Item 5.02
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Departure of Director or Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
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Effective October 26, 2018, Jennifer Reilly, Lifeway’s
Senior Executive Vice President of Sales, resigned to pursue another business opportunity. Ms. Reilly’s resignation was not
a result of any disagreement with Lifeway on any matter relating to its operations, policies, or practices.
On October 31, 2018, Lifeway announced
that it has appointed Amy Feldman, 43, effective October 31, 2018 as its Senior Executive Vice President of Sales. Amy, who previously
held the top sales executive position for Lifeway Foods from 2009 through 2011 when Lifeway’s revenues grew over 60%. She
returns to the company after serving in senior sales executive positions for KeHE, one of the largest specialty/natural/fresh distributors
in the country, and leading natural food brand Enjoy Life Foods.
Amy has spent over 20 years in the food
industry building business, brands, and teams, specifically within the Fresh and Natural Foods arena. She brings a unique global
view of the industry to Lifeway, which includes time spent on multiple sides of the business including working as a retailer, broker,
distributor, and several high growth food brands selling across all channels of trade. Most recently from 2017-2018, Amy served
as the Executive Vice President of Sales at Next Phase Enterprises, a club and mass channel food sales firm. From 2015 through
2017, Ms. Feldman was Vice President of Sales, Channel Development for Mondelez International’s Enjoy Life Foods subsidiary
where she was responsible for developing strategy and introducing the brand through various trade channels such as Foodservice,
E-commerce, Small Format, and International. Prior to joining Enjoy Life, Amy was the Vice President of Sales, Independent Grocery
Channel for Chicago-based KeHE Distributors from 2011-2015.
Amy began her career at Sara Lee and holds
a Bachelor in Business Administration in Food Marketing from Western Michigan University, an MBA from Golden Gate University, and
a Culinary Certificate from Kendall College.
Employment Agreements
On August 29, 2018, Lifeway entered into
an employment agreement with Ms. Feldman for her employment as our Senior Executive Vice President of Sales (the “Feldman
Employment Agreement”), the term of which is effective as of October 29, 2018 and expires on December 31, 2018. The Feldman
Employment Agreement automatically renews on January 1 of each year, and renews automatically for successive terms of one year,
unless pursuant to the Agreement it is terminated earlier or the Board gives timely notice of non-renewal. Ms. Feldman’s
initial base salary is $220,000, which is subject to annual review by the Board. Pursuant to the Agreement, Ms. Feldman 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 Board. For 2018, the Board has set bonus targets in compliance with
its Omnibus Plan and applicable IRS regulations governing performance-based compensation. Ms. Feldman 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 her termination for any reason. The Company will not unreasonably withhold its consent to competitive employment
during the 18-month period if Ms. Feldman satisfies certain obligations regarding her future employment. The Company may terminate
Ms. Feldman’s employment for any lawful reason, with or without Cause, and Ms. Feldman may resign for or without Good Reason
(each as defined in the Feldman Employment Agreement).
Employment Agreements’ summary of payments and benefits
due after termination of employment
Pursuant to the Feldman Employment Agreement,
Ms. Feldman, upon Non-Renewal, termination without Cause, or by her resignation with Good Reason (as defined in the Feldman Employment
Agreement), will be entitled to certain payments and benefits shown in the tables below. Receipt of any severance amounts under
the Feldman Employment Agreement is conditioned on execution of an enforceable general release of claims in a form satisfactory
to us.
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Non-Renewal
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Termination without Cause or Resignation for Good Reason
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Termination for Cause or Resignation Without Good Reason
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Base Salary
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3 months after termination date
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The remainder of the term or 6 months, whichever is greater
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Through termination date
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Bonus Payments
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Except during the Initial Term, Greater of (i) bonus for fiscal year of termination date (ii) bonus paid for fiscal year prior to termination date
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Greater of (i) bonus for fiscal year of termination date (ii) bonus paid for fiscal year prior to termination date
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None
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Outstanding Equity Awards
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Vested but unsettled outstanding equity awards
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Accelerated vesting of all outstanding equity awards
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Vested but unsettled outstanding equity awards
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Health Insurance
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None
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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
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None
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Financial Services or Transition-Related
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None
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$10,000
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None
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The foregoing references to and descriptions of the Feldman
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 Feldman Employment Agreement, which is attached hereto as Exhibit 10.1, and incorporated herein by reference.
Family Relationships
There is no family relationship between
Ms. Feldman and any Lifeway director or executive officer.
Related Party Transactions
Ms. Feldman has no direct or indirect material
interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.