxy. If held in professional fees related tojoint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the new capital raised, which were partially offset by deferred financing fees.Proxy. |
UTZ BRANDS, INC. ANNUAL MEETING OF STOCKHOLDERS Thursday, May 4, 2023 9:00 a.m. ET To register for the virtual meeting along with voting your shares, please follow the instructions below: | • | | Visit register.proxypush.com/utz on your smartphone, tablet or computer. You will need the latest versions of Chrome, Safari, Edge or Firefox. Please ensure your browser is compatible. |
As a stockholder, you will then be required to enter your control number which is located in the upper right hand corner on the reverse side of this proxy card. After registering, you will receive a confirmation email and an email approximately 1 hour prior to the start of the meeting to the email address you provided during registration with a unique link to the virtual meeting. | | | | | | | | | proxy |
80This proxy is solicited by the Board of Directors for use at the Annual Meeting on May 4, 2023.
The shares of stock you hold in your account or in a dividend reinvestment account will be voted as you specify on the reverse side. If no choice is specified, this proxy will be voted “FOR” Items 1, 2 and 3. By signing the proxy, you revoke all prior proxies and appoint Howard A. Friedman and Theresa R. Shea, and each of them with full power of substitution, to vote your shares on the matters shown on the reverse side and any other matters that may come before the Annual Meeting and all adjournments. See reverse for voting instructions. |
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Align executive compensation with stockholders’ returns through long-term incentives (pages 
Incentivize participants to take excessive risk
