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By Telephone. Call 1-866-291-7284 toll-free from the U.S., U.S. territories and Canada, and follow the instructions on the Notice of Internet Availability. You will be asked to provide your control number from the Notice of Internet Availability. Your telephone vote must be received prior to the start of the Annual Meeting to be counted. By Proxy Card. Complete and mail the proxy card that may be requested 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. Online During the Annual Meeting. Access the Annual Meeting by visiting www.proxydocs.com/VITL and providing your control number from your Notice of Internet Availability. You must register to attend the Annual Meeting by 5:00 p.m., Central time on June 7, 2022 and follow the instructions you receive after your successful registration to access the Annual Meeting and to vote your shares during the meeting. | | | | | 4 | | 2022 Proxy Statement | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g65c58.jpg)
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| • | | By Proxy Card. Complete and mail the proxy card that may be requested and return it promptly in the envelope provided. If you return your signed proxy card to us before the Annual Meeting, we will vote your shares as you direct.
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| • | | Online During the Annual Meeting. Access the Annual Meeting by visiting www.proxydocs.com/VITL and providing your control number from your Notice of Internet Availability. You must register to attend the Annual Meeting by 5:00 p.m., Central time on June 8, 2021 and follow the instructions you receive after your successful registration to access the Annual Meeting and to vote your shares during the meeting.
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If your shares of common stock are held in street name (i.e., held for your account by a broker, bank or other nominee), you should have received a notice containing voting instructions from that organization rather than from us. You should follow the instructions in the notice to ensure your vote is counted. To vote online during the Annual Meeting, you may be required to obtain a valid proxy card from your broker or other nominee. Follow the instructions from your broker, bank or other nominee or contact your broker, bank or other nominee to request a proxy card, and access the Annual Meeting by following the instructions you receive after your successful registration at www.proxydocs.com/VITL using the control number provided by your bank, broker or other nominee. Internet proxy voting will be provided to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your internet access, such as usage charges from internet access providers and telephone companies. How many votes do I have? On each matter to be voted upon, you have one vote for each share of common stock you own as of April 12, 2021.11, 2022. What are the Board’s recommendations on how to vote my shares? The Board recommends a vote: Proposal 1:FOR the election of the three Class III director nominees; and Proposal 2:FOR the ratification of the selection of KPMG LLP as our independent registered public accounting firm for the year ending December 26, 2021.25, 2022. Who pays the cost for soliciting proxies? We will pay the entire cost of soliciting proxies. In addition to these Proxy Materials, our directors and employees may also solicit proxies in person, by telephone or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We will also reimburse brokers, banks, custodians, other nominees and fiduciaries for forwarding these materials to their principals to obtain the authorization for the execution of proxies. If I am a stockholder of record and I do not vote, or if I return a proxy card or otherwise vote without giving specific voting instructions, what happens? If you are a stockholder of record and do not vote by completing your proxy card, by telephone, through the Internetinternet or online during the Annual Meeting, your shares will not be voted. If you return a signed and dated proxy card or otherwise vote without marking voting selections, your shares will be voted, as applicable, “For” the election of each of the three nominees for director and “For” the ratification of the selection of KPMG LLP as our independent registered public accounting firm. If any other matter is properly presented at the meeting, your proxyholder (one of the individuals named on your proxy card) will vote your shares using his or her best judgment. If I am a beneficial owner of shares held in street name and I do not provide my broker or bank with voting instructions, what happens? If your shares are held in street name, your bank, broker or other nominee may under certain circumstances vote your shares if you do not timely instruct your broker, bank or other nominee how to vote your shares. Banks, brokers and other nominees can vote your unvoted shares on routine matters but cannot vote such shares on non-routine matters. If you do not timely provide voting instructions to your bank, broker or other nominee to vote your shares, your bank, broker or other nominee may, on routine matters, either vote your shares or leave your shares unvoted. The election of directors (Proposal 1) is a non-routine matter. The ratification of the selection of our independent registered public accounting firm (Proposal 2) is a routine matter. We encourage you to provide voting instructions to your bank, broker or other nominee. This | | | | | | | | |
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QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING ensures that your shares will be voted at the Annual Meeting according to your instructions. You should receive directions from your bank, broker or other nominee about how to submit your proxy to them at the time you receive this proxy statement. If you are a beneficial owner of shares held in street name, in order to ensure your shares are voted in the way you would prefer, you must provide voting instructions to your broker, bank or other agent by the deadline provided in the materials you receive from your broker, bank or other nominee. What does it mean if I receive more than one Notice of Internet Availability? If you receive more than one Notice of Internet Availability, your shares may be registered in more than one name or in different accounts. Please follow the voting instructions on each notice to ensure that all of your shares are voted. Can I revoke my vote after submitting my proxy? Stockholder of Record: Shares Registered in Your Name Yes. If you are the stockholder of record for your shares, you may revoke your proxy at any time before the final vote at the Annual Meeting in one of the following ways: by submitting another properly completed proxy with a later date; by transmitting a subsequent vote over the Internetinternet or by telephone prior to the start of the Annual Meeting; by registering to attend and attending the Annual Meeting and voting online; or by sending a timely written notice to our Corporate Secretary in writing at 3601 South Congress Ave., Suite C100, Austin, Texas 78704 that you are revoking your proxy. Your last vote, whether prior to or at the Annual Meeting, is the vote that we will count. Beneficial Owner: Shares Registered in the Name of a Broker, Bank or Similar Organization If your shares are held in street name, you must contact your broker or nominee for instructions as to how to change your vote. Your personal attendance at the Annual Meeting does not revoke your proxy. Your last vote, whether prior to or at the Annual Meeting, is the vote that we will count. How is a quorum reached? A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if stockholders holding at least a majority of the outstanding shares entitled to vote are present at the Annual Meeting or represented by proxy. On the record date, there were 39,921,29940,607,865 shares outstanding and entitled to vote. Thus, the holders of 19,960,65020,303,933 shares must be present or represented by proxy at the Annual Meeting to have a quorum. The inspector(s) of election appointed for the Annual Meeting will determine whether or not a quorum is present. Abstentions and broker non-votes, if any, will be counted towards the quorum requirement. If there is no quorum, the holders of a majority of shares present at the meeting or represented by proxy may adjourn the meeting to another date. What are “broker non-votes”? As discussed above, when a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee holding the shares as to how to vote on matters deemed to be “non-routine,” the broker or nominee cannot vote the shares. These unvoted shares are counted as “broker non-votes.” Proposal 1 is considered to be “non-routine,” and we therefore expect broker non-votes to exist in connection with this proposal. | | | | | 6 | | 2022 Proxy Statement | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g65c58.jpg)
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QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING What vote is required to approve each item and how are votes counted? Proposal 1: Election of Directors.Directors will be elected by a plurality of votes cast at the Annual Meeting by holders of shares present or represented by proxy and entitled to vote. The three nominees receiving the most “For” votes will be elected as directors. You may not vote your shares cumulatively for the election of directors. Abstentions and broker non-votes will not affect the outcome of the election of directors. Proposal 2: Ratification of the Selection of the Independent Registered Public Accounting Firm.To be approved, the ratification of the selection of KPMG LLP as our independent registered public accounting firm for fiscal year ending December 26, 202125, 2022 must receive “For” votes from the holders of a majority of shares present or represented by proxy and entitled to vote. Abstentions will have the same effect as an “Against” vote. How can I find out the results of the voting at the Annual Meeting? We will announce preliminary voting results at our Annual Meeting. We will publish final voting results in a Current Report on Form 8-K that we will file with the SEC within four business days after the Annual Meeting. If final voting results are not available at that time, we will disclose the preliminary results in the Current Report on Form 8-K and, within four business days after the final voting results are known to us, file an amended Current Report on Form 8-K to disclose the final voting results. When are stockholder proposals and director nominations due for the 20222023 Annual Meeting of Stockholders? If you wish to submit proposals for inclusion in our proxy statement for the 20222023 annual meeting of stockholders (the “2022“2023 Annual Meeting”), we must receive them on or before December 27, 2021.26, 2022. Nothing in this paragraph shall require us to include in our proxy statement or proxy card for the 20222023 Annual Meeting any stockholder proposal that does not meet the requirements of the SEC in effect at the time. Any such proposal will be subject to Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). If you wish to nominate a director or submit a proposal for presentation at the 20222023 Annual Meeting, without including such proposal in next year’s proxy statement, you must be a stockholder of record and provide timely notice in writing to our Secretary at c/o Vital Farms, Inc., 3601 South Congress Ave., Suite C100, Austin, Texas 78704.78704, Attn: Corporate Secretary. To be timely, we must receive the notice not less than 90 days nor more than 120 days prior to the first anniversary of the Annual Meeting, that is, between February 9, 20228, 2023 and March 11, 2022;10, 2023; provided, however, that in the event that the date of the 2022 Annual Meeting is more than 30 days before or more than 30 days after such anniversary date, we must receive your notice (a) no earlier than the close of business on the 120th day prior to the 20222023 Annual Meeting and (b) no later than the close of business on the later of the 90th day prior to the 20222023 Annual Meeting or the close of business on the 10th day following the day on which we first make a public announcement of the date of the 20222023 Annual Meeting. Your written notice must contain specific information required in Section 5 of our amended and restated bylaws (the “Bylaws”). For additional information about our director nomination requirements, please see our Bylaws. In addition to satisfying the foregoing requirements under our Bylaws, to comply with the universal proxy rules (once effective), stockholders who intend to solicit proxies in support of director nominees other than our nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than April 9, 2023. Who should I call if I have any additional questions? If you are the stockholder of record for your shares, please call Matt Siler, our Vice President of Investor Relations, at (877) 455-3063 or email investors@vitalfarms.com. If your shares are held in street name, please contact the telephone number provided on your voting instruction form or contact your broker or nominee holder directly. | | | | | | | | |
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PROPOSAL 1: ELECTION OF DIRECTORS General Our amended and restated certificate of incorporation provides for a classified Board consisting of three classes of directors. Class I consists of three directors, Class II consists of three directors and Class III consists of three directors. Each class serves for a three-year term. Vacancies on our Board may be filled by the affirmative vote of a majority of directors then in office. A director elected by our Board to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified.
Our Board is currently composed of nine directors. There are three directors whose term of office expires in 2021.2022. Upon the recommendation of the Nominating and Corporate Governance Committee, our Board has nominated the three individuals listed in the table below for election as directors at the Annual Meeting. If the nominees listed below are elected, they will each hold office until the annual meeting of stockholders in 20242025 and until each of their successors has been duly elected and qualified or, if sooner, until the director’s resignation or removal. All nominees are currently serving on our Board and have consented to being named in this proxy statement and to serve if elected. It is our policy to encourage directors and nominees for director to attend the Annual Meeting. The brief biographies below include information, as of the date of this proxy statement, regarding the specific and particular experience, qualifications, attributes or skills that led the Nominating and Corporate Governance Committee to believe that each director or nominee should serve on the Board. There are no family relationships among any of our executive officers or directors. | | | | | | | | | | | | | | | | | Nominees | | Age(1) | | | Term Expires | | | Position(s) Held | | | Director Since | | Kofi Amoo-Gottfried | | | 41 | | | | 2021 | | | | Director | | | | 2020 | | Brent Drever | | | 49 | | | | 2021 | | | | Director | | | | 2019 | | Karl Khoury | | | 51 | | | | 2021 | | | | Director | | | | 2015 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | NOMINEES | | AGE(1) | | TERM EXPIRES | | POSITION(S) HELD | | DIRECTOR SINCE | Glenda Flanagan | | 68 | | 2022 | | Director | | 2020 | Gisel Ruiz | | 51 | | 2022 | | Director | | 2020 | Denny Marie Post | | 64 | | 2022 | | Director | | 2019 |
(1) | As of April 12, 202111, 2022 |
Kofi Owusu Amoo-Gottfried has served a member of our Board of Directors since January 2021. Mr. Amoo-Gottfried has served as Vice President of Marketing of Doordash Inc. since May 2019. Prior to joining Doordash, Mr. Amoo-Gottfried held various roles at Facebook, Inc. from November 2015 to February 2019, including Vice President of Brand & Consumer Marketing from August 2018 to January 2019. Before joining Facebook, Mr. Amoo-Gottfried served in various roles at advertising agencies, including FCB NY, Leo Burnett and Publicis Groupe, and was also Global Communications Director for Bacardi Rums. Mr. Amoo-Gottfried received his B.A. in economics and international studies from Macalester College. We believe that Mr. Amoo-Gottfried is qualified to serve on our board of directors because of his extensive business and branding experience, including in consumer and foodservice industries.
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Age: 68 Director since: 2020 Committees: u None | | | | | | | | | | GLENDA FLANAGAN | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g31d31.jpg)
How do you like your eggs? Poached with toast and avocado. | | | | | | | | | | Glenda Flanagan has served as a member of our Board since July 2020. Ms. Flanagan served as the Executive Vice President and Chief Financial Officer of Whole Foods Market, Inc. from 1988 through May 2017. From May 2017 through February 2022, she served as the Executive Vice President and Senior Advisor at Whole Foods. Ms. Flanagan currently serves on the boards of directors of Whole Planet Foundation, Whole Cities Foundation, and Whole Kids Foundation, as well as the public company Credit Acceptance Corporation. Ms. Flanagan holds a B.B.A. in accounting from the University of Texas at Austin. Ms. Flanagan was selected to serve as a member of our Board due to her extensive experience with a leading consumer and health-related brand, and her expertise and background with regard to accounting and financial matters. |
Brent Drever has served as a member of our board of directors since March 2019. Mr. Drever has served as co-founder and President of Manna Tree Partners, an asset management firm focused on improving human health through nutrition, since 2018. Prior to that, Mr. Drever co-founded Acuity Institute in May 2005, a provider of leadership training, coaching and consulting, where he served as chief executive officer from April 2012 to October 2018 and has served as advisor since October 2018. September 2017 to September 2020, Mr. Drever served as co-founder and board president of Zealous Schools, a micro school. In addition to Vital Farms, Inc., Brent currently serves as a Board Member for Nutriati Inc., Verde Farms, and Gotham Greens. Mr. Drever holds a B.S. in Architectural Engineering from the University of Colorado at Boulder. We believe that Mr. Drever is qualified to serve on our board of directors because of his diverse business, management and leadership experience across a variety of industries, including food supply.
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Age: 51 Director since: 2020 Committees: u Audit u Compensation | | | | | | | | | | GISEL RUIZ | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g31d31.jpg)
How do you like your eggs? Over-easy on avocado toast with spicy salsa or red pepper flakes and honey. | | | | | | | | | | Gisel Ruizhas served as a member of our Board since May 2020. Ms. Ruiz has also served on the boards of directors of Cracker Barrel Old Country Store, Inc. since September 2020, of Executive Network Partnering Corporation since September 2020 and of Ulta Beauty, Inc. since March 2022. Prior to that, Ms. Ruiz served as Executive Vice President and Chief Operating Officer of Sam’s West, Inc., a national chain of membership-only retail warehouse clubs, from February 2017 to June 2019. She is currently on the board of advisors at Santa Clara University serving the Retail Management Institute. Ms. Ruiz served on the board of directors of Walmart de Mexico S.A.B. de CV, a multinational retail chain, from October 2016 to May 2019. Ms. Ruiz also held multiple positions at Walmart, Inc., both in the U.S. and international business segments, from 1992 through February 2017, including executive roles from 2010 to February 2017. Ms. Ruiz received her B.S. in Marketing, Retail Management from Santa Clara University. We believe that Ms. Ruiz is qualified to serve on our Board because of her diverse business, management and leadership experience in the consumer and food industries. |
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Karl Khoury has served as a member of our board of directors since January 2015. Mr. Khoury co-foundedPROPOSAL 1: ELECTION OF DIRECTORS and has served as a partner at Arborview Capital Partners LP, a venture capital firm focused on resource efficiency and sustainability, since the firm’s inception in March 2008. Prior to co-founding Arborview Capital, he served as a partner with Columbia Capital, a sector-focused venture capital firm with over $2 billion under management. In addition to Vital Farms, Mr. Khoury is or has been a member of the board of directors of multiple Arborview Capital portfolio companies. Mr. Khoury is on the board of directors of Impact Capital Managers, a network of private capital fund managers in the U.S. and Canada, and he is on the Board of Trustees of the Levine School of Music. Mr. Khoury received his B.S. in Finance from Lehigh University. We believe that Mr. Khoury is qualified to serve on our board of directors because of his extensive finance and investment experience.
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Age: 64 Director since: 2019 Committees: u Nominating and Corporate Governance | | | | | | | | | | DENNY MARIE POST | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g31d31.jpg)
How do you like your eggs? Fried in a piece of toast with a hole in the center (“egg in a frame”). | | | | | | | | | | Denny Marie Post has served as a member of our Board since December 2019. Ms. Post has served on the board of directors of Travel + Leisure, Inc. since May 2018, Bluestone Lane Holdings since October 2020 and Libbey, Inc. since November 2020. Prior to that Ms. Post served on the board of directors of Red Robin Gourmet Burgers, Inc., a casual dining restaurant chain, from August 2016 to April 2019 and served in a variety of senior management roles from August 2011 to April 2019, including President, Chief Executive Officer, Chief Concept Officer and Chief Marketing Officer. Ms. Post has previously held management positions at T-Mobile US, Inc., Starbucks Corporation, Burger King Worldwide Inc., and KFC USA as well as Priszm Brandz Canada (a joint venture of YUM! Brands, Inc.). Ms. Post received her certificate in Finance from Wharton School of Business at the University of Pennsylvania and her B.A. in Journalism and Social Sciences from Trinity University. We believe that Ms. Post is qualified to serve on our Board because of her diverse business, management and leadership experience in the consumer, food and hospitality industries. |
Vote Required Directors are elected by a plurality of the votes of the holders of shares present or represented by proxy and entitled to vote on the election of directors. Accordingly, the three nominees receiving the highest number of affirmative votes will be elected. You may not vote your shares cumulatively for the election of directors. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the three nominees named above. If any nominee becomes unavailable for election as a result of an unexpected occurrence, your shares will be voted for the election of a substitute nominee proposed by our Board. The Board has no reason to believe that any of the nominees would prove unable to serve if elected. There are no arrangements or understandings between us and any director, or nominee for directorship, pursuant to which such person was selected as a director or nominee. Our Recommendation THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR
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PROPOSAL 1: ELECTION OF THE NAMED DIRECTOR NOMINEES.DIRECTORS Information About Our Continuing Directors Set forth below are the names, ages and length of service of the remaining members of our Board whose terms continue beyond the Annual Meeting. | | | | | | | | | Continuing Directors | | Age(1) | | Term Expires | | Position(s) Held | | Director Since | Matthew O’Hayer | | 65 | | 2023 | | Founder, Executive Chairman and Director | | 2009 | Russell Diez-Canseco | | 48 | | 2023 | | President, Chief Executive Officer and Director | | 2019 | Glenda Flanagan | | 67 | | 2022 | | Director | | 2020 | Kelly Kennedy | | 52 | | 2023 | | Director | | 2019 | Gisel Ruiz | | 50 | | 2022 | | Director | | 2020 | Denny Marie Post | | 63 | | 2022 | | Director | | 2019 |
| | | | | | | | | | | | | | | | | | | | | | | CONTINUING DIRECTORS | | AGE(1) | | TERM EXPIRES | | POSITION(S) HELD | | DIRECTOR SINCE | Matthew O’Hayer | | | | 66 | | | | | 2023 | | | Founder, Executive Chairperson and Director | | 2009 | Russell Diez-Canseco | | | | 50 | | | | | 2023 | | | President, Chief Executive Officer and Director | | 2019 | Kofi Amoo-Gottfried | | | | 42 | | | | | 2024 | | | Director | | 2020 | Kelly Kennedy | | | | 53 | | | | | 2023 | | | Director | | 2019 | Karl Khoury | | | | 51 | | | | | 2024 | | | Director | | 2015 | | | | | | RESIGNING DIRECTORS | | | | | | | | | Brent Drever(2) | | | | 50 | | | | | 2024 | | | Director | | 2019 |
(1) | As of April 12, 202111, 2022 |
(2) | Mr. Drever provided notice as of January 26, 2022 that he intends to resign as a member of the Board, with such resignation to be effective June 9, 2022. |
The principal occupation, business experience and education of each continuing director are set forth below.
