The Chefs’ Warehouse, Inc. (the “Company”) (Nasdaq: CHEF), a
premier distributor of specialty food products in the United
States, the Middle East and Canada, announced today that it has
entered into an agreement (the “Cooperation Agreement”) with Legion
Partners Asset Management, LLC and certain of its affiliates
(collectively, “Legion Partners”). Legion Partners beneficially
owns approximately 3.3% of the Company’s outstanding common stock.
As contemplated by the Cooperation Agreement, on March 4, 2024,
the Company temporarily increased the size of the Company’s Board
of Directors (the “Board”) to fourteen members and appointed two
new independent directors, Richard N. Peretz and Wendy M.
Weinstein, to the Board. The Company has agreed to nominate Mr.
Peretz and Ms. Weinstein for election at the Company’s 2024 annual
meeting of stockholders (the “2024 Annual Meeting”). Further, as
provided in the Cooperation Agreement, a third new independent
director, Lester Owens, was appointed to the Board on March 4, 2024
and will be nominated for election at the Company’s 2024 Annual
Meeting.
Mr. Peretz was appointed as a member of the Compensation and
Human Capital Committee of the Board and Ms. Weinstein was
appointed as a member of the Nominating and Corporate Governance
Committee of the Board. In addition, Mr. Owens was appointed as a
member of the Audit Committee of the Board. Also, pursuant to the
Cooperation Agreement, the size of the Board will be reduced from
fourteen to eleven members, with three incumbent directors who have
served on the Board for five years or longer as of the date of the
Cooperation Agreement no longer serving on the Board immediately
following the Company’s 2024 Annual Meeting, and from eleven to
nine members, with two incumbent directors who have served on the
Board for five years or longer as of the date of the Cooperation
Agreement no longer serving on the Board immediately following the
Company’s 2025 annual meeting of stockholders.
Further, pursuant to the Cooperation Agreement, the Board has
agreed to form an Operational and Financial Performance Task Force
with the purpose of improving the Company’s operational and
financial performance, including identifying and making
recommendations to the Board and management on margin improvement
opportunities, which will include Mr. Peretz and Ms. Weinstein. The
Board will, upon consultation with the Operational and Financial
Performance Task Force, retain a nationally recognized independent
consulting firm to assist with the activities of the Operational
and Financial Performance Task Force. In addition, Legion Partners
has agreed to vote its shares in support of any director nominated
and recommended by the Board at the Company’s 2024 Annual Meeting,
in addition to certain customary standstill provisions and other
voting agreements for the duration of the standstill period.
The Cooperation Agreement will be extended for a second year if
the Company achieves certain financial metrics, including if the
Company achieves an Adjusted EBITDA margin percentage of no less
than 5.7% for fiscal year 2024 and if the mid-point of the
Company’s guidance for fiscal 2025 includes an Adjusted EBITDA
margin percentage of no less than 6.2%. The parties have also
agreed to certain mutual non-disparagement obligations.
“We are pleased to welcome Richard and Wendy to the Chefs’
family. I am excited for us all to work together to maximize our
future prospects and increase shareholder value,” said Christopher
Pappas, chairman and chief executive officer of The Chefs’
Warehouse, Inc.
Christopher S. Kiper, Managing Director of Legion Partners Asset
Management, LLC, concluded: “We are excited for Richard and Wendy
to join the Board and serve on the Operational and Financial
Performance Task Force where they can support the Company in
achieving improved Adjusted EBITDA margins and enhancing
shareholder value.”
About Richard N. PeretzRichard N. Peretz has
served as a Venture Partner at Playground Global, LLC, a
technology-focused venture capital firm, since May 2021 and has
served as an independent consultant since February 2020.
Previously, Mr. Peretz served as the Chief Financial Officer of the
United Parcel Service, Inc. (“UPS”), an American multinational
shipping and receiving supply chain management company, from July
2015 to February 2020. Mr. Peretz also held various leadership
positions at UPS, including as the Controller and Treasurer as well
as head of Mergers & Acquisitions from 2007 to 2015, Chief
Financial Officer and Vice President of International Operations
from 2002 to 2007 and in various other roles of increasing
responsibility from 1981 to 2010. Mr. Peretz also currently serves
on the boards of directors of several companies, including: Boxbot,
Inc., a startup venture that produces conveyors and package
handling systems, since September 2023, Altus Power, Inc., a
provider of alternative energy solutions, since December 2021, and
Iris Acquisition Corp., (formerly Tribe Capital Growth Corp. I), a
special purpose acquisition company, since March 2021 where he
serves as Chair of the Audit Committee. Mr. Peretz previously
served on the board of directors of Semper Paratus Acquisition
Corporation, a special purpose acquisition company, from October
2021 to June 2022, Electric Last Mile Solutions, Inc., a designer
and manufacturer of electric vehicles, from June 2021 to June 2022,
Tribe Capital Growth Corp. II, a special purpose acquisition
company from March 2021 to May 2022, and First International
Bancorp, a state-chartered bank of Connecticut, from 2008 to 2015.
