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
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
(e) Compensatory Arrangements of Certain
Officers
On April 21, 2017, Lifeway Foods, Inc. (the Company) entered into
three (3) separate employment agreements (each an Employment
Agreement and collectively, the Employment Agreements) with Mr.
Douglas A. Hass (Hass), Ms. Jennifer Reilly (Reilly), and Mr.
John Waldron (Waldron).
Hass Employment Agreement
On April 21, 2017, the Company entered into an employment
agreement with Douglas A. Hass to continue his employment as the
Companys General Counsel (the Hass Employment Agreement), the
term of which is effective as of January 1, 2017 and expires on
December 31, 2017. The Hass 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 Compensation Committee gives timely
notice of non-renewal. Mr. Hasss base salary for 2017 is
$345,000, and is subject to annual review by the Compensation
Committee. to the Agreement, Mr. Hass is also eligible for
certain cash, 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 Compensation
Committee. For 2017, the Compensation Committee has set bonus
targets in compliance with its Omnibus Plan and applicable IRS
regulations governing performance-based compensation. Mr. Hass is
subject to covenants not to compete and not to solicit the
Company customers, contractors, suppliers, or employees during
his employment and for a period of 18 months following his
termination for any reason. The Company will not unreasonably
withhold its consent to competitive employment during the
18-month period if Mr. Hass satisfies certain obligations
regarding his future employment. The Company may terminate Mr.
Hasss employment for any lawful reason, with or without Cause,
and Mr. Hass may resign for or without Good Reason (each as
defined in the Hass Employment Agreement). This Agreement
supersedes the employment agreement previously entered into
between the Company and Mr. Hass on March 5, 2016.
Reilly Employment Agreement
On April 21, 2017, the Company entered into an employment
agreement with Jennifer Reilly to continue her employment as the
Companys Senior Executive Vice President, Sales (the Reilly
Employment Agreement), the term of which is effective as of
January 1, 2017 and expires on December 31, 2017. The Reilly
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
Compensation Committee gives timely notice of non-renewal. Ms.
Reillys base salary for 2017 is $315,000, and is subject to
annual review by the Compensation Committee. to the Agreement,
Ms. Reilly is also eligible for certain cash, 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 Compensation Committee. For 2017, the
Compensation Committee has set bonus targets in compliance with
its Omnibus Plan and applicable IRS regulations governing
performance-based compensation. Ms. Reilly is subject to
covenants not to compete and not to solicit the Company
customers, contractors, suppliers, or employees during her
employment and for a period of 18 months following her
termination for any reason. The Company will not unreasonably
withhold its consent to competitive employment during the
18-month period if Ms. Reilly satisfies certain obligations
regarding her future employment. The Company may terminate Ms.
Reillys employment for any lawful reason, with or without Cause,
and Ms. Reilly may resign for or without Good Reason (each as
defined in the Reilly Employment Agreement).
Waldron Employment Agreement
On April 21, 2017, the Company entered into an employment
agreement with John Waldron to continue his employment as the
Companys Chief Financial and Accounting Officer (the Waldron
Employment Agreement), the term of which is effective as of
January 1, 2017 and expires on December 31, 2017. The Waldron
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
Compensation Committee gives timely notice of non-renewal. Mr.
Waldrons base salary for 2017 is $400,000, and is subject to
annual review by the Compensation Committee. to the Agreement,
Mr. Waldron is also eligible for certain cash, 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 Compensation Committee. For 2017, the
Compensation Committee has set bonus targets in compliance with
its Omnibus Plan and applicable IRS regulations governing
performance-based compensation. Mr. Waldron is subject to
covenants not to compete and not to solicit the Company
customers, contractors, suppliers, or employees during his
employment and for a period of 18 months following his
termination for any reason. The Company will not unreasonably
withhold its consent to competitive employment during the
18-month period if Mr. Waldron satisfies certain obligations
regarding his future employment. The Company may terminate Mr.
Waldrons employment for any lawful reason, with or without Cause,
and Mr. Waldron may resign for or without Good Reason (each as
defined in the Waldron Employment Agreement). This Agreement
supersedes the employment agreement previously entered into
between the Company and Mr. Waldron on July 20, 2015.
Employment Agreements summary of payments and benefits due
after termination of employment
to each of their respective Employment Agreements, Mr. Hass, Ms.
Reilly, and Mr. Waldron, upon Non-Renewal, termination without
Cause, or by their resignation with Good Reason (as defined in
the respective Employment Agreements), will be entitled to
certain payments and benefits shown in the tables below. Receipt
of any severance amounts under the respective Employment
Agreements is conditioned on execution of an enforceable general
release of claims in a form satisfactory to the Company.
| 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 | None |
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 each of the
Employment Agreements in this Current Report do not purport to be
complete and are qualified in their entirety by reference to the
full texts of the Employment Agreements, which are attached
hereto as Exhibits 10.1 through 10.3, and incorporated herein by
reference.
Item 5.03 Amendments to Articles of Incorporation or
Bylaws; Change in Fiscal Year
The Companys Amended and Restated Bylaws were approved and
adopted by the Companys board of directors on April 24, 2017, to
be effective immediately.
A copy of the Companys Amended and Restated Bylaws is attached as
Exhibit 3.1 to this Current Report on Form 8-K and is
incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
EXHIBITS
| 3.1 | Amended and Restated Bylaws. |
| 10.1 |
Employment Agreement dated April 21, 2017 with Douglas A. Hass. |
| 10.2 |
Employment Agreement dated April 21, 2017 with Jennifer Reilly. |
| 10.3 | Employment Agreement dated April 21, 2017 with John Waldron. |
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. LIFEWAY FOODS, INC. (NASDAQ:LWAY) Recent Trading Information
LIFEWAY FOODS, INC. (NASDAQ:LWAY) closed its last trading session up +0.33 at 9.78 with 19,709 shares trading hands.