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Age: 66 Director since: 2009 Committees: u None | | | | | | | | | | MATTHEW O’HAYER Founder and Executive Chairman | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g31d31.jpg)
How do you like your eggs? Poached. | | | | | | | | | | Matthew O’Hayer is our founder and has served as a member of our Board since inception and as our Executive Chairperson since April 2019. From September 2007 to April 2019, Mr. O’Hayer served as our Chief Executive Officer. Mr. O’Hayer is also the founder and has served as the president of the Organic Egg Farmers of America, an industry association that hosts agricultural conventions on topics related to organic egg production. We believe that Mr. O’Hayer is qualified to serve on our Board because of his leadership in conceptualizing and developing our brand and business, his deep expertise in the food business, his extensive knowledge of our industry and his 40 years of experience building businesses. | | | | | | | | | | |
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Age: 50 Director since: 2019 Committees: u None | | | | | | | | | | RUSSELL DIEZ-CANSECO President, Chief Executive Officer | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g31d31.jpg)
How do you like your eggs? New York-style bacon egg & cheese. | | | | | | | | | | Russell Diez-Canseco has served as our President and Chief Executive Officer since May 2019 and as a member of our Board since December 2019. Prior to this, Mr. Diez-Canseco served as our President and Chief Operating Officer from November 2015 to April 2019, as our Chief Operating Officer from October 2014 to October 2015 and as our Vice President of Operations from January 2014 to September 2014. Prior to joining us, Mr. Diez-Canseco spent several years with McKinsey & Company, a worldwide management consulting firm, H-E-B, a supermarket chain, and the Central Intelligence Agency. Mr. Diez-Canseco received his M.B.A. from Harvard Business School and earned his A.B. in Economics from the University of California at Berkeley. We believe Mr. Diez-Canseco’s strategic vision for our Company and his extensive business experience, including in the food industry, make him qualified to serve on our Board. | | | | | | | | | | |
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Age: 53 Director since: 2019 Committees: u Audit u Compensation | | | | | | | | | | KELLY KENNEDY | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g31d31.jpg)
How do you like your eggs? Deviled. | | | | | | | | | | Kelly Kennedy has served as a member of our Board since December 2019. Ms. Kennedy has served as the Chief Financial Officer of The Honest Company since January 2021. Ms. Kennedy served on the board of directors of Sur La Table, Inc. from September 2018 to November 2020. Ms. Kennedy served as the Chief Financial Officer of The Bartell Drug Company, a family-owned pharmacy chain from September 2018 until its sale to Rite Aid in December 2020. Prior to that, Ms. Kennedy served as the Chief Financial Officer of Sur La Table from June 2015 to September 2018, as the Chief Financial Officer of See’s Candies from January 2014 to June 2015 and as the Chief Financial Officer and Treasurer of Annie’s Inc. from August 2011 to November 2013. Ms. Kennedy has also served in various roles at Revolution Foods, Inc., Established Brands, Inc., Serena & Lily Inc., Forklift Brands, Inc., Elephant Pharm, Inc., Williams-Sonoma, Inc. and Dreyer’s Grand Ice Cream Holdings, Inc. Ms. Kennedy received her M.B.A. from Harvard Business School and her B.A. in Economics from Middlebury College. Ms. Kennedy has also served as a member of the board of directors of FirstFruits Farms LLC since December 2019 and a member of the board of directors of RAD Power Bikes since July 2021. We believe that Ms. Kennedy is qualified to serve on our Board because of her comprehensive financial expertise and experience with retail and consumer brands, including those in the food space. As described above, Ms. Kennedy served as a director of Sur La Table, where she also served as Chief Financial Officer from June 2015 to September 2018. Sur La Table filed a voluntary petition for bankruptcy on July 8, 2020. Except as described in the preceding sentence, no other event has occurred during the past 10 years requiring disclosure pursuant to Item 401(f) of Regulation S-K. |
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Age: 42 Director since: 2020 Committees: u Nominating and Corporate Governance | | | | | | | | | | KOFI AMOO-GOTTFRIED | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g31d31.jpg)
How do you like your eggs? Sunny-side up. | | | | | | | | | | Kofi Amoo-Gottfried has served a member of our Board since January 2021. Mr. Amoo-Gottfried has served as Chief Marketing Officer of DoorDash Inc. since January 2022. Mr. Amoo-Gottfried previously served as Vice President of Marketing for DoorDash from May 2019 to December 2021. Prior to joining DoorDash, Mr. Amoo-Gottfried held various roles at Facebook, Inc. from November 2015 to February 2019, including Vice President of Brand & Consumer Marketing from August 2018 to January 2019. Before joining Facebook, Mr. Amoo-Gottfried served in various roles at advertising agencies, including FCB NY, Leo Burnett and Publicis Groupe, and was also Global Communications Director for Bacardi Rums. Mr. Amoo-Gottfried received his B.A. in economics and international studies from Macalester College. We believe that Mr. Amoo-Gottfried is qualified to serve on our Board because of his extensive business and branding experience, including in consumer and foodservice industries. | | | | | | | | | | |
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PROPOSAL 1: ELECTION OF DIRECTORS | | | | | | | | | | | | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g07b97.jpg)
Age: 51 Director since: 2015 Committees: u Audit u Compensation | | | | | | | | | | KARL KHOURY | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g31d31.jpg)
How do you like your eggs? Over-easy on avocado toast with cumin, olive oil and arugula. | | | | | | | | | | Karl Khoury has served as a member of our Board since January 2015. Mr. Khoury co-founded and has served as a partner at Arborview Capital, a venture capital firm focused on resource efficiency and sustainability, since the firm’s inception in March 2008. Prior to co-founding Arborview Capital, he served as a partner with Columbia Capital, a sector-focused venture capital firm with over $2 billion under management. In addition to Vital Farms, Mr. Khoury is or has been a member of the board of directors of multiple Arborview Capital portfolio companies. Mr. Khoury is on the board of directors of Impact Capital Managers, a network of private capital fund managers in the U.S. and Canada, and he is on the Board of Trustees of the Levine School of Music. Mr. Khoury received his B.S. in Finance from Lehigh University. We believe that Mr. Khoury is qualified to serve on our Board because of his extensive finance and investment experience. |
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Age: 50 Director since: 2019 Committees: u None | | | | | | | | | | BRENT DREVER | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g31d31.jpg)
How do you like your eggs? In an omelette with lots of veggies. | | | | | | | | | | Brent Drever has served as a member of our Board since March 2019. Mr. Drever has served as co-founder and President of Manna Tree Partners, an asset management firm focused on improving human health through nutrition, since 2018. Prior to that, Mr. Drever co-founded Acuity Institute in May 2005, a provider of leadership training, coaching and consulting, where he served as Chief Executive Officer from April 2012 to October 2018 and has served as advisor since October 2018. September 2017 to September 2020, Mr. Drever served as co-founder and board president of Zealous Schools, a micro school. In addition to Vital Farms, Brent currently serves as a Board Member for Nutriati Inc., Verde Farms, and Gotham Greens. Mr. Drever holds a B.S. in Architectural Engineering from the University of Colorado at Boulder. We believe that Mr. Drever is qualified to serve on our Board because of his diverse business, management and leadership experience across a variety of industries, including food supply. Mr. Drever, a valued member of our Board, will resign from the Board effective June 9, 2022. The Board wishes to thank Mr. Drever for his years of dedicated service and work on behalf of the Company and our stockholders. | | | | | | | | | | |
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PROPOSAL 1: ELECTION OF DIRECTORS Director Skills and Qualifications In addition to the information provided in our directors’ biographies and elsewhere in this proxy statement, the following matrix summarizes certain skills and experience of our boardcurrent directors, taking into account a number of directors since inceptionqualifications we believe are important for service on our Board. This matrix is based on self-reported data collected from our directors. The matrix is intended to provide a summary of our directors’ self-reported qualifications and asshould not be considered to be a complete list of each director’s strengths and contributions to our executive chairman since April 2019. From September 2007Board. ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g23a43.jpg)
Board Diversity In assessing candidates for director nomination, our Board and Nominating and Corporate Governance Committee consider, among other things, candidates’ diversity (including diversity of gender identity, ethnic background and country of origin), age, skills and other factors deemed appropriate to April 2019, Mr. O’Hayer served asmaintain a balance of knowledge, experience, and capability on our chief executive officer. Mr. O’Hayer is alsoBoard. In accordance with applicable Nasdaq listing requirements, the founder and has served as the presidentfollowing table presents our Board diversity statistics. Each of the Organic Egg Farmers of America, an industry association that hosts agricultural conventions on topics related to organic egg production. We believe that Mr. O’Hayer is qualified to serve on our board of directors because of his leadership in conceptualizing and developing our brand and business, his deep expertisecategories listed in the food business, his extensive knowledge of our industry and his 40 years of experience building businesses.table below has the meaning ascribed to it in Nasdaq Rule 5605(f). | | | | | | | | | | BOARD DIVERSITY MATRIX (AS OF FEBRUARY 4, 2022) | Total Number of Directors | | 9 | | | | | | | | FEMALE | | MALE | | NON-BINARY | | DID NOT DISCLOSE GENDER | Part 1: Gender Identity | Directors | | 4 | | 5 | | 0 | | 0 | Part 2: Demographic Background | African American or Black | | 0 | | 1 | | 0 | | 0 | Hispanic or Latinx | | 1 | | 1 | | 0 | | 0 | White | | 3 | | 4 | | 0 | | 0 | Two or More Races or Ethnicities | | 0 | | 1 | | 0 | | 0 | LGBTQ+ | | 0 | Did Not Disclose Demographic Background | | 0 |
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Russell Diez-Canseco has served as our president and chief executive officer since May 2019 and as a member of our board of directors since December 2019. Prior to this, Mr. Diez-Canseco served as our president and chief operating officer from November 2015 to April 2019, as our chief operating officer from October 2014 to October 2015 and as our vice president of operations from January 2014 to September 2014. Prior to joining us, Mr. Diez-Canseco spent several years with McKinsey & Company, a worldwide management consulting firm, H-E-B, a supermarket chain, and the Central Intelligence Agency. Mr. Diez-Canseco received his M.B.A. from Harvard Business School and earned his A.B. in Economics from the University of California at Berkeley. We believe Mr. Diez-Canseco’s strategic vision for our company and his extensive business experience, including in the food industry, make him qualified to serve on our board of directors.
Glenda Flanaganhas served as a member of our board of directors since July 2020. Ms. Flanagan served as the Executive Vice President and Chief Financial Officer of Whole Foods Market, Inc. (“Whole Foods”), the natural and organic food supermarket chain acquired by Amazon, Inc. in 2017, from 1988 through May 2017. Since then she has served as the Executive Vice President and Senior Advisor at Whole Foods. Ms. Flanagan currently serves on the boards of directors of Whole Planet Foundation, Whole Cities Foundation, and Whole Kids Foundation, as well as the public company Credit Acceptance Corporation. Ms. Flanagan holds a B.B.A. in accounting from the University of Texas at Austin. Ms. Flanagan was selected to serve as a member of our board of directors due to her extensive experience with a leading consumer and health-related brand, and her expertise and background with regard to accounting and financial matters.
Kelly Kennedy has served as a member of our board of directors since December 2019 and has also served as a member of the board of directors of FirstFruits Farms LLC since December 2019. Ms. Kennedy has served as the chief financial officer of The Honest Company since January 2021. Ms. Kennedy served on the board of directors of Sur La Table, Inc. from September 2018 to November 2020. Ms. Kennedy served as the chief financial officer of The Bartell Drug Company, a family-owned pharmacy chain from September 2018 until its sale to Rite Aid in December 2020. Prior to that, Ms. Kennedy served as the chief financial officer of Sur La Table from June 2015 to September 2018, as the chief financial officer of See’s Candies from January 2014 to June 2015 and as the chief financial officer and treasurer of Annie’s Inc. from August 2011 to November 2013. Ms. Kennedy has also served in various roles at Revolution Foods, Inc., Established Brands, Inc., Serena & Lily Inc., Forklift Brands, Inc., Elephant Pharm, Inc., Williams-Sonoma, Inc. and Dreyer’s Grand Ice Cream Holdings, Inc. Ms. Kennedy received her M.B.A. from Harvard Business School and her B.A. in Economics from Middlebury College. We believe that Ms. Kennedy is qualified to serve on our board of directors because of her comprehensive financial expertise and experience with retail and consumer brands, including those in the food space. As described above, Ms. Kennedy served as a director of Sur La Table, where she also served as chief financial officer from June 2015 to September 2018. Sur La Table filed a voluntary petition for bankruptcy on July 8, 2020. Except as described in the preceding sentence, no other event has occurred during the past 10 years requiring disclosure pursuant to Item 401(f) of Regulation S-K.
Denny Marie Post has served as a member of our board of directors since December 2019. Ms. Post has served on the board of directors of Travel + Leisure, Inc. since May 2018, Bluestone Lane Holdings since October 2020 and Libbey, Inc. since November 2020. Prior to that Ms. Post served on the board of directors of Red Robin Gourmet Burgers, Inc., a casual dining restaurant chain, from August 2016 to April 2019 and served in a variety of senior management roles from August 2011 to April 2019, including president, chief executive officer, chief concept officer and chief marketing officer. Ms. Post has previously held management positions at T-Mobile US, Inc., Starbucks Corporation, Burger King Worldwide Inc., and KFC USA as well as Priszm Brandz Canada (a joint venture of YUM! Brands, Inc.). Ms. Post received her certificate in Finance from Wharton School of Business at the University of Pennsylvania and her B.A. in Journalism and Social Sciences from Trinity University. We believe that Ms. Post is qualified to serve on our board of directors because of her diverse business, management and leadership experience in the consumer, food and hospitality industries.
Gisel Ruizhas served as a member of our board of directors since May 2020. Ms. Ruiz has also served on the board of directors of Cracker Barrel Old Country Store, Inc. since September 2020. Prior to that, Ms. Ruiz
served as executive vice president and chief operating officer of Sam’s West, Inc., a national chain of membership-only retail warehouse clubs, from February 2017 to June 2019. She is currently on the board of advisors at Santa Clara University serving the Retail Management Institute. Ms. Ruiz served on the board of directors of Walmart de Mexico S.A.B. de CV, a multinational retail chain, from October 2016 to May 2019. Ms. Ruiz also held multiple positions at Walmart, Inc., both in the U.S. and international business segments, from 1992 through February 2017, including executive roles from 2010 to February 2017. Ms. Ruiz received her B.S. in Marketing, Retail Management from Santa Clara University. We believe that Ms. Ruiz is qualified to serve on our board of directors because of her diverse business, management and leadership experience in the consumer and food industries.
INFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE Corporate Governance Highlights Board Chairperson and Chief Executive Officer positions are separate. 7 of 9 directors are independent. 6 of 9 directors are women and/or members of underrepresented minority groups. Lead independent director. Each standing committee is composed entirely of independent directors. Regular committee meetings and executive sessions without members of management present. Annual Board and committee self-evaluations and review of committee charters. Overall attendance by our directors at Board and committee meetings of over 97% in 2021. Board Independence As required under
Under The Nasdaq Stock Market (“Nasdaq”) listing standards, a majority of the members of a listed company’s Board must qualify as “independent,” as affirmatively determined by the Board. The Board consults with the Company’s counsel to ensure that the Board’s determinations with respect to independence are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent listing standards of Nasdaq, as in effect from time to time. Based on information provided by each director concerning herhis or hisher background, employment and affiliations, the Board has determined that none of our directors, other than Mr. Diez-Canseco Ms. Flanagan and Mr. O’Hayer, has any relationships that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the Nasdaq listing standards. In making these determinations, our Board considered the current and prior relationships that each non-employee director has with our companyCompany and all other facts and circumstances our Board deemed relevant in determining their independence, including the beneficial ownership of our shares by each non-employee director and the transactions described in the section titled “Transactions with Related Persons.” The Board also determined that each member of our Audit, Compensation and Nominating and Corporate Governance Committees satisfies the independence standards for such committees established by the SEC and the Nasdaq listing standards, as applicable. Leadership Structure and Risk Oversight Our Corporate Governance Guidelines specify that the Board will select our Chief Executive Officer and chairperson of the Board in the manner that it determines to be in the best interests of our stockholders and in accordance with any stockholder agreements. The Board does not believe there should be a fixed rule regarding the positions of Chief Executive Officer and chairperson being held by different individuals, or whether the chairperson should be a Vital Farms employee or should be elected from among the non-employee directors. The needs of Vital Farms and the individuals available to assume these roles may require different outcomes at different times, and the Board believes that retaining flexibility in these decisions is in the best interests of our company.Company. Pursuant to its charter, the Nominating and Corporate Governance Committee periodically reviews this matter and makes recommendations to the Board. Most recently, the Nominating and Corporate Governance Committee has recommended, and the Board has determined, that the roles of Chief Executive Officer and chairperson of the Board should be separate. The role of executive chairperson is currently held by MatthewMr. O’Hayer, our founder, who has served in such capacity since April 2019. Our Corporate Governance Guidelines further specify that in the event that we do not have an independent chairperson of the Board, the independent directors may designate a lead independent director. Our lead independent director is Denny MarieMs. Post, who has served in such capacity since August 2020. The lead independent director’s duties include: (i) presiding at all meetings of the Board at which the chairperson is not present, including executive sessions of the independent directors; (ii) acting as liaison between the independent directors and the Chief Executive Officer and | | | | | 16 | | 2022 Proxy Statement | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g65c58.jpg)
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INFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE chairperson; (iii) presiding over meetings of the independent directors; (iv) consulting with the chairperson in planning and setting schedules and agendas for Board meetings; and (v) performing such other functions as the Board may delegate. One of the Board’s key functions is informed oversight of our risk management process. The Board does not have a standing risk management committee, but rather administers this oversight function directly through the Board as a whole, as well as through various Board standing committees that address risks inherent in their respective areas of oversight. In particular, our Board is responsible for monitoring and assessing strategic risk exposure, including a determination of the nature and level of risk appropriate for the Company. Our Audit Committee has the responsibility to consider and discuss with management and the auditors, as appropriate, the Company’s guidelines and policies with respect to financial risk management and financial risk assessment, including the Company’s major financial risk exposures and the steps taken by management to monitor and control these exposures. In addition, the Audit Committee considers management risks relating to data privacy, technology and information security, including cyber security,cybersecurity, and back-up of information systems and the steps the Company has taken to monitor and control such exposures, as well as overseeing the performance of our internal audit function, as applicable. Our Compensation Committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking, including risks related to executive compensation and overall compensation and benefit strategies, plans, arrangements, practices and policies. Our Nominating and Corporate Governance Committee monitors the effectiveness of our corporate governance guidelines,Corporate Governance Guidelines, including whether they are successful in preventing illegal or improper liability-creating conduct. The Nominating and Corporate Governance Committee also oversees and reviews with management the Company’s major legal compliance risk exposures and the steps management has taken to monitor or mitigate such exposures, including the Company’s procedures and any related policies with respect to risk assessment and risk management. It is the responsibility of the committee chairs to report findings regarding material risk exposures to the Board as quickly as possible. In connection with its reviews of the operations and corporate functions of our company,Company, our Board addresses the primary risks associated with those operations and corporate functions. In addition, our Board reviews the risks associated with our company’sCompany’s business strategies periodically throughout the year as part of its consideration of undertaking any such business strategies. While the Board and its committees oversee risk management strategy, management is responsible for implementing and supervising day-to-day risk management processes and reporting to the Board and its committees on such matters. Board Size and Composition The number of directors comprising our Board is fixed from time to time by resolution of the Board, pursuant to our amended and restated certificate of incorporation. Our Board currently consists of nine members. On January 26, 2022, Mr. Drever notified the Board of his resignation from the Board effective as of June 9, 2022, and our Board approved a resolution reducing the size of the Board from nine to eight members, with such reduction contingent upon and effective as of Mr. Drever’s resignation from the Board. Our amended and restated certificate of incorporation provides for a classified Board consisting of three classes of directors. Currently, Class I consists of three directors, Class II consists of three directors and Class III consists of three directors. Effective upon Mr. Drever’s resignation from the Board, Class I will consist of two directors. Each class serves for a three-year term. Vacancies on our Board may be filled by the affirmative vote of a majority of directors then in office. A director elected by our Board to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified. Our Nominating and Corporate Governance Committee is charged with oversight of the Company’s governance structure, including the size and composition of the Board. We believe that the current size of the Board (including the planned reduction in size upon Mr. Drever’s resignation) is appropriate for our Company. Furthermore, we believe that it is appropriate for our Company to maintain a classified Board. The continuity, stability and institutional knowledge provided by having two-thirds of our Board carry over year-over-year is advantageous for us, particularly as a relatively new public company. | | | | | | | | |
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INFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE Board Meetings and Attendance The Board oversees our business and monitors the performance of our management. Our executive officers and management oversee our day-to-day operations. The independent directors meet quarterly in executive sessions without management or any non-independent directors. The purpose of these executive sessions is to promote open and candid discussion among the non-employee directors. In fiscal 2020, the Company’s independent non-employee directors met two times in regularly scheduled executive sessions at which only independent directors were present. Our Board held 15five meetings during the fiscal year ended December 27, 2020.26, 2021. Each of the incumbent directors attended at least 75% of the total of the meetings of the Board and the meetings of the committees of the Board on which he or she served during the fiscal year ended December 27, 202026, 2021 (in each case, which were held during the period for which he or she was a director and/or a member of the applicable committee). Total board and committee attendance during the fiscal year ended December 26, 2021 was over 97%. At least quarterly, the independent directors meet in executive sessions without management or any non-independent directors. The purpose of these executive sessions is to promote open and candid discussion among the non-employee directors. In the fiscal year ended December 26, 2021, the Company’s independent non-employee directors met five times in regularly scheduled executive sessions. It is our policy to encourage our directors to attend the Annual Meeting. We anticipate that a majority of the members of the Board will attend the Annual Meeting. Board Committees Our Board has established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Each of these committees is composed entirely of independent directors. The following table provides independent director committee membership and committee meeting information for the fiscal year ended December 27, 2020:26, 2021: | | | | | | | | | | | | | Name | | Audit Committee | | | Compensation Committee | | | Nominating and Corporate Governance Committee | | Kofi Amoo-Gottfried(1) | | | | | | | | | | | | | Brent Drever | | | | | | | | | | | X | * | Glenda Flanagan | | | | | | | | | | | | | Kelly Kennedy† | | | X | * | | | | | | | X | | Karl Khoury | | | X | | | | X | | | | | | Denny Marie Post | | | | | | | X | | | | X | | Gisel Ruiz | | | X | | | | X | * | | | | | | | | | | | | | | | | | | Total meetings in 2020 | | | 9 | | | | 1 | | | | 1 | |
| | | | | | | | | | | NAME | | AUDIT COMMITTEE | | COMPENSATION COMMITTEE | | NOMINATING AND CORPORATE GOVERNANCE COMMITTEE | | | | | Kofi Amoo-Gottfried | | | | | | 🌑 | | | | | Brent Drever | | | | 🌑(1) | | 🌑* | | | | | Glenda Flanagan | | | | | | | | | | | Kelly Kennedy† | | 🌑* | | | | 🌑(2) | | | | | Karl Khoury | | 🌑 | | 🌑 | | | | | | | Denny Marie Post | | | | 🌑(3) | | 🌑 | | | | | Gisel Ruiz | | 🌑 | | 🌑* | | | | | | | Total meetings in 2021 | | 4 | | 9 | | 4 |
* | Committee ChairChairperson |
(1) | Mr. Amoo-Gottfried began serving onDrever was appointed to the Compensation Committee effective August 2, 2021. |
(2) | Ms. Kennedy resigned as a member of the Nominating and Corporate Governance Committee upon his appointment tofollowing such Committee’s May 3, 2021 meeting. |
(3) | Ms. Post resigned as a member of the Board, effective January 4, 2021.Compensation Committee following such Committee’s May 3, 2021 meeting. |
Below is a description of each committee of the Board. Each of the committees has authority to engage legal counsel or other experts or consultants as it deems appropriate to carry out its responsibilities. The Board has determined that each member of each committee meets the applicable Nasdaq rules and regulations regarding “independence” and each member is free of any relationship that would impair his or her individual exercise of independent judgment with regard to the Company. Each of the committees operates pursuant to a written charter and each committee reviews and assesses the adequacy of its charter and submits its charter to the Board for approval. The charters are all available in the “Investors–Corporate “Investor Relations–Governance” section of our website, www.vitalfarms.com. The inclusion of our website address here and elsewhere in this proxy statement does not include or incorporate by reference the information on our website into this proxy statement. Audit Committee
The Audit Committee of the Board was established by the Board in accordance with Section 3(a)(58)(A) of the Exchange Act. The primary purpose of the audit committee is to discharge the responsibilities of our Board with respect to our corporate accounting and financial reporting processes, systems of internal control and financial statement audits, and to oversee our independent registered public accounting firm. Specific responsibilities of our audit committee include:
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helping our board of directors oversee our corporate accounting and financial reporting processes;INFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE
| | | | AUDIT COMMITTEE | Current Members: u Kelly Kennedy (Chair) u Karl Khoury u Gisel Ruiz | | The Audit Committee of the Board was established by the Board in accordance with Section 3(a)(58)(A) of the Exchange Act. The primary purpose of the Audit Committee is to discharge the responsibilities of our Board with respect to our corporate accounting and financial reporting processes, systems of internal control and financial statement audits, and to oversee our independent registered public accounting firm. Specific responsibilities of our Audit Committee include: • helping our Board oversee our corporate accounting and financial reporting processes; |
managing the selection, engagement, qualifications, independence and performance of a qualified firm to serve as the independent registered public accounting firm to audit our financial statements; discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, our interim and year-end operating results; developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters;matters, including our whistleblower report system, and addressing any reports submitted; reviewing related person transactions; overseeing management of our cybersecurity and other information technology risks, controls and procedures; obtaining and reviewing a report by the independent registered public accounting firm at least annually that describes our internal quality control procedures, any material issues with such procedures and any steps taken to deal with such issues when required by applicable law; and approving or, as permitted, pre-approving, audit and permissible non-audit services to be performed by the independent registered public accounting firm. Kelly Kennedy, Karl Khoury and Gisel Ruiz served as members of the Audit Committee during 2020,2021, with Ms. Kennedy serving as ChairChairperson of the committee. Our Board has determined that each member of the Audit Committee is independent under the Nasdaq listing standards and a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act. The Board has further determined that Ms. Kennedy is an “audit committee financial expert” within the meaning of the SEC regulations and applicable listing standards of Nasdaq. Each member of our audit committeeAudit Committee can read and understand fundamental financial statements in accordance with applicable requirements. In arriving at these determinations, our board of directorsBoard has examined each audit committeeAudit Committee member’s scope of experience and the nature of their employment in the corporate finance sector. Compensation The Audit Committee
The primary purpose of our Compensation Committee is to discharge met four times during the responsibilities of our Board in overseeing our compensation policies, plans and programs and to review and determine the compensation to be paid to our executive officers, directors and other senior management, as appropriate. Specific responsibilities of our Compensation Committee include:fiscal year ended December 26, 2021.
reviewing and approving the compensation of our chief executive officer, other executive officers and senior management;
administering our equity incentive plans and other benefit programs;
| | | | COMPENSATION COMMITTEE | Current Members: u Gisel Ruiz (Chair) u Kelly Kennedy u Karl Khoury | | The primary purpose of our Compensation Committee is to discharge the responsibilities of our Board in overseeing our compensation policies, plans and programs and to review and determine the compensation to be paid to our executive officers, directors and other senior management, as appropriate. Specific responsibilities of our Compensation Committee include: • reviewing and approving the compensation of our Chief Executive Officer, other executive officers and senior management; • administering our equity incentive plans and other benefit programs; |
reviewing, adopting, amending and terminating incentive compensation and equity plans, severance agreements, profit sharing plans, bonus plans, change-of-control protections and any other compensatory arrangements for our executive officers and other senior management; and reviewing and establishing general policies relating to compensation and benefits of our employees, including our overall compensation philosophy. Karl Khoury, Denny Marie Post, Brent Drever and Gisel Ruiz served as members of the Compensation Committee during 2020,2021, with Ms. Ruiz serving as ChairChairperson of the committee. Following the committee’s May 3, 2021 meeting, Ms. Post resigned from the Compensation Committee and Mr. Drever was appointed as a member of the committee. Effective March 7, 2022, Mr. Drever resigned from the Compensation Committee, and Kelly Kennedy was appointed as a member of the committee. Our Board has determined that each member of the Compensation Committee is independent under the Nasdaq listing standards and a ”non-employee“non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act. The Compensation Committee met oncenine times during the fiscal year ended December 27, 2020.26, 2021.
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INFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE Compensation Consultant and Peer Group Benchmarking During the past fiscal year, after taking into consideration the six factors prescribed by the SEC and Nasdaq, the Compensation Committee engaged Frederic W. Cook & Co., Inc. (“FW Cook”), an independent compensation consultant, to provide it with information, recommendations and other advice relating to executive compensation on an ongoing basis. The Compensation Committee has assessed FW Cook’s independence and determined that FW Cook had no conflicts of interest in connection with its provisions of services to the Compensation Committee. In 2020, the The Compensation Committee has engaged FW Cook to provide market data, peer group analysis and conduct an executive compensation assessment analyzing the cash and equity compensation of our executive officers and directors against compensation for similarly situated executives and directors at our peer group. The Compensation Committee undertakes to review our peer group on an annual basis. Based on consultation with FW Cook, the Compensation Committee determined that, for purposes of the fiscal year ended December 26, 2021, our peer group for compensation purposes would consist of the entities listed below: Canada Goose Holdings Inc. Craft Brew Alliance, Inc. John B. Sanfilippo & Son, Inc. Nature’s Sunshine Products, Inc. The Simply Good Foods Company Our Compensation Committee utilizes the data and analysis from FW Cook to evaluate and determine appropriate levels of overall compensation for our executive officers, as well as each separate element of compensation, to be consistent and competitive with our peer group. Compensation Committee Processes and Procedures Typically, the Compensation Committee meets quarterly and with greater frequency if necessary. The agenda for each meeting is usually developed by the ChairChairperson of the Compensation Committee, in consultation with our Chief Executive Officer. The Compensation Committee meets regularly in executive session. However, from time to time, various members of management and other employees as well as outside advisers or consultants may be invited by the Compensation Committee to make presentations, to provide financial or other background information or advice or to otherwise participate in Compensation Committee meetings. The Chief Executive Officer may not participate in, or be present during, any deliberations or determinations of the Compensation Committee regarding his compensation or individual performance objectives. The charter of the Compensation Committee grants the Compensation Committee full access to all books, records, facilities and personnel of the Company. In addition, under theits charter, the Compensation Committee has the authority to obtain, at our expense, advice and assistance from compensation consultants and internal and external legal, accounting or other advisers and other external resources that the Compensation Committee considers necessary or appropriate in the performance of its duties. The Compensation Committee has direct responsibility for the oversight of the work of any consultants or advisers engaged for the purpose of advising the Compensation Committee. In particular, the Compensation Committee has the authority to | | | | | 20 | | 2022 Proxy Statement | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g65c58.jpg)
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INFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE retain compensation consultants to assist in its evaluation of executive and director compensation, including authority to approve the consultant’s reasonable fees and other retention terms. Under theits charter, the Compensation Committee may select, or receive advice from, a compensation consultant, legal counsel or other adviser to the Compensation Committee, other than in-house legal counsel and certain other types of advisers, only after assessing the independence of such person in accordance with SEC and Nasdaq requirements that bear upon the adviser’s independence; however, there is no requirement that any adviser be independent. Our Compensation Committee conducts an annual review of the independence of its advisers under the applicable SEC and Nasdaq requirements, based on certifications provided by such advisers outlining their relationships and the presence of any potential conflicts of interest with the Company. The Compensation Committee determined in March 2022 that each such adviser (including FW Cook) was independent under SEC and Nasdaq standards. Under its charter, the Compensation Committee may form, and delegate authority to, subcommittees consisting of one or more members of the Board (whether or not he or she is on the Compensation Committee), to the extent allowed under applicable law and stock exchange listing requirements. In 2020, the Compensation Committee formed a subcommittee, currently composed of Russell Diez-Canseco, to which it delegated authority to grant, without any further action required by the Compensation Committee, stock options and restricted stock awards to employees who are not executive officers of the Company. The purpose of this delegation of authority is to enhance the flexibility of equity administration within the Company and to facilitate the timely grant of equity to non-executive employees, particularly new employees, within specified limits approved by the Compensation Committee. In particular, the subcommittee may not grant options to acquire more than an aggregate of 200,000 shares to certain employees, as and when hired. As part of its oversight function, the Compensation Committee reviews, on a quarterly basis, the list of grants made by the subcommittee. The Compensation Committee’s process comprises two related elements: the determination of compensation levels and the establishment of performance objectives for the current year. For executives other than the Chief Executive Officer, ourthe Compensation Committee solicits and considers evaluations and recommendations submitted to the Compensation Committee by the Chief Executive Officer. In the case of the Chief Executive Officer, the evaluation of his performance is conducted by the Compensation Committee, which determines any adjustments to his compensation as well as awards to be granted. Our Compensation Committee makes most of the significant adjustments to annual compensation, determines bonus and equity awards, and establishes new performance objectives at one or more meetings generally held during the first quarter of the year. Our Compensation Committee also considers matters related to individual compensation, such as compensation for new executive hires, as well as high-level strategic issues, such as the efficacy of our compensation strategy, potential modifications to that strategy and new trends, plans or approaches to compensation, at various meetings throughout the year. We have designed our executive compensation program to attract, motivate and retain a team of highly qualified executives who will drive innovation and business success. To inform executive compensation decisions and ensure the competitiveness of our executive compensation programs and decisions, our Compensation Committee benchmarks our executive compensation against the total executive compensation of aour peer group of companies.group. For all executives and directors as part of its deliberations, the Compensation Committee may also review and consider, as appropriate, materials such as executive stock ownership information, companyCompany stock performance data, analyses of historical executive compensation levels and current Company-wide compensation levels. Nominating and Corporate Governance Committee
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Specific responsibilities of our Nominating and Corporate Governance Committee include:
INFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE identifying and evaluating candidates, including the nomination of incumbent directors for reelection and nominees recommended by stockholders, to serve on our board of directors;
considering and making recommendations to our board of directors regarding the composition and chairmanship of the committees of our board of directors;
reviewing and recommending to our board of directors the compensation paid to our directors;
| | | | NOMINATING AND CORPORATE GOVERNANCE COMMITTEE | Current Members: u Denny Marie Post (Chair) u Kofi Amoo-Gottfried | | Specific responsibilities of our Nominating and Corporate Governance Committee include: • identifying and evaluating candidates, including the nomination of incumbent directors for reelection and nominees recommended by stockholders, to serve on our Board; • considering and making recommendations to our Board regarding the composition and chairmanship of the committees of our Board; • reviewing and recommending to our Board the compensation paid to our directors; |
instituting plans or programs for the continuing education of our board of directorsBoard and orientation of new directors; reviewing, evaluating and recommending to our board of directorsBoard succession plans for our executive officers; developing and making recommendations to our board of directorsBoard regarding corporate governance guidelines and matters, including in relation to corporate social responsibility; providing oversight of environmental, social and governance matters, including our environmental sustainability initiatives, human capital management and obligations as a public benefit corporation; and overseeing periodic evaluations of the board of directors’Board’s performance, including committees of the board of directors.Board. Brent Drever, Kelly Kennedy, Kofi Amoo-Gottfried and Denny Marie Post served as members of the Nominating and Corporate Governance Committee during 2020,2021, with Mr. Drever serving as ChairChairperson of the committee. Mr. Amoo-Gottfried began servingMs. Kennedy resigned as a member of the committee following the committee’s May 3, 2021 meeting. Effective January 27, 2022, Mr. Drever resigned from the Nominating and Corporate Governance Committee, upon his appointment toand Denny Marie Post was appointed as the Board, effective January 4, 2021.Chairperson of the committee. Our Board has determined that each member of the nominatingNominating and corporate governanceCorporate Governance committee is independent under the Nasdaq listing standards.standards and a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act. The Nominating and Corporate Governance Committee met one timefour times during the fiscal year ended December 27, 2020.26, 2021. Our Board determines the appropriate characteristics, skills and experience for the Board as a whole and for its individual members. The Board considers recommendation for nominees from the Nominating and Corporate Governance Committee. The Board, and in turn the Nominating and Corporate Governance Committee, consider the minimum general criteria below, and may add any specific additional criteria with respect to specific searches, in selecting candidates and existing directors for serving on the Board. An acceptable candidate may not fully satisfy all of the criteria but is expected to satisfy nearly all of them. The Board believes that candidates for director should have certain minimum qualifications, including the highest personpersonal integrity and ethics, the ability to read and understand basic financial statements, understandan understanding of Vital Farms’ industry and being older than 21. In considering candidates recommended by the Nominating and Corporate Governance Committee, the Board intends to consider other factors, such as: (i) possessing relevant expertise upon which to be able to offer advice and guidance to management; (ii) having sufficient time to devote to the affairs of Vital Farms;the Company; (iii) demonstrating excellence in his or her field; (iv) having the ability to exercise sound business judgment; (v) experience as a board member or executive officer of another publicly held company; (vi) having a diverse personal background, perspective and experience; and (vii) having the commitment to rigorously represent the long-term interests of Vital Farms’the Company’s stakeholders consistent with Vital Farms’the Company’s public benefit corporation (“PBC”) status. The Board and the Nominating and Corporate Governance Committee reviewsreview candidates for director nomination in the context of the current composition of the Board, our operating requirements and the long-term interests of Vital Farms’our stakeholders. In conducting this assessment, the Board and the Nominating and Corporate Governance Committee consider diversity (including diversity of gender, ethnic background and country of origin), age, skills and other factors that it deemsdeemed appropriate to maintain a balance of knowledge, experience and capability on the Board. For incumbent directors, the Board reviewsand the Nominating and Corporate Governance Committee review those directors’ overall service to Vital Farmsthe Company during their term, including the number of meetings attended, level of participation, quality of performance and any other relationships and transactions that might impair the directors’ independence. In the case of newall director candidates, the Board and the Nominating and Corporate Governance Committee also determinesdetermine whether the nominee must beis independent forunder applicable Nasdaq purposes.and SEC standards. | | | | | 22 | | 2022 Proxy Statement | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g65c58.jpg)
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INFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE Generally, our Nominating and Corporate Governance Committee identifies candidates for director nominees in consultation with management, using search firms or other advisors, through the recommendations submitted by stockholders or through such other methods as the Nominating and Corporate Governance Committeecommittee deems to be helpful to identify candidates. The Nominating and Corporate Governance Committee conducts any appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates after considering the function and needs of the Board. The Nominating and Corporate Governance Committee meets to discuss and consider the candidates’ qualifications and then selects a nominee for recommendation to the Board by majority vote. The Nominating and Corporate Governance Committee may gather information about the candidates through interviews, questionnaires, background checks or any other means that the Nominating and Corporate Governance Committeecommittee deems to be appropriate in the evaluation process. We have no formal policy regarding board diversity. Our Nominating and Corporate Governance Committee’s priority in selecting boardBoard members is identification of persons who will further the interests of our companyCompany through his or her established record of professional accomplishment, the ability to contribute positively to the collaborative culture among boardBoard members and professional and personal experiences and expertise relevant to our growth strategy. The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders. The Nominating and Corporate Governance Committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth above, based on whether or not the candidate was recommended by a stockholder. Stockholders who wish to recommend individuals for consideration by the Nominating and Corporate Governance Committee to become nominees for election to the Board may do so by providing timely notice in writing to our Secretary at c/o Vital Farms, Inc., Attn: Corporate Secretary, 3601 South Congress Ave., Suite C100, Austin, Texas 78704. To be timely, we must receive the notice not less than 90 days nor more than 120 days prior to the anniversary of the prior year’s annual meeting of stockholders; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 30 days after such anniversary date, we must receive the stockholder’s notice (i) no earlier than the close of business on the 120th day prior to the proposed date of the annual meeting and (ii) no later than the close of business on the later of the 90th day prior to the annual meeting or the 10th day following the day on which we first make a public announcement of the date of the annual meeting. Submissions must include the specific information required in Section 5 of our Bylaws. For additional information about our director nomination requirements, please see our Bylaws. Audit Committee Report The material in this report is not “soliciting material,” is not deemed filed with the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. The Audit Committee has reviewed and discussed the audited financial statements for the fiscal year ended December 27, 202026, 2021 with management of the Company. The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. The Audit Committee has also received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent accountants’ communications with the Audit Committee concerning independence and has discussed with the independent registered public accounting firm the accounting firm’s independence. Based on the foregoing, the Audit Committee has recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2020.26, 2021. Vital Farms, Inc. Audit Committee Kelly Kennedy Karl Khoury Gisel Ruiz | | | | | | | | |
