LIFEWAY FOODS, INC. (NASDAQ:LWAY) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02
As we previously disclosed, on November 19, 2018, Lifeway announced that it had appointed Eric Hanson, 44, its Chief Accounting Officer, to the additional position of Chief Financial Officer. In connection with Mr. Hanson’s appointment as Chief Financial and Accounting Officer, on January 18, 2019, Lifeway entered into an Executive Employment Agreement with Mr. Hanson (the “Hanson Employment Agreement”).
Employment Agreement
On January 18, 2019, Lifeway entered into an employment agreement with Mr. Hanson for his employment as our Chief Financial and Accounting Officer (the “Hanson Employment Agreement”), the term of which is effective as of November 19, 2018 and expires on December 31, 2019. The Hanson Employment Agreement automatically renews on January 1 of each year, and renews automatically for successive terms of one year, unless to the Agreement it is terminated earlier or the Board gives timely notice of non-renewal.
Mr. Hanson’s initial base salary is $250,000, which is subject to annual review by the Board. to the Agreement, Mr. Hanson is also eligible for a cash bonus of up to 30% of his base salary, as well as equity and other incentive awards, in the sole discretion of the Board, based on the satisfaction of certain pre-established performance goals established by the Board. For 2019, the Board will set bonus targets in compliance with its Omnibus Plan and in consultation with the Board’s independent compensation consultant and management.
Mr. Hanson is subject to covenants not to compete and not to solicit Lifeway customers, contractors, suppliers, or employees during her employment and for a period of 18 months following his termination for any reason. Lifeway will not unreasonably withhold its consent to competitive employment during the 18-month period if Mr. Hanson satisfies certain obligations regarding his future employment. Lifeway may terminate Mr. Hanson’s employment for any lawful reason, with or without Cause, and Mr. Hanson may resign for or without Good Reason (each as defined in the Hanson Employment Agreement).
Employment Agreement summary of payments and benefits due after termination of employment
to the Hanson Employment Agreement, Mr. Hanson, upon Non-Renewal, termination without Cause, or by his resignation with Good Reason (as defined in the Hanson Employment Agreement), will be entitled to certain payments and benefits shown in the tables below. Receipt of any severance amounts under the Hanson Employment Agreement is conditioned on execution of an enforceable general release of claims in a form satisfactory to Lifeway.
| Non-Renewal | Termination without Cause or Resignation for Good Reason | Termination for Cause or Resignation Without Good Reason | |
| Base Salary | 3 months after termination date | The remainder of the term or 6 months, whichever is greater | Through termination date |
| Bonus Payments | Greater of (i) bonus for fiscal year of termination date (ii) bonus paid for fiscal year prior to termination date | Greater of (i) bonus for fiscal year of termination date (ii) bonus paid for fiscal year prior to termination date | None |
| Outstanding Equity Awards | Vested but unsettled outstanding equity awards | Accelerated vesting of all outstanding equity awards | Vested but unsettled outstanding equity awards |
| Health Insurance | Contributions toward COBRA premiums through the earliest of (i) three calendar months after termination date, (ii) the date executive becomes eligible for group health insurance through another employer, or (iii) the date executive ceases to be eligible for COBRA coverage | Company-paid COBRA premiums through the earliest of (i) six calendar months after termination date, (ii) the date executive becomes eligible for group health insurance through another employer, or (iii) the date executive ceases to be eligible for COBRA coverage | None |
| Financial Services or Transition-Related | None | $10,000 | None |
The foregoing references to and descriptions of the Hanson Employment Agreement in this Current Report do not purport to be complete are qualified in their entirety by reference to the full text of the Hanson Employment Agreement, which is attached hereto as Exhibit 10.1, and incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
Lifeway Foods, Inc. Exhibit
EX-10.1 2 lifeway_ex1001.htm EXECUTIVE EMPLOYMENT AGREEMENT Exhibit 10.1 EXECUTIVE EMPLOYMENT AGREEMENT This Agreement is made as of the date last signed below (the “Effective Date”) between Lifeway Foods,…
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About LIFEWAY FOODS, INC. (NASDAQ:LWAY)
Lifeway Foods, Inc. (Lifeway) is engaged in the manufacturing of probiotic, cultured, functional dairy health food products. The Company is engaged in the sale of fermented dairy products, which are produced and are sold to consumers through a network of distributors and retailers in the United States. Through its distributors, the Company also sells its products to retailers in Mexico, Costa Rica, Dubai, Hong Kong, China and the Caribbean. The Company’s primary product is kefir, a dairy beverage similar to but distinct from yogurt, in various flavors and in various package configurations. In addition to the drinkable products, Lifeway manufactures Lifeway Farmer Cheese, a line of various farmer cheeses. Kefir also serves as a base for lower-calorie dressings, dips, marinades, soups or sauces and as a basic ingredient in other home-prepared foods. Recipes are made available through the Company’s Website. The Company also markets and sells its ProBugs line of drinkable kefir.