Mr. Peretz served as an Investment Committee Member for the UPS
Strategic Venture, a venture capital fund managed by the UPS
Strategic Enterprise Fund of UPS, from 2013 to February 2020. Mr.
Peretz served as a Board Member on the Atlanta Chapter of the
American Red Cross, a disaster and humanitarian relief
organization, from 2008 to 2015. Mr. Peretz earned a B.A. in
Business Administration from the University of Texas at San Antonio
and an M.B.A. from the Goizueta Business School at Emory
University.
About Wendy M. WeinsteinWendy M. Weinstein has
served as Chief Marketing Officer at W2K Consulting, a marketing
and management consulting firm with restaurant and food and
beverage industry clients, since January 2001. In addition, Ms.
Weinstein is a consultant in the restaurant technology, media and
food distribution verticals through the Gerson Lehrman Group, Inc.,
a consulting and information services company, since October 2011.
Previously, Ms. Weinstein was an owner and operator of Plates
Restaurant, a fine dining restaurant in Westchester, New York, from
January 2003 until its sale in October 2019. Prior to that, she
served as Director of International Marketing at Sanpellegrino
S.p.A, an Italian mineral water company (acquired by Nestle S.A. in
1998), from 1996 to 2000, and as Director of Marketing from 1989 to
1995. Ms. Weinstein currently serves as a director on the board of
Newport Restaurant Group, a hospitality services firm, where she
serves as a member of the Audit Committee, since January 2024. Ms.
Weinstein earned a B.A. from the University of Pennsylvania.
About Lester OwensLester Owens previously
served as Senior Executive Vice President and former head of
Operations and as a member of the Operating Committee at Wells
Fargo & Company, a multinational financial services company,
from July 2020 to March 2023. Mr. Owens joined Wells Fargo from
Bank of New York Mellon, where he was Global Head of Operations
from February 2019 to July 2020. Prior to joining Bank of New York
Mellon, Mr. Owens spent 10 years at JP Morgan Chase, where he was
responsible for Global Wholesale Banking Operations, among other
roles. He previously led significant operations functions for
Deutsche Bank, Citibank and Bankers Trust. He has served on several
boards of directors, including the Board of Directors of the
Depository Trust & Clearing Corporation (DTCC) in 2016, and he
chaired the Clearing House Interbank Payments Board from 2015 to
2016. Mr. Owens is currently Chairman of the Board of Directors of
Robert Wood Johnson Barnabas Health, Inc. Mr. Owens has a B.A. from
Long Island University and an M.B.A. from Fairleigh Dickinson
Executive.
The complete agreement will be included as an exhibit to a
Current Report on Form 8-K filed by the Company with the Securities
and Exchange Commission.
Linklaters LLP is serving as legal counsel to the Company.
Olshan Frome Wolosky LLP is serving as legal counsel to Legion
Partners.
About The Chefs’ WarehouseThe Chefs’ Warehouse,
Inc. (http://www.chefswarehouse.com) is a premier distributor of
specialty food products in the United States, the Middle East and
Canada focused on serving the specific needs of chefs who own
and/or operate some of the nation’s leading menu-driven independent
restaurants, fine dining establishments, country clubs, hotels,
caterers, culinary schools, bakeries, patisseries, chocolatiers,
cruise lines, casinos and specialty food stores. The Chefs’
Warehouse, Inc. carries and distributes more than 70,000 products
to more than 44,000 customer locations throughout the United
States, the Middle East and Canada.
About Legion Partners
Legion Partners is an activist investment manager based in Los
Angeles, CA, focused on U.S. small-cap companies. Legion Partners
seeks to generate attractive long-term returns employing deep
fundamental research, a concentrated portfolio and responsible,
collaborative engagement as a catalyst for value creation. Founded
in 2012, Legion Partners takes a value-driven approach to managing
a high-conviction portfolio on behalf of sophisticated
institutional and individual investors.
Forward-Looking StatementsStatements in this
press release regarding the Company’s business that are not
historical facts are “forward-looking statements” that involve
risks and uncertainties and are based on current expectations and
management estimates; actual results may differ materially.
Forward-looking statements in this news release may address the
following subjects among others: the Company’s strategic plans and
the effectiveness of the Company’s Board in overseeing the
execution of the Company’s strategic plans. Any forward-looking
statements are made pursuant to the Private Securities Litigation
Reform Act of 1995 and, as such, speak only as of the date made. A
more detailed description of these and other risk factors is
contained in the Company’s most recent annual report on Form 10-K
filed with the Securities and Exchange Commission on February 27,
2024, and other reports filed by the Company with the Securities
and Exchange Commission since that date. The Company is not
undertaking to update any information in the foregoing report until
the effective date of its future reports required by applicable
laws. Any projections of future results of operations are based on
a number of assumptions, many of which are outside the Company’s
control and should not be construed in any manner as a guarantee
that such results will in fact occur. These projections are subject
to change and could differ materially from final reported results.
The Company may from time to time update these publicly announced
projections, but it is not obligated to do so.
Contact:Investor Relations:Jim Leddy, CFO(718)
684-8415
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