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INFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE Code of Business Conduct and Ethics We have adopted a Code of Business Conduct and Ethics (“Code of Conduct”) that applies to all our employees, officers and directors. This includes our principal executive officer, principal financial officer and principal accounting officer or controller, or persons performing similar functions. The full text of our Code of Conduct is posted onavailable in the “Investor Relations–Governance” section of our website, at www.vitalfarms.com. We intend to disclose on our website any future amendments of our Code of Conduct or waivers that exempt any principal executive officer, principal financial officer, principal accounting officer or controller, persons performing similar functions or our directors from provisions in the Code of Conduct. Information contained on, or that can be accessed through, our website is not incorporated by reference into this proxy statement, and you should not consider information on our website to be part of this proxy statement. Corporate Governance Guidelines The Board has adopted Corporate Governance Guidelines to assure that the Board will have the necessary authority and practices in place to review and evaluate our business operations as needed and to make decisions that are independent of our management. The guidelines are also intended to align the interests of directors and management with those of our stockholders. The Corporate Governance Guidelines set forth the practices the Board intends to follow with respect to, among other things, boardBoard composition and selection including diversity, boardBoard meetings and involvement of senior management, Chief Executive Officer performance evaluation and succession planning and boardBoard committees and compensation. The Corporate Governance Guidelines are available in the “Investors–“Investor Relations–Governance” section of our website, www.vitalfarms.com. Certified B Corporation While not required by Delaware law or the terms of our amended and restated certificate of incorporation, we have elected to have our social and environmental performance, accountability and transparency assessed against the proprietary criteria established by B Lab, an independent non-profit organization. As a result of this assessment, in December 2015, we were designated as a Certified B Corporation. In order to be designated as a Certified B Corporation, companies are required to take a comprehensive and objective assessment of their positive impact on society and the environment. The assessment evaluates how a company’s operations and business model impacts its workers, customers, suppliers, community and the environment using a 200-point scale. While the assessment varies depending on a company’s size (number of employees), sector and location, representative indicators in the assessment include payment above a living wage, employee benefits, stakeholder engagement, supporting underserved suppliers and environmental benefits from a company’s products or services. After completing the assessment, B Lab will verify the company’s score to determine if it meets the 80-point minimum bar for certification. The review process includes a phone review, a random selection of indicators for verifying documentation and a random selection of company locations for onsite reviews, including employee interviews and facility tours. Once certified, every Certified B Corporation must make its assessment score transparent on B Lab’s website. Designation as a Certified B Corporation and continued certification is at the sole discretion of B Lab. To maintain our certification, we are required to update our assessment and verify our updated score with B Lab every three years. We were most recently recertified in January 2022. Public Benefit Corporation In addition to our Certified B Corporation status, and as a demonstration of our long-term commitment to our mission to bring ethical food to the table by coordinating a network of family farms to operate with a well-defined set of organic agricultural practices that includes the humane treatment of farm animals as a central tenet, we elected in October 2017 to be treated as a public benefit corporation under Delaware law. Under Delaware law, a public benefit corporation is required to identify in its certificate of incorporation the public benefit or benefits it will promote and its directors have a duty to manage the affairs of the corporation in a manner that balances | | | | | 24 | | 2022 Proxy Statement | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g65c58.jpg)
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INFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE the pecuniary interests of the corporation’s stockholders, the best interests of those materially affected by the corporation’s conduct, and the specific public benefit or public benefits identified in the public benefit corporation’s certificate of incorporation. Public benefit corporations organized in Delaware are also required to assess their benefit performance internally and to disclose to stockholders at least biennially a report detailing their success in meeting their benefit objectives. As provided in our amended and restated certificate of incorporation, the public benefits that we promote, and pursuant to which we manage our Company, are: (i) bringing ethically produced food to the table; (ii) bringing joy to our customers through products and services; (iii) allowing crew members to thrive in an empowering, fun environment; (iv) fostering lasting partnerships with our farms and suppliers; (v) forging an enduring profitable business; and (vi) being stewards of our animals, land, air and water, and being supportive of our community. Periodic Public Benefit Corporation Statement As a public benefit corporation, our Board and executive team manage our Company with an eye toward promoting the long-term benefits of each of our stakeholders. Pursuant to Section 366(b) of the Delaware General Corporation Law, the following is a summary of how we have supported each of the public benefit objectives listed in our amended and restated certificate of incorporation: Bringing ethically produced food to the table Our animal welfare practices for the hens that lay our eggs are consistently and independently audited by Certified Humane and certain retailers. Our organic egg farms are audited by Oregon Tilth and Bioagricert according to USDA National Organic Program (NOP) standards, and our dairy farms are evaluated to the National FARM Program standard. We work with suppliers located in areas with diverse social, economic and cultural circumstances. We strive to work with suppliers that share our values and commitment to ethics. All suppliers are required to comply with our Supplier Code of Conduct, which includes requirements related to non-discrimination, diversity and inclusion, labor practices, freedom of association, health and safety, supplier ethics, environmental impact and animal welfare. Bringing joy to our customers through products and services We believe our customers and consumers trust our brand because we maintain a steadfast adherence to our values of honesty and transparency in food production. We bring our brand to life in playful, savvy and mindful ways, with transparency always at the foundation. Our Traceability product feature allows consumers to see 360° video footage of the family farm on which their eggs were laid. We launched Traceability in January 2020 and have received over 600,000 views to date, demonstrating that people are interested in being connected to the source of their food. Allowing crew members to thrive in an empowering, fun environment We believe in enabling our crew members to grow both professionally and personally with Vital Farms. We cultivate leaders across every level of the business and are committed to building a people-centered culture that embodies our values and understands the unique needs of our crew members. In 2021, we completed an extensive crew member engagement survey. We had a crew member participation rate of over 90% with 99% of remote crew members participating. Our survey found that 90% of crew members believe the products and services Vital Farms provides are as good as or better than its main competitors, 96% of crew members feel we have found ways to collaborate as a team while working remotely and 90% of crew members feel genuinely supported if they need flexible working arrangements. For all crew members, we provide competitive compensation and full benefits from the first day they join Vital Farms. For our crew members at Egg Central Station, our shell egg processing facility in Springfield, Missouri, we pay at least 25% above living wage. | | | | | | | | |
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INFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE Fostering lasting partnerships with our farmers and suppliers We work with over 275 family farms. In 2021, our Farm Support team made over 2,900 visits to see our egg farmers in person. We survey our egg farmers twice a year, asking one simple question: On a scale of 1-10 (with 10 being the highest), how likely are you to recommend becoming a Vital Farms farmer? In our most recent survey, more than half of the respondents provided a score of 9 or 10, indicating that they are promoters of Vital Farms. Many of our farmers personally refer others to work with us. In 2021, we made investments in the National Young Farmers Coalition and Farmer Veteran Coalition, two organizations that are working to build a more equitable food system. We have also announced a commitment to create opportunities for black farmers and have since spent time listening to experts and aligning with organizations that support this important cause. We have more work ahead of us to meaningfully fulfill this commitment and will continue to report progress on our actions to increase diversity in our farmer network and the farming community more broadly Forging an enduring profitable business While we are not motivated solely by what maximizes profits for our stockholders, we have always been fierce business competitors who like to win. We have become the leading pasture-raised egg brand in the U.S. and the #2 overall U.S. egg brand by retail dollar sales, and we have continued to see growth in our butter business. We have built a sustainable company founded on products that increasingly resonate with consumers. Our trusted brand and Conscious Capitalism-focused business model have contributed to an increase in net revenue from $1.9 million in fiscal year 2010 to $260.9 million in the fiscal year ended December 26, 2021, which represents a 56.5% compounded annual growth rate. From fiscal year 2019 to fiscal year 2021, we grew our net revenue by 85% and the number of stores carrying our products increased by 24%. A key part of forging an enduring profitable business is our expansion of Egg Central Station, our shell egg production facility in Springfield, Missouri. The expansion will allow us to produce an additional 3 million eggs per day, creating capacity for approximately $300 million in additional potential revenue. We have continued to see increases in product velocities, household penetration and the number of stores selling our products. Being stewards of our animals, land, air and water, and being supportive of our community We believe in treating animals with care and respect, providing them a life where they have the freedom to act out their natural behaviors. We work with U.S. family farmers who share our commitment to animal welfare and aspiration to make ethically produced food accessible to more households across the country. For our pasture-raised eggs, all of the over 275 family farms in our network are located along what we call the “Pasture Belt,” a region of the United States with a more temperate climate that enables the girls to be outdoors year-round. Each hen receives at least 108 square feet of pasture on which they have the freedom to roam and forage during the daytime for natural food sources like native grasses and insects. Our approach helps enable over 3.4 million hens to live a life with access to the outdoors. Every egg farmer in our network of family farms practices pasture-rotation, a method that rejuvenates the land naturally without herbicides or pesticides. Currently, across our network of family farms, over 8,400 acres of land has the capability of rejuvenating naturally. The cows that produce the cream used for our butter and ghee are raised on U.S. family farms by farmers who embrace rigorous animal welfare standards. We work with a network of dairy farmers that source from U.S. family farms, follow the Five Freedoms of animal welfare and have committed to version 4.0 of the FARM Animal Care Program. The cows are allowed to express their natural behaviors, socialize with their herd, and have plenty of room in the barns to eat, drink, and lie down in a clean, dry space whenever they desire. | | | | | 26 | | 2022 Proxy Statement | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g65c58.jpg)
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INFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE We aim to use packaging that is recyclable and compostable, minimizing our consumption of virgin materials. By weight, in 2021, our packaging was 99% recyclable and 48% compostable, and 90% of our packaging was made from post-consumer recycled materials. We support a vast network of community organizations through monetary and product donations as well as paid time for crew volunteering. We work with non-profit organizations that advocate for causes such as food insecurity, animal welfare, children’s health, youth empowerment and environmental conservation. In 2021, we donated nearly $1.0 million in monetary and product contributions across 31 non-profit organizations in support of our purpose to improve the lives of people, animals, and the planet through food. In order to ensure achievement of the public benefit objectives outlined in our amended and restated certificate of incorporation, our Board carefully considers these objectives and the interests of each of our stakeholder groups in its oversight of the Company. We believe that we have been successful in meeting these objectives and promoting the attendant public benefits to our stakeholders. Our January 2022 recertification as a Certified B Corporation, which followed a comprehensive and objective assessment of our social and environmental impacts, serves to underscore our continued commitment to these objectives. Stockholder Communications with the Board Stockholders wishing to communicate with the Board or an individual director may send a written communication to the Board or such director c/o Vital Farms, Inc., 3601 S Congress Ave Suite C100, Austin, Texas, 78704, Attn: Corporate Secretary. The Corporate Secretary will review each communication. The Corporate Secretary will forward such communication to the Board or to any individual director to whom the communication is addressed unless the communication contains advertisements or solicitations or is unduly hostile, threatening or similarly inappropriate, in which case the Corporate Secretary shall discard the communication or inform the proper authorities, as may be appropriate. Hedging, PolicyPledging Shares and Other Transactions Involving Company Stock Our insider trading policy prohibits our employees, directors and designated consultants from engaging in “hedging” or other monetization transactions with respect to our common stock or borrowing againststock. Additionally, our insider trading policy prohibits pledging shares of our common stock.stock as collateral for a loan, except in the limited circumstances set forth in our pledging policy. Pursuant to our pledging policy, our directors or executive officers may pledge their shares of common stock as collateral for a loan, with prior approval from our Board following recommendation from our Nominating and Corporate Governance Committee, if the transaction meets certain criteria (including a requirement that the maximum collateralized loan amount does not exceed 25% of the stock’s value). Example: A director pledges 100,000 shares as collateral for a loan, and the current stock price is $15.00 per share. The director may borrow up to 25% of 100,000 x $15.00, or $375,000, against such shares. If the stock price later increases to $25.00 per share, the director may borrow up to an additional $250,000 against the pledged shares. If the director then borrows the full additional allowable amount of $250,000 and the stock price subsequently decreases to $20.00, the director must repay $125,000 to maintain compliance with the 25% limit under this policy. Our Nominating and Corporate Governance Committee oversees compliance with our pledging policy. Any of our directors or executive officers seeking approval of a pledging arrangement must first submit a request for pre-approval to our Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee then evaluates certain criteria (including whether the pledging arrangement is in the best interests of the Company) to decide whether to recommend that the Board approve or deny such request. We believe that this monitoring is effective and includes appropriate controls. As of April 11, 2022, no pledges of common stock have been made pursuant to our pledging policy or otherwise. | | | | | | | | |
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ENVIRONMENTAL, SOCIAL & GOVERNANCE Environmental, Social and Governance (ESG) Highlights We have taken the first step to identify the risks and opportunities associated with climate change and its impact on our business, engaging a third party to assess our Scope 1, 2, and 3 greenhouse gas emissions for 2019 and 2020 to help us understand and mitigate our carbon footprint. Diversity, Equity, and Inclusion (DEI) We appointed our first Head of Diversity, Equity and Inclusion and established an internal Diversity Council to oversee our approach to DEI. We were recognized by 50/50 Women on Boards for being among only 8% of companies on the Russell 3000 Index that has a gender-balanced board of directors. We set the foundations for sound ESG governance and established oversight of our ESG strategy through our Nominating and Corporate Governance Committee. We have adopted and published a DEI Policy, Health and Workplace Safety Policy, Human Rights Policy and a Supplier Code of Conduct. In partnership with third-party experts, we engaged our internal and external stakeholders to conduct our first assessment of the ESG issues most impactful to our business. Transparency and Reporting In March 2022, we published our Inaugural Sustainability Report to communicate our ESG commitments and progress. In December 2021, we launched an investor-focused ESG Fact Sheet on our website to provide a high-level outline of our ESG areas of focus. Our mission is to bring ethical food to the table. As part of this mission, we are keenly focused on integrating ESG principles into how we conduct business. Our Senior Leadership Team and Board recognize the importance of these responsibilities, and we have established an internal cross-functional working group that is tasked with driving additional progress toward initiatives that promote sustainability and further transparency. Our values are rooted in the principles of Conscious Capitalism, which prioritizes the long-term benefits of each of our stakeholders. Recognizing the impact of emissions and supply chain sustainability across our stakeholder base, we published our Inaugural Sustainability Report in early 2022 and will be comprehensively measuring progress going forward using the standards of the Sustainability Accounting Standards Board (SASB). We believe in focusing our efforts on where we believe we can have the most impact. Against this backdrop, we have focused our ESG efforts on the impacts that they will have on each of our stakeholder groups: (i) farmers and suppliers; (ii) crew members; (iii) community and environment; (iv) customers and consumers; and (v) stockholders. Farmers & Suppliers The network of over 275 family farms we work with is the foundation of our supply chain. For our pasture-raised eggs, the farms in our network are located along what we call the “Pasture Belt,” a region of the United States with a more temperate climate, enabling over 3.4 million hens to live a life with access to the outdoors. Each hen receives at least 108 square feet | | | | | | | | |
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ENVIRONMENTAL, SOCIAL & GOVERNANCE of pasture on which they have the freedom to roam and forage during the daytime for natural food sources. We work with a network of dairy farmers that source from U.S. family farms, follow the Five Freedoms of animal welfare, and have committed to the FARM Animal Care Program. The cows are allowed to express their natural behaviors, socialize with their herd, and have plenty of room in the barns to eat, drink, and lie down in a clean, dry space whenever they desire. Notably: Our animal welfare practices for the hens that lay our eggs are consistently and independently audited by Certified Humane and certain retailers; Our organic egg farms are audited by Oregon Tilth and Bioagricert according to USDA National Organic Program (NOP) standards; and Our dairy farms are evaluated to the National FARM Program standard. We maintain a rigorous Supplier Code of Conduct. Suppliers are required to have an Environmental Management System (EMS) in place to comply with ISO 14001 or equivalent. In 2021, we began a relationship with an external veterinary partner. The services help educate our crew, quickly aid our farmers in need and hopefully increase farm production over time. Additionally, our Compliance team audits our farmers on a regular basis. These audits cover an extensive compliance checklist on all our animal welfare and environmental standards. We are committed to continuously building an environment where each of our farmers feels welcome, valued, respected and appreciated. In 2020, we announced a commitment to create opportunities for black farmers and have since spent time listening to experts and aligning with organizations that support this important cause. Crew Members We empower our crew members to live our mission and our values, and we aim to achieve a team that is representative of the community we serve. We believe that a diverse team pushes the boundaries for creativity and innovation. Some recent examples of our commitment to the development of our crew members include the completion of a crew member engagement survey using Culture Amp®, an employee experience platform with a mission to create culture-first organizations, and a Leadership Academy for all people managers at our ECS processing facility that supports their professional growth and development. We believe in providing our crew members an environment of equal opportunity and the tools necessary to succeed. To ensure equality among our workers, our human resources team annually reviews our employees’ pay to ensure that every employee receives pay equity for their roles. The benefits we provide to crew members include health insurance, 401(k) matching, equity grants, leadership training and an Employee Stock Purchase Plan. For all crew members at ECS, we pay at least 25% above living wage and provide a full benefits package from the first day they join Vital Farms. We take the health and safety of our crew members seriously, and we expect our team to follow our safety standards and protocols. We perform regular safety audits to ensure that proper safety policies are in place and appropriate safety training is provided. We measure and report out on safety metrics and regularly review our safety performance with our Board. In 2021, we had seven reported injuries. Our Total Recorded Injury Rate (TRIR) was 9.8. In 2021, our Lost-Time Incident Rate was 0.758. In recent years, we have taken significant actions to enhance our commitment to diversity, equity and inclusion (DEI). In 2020, we formally established our DEI function with an objective to increase diversity across our crew and identify ways in which we can have a meaningful impact in building a more equitable world through community investment and involvement. Our DEI initiatives include engaging the National Diversity Council, a non-profit organization that champions diversity as a business imperative, to conduct a DEI audit. We also expanded our foundational training around conscious inclusion for all crew members. Feedback from the National Diversity Counsel has informed our DEI-specific action plans under the leadership of our Head of DEI, who we hired in 2021. As of December 26, 2021, approximately 45% of our full-time crew members were women and approximately 17% were members of underrepresented minority groups, respectively. | | | | | 30 | | 2022 Proxy Statement | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g65c58.jpg)
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ENVIRONMENTAL, SOCIAL & GOVERNANCE Community & Environment We support a vast network of community organizations through monetary and product donations, as well as paid time off for crew volunteering. We therefore measure success not only in financial terms, but also in our ongoing support of our communities and environment. Specifically, in 2021: We donated nearly $1.0 million in monetary and product contributions across 31 non-profit organizations in support of our purpose to improve the lives of people, animals, and the planet through food; We formed partnerships with the Boys & Girls Club of America and the Whole Kids Foundation; and We continued our longstanding relationship with Feeding America and its affiliated local food banks, where we provided over 490,000 meals throughout the year We are also conscious stewards of the incredible gifts of nature, including animals, land, air and water. We are committed to responsible ESG practices that include climate change resilience, conservation of natural resources, pollution prevention and reduction of waste. We work with family farms who share our commitment to animal welfare and sustainable practices, including not using pesticides or herbicides on their pasture. To track our waste, energy and water usage, we have been working with our vendors to compile information on our usages within these areas. We have undertaken a number of initiatives designed to reduce our adverse impact on the environment, including: Engaging with qualified energy professionals to conduct regular third-party inspections and provide utility and financial savings information to relevant decision makers; Constructing our facility to be LEED Silver Certified and use solar panels to significantly reduce electricity use and reduce greenhouse gas emissions; and Protecting biodiversity at our sites and in surrounding habitats. Additionally, we consider the impact that greenhouse gases can have on the communities we serve, especially on people who live in vulnerable areas. Beginning in 2021, we worked with greenhouse gas inventory experts to develop our first Scope 1, 2, and 3 emissions inventories. We are continuously researching and designing innovative ways to boost efficiency, such as utilizing high-efficiency electrical equipment including LED and motion detector lighting and high-efficiency HVAC units. We aim to use packaging that is recyclable and compostable, while prioritizing our food safety and quality standards. Our hybrid egg cartons are made from 100% recycled material, which has saved over 33,000 trees since launch. We believe that our focus on innovation, with the objective of reducing costs and improving the ecological impacts of our operations, provides a strategic benefit. Customer & Consumers We believe our customers and consumers trust our brand because we have always maintained a steadfast adherence to our values of honesty and transparency in food production. We are a company committed to deliver an exceptional, inclusive customer experience while providing a clear and accessible depiction of our principles and practices. We anticipate and respond to the needs of our customers, creating personalized and effortless experiences across all channels, and we endeavor to empower customers through a diverse mix of innovative, responsible products and services. Our Traceability product feature allows anyone to see 360° video footage of the family farm on which their eggs were laid. We strive to respond to all consumer inquiries in an hour or less. Additionally, we provide a variety of customer loyalty programs to enhance customer and consumer satisfaction. Stockholders We are committed to excellence in corporate governance practices, including an emphasis on a culture of accountability and competitive behavior in line with our mission and values. Our Code of Conduct outlines the ethical principles that help each of us make the right decisions when conducting business worldwide. | | | | | | | | |
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ENVIRONMENTAL, SOCIAL & GOVERNANCE We also believe that strong sustainability governance will support our long-term success. As a public benefit corporation, we are legally required to balance our financial interests with the best interests of our stakeholders. We believe that prioritizing the long-term viability of all stakeholders will produce stronger outcomes, for everyone, over time. Our Board and its committees help set the tone for our Company and meet regularly to review policies, current regulations and industry best practices. As part of our sustainability initiatives, our Nominating and Corporate Governance Committee receives updates from management on ESG initiatives and metrics and provides regular updates to the Board. We are keenly focused on customer privacy, cybersecurity and data integrity and management. Our risk management teams oversee compliance with applicable laws and regulations and coordinate with subject-matter experts throughout the business and external service providers to identify, monitor and mitigate client risk, including information security risk management and cyber defense programs. These teams maintain robust testing protocols and training programs and regularly provide updates to management. The Audit Committee of our Board is charged with oversight of cybersecurity matters and receives regular updates from management. We evaluate our cybersecurity readiness through internal reviews and effective 24/7 oversight. We routinely engage with our stakeholders to better understand their views on ESG matters, carefully considering the feedback we receive and acting when appropriate. For more information, please visit our corporate website at investors.vitalfarms.com. | | | | | 32 | | 2022 Proxy Statement | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g65c58.jpg)
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PROPOSAL 2: RATIFICATION OF THE SELECTION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Audit Committee of the Board has selected KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 26, 202125, 2022 and has further directed that management submit the selection of its independent registered public accounting firm for ratification by the stockholders at the Annual Meeting. KPMG LLP has audited the Company’s financial statements since 2019. Representatives of KPMG LLP are expected to be available during the Annual Meeting with the opportunity to make a statement if he or she desires and to respond to appropriate questions. Our organizational documents do not require that the stockholders ratify the selection of KPMG LLP as our independent registered public accounting firm. However, the Audit Committee of the Board is submitting the selection of KPMG LLP to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee of the Board will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee of the Board in its discretion may direct the appointment of different independent auditors at any time during the year if they determine that such a change would be in the best interests of the Company and its stockholders. Vote Required The affirmative vote of the holders of a majority of the shares present or represented by proxy and entitled to vote on the matter at the annualAnnual Meeting will be required to ratify the selection of KPMG LLP. Independent Registered Public Accounting Firm Fees The following table represents the aggregate fees billed to the Company for the fiscal years ended December 27, 202026, 2021 and December 30, 201927, 2020 by KPMG LLP, our independent registered public accounting firm. All fees described below were pre-approved by the Audit Committee. | | | | | | | | | | | Fiscal Year | | | | 2020 | | | 2019 | | Audit Fees(1) | | $ | 1,512,662 | | | $ | 1,493,500 | | Audit-related fees | | | — | | | | — | | Tax fees | | | — | | | | — | | All other fees | | | — | | | | — | | | | | | | | | | | Total Fees | | $ | 1,512,662 | | | $ | 1,493,500 | | | | | | | | | | |
| | | | | | | | | | | | | FISCAL YEAR | | | | | | | 2021 | | | 2020 | | | | | Audit Fees(1) | | | $644,330 | | | | $1,512,662 | | | | | Audit-related fees | | | — | | | | — | | | | | Tax fees | | | — | | | | — | | | | | All other fees | | | — | | | | — | | | | | Total Fees | | | $644,330 | | | | $1,512,662 | |
(1) | Audit fees relate to the audit of our annual financial statements, review of interim financial statements and assistance with registration statements filed with the SEC. In fiscal year 2020, $721,162 of the audit fees were in connection with our registration statements related to our initial public offering and our follow-on offering, including comfort letters, consents and review of documents filed with the SEC. |
Pre-Approval Policies and Procedures Our Audit Committee approves all audit and pre-approves all non-audit services provided by KPMG LLP before it is engaged by us to render non-audit services to ensure that the provision of these services does not impair the auditor’s independence. These services may include audit-related services, tax services and other non-audit services. The pre-approval of services may be delegated to one or more of the Audit Committee’s members, but the decision must be reported to the full Audit Committee at its next scheduled meeting. The pre-approval requirement does not apply with respect to non-audit services if: all such services do not, in the aggregate, amount to more than 5% of the total fees paid by us to KPMG LLP during the fiscal year in which the services are provided; such services were not recognized as non-audit services at the time of the relevant engagement; and such services are promptly brought to the attention of and approved by the Audit Committee (or its delegate) prior to the completion of the annual audit. Change in Independent Registered Accounting Firm
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In 2019, our board of directors approved the change of accountants to KPMG LLP, and we dismissed RSM US LLP on August 19, 2019.
