| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers. |
On February 4, 2023, the Board of Directors (the “Board”) of Vital Farms, Inc. (the “Company”) appointed Thilo Wrede as Chief Financial Officer and principal financial officer of the Company, effective on or about March 15, 2023 (the “Transition Date”). Mr. Wrede will replace Bo Meissner, who will step down from his role as Chief Financial Officer and principal financial officer, effective as of the Transition Date. As further described below, as of the Transition Date, Mr. Meissner will no longer be an officer, executive or agent of the Company, but remain with the Company through April 30, 2023 to ensure a smooth leadership transition (the “Departure Date”), then transitioning to a non-employee advisory role through July 31, 2023.
Appointment of Thilo Wrede as Chief Financial Officer
On February 4, 2023, the Board appointed Thilo Wrede to serve as the Company’s Chief Financial Officer and as the principal financial officer of the Company, effective as of the Transition Date.
Prior to his appointment as the Company’s Chief Financial Officer, Mr. Wrede, age 49, served as the Global Chief Financial Officer of Sabra Dipping Company, LLC, a producer of fresh dips and spreads, since August 2020. Mr. Wrede previously served in a variety of roles at PepsiCo, a multinational food and beverage company, including Chief Financial Officer – Central and South America Foods and Chief Financial Officer – Caribbean and Central America Foods, from May 2014 through August 2020. Prior to joining PepsiCo, Mr. Wrede served in Equity Research Analyst roles for Jefferies & Company and Credit Suisse. Mr. Wrede received an engineering degree from Technische Universität Berlin and received his MBA from Columbia Business School.
Pursuant to Mr. Wrede’s offer letter agreement, Mr. Wrede will receive an annual base salary of $410,000 per year and will be eligible for a discretionary annual bonus at an annual target amount of 60% of his base salary, as and if determined by the Board. Mr. Wrede will receive a sign-on bonus of $200,000, subject to recoupment in the event he resigns without Good Reason (as defined in the Company’s Change in Control Severance Plan (the “Severance Plan”)) during the first 12 months of his employment with the Company. In addition, Mr. Wrede will receive, on or shortly after his start date, an award under the Company’s 2020 Equity Incentive Program valued at $850,000, which is expected to consist of a combination of stock options and restricted stock units (“RSUs”). The options and RSUs will vest in three equal annual installments beginning on the first anniversary of the grant date, subject to Mr. Wrede’s continued employment with the Company. Mr. Wrede will further be eligible for a one-time make-whole bonus payment of up to $550,000 to compensate Mr. Wrede for certain forfeited compensation. Such bonus will be subject to recoupment in the event he resigns without Good Reason (as defined in the Severance Plan) during the first 12 months of his employment with the Company.
Additionally, Mr. Wrede will be eligible to participate in the Severance Plan. Pursuant to the Severance Plan, upon either a termination by the Company without cause or resignation for good reason (either, a “Covered Termination”) within the 12-month period following the closing of a change in control of the Company (a “Change in Control Period”), Mr. Wrede will be eligible to receive (i) severance payments, in the form of salary continuation, in an amount equal to (a) 12 months of Mr. Wrede’s then-current base salary, plus (b) the amount of Mr. Wrede’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 Mr. Wrede’s current target bonus, prorated to reflect the partial year of service; (iv) reimbursement of COBRA premiums for a period of up to 12 months; and (v) 100% acceleration of unvested equity awards (including those that vest upon satisfaction of performance criteria). If Mr. Wrede is subject to a Covered Termination other than during a Change of Control Period, Mr. Wrede 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; and (iii) reimbursement of COBRA premiums for a period of up to 12 months. Further, upon Mr. Wrede’s death or disability, Mr. Wrede shall be eligible to receive (i) the pro rata portion of Mr. Wrede’s annual 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 Severance Plan.