PROPOSAL 2: RATIFICATION OF THE SELECTION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The independent auditor’s report on our consolidated financial statements prepared by RSM US LLP under auditing standards generally accepted in the United States of America for the 2018 fiscal year did not contain an adverse opinion or disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope, or accounting principles. There were (i) no disagreements with RSM US LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of RSM US LLP, would have caused RSM US LLP to make reference to the subject matter of the disagreements in connection with its report and (ii) no reportable events of the type listed in paragraphs (A) through (D) of Item 304(a)(1)(v) of Regulation S-K issued by the SEC, in connection with the audit of our financial statements for the 2018 fiscal year and the subsequent period through the replacement of RSM US LLP with KPMG LLP.
Neither we nor anyone acting on our behalf consulted with KPMG LLP at any time prior to their retention by us as our independent registered public accounting firm regarding any of the matters described in Item 304(a)(2)(i) or Item 304(a)(2)(ii) of Regulation S-K.
We have provided RSM US LLP with a copy of the disclosures set forth under the heading “Changes in Independent Registered Public Accounting Firm” included in this proxy statement, which also appeared in our Annual Report on Form 10-K for the fiscal year ended December 27, 2020. In connection with the disclosure in our Annual Report on Form 10-K, RSM US LLP furnished a letter addressed to the SEC stating that RSM US LLP agrees with statements related to them made by us under the heading “Changes in and Disagreements with Accountants on Accounting and Financial Disclosure” in the Annual Report. A copy of that letter was filed as Exhibit 16.1 to our Annual Report on Form 10-K.
Our Recommendation THE BOARD UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OF
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EXECUTIVE OFFICERS The following table sets forth information regarding our executive officers as of April 12, 2021, other than with respect to Ms. Bal, whose employment with us commenced on April 26,11, 2021: | | | | | | | | NameNAME
| | AgeAGE | | Position(s) POSITION(S) | | | | Matthew O’Hayer | | 6566 | | Founder, Executive ChairmanChairperson and Director | | | | Russell Diez-Canseco | | 4850 | | President, Chief Executive Officer and Director | | | | Jason Dale | | 4950 | | Chief Operating Officer | | | | Joanne Bal | | 5455 | | General Counsel, Corporate Secretary and Head of Environmental, Social and Governance | Scott Marcus
| | 46 | | Chief Marketing Officer
| Bo Meissner | | 5960 | | Chief Financial Officer | | | | Peter Pappas | | 5758 | | Chief Sales Officer | | | | Stephanie Coon | | 40 | | Senior Vice President, People and Strategy | | | | Kathryn McKeon | | 39 | | Chief Marketing Officer |
Biographical information for Mr. O’Hayer and Mr. Diez-Canseco is included above with the director biographies under the caption “Information About Our Continuing Directors.” Joanne Bal has served as our General Counsel, Corporate Secretary and Head of Environmental, Social and Governance since April 2021. Prior to joining us, Ms. Bal served as Vice President and Chief Counsel, Levi Strauss Americas at Levi Strauss & Co., a global apparel company, from November 2016 to April 2021. Prior to Levi Strauss, Mrs.Ms. Bal served as Managing Director, Legal Services and Segment General Counsel for Applied Materials, Inc., a leading provider of semiconductor equipment and services, from September 2010 to October 2016. Prior to that time, Ms. Bal held various legal and business roles in both public and private technology companies, including LSI Corporation (acquired by Broadcom Inc.), Navis LLC, and Identix Incorporated. Ms. Bal began her career in private practice at two internationally-recognizedinternationally recognized law firms. Ms. Bal received her J.D. from the University of Chicago Law School of Law and her B.A. in Political Economy from the University of California, Berkeley. Jason Dale has served as our Chief Operating Officer and Chief Financial Officer since January 2020. Prior to this, Mr. Dale served as our Chief Operating Officer from August 2019 to January 2020 and as our Chief Financial Officer from October 2014 to August 2019. Prior to joining us, Mr. Dale held a variety of executive management roles at Michael Angelo’s Gourmet Foods, Inc., a producer of premium, authentic frozen Italian entrees, including chief financial officerChief Financial Officer and chief operating officer.Chief Operating Officer. Mr. Dale received his B.S.B. in Accounting from the University of Phoenix. Scott Marcus has served as our Chief Marketing Officer since May 2019. Prior to this, Mr. Marcus served as our Vice President of Sales and Marketing from July 2018 to April 2019 and as our Vice President of Marketing from February 2016 to July 2018. Prior to joining us, Mr. Marcus served in various roles at Mondelēz International, Inc. (formerly Kraft Foods), an American multinational confectionery, food and beverage holding company, including marketing director for the Savory brands North America business, brand marketing director of the Ritz franchise, and senior brand manager of belVita Breakfast United States. Mr. Marcus received his M.B.A. from The Fuqua School of Business at Duke University and his B.B.A. in Marketing from The George Washington University.
Bo Meissner has served as our Chief Financial Officer since December 2020. Prior to this, Mr. Meissner served as our executive vice presidentExecutive Vice President of financeFinance from July 2020 to December 2020. Prior to joining us, from May 2016 to July 2020, Mr. Meissner served as Vice President and Chief Financial Officer of NatureSweet, a company selling greenhouse grown vegetables. Prior to NatureSweet, Mr. Meissner served in various roles at Boulder Brands, a food company, including as Senior Vice President of Finance and Treasury from December 2010 to August 2015. Mr. Meissner also served in a broad range of finance and accounting roles at Dr Pepper Snapple Group (formerly Cadbury Schweppes Americas Beverages and now part of Keurig Dr Pepper, Inc.) and at Procter & Gamble. Mr. Meissner received his M.B.A. from Queen’s University in Kingston, Canada and received his B.Sc. in Geology from Carleton University in Ottawa, Canada. Peter Pappas has served as our Chief Sales Officer since October 2020. Prior to joining us, Mr. Pappas served as Chief Commercial Officer at Califia Farms, a plant-based food and beverage company, from January 2019 to October 2020. Prior to Califia Farms, Mr. Pappas served as Executive Vice President of Sales and Operations for the Western Division of Advantage Solutions, a sales and marketing consultancy, from 2014 to October 2018. Mr. Pappas also served as Chief Customer Officer/SVP Sales & Marketing of Dean Foods, an American dairy processor, and as Vice President of U.S. Sales for MillerCoors Brewing Company, and he held positions of increasing responsibility with Pepsi Cola and PepsiCo. Mr. Pappas received his B.A. in International Relations and Business from University of California, Los Angeles. | | | | | | | | |
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EXECUTIVE OFFICERS Stephanie Coon has served as our Senior Vice President, People and Strategy since January 2022. Ms. Coon joined Vital Farms in August 2021 as our Senior Vice President, Strategy. Prior to joining us, Ms. Coon worked at KIND Snacks from October 2016 through June 2021, serving as Vice President of Strategic Development and Senior Vice President, Strategy & Execution. Prior to that time, Ms. Coon worked as Director of Strategy at The Hershey Company and as an Associate Principal at McKinsey & Company. Ms. Coon received her M.Sc. in Educational Research Methodology from the University of Oxford and both her B.A. and M.A. in Public Policy from the State University of New York at Albany. Kathryn McKeon has served as our Chief Marketing Officer since January 2022. Ms. McKeon joined Vital Farms in 2016 and has served in a number of roles with us, including Vice President of Marketing, Senior Director of Marketing, Director of Marketing and Brand Manager. Prior to joining us, Ms. McKeon worked in brand marketing for Mondelēz International, Inc. (formerly Kraft Foods). Ms. McKeon received her M.B.A. from the Stern School of Business at New York University and her B.B.A. in Marketing from The University of Texas at Austin. | | | | | 38 | | 2022 Proxy Statement | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g65c58.jpg)
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EXECUTIVE OFFICER AND DIRECTOR COMPENSATION Executive Officer Compensation
Executive Compensation Highlights | • | | Pay for Performance: 71% of CEO target compensation and 60% of non-CEO executive target compensation (on average) is variable / “at risk,” aligned to our peer group average. | |
| • | | Equity Focus: A meaningful portion of our executives’ compensation package consists of equity awards, aligning the interests of our executives and stockholders. 75% of the 2021 equity award value was granted in stock options, which focus executives on creation of long-term stockholder value. | |
| • | | Long-Term Equity Vesting: Stock options and restricted stock units awarded to our executives include long-term vesting (3 or more years), to encourage retention and executive focus on long-term performance. | |
| • | | Comprehensive Annual Review: Our Compensation Committee undertakes an annual review of our compensation strategy and competitive positioning to market, taking into account peer group compensation and compensation-related risks before approving CEO and senior management compensation. | |
| • | | Independent Compensation Committee and Independent Compensation Consultant: Our Compensation Committee consists entirely of independent directors and obtains advice from an external, independent compensation consultant. | |
Summary Compensation Table The following table sets forth information for each of the last two completed fiscal years regarding compensation awarded to or earned by our Chief Executive Officer and the two other most highly compensated executive officers, or collectively, the named executive officers, during the fiscal years indicated: | Name and Principal Position | | Year | | Salary ($)(1) | | Bonus ($) | | Option Awards ($)(2) | | Non-Equity Incentive Plan Compensation ($)(3) | | All Other Compensation ($)(4) | | Total ($) | | | | | | | NAME AND PRINCIPAL POSITION | | | YEAR | | SALARY ($)(1) | | BONUS ($) | | STOCK AWARDS ($) | | OPTION AWARDS ($)(2) | | NON-EQUITY INCENTIVE PLAN COMPENSATION ($)(3) | | ALL OTHER COMPENSATION ($)(4) | | TOTAL ($) | Russell Diez-Canseco | | 2020 | | | 391,204 | | | | — | | | 121,056 | | | 656,042 | | | 17,042 | | | 1,185,326 | | | | | 2021 | | | | | 486,346 | | | | | — | | | | | 187,498 | | | | | 562,457 | | | | | 300,000 | | | | | 17,427 | | | | | 1,553,728 | | President and Chief Executive Officer | | | 2019 | | | | 328,462 | | | | — | | | | 2,330,074 | | | | 154,808 | | | | 16,710 | | | | 2,830,053 | | | | | 2020 | | | | | 391,204 | | | | | — | | | | | — | | | | | 121,056 | | | | | 656,042 | | | | | 17,042 | | | | | 1,185,326 | | Bo Meissner(5) | | 2020 | | | 137,846 | | | | — | | | 2,615,821 | | | 100,000 | | | 5,430 | | | 2,859,097 | | | Chief Financial Officer | | | | | | | | | | | | | | | | Joanne Bal(5) | | | | | 2021 | | | | | 223,385 | | | | | — | | | | | 562,997 | | | | | 187,508 | | | | | 131,277 | | | | | 7,497 | | | | | 1,112,664 | | General Counsel, Corporate Secretary and Head of Environmental, Social and Governance | | | | | | | | | | | | | | | | | | | | | | | | | | | Peter Pappas(6) | | 2020 | | | 56,680 | | | 50,000 | | | 932,504 | | | 249,600 | | | 5,051 | | | 1,293,836 | | | | | 2021 | | | | | 329,885 | | | | | — | | | | | 74,994 | | | | | 224,978 | | | | | 118,800 | | | | | 19,707 | | | | | 768,364 | | Chief Sales Officer | | | | | | | | | | | | | | | | | | 2020 | | | | | 56,680 | | | | | 50,000 | | | | | — | | | | | 932,504 | | | | | 249,600 | | | | | 5,051 | | | | | 1,293,836 | |
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EXECUTIVE OFFICER AND DIRECTOR COMPENSATION (1) | Salary amounts represent actual amounts earned during 2020.the fiscal year ended December 26, 2021. See “—Narrative to the Summary Compensation Table—Annual Base Salary” below. |
(2) | The amounts shown for stock and option awards represent the aggregate grant date fair value of the option awards granted to our named executive officers during the years indicated as computed in accordance with Accounting Standards Codification Topic 718 (“ASC 718”). See Note 2 to Consolidated Financial Statements in our Annual Report on Form 10-K for a discussion of assumptions made by the Company in determining the aggregate grant date fair value of our option awards. Note that the amounts reported in this column reflect the accounting cost for these stock optionsawards and do not reflect the actual economic value that may be realized by the named executive officers upon the vesting of the stock options, the exercise of the stock options or the sale of the common stock underlying such stock options.officers. For additional information on these awards, please see “Outstanding Equity Awards at Fiscal Year-End.” |
(3) | See “—Narrative to Summary Compensation Table—Non-Equity Incentive Plan Compensation” below for a description of the material terms of the program pursuant to which this compensation was awarded. The amounts shown for non-equity incentive plan compensation represent amounts earned for the fiscal years presented, whether or not actually paid during such year. |
(4) | Includes companyCompany matching contributions to 401(k) plans in the amounts of $10,087, $4,932$10,700, $6,663 and $3,534$10,700, and life insurance premium payments in the amounts of $77, $52 and $77 for Mr. Diez-Canseco, Mr. MeissnerMs. Bal and Mr. Pappas, respectively.respectively, for the fiscal year ended December 26, 2021. Includes vehicle allowance of $6,000 and $7,800 for Mr. Diez-Canseco and Mr. Pappas, respectively, for the fiscal year ended December 26, 2021. |
(5) | Mr. MeissnerMs. Bal commenced employment with us in July 2020 as our Executive Vice President, Finance and became our Chief Financial Officer on December 28, 2020 at the beginning of our 2021 fiscal year.April 2021.
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(6) | Mr. Pappas commenced employment with us in October 2020. |
Narrative to the Summary Compensation Table Annual Base Salary Our named executive officers receive a base salary to compensate them for services rendered to us. The base salary payable to each named executive officer is intended to provide a fixed component of compensation reflecting the executive’s skill set, experience, role and responsibilities. None of our named executive officers is currently party to an employment agreement or other agreement or arrangement that provides for automatic or scheduled increases in base salary. See “—Employment Arrangements” for additional information. Non-Equity Incentive Plan Compensation We develop a performance-based bonus program annually. Under the 2020 annual performance bonus2021 program, each named executive officer was eligible to be considered for an annual performance bonus based on (1) the individual’s target bonus, as a percentage of base salary, and (2) the percentage attainment of our 20202021 corporate goals established by our Boardthe Compensation Committee in its sole discretion and communicated to each officer. Each named executive officer is assigned a target performance bonus expressed as a percentage of histheir base salary, which for 20202021 was 100% for Mr. Diez-Canseco and 60% for of each of Mr. MeissnerMs. Bal and Mr. Pappas, prorated forPappas. For the portion of thefiscal year each was employed by the company. For 2020,ended December 26, 2021, the Compensation Committee determined that each of Mr. Diez-Canseco, Ms. Bal and Mr. Pappas was entitled to 168%60% of his or her target bonus. Eachbonus; provided that Ms. Bal’s bonus would be equal to 60% of Mr. Meissner and Mr. Pappas received a performance bonus pursuant to theirher base salary actually earned in the fiscal year ended December 26, 2021, in accordance with the terms of Ms. Bal’s offer letters, each as described below under “—Employment Arrangements.”letter. Accordingly, our BoardCompensation Committee approved performance bonuses for each of the named executive officers as reflected in the column of the Summary Compensation Table above entitled “Non-Equity“Non-Equity Incentive Plan Compensation.” Equity-Based Incentive Awards Our equity award program is the primary vehicle for offering long-term incentives to our executives. We believe that equity awards provide our executives with a strong link to our long-term performance, create an ownership culture and help to align the interests of our executives and our stockholders. We have used stock option grants, and beginning in 2021, stock option grants in combination with restricted stock unit grants, for this purpose because we believe they are an effective means by which to align the long-term interests of our executive officers with those of our stockholders. The use of options also can provide tax and other advantages to our executive officers relative to other forms of equity compensation. We believe that our equity awards are an important retention tool for our executive officers, as well as for our other employees. We award equity grants broadly to our employees, including to our non-executive employees. Grants to our executives and other employees are made at the discretion of the Board and are generally made upon commencement of employment, promotion or annually during the first quarter of each year. In August 2020, in connection with the completion of our IPO, the Board granted options to purchase shares of common stock with an exercise price equal to the initial public offering price of $22.00 per share. Mr. Diez-Canseco received 18,750 options to purchase shares of common stock and Mr. Meissner received 399,777 options to purchase shares of common stock. Mr. Meissner’s grant included his initial grant provided upon his commencement of employment. See “—Employment Arrangements” for additional information.
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EXECUTIVE OFFICER AND DIRECTOR COMPENSATION Outstanding Equity Awards at Fiscal Year-End The following table provides information regarding equity awards held by the named executive officers that were outstanding as of December 27, 2020:26, 2021: | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards(1) | | Name | | Grant Date | | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | Russell Diez-Canseco | | | 3/14/2014 | | | | 12,300 | | | | — | | | $ | 0.67 | | | | 3/14/2024 | | Chief Executive Officer | | | 9/26/2014 | | | | 216,074 | | | | — | | | $ | 1.43 | | | | 9/26/2024 | | | | | 5/22/2015 | | | | 123,000 | | | | — | | | $ | 1.43 | | | | 5/22/2025 | | | | | 1/1/2016 | | | | 98,400 | | | | — | | | $ | 3.25 | | | | 1/1/2026 | | | | | 12/1/2016 | | | | 137,760 | | | | 34,440 | (2) | | $ | 3.25 | | | | 12/1/2026 | | | | | 5/22/2018 | | | | 88,560 | | | | 132,840 | (3) | | $ | 3.67 | | | | 5/22/2028 | | | | | 8/22/2019 | | | | 209,870 | | | | 839,482 | (2) | | $ | 5.33 | | | | 8/22/2029 | | | | | 7/30/2020 | | | | — | | | | 18,750 | (4) | | $ | 22.00 | | | | 7/30/2030 | | Bo Meissner | | | 7/30/2020 | | | | — | | | | 399,777 | (5) | | $ | 22.00 | | | | 7/30/2030 | | Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | Peter Pappas | | | 10/26/2020 | | | | — | | | | 91,972 | (4) | | | 34.09 | | | | 10/26/2030 | | Chief Sales Officer | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | OPTION AWARDS(1) | | | STOCK AWARDS | | | | | | | | | | NAME | | GRANT DATE | | | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) EXERCISABLE | | | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) UNEXERCISABLE | | | OPTION EXERCISE PRICE ($) | | | OPTION EXPIRATION DATE | | | NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED (#) | | | MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED ($)(6) | | Russell Diez-Canseco | | | 9/26/2014 | | | | 137,575 | | | | — | | | $ | 1.43 | | | | 9/26/2024 | | | | | | | | | | | | | 5/22/2015 | | | | 34,940 | | | | — | | | $ | 1.43 | | | | 5/22/2025 | | | | | | | | | | | | | 1/1/2016 | | | | 39,360 | | | | — | | | $ | 3.25 | | | | 1/1/2026 | | | | | | | | | | | | | 12/1/2016 | | | | 99,685 | | | | — | | | $ | 3.25 | | | | 12/1/2026 | | | | | | | | | | | | | 5/22/2018 | | | | 132,840 | | | | 88,560(2) | | | $ | 3.67 | | | | 5/22/2028 | | | | | | | | | | | | | 8/28/2019 | | | | 419,740 | | | | 629,612(3) | | | $ | 5.33 | | | | 8/28/2029 | | | | | | | | | | | | | 7/30/2020 | | | | 8,202 | | | | 10,548(4) | | | $ | 22.00 | | | | 7/30/2030 | | | | | | | | | | | | | 3/22/2021 | | | | — | | | | 71,564(5) | | | $ | 25.78 | | | | 3/22/2031 | | | | | | | | | | | | | 3/22/2021 | | | | | | | | | | | | | | | | | | | | 7,273(5) | | | | 125,896 | | Joanne Bal | | | 4/26/2021 | | | | — | | | | 72,486(5) | | | $ | 25.56 | | | | 4/26/2031 | | | | | | | | | | | | | 4/26/2021 | | | | | | | | | | | | | | | | | | | | 7,336(5) | | | | 126,986 | | Peter Pappas | | | 10/26/2020 | | | | 22,993 | | | | 68,979(4) | | | $ | 34.09 | | | | 10/26/2030 | | | | | | | | | | | | | 3/22/2021 | | | | — | | | | 28,625(5) | | | $ | 25.78 | | | | 3/22/2031 | | | | | | | | | | | | | 3/22/2021 | | | | | | | | | | | | | | | | | | | | 2,909(5) | | | | 50,355 | |
(1) | Equity awards granted prior to July 30, 2020 were granted under our 2013 Incentive Plan (“2013 Plan”) and equity awards granted on or after July 30, 2020 were granted under our 2020 Equity Incentive Plan (“2020 Plan”). Our 2020 Plan, which became effective on July 30, 2020, the day immediately prior to the date on which our registration statement in connection with our initial public offering was declared effective by the SEC. Our 2013 Plan was suspended when our 2020 Plan became effective on July 30, 2020; however, awards outstanding under our 2013 Plan continue in full effect in accordance with their existing terms. All vesting is subject to the individual’s continuous service with us through the vesting dates. |
(2) | The shares subject to this award vest in equal annual installments over five years from the date of grant.January 1, 2018. |
(3) | The shares subject to this award vest in equal annual installments over five years from January 1, 2018.the date of grant. |
(4) | The shares subject to this award vest in equal annual installments over four years from the date of grant subject to the executive officer’s continued service.grant. |
(5) | The shares subject to this award vest in equal annual installments over fivethree years from July 24, 2020 subject to the executive officer’s continued service.date of the grant. |
(6) | Market values are calculated based on the closing market price of our common stock as reported on the Nasdaq Global Select Market on December 23, 2021, which was $17.31 per share. |
Employment Arrangements Below are descriptions of our employment agreements and arrangements with our named executive officers. The agreements generally provide for at-will employment without any specific term and set forth the named executive officer’s initial base salary, annual target bonus and severance benefits upon a qualifying termination of employment or change in control of our company.Company. Each named executive officer is also eligible to participate in all employee benefit plans that are generally available to our employees. Furthermore, each of our named executive officers has executed our standard form of proprietary information and inventions assignment agreement. The key terms of the employment agreements with our named executive officers, including potential payments upon termination or change in control, are described below. Russell Diez-Canseco We maintain an employment agreement with Russell Diez-Canseco, originally entered into in October 2018, while Mr. Diez-Canseco served as our President and Chief Operating Officer, which was most recently amended and restated in July 2020.April 2022. Pursuant to the amended and restated employment agreement, Mr. Diez-Canseco is entitled to a base salary of $350,000 | | | | | 42 | | 2022 Proxy Statement | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g65c58.jpg)
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EXECUTIVE OFFICER AND DIRECTOR COMPENSATION $625,000 per year (which was subsequently increased by our board of directors to $450,000 on July 30, 2020).year. Mr. Diez-Canseco is eligible to receive an annual bonus payment as may bebased on performance objectives determined by our board of directorsBoard in its sole discretion, based uponwith a target bonus amount of 100% of base salary. We also provide Mr. Diez-Canseco with a recurring monthly payment of $500 to cover expenses related to his performance and other criteria as may be established by the board from time to time.personal automobile, which he uses for work-related travel. Mr. Diez-Canseco must provide to us two weeks’ written notice of his resignation other than for good reason and, in the event of our termination of Mr. Diez-Canseco’s employment without cause, we must either provide two weeks’ written notice of termination or payment in lieu of two weeks’ notice. We may terminate Mr. Diez-Canseco immediately for cause and upon his death or disability. Regardless of the manner in which he is terminated, Mr. Diez-Canseco is entitled to receive amounts earned during his term of service, including salary, unreimbursed expenses incurred by him on our behalf and accrued and unused vacation pay in accordance with our normal policies and practice. Upon termination by Mr. Diez-Canseco for good reason or termination by usthe Company without cause, in each case within the 12-month period following the closing of a change in control of the Company (a “Change in Control Period”), Mr. Diez-Canseco shall be eligible to receive (i) severance payments, in the form of salary continuation, in an amount equal to 24 months of then-current base salary; (ii) the amount of Mr. Diez-Canseco’s target bonus under the Company’s annual bonus program; (iii) the pro rata portion of Mr. Diez-Canseco’s current target bonus, prorated to reflect the partial year of service; (iv) the prior fiscal year bonus based on actual performance, if unpaid at the time of termination; (v) reimbursement of COBRA premiums for a period of up to 18 months; (vi) 100% acceleration of unvested equity awards (including those that vest upon performance criteria); and (vii) a three-month post-termination exercise period for any vested stock options. Upon termination by Mr. Diez-Canseco for good reason or upon histermination by the Company without cause (other than during a Change in Control Period), Mr. Diez-Canseco shall be eligible to receive (i) payments, in the form of salary continuation, in an amount equal to 24 months of then-current base salary; (ii) the prior fiscal year bonus based on actual performance, if unpaid at the time of termination; (iii) reimbursement of COBRA premiums for a period of up to 18 months; and (iii) a three-month post-termination exercise period for any vested stock options. Upon Mr. Diez-Canseco’s death or disability, Mr. Diez-Canseco shall be eligible to receive (i) payments, in the following severance benefits: a lump sumform of salary continuation, in an amount equal to 150%24 months of his annualMr. Diez-Canseco’s then-current base salary, orsalary; (ii) the Base Salary Severance;
onepro rata portion of Mr. Diez-Canseco’s current bonus, prorated to reflect the partial year of service based on actual performance; (iii) the prior fiscal year bonus based on actual performance, if unpaid at the time of termination; (iv) reimbursement of COBRA premiums for continued health benefits under COBRAa period of up to 18 months; (v) 100% acceleration of unvested equity awards (including those that vest upon performance criteria); and (vi) a post-termination exercise period of 12 months (in the case of disability) or 18 months (in the case of death) for any vested stock options.
Upon termination of Mr. Diez-Canseco’s employment due to his retirement, Mr. Diez-Canseco shall be eligible to receive (i) the prior fiscal year bonus based on actual performance, if unpaid at the level existingtime of termination; (ii) the pro rata portion of Mr. Diez-Canseco’s current bonus, prorated to reflect the partial year of service based on the termination date;actual performance; and we will permit Mr. Diez-Canseco to use shares to pay the (iii) a three-month post-termination exercise priceperiod for allany vested options owned by him on the termination date.stock options.
These severance benefits described above are conditioned upon Mr. Diez-Canseco’s compliance with his post-termination obligations under his employment agreement and upon his execution, delivery and non-revocation of a release of claims in favor of the company.Company. The employment agreement also contains intellectual property assignments and post-termination non-disclosure, non-solicitation, non-competition and non-disparagement obligations. For purposes of Mr. Diez-Canseco’s employment agreement, “cause” means a good faith finding by the board of directors that (A) Mr. Diez-Canseco failed to substantially perform his duties and obligations to the company (other than a failure resulting from the death or incapacity due to disability) subject to a notice and cure opportunity; (B) Mr. Diez-Canseco has committed a crime involving fraud, dishonesty, theft or breach of trust; (C) Mr. Diez-Canseco has been convicted of a felony involving moral turpitude; (D) Mr. Diez-Canseco intentionally and willfully engaged in misconduct that is demonstrably and materially injurious to the company, monetarily or otherwise; (E) Mr. Diez-Canseco materially breached his employment agreement or any other agreement with us regarding his intellectual property rights; (F) Mr. Diez-Canseco willfully violated state or federal laws or regulations in connection with his employment to our material detriment; or (G) Mr. Diez-Canseco willfully failed to cooperate with a bona fide internal investigation or an investigation by regulatory or law enforcement authorities, after being instructed by us to cooperate, or willfully destroyed or failed to preserve documents or other materials relevant to such investigation.
For purposes of Mr. Diez-Canseco’s employment agreement, “good reason” means (A) a material reduction in salary; (B) any material diminution in the authority or responsibilities of Mr. Diez-Canseco with respect to the our business; (C) an office relocation farther than 50 miles from our principal executive offices; or (D) a material breach by us of the employment agreement.
Bo MeissnerJoanne Bal
We entered into an offer letter agreement with Mr. MeissnerMs. Bal in connection with hisher commencement of employment with us as our Executive Vice President, FinanceGeneral Counsel, Corporate Secretary and Head of Environmental, Social and Governance in July 2020.April 2021. Pursuant to the offer letter agreement, Mr. MeissnerMs. Bal was entitled to an initial base salary of $320,000$330,000 per year (which was most recently increased by the compensation committee of our Board to $350,000 on March 3, 2022), an initial target annual performance bonus of 60% of base salary, and an initial stock option grant to purchase 162,511 shares of our common stock with a | | | | | | | | |
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common stock, which was issued in connection with the pricingEXECUTIVE OFFICER AND DIRECTOR COMPENSATION
total grant date value of our initial public offering. Mr. Meissner’s$750,000. Ms. Bal’s offer letter agreement provided that for 2020, Mr. Meissner’s2021, Ms. Bal’s annual performance bonus would be determined by the Board but would be no less than 90% and no more than 100% of 60% of Mr. Meissner’sMs. Bal’s base salary, prorated for the time that heshe was employed during 2020. the fiscal year ended December 26, 2021. In recognitionaddition to her offer letter agreement, Ms. Bal is party to our Change in Control Severance Plan. Pursuant to the Change in Control Severance Plan, upon either a termination the Company without cause or resignation for good reason (either, a “Covered Termination”) within the 12-month period following the closing of Mr. Meissner’s servicea change in 2020,control of the Compensation Committee approvedCompany (a “Severance Plan Change in Control Period”), Ms. Bal will be eligible to receive (i) severance payments, in the form of salary continuation, in an aggregate performance bonus inamount equal to (a) 12 months of Ms. Bal’s then-current base salary, plus (b) the amount of $100,000Ms. Bal’s target bonus under the Company’s annual bonus program; (ii) the prior fiscal year bonus based on actual performance, if unpaid at the time of termination; (iii) the pro rata portion of Ms. Bal’s current target bonus, prorated to reflect the partial year of service; (iv) reimbursement of COBRA premiums for 2020. a period of up to 12 months; (v) 100% acceleration of unvested equity awards (including those that vest upon satisfaction of performance criteria); and (vi) a three-month post-termination exercise period for any vested stock options granted on or after the effective date of the Change in Control Severance Plan. Pursuant to his offer letter, Mr. Meissner assumed the positionChange in Control Severance Plan, if Ms. Bal is subject to a Covered Termination other than during a Severance Plan Change of Chief Financial OfficerControl Period, Ms. Bal will be eligible to receive (i) severance payments, in the form of salary continuation, in an amount equal to 12 months of her then-current base salary; (ii) the prior fiscal year bonus based on actual performance, if unpaid at the time of termination; (iii) reimbursement of COBRA premiums for a period of up to 12 months; and (iv) a three-month post-termination exercise period for any vested stock options granted on or after the effective December 28, 2020.date of the Change in Control Severance Plan. Pursuant to the Change in Control Severance Plan, upon Ms. Bal’s death or disability, Ms. Bal shall be eligible to receive (i) the pro rata portion of Ms. Bal’s current bonus, prorated to reflect the partial year of service, based on actual performance; (ii) the prior fiscal year bonus based on actual performance, if unpaid at the time of termination; (iii) 100% acceleration of unvested equity awards (including those that vest upon satisfaction of performance criteria); and (iv) a post-termination exercise period of 12 months (in the case of disability) or 18 months (in the case of death) for any vested stock options granted on or after the effective date of the Change in Control Severance Plan. Peter Pappas We entered into an offer letter agreement with Mr. Pappas in connection with his commencement of employment with us as our Chief Sales Officer in October 2020. Pursuant to the offer letter agreement, Mr. Pappas was entitled to an initial base salary of $320,000 per year (which was most recently increased by the compensation committee of our Board to $350,000 on March 3, 2022), a one-time sign-on bonus of $50,000 (which is subject(subject to prorated repayment if Mr. Pappas resignsresigned from employment prior to the twelve-month anniversary of his start date), an initial target annual performance bonus of 60% of base salary, and an initial stock option grant to purchase 91,972 shares of our common stock. Mr. Pappas’ offer letter agreement provided that for 2020, Mr. Pappas’ annual performance bonus would be determined by the Board but would be no less than 130% and no more than 130% of 60% of Mr. Pappas’ base salary for the full calendar year 2020. We also provide Mr. Pappas with a recurring monthly payment of $650 to cover expenses related to his personal automobile, which he uses for work-related travel. In addition to his offer letter agreement, Mr. Pappas is party to our Change in Control Severance Plan. Pursuant to the Change in Control Severance Plan, upon a Covered Termination during a Severance Plan Change in Control Period, Mr. Pappas will be eligible to receive (i) severance payments, in the form of salary continuation, in an amount equal to (a) 12 months of Mr. Pappas’ then-current base salary, plus (b) the amount of Mr. Pappas’ target bonus under the Company’s annual bonus program; (ii) the prior fiscal year bonus based on actual performance, if unpaid at the time of termination; (iii) the pro rata portion of Mr. Pappas’ current target bonus, prorated to reflect the partial year of service; (iv) reimbursement of COBRA premiums for a period of up to 12 months; (v) 100% acceleration of unvested equity awards (including those that vest upon satisfaction of performance criteria); and (vi) a three-month post-termination exercise period for any vested stock options granted on or after the effective date of the Change in Control Severance Plan. | | | | | 44 | | 2022 Proxy Statement | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g65c58.jpg)
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EXECUTIVE OFFICER AND DIRECTOR COMPENSATION Pursuant to the Change in Control Severance Plan, if Mr. Pappas is subject to a Covered Termination other than during a Severance Plan Change of Control Period, Mr. Pappas will be eligible to receive (i) severance payments, in the form of salary continuation, in an amount equal to 12 months of his then-current base salary; (ii) the prior fiscal year bonus based on actual performance, if unpaid at the time of termination; (iii) reimbursement of COBRA premiums for a period of up to 12 months; and (iv) a three-month post-termination exercise period for any vested stock options granted on or after the effective date of the Change in Control Severance Plan. Pursuant to the Change in Control Severance Plan, upon Mr. Pappas’ death or disability, Mr. Pappas shall be eligible to receive (i) the pro rata portion of Mr. Pappas’ current bonus, prorated to reflect the partial year of service, based on actual performance; (ii) the prior fiscal year bonus based on actual performance, if unpaid at the time of termination; (iii) 100% acceleration of unvested equity awards (including those that vest upon satisfaction of performance criteria); and (iv) a post-termination exercise period of 12 months (in the case of disability) or 18 months (in the case of death) for any vested stock options granted on or after the effective date of the Change in Control Severance Plan. Health and Welfare and Retirement Benefits; Perquisites All of our current named executive officers are eligible to participate in our employee benefit plans, including our medical, dental, vision, disability and life insurance plans, in each case on the same basis as all of our other employees. We generally do not provide perquisites or personal benefits to our named executive officers, except in limited circumstances. 401(k) Plan Our named executive officers are eligible to participate in a defined contribution retirement plan that provides eligible U.S. employees with an opportunity to save for retirement on a tax advantaged basis. Eligible employees may defer eligible compensation on a pre-tax or after-tax (Roth) basis, up to the statutorily prescribed annual limits on contributions under the Code. Contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participants’ directions. We currently make matching contributions into the 401(k) plan on behalf of participants equal to 100% on participant contributions up to 3% of their compensation. Participants are immediately and fully vested on all contributions. The 401(k) plan is intended to be qualified under Section 401(a) of the Code with the 401(k) plan’s related trust intended to be tax exempt under Section 501(a) of the Code. As a tax-qualified retirement plan, contributions to the 401(k) plan (except for Roth contributions) and earnings on those contributions are not taxable to the employees until distributed from the 401(k) plan. Our board of directorsBoard may elect to adopt qualified or nonqualified benefit plans in the future, if it determines that doing so is in our best interests. Director Compensation
Cash and Equity Compensation We maintain a non-employee director compensation policy, which provides that each of our non-employee directors (that being, each of our directors other than Mr. Diez-Canseco and Mr. O’Hayer) will receive the following compensation for service on our Board: an annual cash retainer of $40,000; an additional annual cash retainer of $20,000 for service as lead independent director; an additional annual cash retainer of $10,000, $7,500 and $5,000 for service as a member of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, respectively; an additional annual cash retainer of $20,000, $15,000 and $10,000 for service as chairmanchairperson of the Audit Committee, chairmanchairperson of the Compensation Committee and chairmanchairperson of the Nominating and Corporate Governance Committee, respectively (in lieu of the committee member retainer above); an initial restricted stock unit award granted at the time a non-employee director first joins our Board, covering the number of shares equal to $120,000 divided by the closing sales price of our common stock on the grant date, vesting in three equal annual installments; and | | | | | | | | |
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EXECUTIVE OFFICER AND DIRECTOR COMPENSATION an annual restricted stock unit award covering the number of shares equal to $80,000 divided by the closing sales price of our common stock on the date of the applicable annual meeting, vesting on the earlier of (i) the one-year anniversary of the date of grantgrant; and (ii) the day before the next annual meeting. Each non-employee director may elect to convert his or her cash compensation under the compensation policy into an award of restricted stock units, which we refer to as the retainer grant. If a non-employee director timely makes this election, each such retainer grant will be automatically granted on the first business day following the date the corresponding cash compensation otherwise would be paid under the policy and will cover a number of shares of our common stock equal to (A) the aggregate amount of the corresponding cash compensation otherwise payable to the non-employee director divided by (B) the closing sales price per share of our common stock on the date the corresponding cash compensation otherwise would be paid (or, if such date is not a business day, on the first business day thereafter), rounded down to the nearest whole share. In addition, each retainer grant will be fully vested on the grant date. Director Compensation The following table sets forth information regarding the compensation earned for service on the Board by our non-employee directors during the year ended December 27, 2020. Mr. Amoo-Gottfried joined the Board in January 2021 and received no compensation from us during the year ended December 27, 2020.26, 2021. Directors who are also our employees, such as Mr. Diez-Canseco our chief executive officer, also serves on our Board but receivesand Mr. O’Hayer, receive no additional compensation for their service as directors and are not set forth in connection with such service.the table below. | | | | | | | | | | | | | | | | | Name | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($) | | | Option Awards(1)(2) ($) | | | Total ($) | | Brent Drever | | | 20,604 | | | | 282,075 | | | | — | | | | 302,679 | | Glenda Flanagan | | | 16,484 | | | | 282,075 | | | | — | | | | 298,559 | | Kelly Kennedy | | | 64,031 | | | | 282,075 | | | | 18,819 | | | | 364,925 | | Karl Khoury | | | 23,695 | | | | 282,075 | | | | — | | | | 305,770 | | Denny Marie Post | | | 61,160 | | | | 282,075 | | | | 18,819 | | | | 362,054 | | Gisel Ruiz | | | 35,662 | | | | 282,075 | | | | 76,358 | | | | 394,095 | |
| | | | | | | | | | | | | | | | | | | | | | NAME | | FEES EARNED OR PAID IN CASH ($) | | | STOCK AWARDS ($)(1)(2) | | | OPTION AWARDS ($)(2) | | | TOTAL ($) | | Kofi Amoo-Gottfried | | | 44,135 | | | | 199,994 | | | | — | | | | 244,129 | | Brent Drever | | | 53,173 | | | | 80,007 | | | | — | | | | 133,180 | | Glenda Flanagan | | | 40,000 | | | | 80,007 | | | | — | | | | 120,007 | | Kelly Kennedy | | | 60,685 | | | | 80,007 | | | | — | | | | 140,692 | | Karl Khoury | | | 57,500 | | | | 80,007 | | | | — | | | | 137,507 | | Denny Marie Post | | | 69,604 | | | | 80,007 | | | | — | | | | 149,611 | | Gisel Ruiz | | | 65,000 | | | | 80,007 | | | | — | | | | 145,007 | |
(1) | The amounts reported in this column reflectshown for stock awards represent the aggregate grant date fair value of the stock and option awards granted to our non-employeedirectors during the years indicated as computed in accordance with ASC Topic 718. See Note 2 to Consolidated Financial Statements in our Annual Report on Form 10-K for a discussion of assumptions made by the Company in determining the aggregate grant date fair value of our awards. Note that the amounts reported in this column reflect the accounting cost for these awards and do not reflect the actual economic value that may be realized by the non-employeedirectors upon the vesting of the awards, the exercise of the stock options or the sale of the common stock underlying such awards. |
(2) | The following table provides information regarding the aggregate number of stock and option awards granted to our non-employee directors that were outstanding as of December 27, 2020:26, 2021: |
| Name | | Stock Awards (#) | | | Option Awards (#) | | | | | | | NAME | | | STOCK AWARDS (#) | | | OPTION AWARDS (#) | | Kofi Amoo-Gottfried | | | | 8,259 | | | | — | | Brent Drever | | | 7,500 | | | | — | | | | 8,471 | | | | — | | Glenda Flanagan | | | 7,500 | | | | — | | | | 8,471 | | | | — | | Kelly Kennedy | | | 7,500 | | | | 26,141 | | | | 8,471 | | | | 26,141 | | Karl Khoury | | | 7,500 | | | | — | | | | 8,471 | | | | — | | Denny Marie Post | | | 7,500 | | | | 26,141 | | | | 8,471 | | | | 26,141 | | Gisel Ruiz | | | 7,500 | | | | 17,136 | | | | 8,471 | | | | 17,136 | |
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EXECUTIVE OFFICER AND DIRECTOR COMPENSATION Limitations on Liability and Indemnification Matters Our amended and restated certificate of incorporation contains provisions that limit the liability of our current and former directors for monetary damages to the fullest extent permitted by Delaware law. Delaware law provides that directors of a corporation will not be personally liable for monetary damages for any breach of fiduciary duties as directors, except liability for: | (1) | any breach of the director’s duty of loyalty to the corporation or its stockholders; |
| (2) | any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; |
| (3) | unlawful payments of dividends or unlawful stock repurchases or redemptions; or |
| (4) | any transaction from which the director derived an improper personal benefit. |
Such limitation of liability does not apply to liabilities arising under federal securities laws and does not affect the availability of equitable remedies such as injunctive relief or rescission. Our amended and restated certificate of incorporation authorizes us to indemnify our directors, officers, employees and other agents to the fullest extent permitted by Delaware law. Our amended and restated bylaws provides that we are required to indemnify our directors and officers to the fullest extent permitted by Delaware law and may indemnify our other employees and agents. Our amended and restated bylaws will also provide that, on satisfaction of certain conditions, we will advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding, and permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in that capacity regardless of whether we would otherwise be permitted to indemnify him or her under the provisions of Delaware law. We have entered and expect to continue to enter into agreements to indemnify our directors, executive officers and other employees as determined by our board of directors.Board. With certain exceptions, these agreements provide for indemnification for related expenses including attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in any action or proceeding. We believe these provisions in our amended and restated certificate of incorporation and amended and restated bylaws and these indemnification agreements are necessary to attract and retain qualified persons as directors and officers. We also maintain customary directors’ and officers’ liability insurance. The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions. Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors, executive officers or persons controlling us, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. Rule 10b5-1 Sales Plans Our directors and officers may adopt written plans, known as Rule 10b5-1 plans, in which they will contract with a broker to buy or sell shares of our common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades under parameters established by the director or officer when entering into the plan, without further direction from them. The director or officer may amend a Rule 10b5-1 plan in some circumstances and may terminate a plan at any time. Our directors and executive officers may also buy or sell additional shares outside of a Rule 10b5-1 plan when they do not possess of material nonpublic information, subject to compliance with the terms of our insider trading policy. | | | | | | | | |
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EQUITY COMPENSATION PLAN INFORMATION The following table provides certain information with respect to all of our equity compensation plans in effect as of December 27, 2020.26, 2021. | | | | | | | | | | | | | Plan Category | | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)(#) | | | Weighted-average exercise price of outstanding options, warrants and rights (b)($) | | | Number of securities remaining available for issuance under equity compensation plans (excluding securities reflected in column (a)) (c)(#) | | Equity compensation plans approved by security holders: | | | | | | | | | | | | | 2013 Incentive Plan | | | 4,883,052 | | | | 3.69 | | | | — | (1) | 2020 Equity Incentive Plan | | | 932,632 | | | | 23.55 | (2) | | | 7,615,143 | (3) | 2020 Employee Stock Purchase Plan | | | — | | | | — | | | | 900,000 | (4) | Equity compensation plans not approved by security holders | | | — | | | | — | | | | — | | | | | | | | | | | | | | | Total | | | 5,815,684 | | | | | | | | 8,515,143 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | PLAN CATEGORY | | NUMBER OF SECURITIES TO BE ISSUED UPON EXERCISE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (A)(#) | | | WEIGHTED AVERAGE EXERCISE PRICE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (B)($) | | | NUMBER OF SECURITIES REMAINING AVAILABLE FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS (EXCLUDING SECURITIES REFLECTED IN COLUMN (A)) (C)(#) | | Equity compensation plans approved by security holders: | | | | | | | | | | | | | 2013 Incentive Plan | | | 3,578,112 | | | | 3.83 | | | | —(1) | | 2020 Equity Incentive Plan | | | 1,456,788 | | | | 21.87(2) | | | | 8,698,747(3) | | 2020 Employee Stock Purchase Plan (“ESPP”) | | | — | | | | — | | | | 1,294,440(4) | | Equity compensation plans not approved by security holders | | | — | | | | — | | | | — | | Total | | | 5,034,900 | | | | | | | | 9,993,187 | |
(1) | Following the adoption of the 2020 Plan, no additional stock awards have been or will be granted under the 2013 Plan. Any shares becoming available under the 2013 Plan by repurchase, forfeiture, expiration or cancellation will become available for grant under the 2020 Plan. |
(2) | The weighted average exercise price is calculated based solely on outstanding stock options and does not take into account shares of common stock underlying restricted stock units, which have no exercise price. |
(3) | The number of shares of common stock reserved for issuance under the 2020 Plan will automatically increase on January 1 of each year by 4% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by our Board (which may be zero). Pursuant to the terms of the 2020 Plan, the number of shares available under the 2020 Plan was increased by 1,577,7611,619,758 shares effective January 1, 2021.2022. |
(4) | The number of shares of common stock reserved for issuance under the ESPP will automatically increase on January 1 of each year by the lesser of (i) 1% of the outstanding number of shares of common stock on the immediately preceding December 31 and (ii) 900,000, or such lesser number of shares as determined by the Company’s board of directors.Board. Pursuant to the terms of the ESPP, the number of shares available under the ESPP increased by 394,440404,939 shares effective January 1, 2021.2022. |
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TRANSACTIONS WITH RELATED PERSONS Other than compensation arrangements for
Certain Related-Party Transactions Below are our directors and executive officers, participation in our IPO and participation in our secondary follow-on offering in November 2020, below we describerelated party transactions since December 30, 201928, 2020 to which we werehave been a party or will be a party, other than compensation, termination, change in control and other arrangements, which are described in the sections titled “Executive Officer and Director Compensation,” in which: the amounts involved exceeded or will exceed $120,000; and any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of, or person sharing the household with, the foregoing persons, had or will have a direct or indirect material interest. Certain Related-Party Transactions
Participation in Initial Public Offering and Secondary Follow-On Offering
In connection with our initial public offering, which was completed in August 2020, Ms. Ruiz purchased 9,000 shares of common stock offered by us, and Mr. Khoury purchased 4,000 shares of common stock offered by us. Such purchases were made through the underwriters at the initial public offering price of $22.00 per share for an aggregate purchase price of $286,000.
Additionally, in connection with both our initial public offering and our secondary follow-on offering in November 2020, certain of our directors, executive officers and holders of 5% or more of our capital stock sold shares of common stock, as follows:
| | | | | | | | | | | Number of Shares Sold | | Name of Selling Stockholder | | Initial Public Offering | | | Secondary Follow- On Offering | | Jason Jones | | | 913,122 | | | | — | | Bowie Strategic Investments, Inc. | | | 421,337 | | | | 1,354,684 | | Entities affiliated with Manna Tree Partners | | | 281,500 | | | | 1,000,000 | | Entities affiliated with SJF Ventures | | | 286,014 | | | | 425,000 | | Entities affiliated with Sunrise Strategic Partners | | | 1,088,697 | | | | — | | Arborview Capital Partners LP | | | 227,749 | | | | 250,000 | | Matthew O’Hayer | | | 1,517,105 | | | | — | |
All of these shares were sold to the public at the corresponding public offering price, and the selling stockholders paid all applicable per share underwriting fees and commissions to the underwriters. We received no proceeds from the sale of these shares by the selling stockholders.
Guarantor Warrant
Mr. O’Hayer, our Executive Chairman, guaranteed Vital Farms’ obligations under a line of credit agreement that Vital Farms entered into in 2015 and that matured and was repaid in full in 2017. In connection with this guarantee, we issued Mr. O’Hayer a warrant to purchase 196,800 shares of Vital Farms common stock at an exercise price of $1.43 per share. The warrant expired on the earlier of June 12, 2020 or the completion of our IPO. Mr. O’Hayer exercised this warrant in full in June 2020, resulting in net proceeds to Vital Farms of approximately $282,000.
Relationship with Whole Foods We serve the majority of our natural channel retail customers through food distributors, such as US Foods, which purchases, stores, sells and delivers our products to Whole Foods, and United Natural Foods, Inc. (“UNFI”), which was Whole Foods’ distributor through March 2020. As a result, we are not able to precisely attribute our net revenue to Whole Foods. In the fiscal year 2020,ended December 26, 2021, UNFI accounted for approximately 15%18% of our net revenue and US Foods, Inc. accounted for approximately 18%14% of our net revenue. We rely on third-party data and internal analysis to calculate the portion of retail sales attributable to Whole Foods. Based on this third-party data and internal analysis, Whole Foods accounted for approximately 28%25% of our retail sales in the fiscal year 2020.ended December 26, 2021. We have also entered into certain chargeback and vendor agreements with Whole Foods. Our director Glenda Flanagan, isa member of our Board, was, prior to February 2022, an Executive Vice President and Senior Advisor at Whole Foods. Agreements with Sandpebble Builders Preconstruction In September 2016, we entered into a consulting contract with Sandpebble Builders Preconstruction, Inc. (“Sandpebble”) for project management services for our initial construction of Egg Central Station, including in relation to design, procurement, scheduling, site control and certifications. In 2019, we entered into a subsequent consulting contract with Sandpebble for similar project management services in connection with our expansion of Egg Central Station. Victor Canseco, the owner and principal of Sandpebble, is the father of Russell Diez-Canseco, our President, Chief Executive Officer and a member of our Board. Pursuant to our consulting agreements with Sandpebble, we paid Sandpebble approximately $842,000$1,037,000 in the fiscal year 2020.ended December 26, 2021. Director Loans
In February 2019, we loaned $3.2 million to Matthew O’Hayer and $800,000 to Jason Jones, which we collectively refer to as the 2019 Director Loans. Each of the 2019 Director Loans was made pursuant to a non-recourse promissory note with interest at a rate per annum calculated at the lower of (i) the maximum applicable non-usurious rate of interest and (ii) the LIBOR rate (as defined in the Credit Facility), as such rate may be in effect from time to time, plus 2%. The initial interest rate on the 2019 Director Loans was 4.78%. Unless a 2019 Director Loan is accelerated in accordance with its terms, we will terminate it upon the earliest to occur of (i) August 7, 2022, (ii) the date of closing of a Liquidity Transaction (as defined in the applicable 2019 Director Loan) and (iii) prior to the time such note would be prohibited by the Sarbanes-Oxley Act.
As security for the payment of our obligations under the Credit Facility, in February 2019 we collaterally assigned and granted a security interest in the 2019 Director Loans to PNC Bank, National Association, including all rights to receive payments under the 2019 Director Loans and all proceeds thereof.
Mr. O’Hayer repaid his 2019 Director Loan in full on November 26, 2019. Mr. Jones repaid his 2019 Director Loan in full on August 13, 2020.
Stockholders Agreement
In connection with our convertible preferred stock and common stock financings in years prior to 2020, we entered into a stockholders agreement, as subsequently amended and restated, with certain parties including: entities affiliated with Arborview Capital Partners LP, where our director Karl Khoury is a partner; entities affiliated with Bowie Strategic Investments, Inc., entities affiliated with Inherent Group, LLC, where our former director Anthony Davis is chief executive officer and chief investment officer; entities affiliated with InvestEco Capital Corp; entities affiliated with Manna Tree Partners; entities affiliated with SJF Ventures; and entities affiliated with Sunrise Strategic Partners, LLC. This stockholders agreement terminated upon the completion of our IPO, except with respect to registration rights.
Liquidity Commitment Agreements
In connection with certain of our sales of capital stock, Matthew O’Hayer entered into agreements with us and certain of our stockholders, including certain beneficial owners of more than 5% of our capital stock and entities affiliated with certain of our directors, to use his commercially reasonable best efforts to cause us to list our common stock on a securities exchange or enter into one or more liquidity transactions. Upon the completion of our IPO, these agreements were satisfied in full.
Equity Grants to Directors and Executive Officers We have granted stock options and restricted stock units to certain of our directors and executive officers. For more information regarding the stock options and stock awards granted to our directors and named executive officers, see the sections titled “Executive Officer and Director Compensation—Director Compensation” and “Executive Officer and Director Compensation—Executive Compensation.” Indemnification Agreements Our amended and restated certificate of incorporation contains provisions limiting the liability of directors, and our amended and restated bylaws provides that we will indemnify each of our directors and officers to the fullest extent permitted under Delaware law. Our amended and restated certificate of incorporation and amended and restated bylaws also provides our board of directorsBoard with discretion to indemnify our employees and other agents when determined appropriate by the board.Board. In addition, we have entered into an indemnification agreement with each of our directors and executive officers, which requires us to indemnify them. For more information regarding these agreements, see the section titled “Executive Officer and Director Compensation——Limitations on Liability and Indemnification Matters.” | | | | | | | | |
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TRANSACTIONS WITH RELATED PERSONS Policies and Procedures Regarding Transactions with Related Persons We have adopted a policy that our executive officers, directors, nominees for election as a director, beneficial owners of more than 5% of any class of our common stock and any members of the immediate family of any of the foregoing persons are not permitted to enter into a related person transaction with us without the approval or ratification of our board of directorsBoard or our audit committee.Audit Committee. Any request for us to enter into a transaction with an executive officer, director, nominee for election as a director, beneficial owner of more than 5% of any class of our common stock or any member of the immediate family of any of the foregoing persons, in which the amount involved exceeds $120,000 and such person would have a direct or indirect interest, must be presented to our board of directorsBoard or our audit committeeAudit Committee for review, consideration and approval. In approving or rejecting any such proposal, our board of directorsBoard or our audit committeeAudit Committee is to consider the material facts of the transaction, including whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction. | | | | | 52 | | 2022 Proxy Statement | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g65c58.jpg)
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Security Ownership of Certain Beneficial Owners and Management The following table sets forth information known to us regarding the beneficial ownership of shares of our common stock as of April 12, 2021,11, 2022 by: (i) each of our named executive officers; (ii) each of our directors; (iii) all of our executive officers and directors as a group; and (iv) each person, or group of affiliated persons, known by us to beneficially own more than 5% of any class of our voting securities. Information with respect to beneficial ownership is based on information furnished to us by each director, executive officer or stockholder who holds more than 5% of our outstanding common stock, and Schedules 13G or 13D filed with the SEC, as the case may be. Beneficial ownership is determined according to the rules of the SEC and generally means that a person has beneficial ownership of a security if he or she possesses sole or shared voting or investment power of that security, and includes options and warrants that are currently exercisable within 60 days of April 12, 2021.11, 2022. Options to purchase shares of our common stock that are exercisable within 60 days of April 12, 2021,11, 2022, are deemed to be beneficially owned by the persons holding these options for the purpose of computing percentage ownership of that person, but are not treated as outstanding for the purpose of computing any other person’s ownership percentage. Except as indicated in the footnotes below, each of the beneficial owners named in the table below has, to our knowledge, sole voting and investment power with respect to all shares of common stock listed as beneficially owned by him or her, except for shares owned jointly with that person’s spouse. We have based our calculation of beneficial ownership on 39,921,29940,607,865 shares of our common stock outstanding as of April 12, 2021.11, 2022. Unless otherwise indicated, the address for each of the stockholders in the table below is c/o Vital Farms, Inc., 3601 South Congress Ave., Suite C100, Austin, Texas 78704. | | | | | | | | | Name and Address of Beneficial Owner | | Number of Shares Beneficially Owned | | | Percent of Shares Beneficially Owned | | 5% Stockholders: | | | | | | | | | Jason Jones(1) | | | 3,775,288 | | | | 9.3 | % | Entities affiliated with SJF Ventures(2) | | | 2,100,730 | | | | 5.3 | % | Eventide Asset Management, LLC(3) | | | 2,053,232 | | | | 5.1 | % | Directors and Named Executive Officers: | | | | | | | | | Russell Diez-Canseco4) | | | 859,976 | | | | 2.1 | % | Bo Meissner | | | — | | | | — | | Peter Pappas | | | — | | | | — | | Matthew O’Hayer(5) | | | 10,849,649 | | | | 27.0 | % | Kofi Amoo-Gottfried | | | — | | | | — | | Brent Drever(6) | | | 1,536,012 | | | | 3.8 | % | Glenda Flanagan(7) | | | 1,605,730 | | | | 4.0 | % | Kelly Kennedy(8) | | | 28,641 | | | | * | | Karl Khoury(9) | | | 1,786,880 | | | | 4.5 | % | Denny Marie Post(8) | | | 28,641 | | | | * | | Gisel Ruiz(10) | | | 28,636 | | | | * | | All current executive officers and directors as a group (14 persons)(11) | | | 17,098,327 | | | | 41.3 | % |
| | | | | | | | | | | | NAME AND ADDRESS OF BENEFICIAL OWNER | | NUMBER OF SHARES BENEFICIALLY OWNED | | | PERCENT OF SHARES BENEFICIALLY OWNED | | | | | 5% Stockholders: | | | | | | | | | | | | Jason Jones(1) | | | 3,545,010 | | | | 8.7% | | | | | Eventide Asset Management, LLC(2) | | | 2,950,000 | | | | 7.3% | | | | | BlackRock, Inc.(3) | | | 2,910,862 | | | | 7.2% | | | | | Catherine Stewart(4) | | | 2,583,410 | | | | 6.4% | | | | | AllianceBernstein L.P.(5) | | | 2,219,151 | | | | 5.5% | | | | | Directors and Named Executive Officers: | | | | | | | | | | | | Russell Diez-Canseco(6) | | | 1,094,481 | | | | 2.7% | | | | | Joanne Bal(7) | | | 26,607 | | | | * | | | | | Peter Pappas(8) | | | 33,215 | | | | * | | | | | Matthew O’Hayer(9) | | | 10,821,474 | | | | 26.6% | | | | | Kofi Amoo-Gottfried(10) | | | 5,067 | | | | * | | | | | Brent Drever(11) | | | 34,660 | | | | * | | | | | Glenda Flanagan(12) | | | 8,471 | | | | * | | | | | Kelly Kennedy(13) | | | 34,612 | | | | * | | | | | Karl Khoury(14) | | | 141,701 | | | | * | | | | | Denny Marie Post(15) | | | 35,112 | | | | * | | | | | Gisel Ruiz(16) | | | 34,607 | | | | * | | | | | All current executive officers and directors as a group (15 persons)(17) | | | 12,773,927 | | | | 31.5% | |
* | Represents beneficial ownership of less than 1%. |
(1) | The information shown is as of December 31, 20202021 and is based on a Schedule 13G13G/A filed by Mr. Jones on February 12, 2020.11, 2022. Consists of (a) 640,461(i) 596,322 shares held by The MIPOTH-C Trust, formed 8/31/2018, of which Mr. Jones is trustee, (b) 640,461(ii) 596,322 shares held by The MIPOTH-J Trust, formed 8/31/7/25/2018, of which Mr. Jones is trustee, (c) 1,633,366(iii) 1,591,366 shares held by The NANAPA Trust, formed 7/25/2018, of which Mr. Jones is |
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | trustee, (d) 615,000(iv) 307,500 shares underlying outstanding options held by The MIPOTH-C Trust and 307,500 shares underlying outstanding options held by the MIPOTH-J Trust that are immediately exercisable or will be immediately exercisable within 60 days of December 31, 2020,2021, and (e)(v) 123,000 shares that The MIPOTH-C Trust may |
| acquire and 123,000 shares that The MIPOTH-J Trust may acquire from Matthew O’Hayer at any time on or prior to September 1, 2023 upon exercise of call options pursuant to agreements among Mr. O’Hayer, Mr. Jones and such trusts. |
(2) | The information shown is as of December 31, 20202021 and is based on a Schedule 13G13G/A filed by Eventide Asset Management, LLC (“Eventide”) on February 16, 2021. Includes (a) 1,829,520 shares held by SJF Ventures III, L.P. (“SJF III”) and (b) 271,210 shares held by SJF Ventures IIIA, L.P. (“SJF IIIA” and with SJF III, the “SJF Entities”). SJF GP III, LLC (“SJF GP”)14, 2022. Eventide is the general partnerbeneficial owner of SJF III and SJF GP IIIA, LLC2,950,000 shares by virtue of being the investment adviser to Eventide Gilead Fund (“SJF GPA”Eventide Fund”) is the general partner, a registered investment company. As of SJF IIIA. Richard Defieux, David Griest, Arrun Kapoor, Alan Kelley, David Kirkpatrick and Cody Nystrom (collectively, the “Managing Directors”) are the managing membersDecember 31, 2021, Eventide Fund held 2,950,000 shares of each of SJF GP and SJF GPA and, as a result, may be deemed to share voting and investment power with respect to the shares held by each of the SJF Entities. Each Managing Director disclaims beneficial ownership of such shares.common stock. The address of each ofEventide and the SJF EntitiesEventide Fund is 200 North Mangum Street,One International Place, Suite 203, Durham, North Carolina 27701.4210, Boston, Massachusetts 02110. |
(3) | The information shown is as of December 31, 20202021 and is based on a Schedule 13G filed by BlackRock, Inc. on February 12, 2020. Eventide Asset Management, LLC (“Eventide”) is the beneficial owner of 2,053,232 shares by virtue of being the investment adviser to registered investment companies (“Eventide Funds”). As of December 31, 2020, the Eventide Gilead Fund held 1,985,000 shares, and the Eventide Exponential Technologies Fund held 68,232 shares.4, 2022. The address of Eventide and the Eventide FundsBlackRock, Inc. is One International Place, Suite 4210, Boston, Massachusetts 02110.55 East 52nd Street New York, New York 10055 |
(4) | The information shown is as of December 31, 2021 and is based on a Schedule 13G filed by Ms. Stewart on February 16, 2022. Matthew O’Hayer maintains sole voting control over such shares based on a voting agreement between Ms. Stewart and Mr. O’Hayer. |
(5) | The information shown is as of December 31, 2021 and is based on a Schedule 13G filed by AllianceBernstein L.P. on February 14, 2022. Shares are acquired solely for investment purposes on behalf of client discretionary investment advisory accounts. AllianceBernstein L.P. has sole voting power over 2,147,169 of such shares, sole dispositive power over 2,190,183 of such shares and shared dispositive power over 28,968 of such shares. The address of AllianceBernstein L.P. is 1345 Avenue of the Americas, New York, New York 10105. |
(6) | Includes (i) 798,476890,476 shares underlying outstanding options that are immediately exercisable or will be immediately exercisable within 60 days of April 12, 202111, 2022 and (ii) 61,500 shares that Mr. Diez-Canseco may acquire from Mr. O’Hayer upon exercise of a call option pursuant to an agreement between Mr. O’Hayer and Mr. Diez-Canseco, which is immediately exercisable. |
(5)(7) | Includes 199,155(i) 24,162 shares underlying outstanding options that are immediately exercisable or will be immediately exercisable within 60 days of April 12, 2021.11, 2022 and (ii) 2,445 shares issuable upon settlement of restricted stock units within 60 days of April 11, 2022. |
(8) | Includes 32,534 shares underlying outstanding options that are immediately exercisable or will be immediately exercisable within 60 days of April 11, 2022. |
(9) | Includes 272,570 shares underlying outstanding options that are immediately exercisable or will be immediately exercisable within 60 days of April 11, 2022. Includes 307,500 shares that are transferable upon exercise of call options held by The MIPOTH-C Trust in respect of 123,000 shares, The MIPOTH-J Trust in respect of 123,000 shares and Russell Diez-Canseco in respect of 61,500 shares. |
(6)(10) | Consists of (i) 1,533,512 shares held by MTP C001 Holdings, LLC (“MTP LLC”) and (ii) 2,500Includes 3,471 shares issuable upon settlement of restricted stock units within 60 days of April 12, 2021. Mr. Drever is on the investment committee of the ultimate general partner of MTP LLC, as a result, may be deemed to share voting and investment power with respect to the shares held by MTP LLC. Mr. Drever disclaims beneficial ownership of such shares, except to the extent of his pecuniary interest therein.11, 2022.
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(7)(11) | Consists of (i) 1,603,230 shares held by Bowie Strategic Investments, Inc. (“Bowie”) and (ii) 2,500Includes 5,971 shares issuable upon settlement of restricted stock units within 60 days of April 12, 2021. Ms. Flanagan is a member of the investment committee of Bowie and, as a result, may be deemed to share voting and investment power with respect to the shares held by Bowie. Ms. Flanagan disclaims beneficial ownership of such shares, except to the extent of her pecuniary interest therein.11, 2022.
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(8)(12) | Includes 5,971 shares issuable upon settlement of restricted stock units within 60 days of April 11, 2022. |
(13) | Includes (i) 26,141 shares underlying options that are immediately exercisable or will be immediately exercisable within 60 days of April 12, 202111, 2022 and (ii) 2,5005,971 shares issuable upon settlement of restricted stock units within 60 days of April 12, 2021.11, 2022. |
(9)(14) | Consists of (i) 4,000 shares held by Mr. Khoury, (ii) 1,780,380 shares held by Arborview Capital Partners LP (“ACP”), and (iii) 2,500Includes 5,971 shares issuable upon settlement of restricted stock units within 60 days of April 12, 2021. Mr. Khoury is a managing member and a member of the investment committee of the ultimate general partner of ACP and, as a result, may be deemed to share voting and investment power with respect to the shares held by ACP. Mr. Khoury disclaims beneficial ownership of such shares, except to the extent of his pecuniary interest therein.11, 2022.
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(10)(15) | Includes (i) 26,141 shares underlying options that are immediately exercisable or will be immediately exercisable within 60 days of April 11, 2022 and (ii) 5,971 shares issuable upon settlement of restricted stock units within 60 days of April 11, 2022. |
(16) | Includes (i) 17,136 shares underlying options that are immediately exercisable or will be immediately exercisable within 60 days of April 12, 202111, 2022 and (ii) 2,5005,971 shares issuable upon settlement of restricted stock units within 60 days of April 12, 2021.11, 2022. |
(11)(17) | Includes (i) 1,502,4651,748,410 shares underlying options that are immediately exercisable or will be exercisable within 60 days of April 12, 202111, 2022 and (ii) 15,00041,742 shares issuable upon settlement of restricted stock units within 60 days of April 12, 2021.11, 2022. |
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HOUSEHOLDING OF PROXY MATERIALS AND OTHER MATTERS Householding of Proxy Materials The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for Notices of Internet Availability of Proxy Materials or other Annual Meeting materials with respect to two or more stockholders sharing the same address by delivering a single Notice of Internet Availability of Proxy Materials or other Annual Meeting materials addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies. This year, a number of brokers with account holders who are our stockholders will be “householding” our Proxy Materials. A single Notice of Internet Availability of Proxy Materials will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate Notice of Internet Availability of Proxy Materials, please notify your broker or Vital Farms, Inc. Direct your written request to Vital Farms, Inc., 3601 South Congress Ave., Suite C100, Austin, Texas 78704, Attn: Jason Dale,Corporate Secretary, or email investors@vitalfarms.com. Stockholders who currently receive multiple copies of the Notices of Internet Availability of Proxy Materials at their addresses and would like to request “householding” of their communications should contact their brokers. OTHER MATTERSOther Matters
The Board knows of no business to be brought before the Annual Meeting which is not referred to in the accompanying Notice of Annual Meeting. Should any such matters be presented, the persons named in the proxy shall have the authority to take such action in regard to such matters as in their judgment seems advisable. If you hold shares through a broker, bank or other nominee as described above, they will not be able to vote your shares on any other business that comes before the Annual Meeting unless they receive instructions from you with respect to such matter. | | | By Order of the Board of Directors | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-21-131467/g111648g61e26.jpg) ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g05n04.jpg) | Jason Dale
Joanne Bal | Corporate Secretary |
April 26, 202125, 2022 A copy of our Annual Report on Form 10-K for the fiscal year ended December 27, 202026, 2021 is available free of charge at the SEC’s web site at www.sec.gov. Stockholders can also access this proxy statement and our Annual Report on Form 10-K at investors.vitalfarms.com. A copy of our Annual Report on Form 10-K for the fiscal year ended December 27, 202026, 2021 is also available without charge upon written request to our Corporate Secretary via email at investors@vitalfarms.com. ![LOGO](https://files.docoh.com/DEF 14A/0001193125-21-131467/g111648pc1.jpg)
P.O. BOX 8016, CARY, NC 27512-9903
YOUR VOTE IS IMPORTANT! PLEASE VOTE BY:
| | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-21-131467/g111648pc2.jpg)
| | INTERNET
| | Go To: www.proxypush.com/VITL | | • Cast your vote online
| | • Have your Proxy Card ready
| | • Follow the simple instructions to record your vote
| ![LOGO](https://files.docoh.com/DEF 14A/0001193125-21-131467/g111648pc3.jpg)
| | PHONE Call 1-866-291-7284
| | • Use any touch-tone telephone
| | • Have your Proxy Card ready
| | • Follow the simple recorded instructions
| ![LOGO](https://files.docoh.com/DEF 14A/0001193125-21-131467/g111648pc4.jpg)
| | MAIL
| | • Mark, sign and date your Proxy Card
| | • Fold and return your Proxy Card in the postage-paid envelope provided
| ![LOGO](https://files.docoh.com/DEF 14A/0001193125-21-131467/g111648pc5.jpg)
| | You must register to attend the meeting by 05:00 P.M., Central Time on June 8, 2021 at www.proxydocs.com/VITL
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| | | Vital Farms, Inc. | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-21-131467/g111648pc6.jpg) | Annual Meeting of Stockholders | | | For Stockholders of record on April 12, 2021 | | |
| | | TIME:
| ![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g65c58.jpg)
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| | Wednesday, June 9, 2021, 09:00 AM, Central Time | PLACE:2022 Proxy Statement | | Annual Meeting to be held live via the Internet - please visit
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| | www.proxydocs.com/VITL for more details.
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![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g00n33.jpg)
YOUR VOTE IS IMPORTANT PLEASE VOTE BY: Vital Farms, Inc. Annual Meeting of Stockholders For Stockholders of record as of April 11, 2022 TIME: Wednesday, June 8, 2022 9:00 AM, Central Time PLACE: Annual Meeting to be held live via the Internet Please visit www.proxydocs.com/VITL for more details. This proxy is being solicited on behalf of the Board of Directors The undersigned hereby appoints RussellMatthew O’Hayer, RusselO Diez-Canseco and Jason DaleJoanne Bal (the “Named Proxies”), and each or either ofDQ\RIof them, as the true and lawful attorneys of the undersigned, with full power of substitution and revocation, and authorizes them, and each of them,RUDQ\RIthem, to vote all the shares of capital stock of Vital Farms, Inc. which the undersigned is entitled to vote at said meeting and any adjournment thereof upon the matters specified and upon such other matters as may be properly brought before the meeting or any adjournment thereof, conferring authority upon such true and lawful attorneys to vote in their discretion on such other matters as may properly come before the meeting and revoking any proxy heretofore given. THE SHARES REPRESENTED BY THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, SHARES WILL BE VOTED FOR ALL NOMINEES FOR DIRECTOR IN PROPOSAL 1 AND FOR PROPOSAL 2. In their discretion, the Named Proxies are authorized to vote upon such other matters that may properly come before the meeting or any adjournment or postponement thereof. You are encouraged to specify your choice by marking the appropriate box (SEE REVERSE SIDE), but you need not mark any box if you wish to vote in accordance with the Board of Directors’ recommendation. The Named Proxies cannot vote your shares unless you sign (on the reverse side) and return this card. PLEASE BE SURE TO SIGN AND DATE THIS PROXY CARD AND MARK ON THE REVERSE SIDE
Vital Farms, Inc.
Annual Meeting of Stockholders
Please make P.O. BOX 8016, CARY, NC 27512-9903 INTERNET Go To: www.proxypush.com/VITL Cast your marks like this: ☒vote online Have your Proxy Card ready Follow the simple instructions to record your vote PHONE Call 1-866-291-7284 Use dark black pencil or pen only
THE BOARD OF DIRECTORS RECOMMENDS A VOTE:
FOR ALL NOMINEES FOR DIRECTOR IN PROPOSAL 1 AND FOR PROPOSAL 2
| | | | | | | | | PROPOSAL | | | | YOUR VOTE | | | | BOARD OF
DIRECTORS
RECOMMENDS | | | | | | 1. Election of Directors
| | | | | | | | ![LOGO](https://files.docoh.com/DEF 14A/0001193125-21-131467/g111648pc7.jpg) | | | FOR | | WITHHOLD | | | 1.01 Kofi Amoo-Gottfried
| | ☐ | | ☐ | | | | FOR | | | | | | 1.02 Brent Drever
| | ☐ | | ☐ | | | | FOR | | | | | | 1.03 Karl Khoury
| | ☐ | | ☐ | | | | FOR | | | | | | | | FOR | | AGAINST | | ABSTAIN | | | 2. To ratify the selection of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 26, 2021
| | ☐ | | ☐ | | ☐ | | FOR |
any touch-tone telephone Have your Proxy Card ready Follow the simple recorded instructions MAIL Mark, sign and date your Proxy Card Fold and return your Proxy Card in the postage-paid envelope provided “ALEXA, VOTE MY PROXY” Open Alexa app and browse skills Search “Vote my Proxy” Enable skill You must register to attend the meeting by 05:00 P.M.,PM Central Time, on June 8, 20217, 2022 at www.proxydocs.com/VITL
![LOGO](https://files.docoh.com/DEF 14A/0001193125-22-117524/g290781g00n34.jpg)
Vital Farms, Inc. Annual Meeting of Stockholders THE BOARD OF DIRECTORS RECOMMENDS A VOTE: FOR ON PROPOSALS 1 AND 2 PROPOSAL YOUR VOTE BOARD OF DIRECTORS RECOMMENDS 1. Election of three “Class II” directors of the Company to serve until the Company’s 2025 annual meeting of stockholders or until their successors are duly elected and qualified FOR WITHHOLD 1.01 Glenda Flanagan #P2# #P2# FOR 1.02 Denny Marie Post #P3# #P3# FOR 1.03 Gisel Ruiz #P4# #P4# FOR FOR AGAINST ABSTAIN 2. To ratify the selection of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 25, 2022. #P5# #P5# #P5# FOR You must register to attend the meeting by 05:00 PM, Central Time on June 7, 2022 at www.proxydocs.com/VITL Authorized Signatures - Must be completed for your instructions to be executed. Please sign exactly as your name(s) appears on your account. If held in joint 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 Proxy/Vote Form. | | | | | | | | | | | | | | | | | | | | | | Signature (and Title if applicable) | | Date | | | | Signature (if held jointly) | | Date |
Signature (and Title if applicable) ProposalPage - VIFL Date Date Signature (if held jointly) Please make your marks like this: |