PRELIMINARY
PROXY STATEMENT
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of
the
Securities Exchange Act of 1934
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Filed
by the Registrant ☒ |
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Filed
by a Party other than the Registrant ☐ |
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Check
the appropriate box: |
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☒ |
Preliminary
Proxy Statement |
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☐ |
Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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☐ |
Definitive
Proxy Statement |
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☐ |
Definitive
Additional Materials |
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☐ |
Soliciting
Material under §240.14a-12 |
| FAT
BRANDS INC. |
| (Name
of Registrant as Specified In Its Charter) |
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| (Name
of Person(s) Filing Proxy Statement, if other than the Registrant) |
| Payment
of Filing Fee (Check all boxes that apply): |
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| ☒ |
No
fee required. |
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| ☐ |
Fee paid previously with preliminary material. |
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| ☐ |
Fee
computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
PRELIMINARY PROXY STATEMENT –
SUBJECT TO COMPLETION
FAT
Brands Inc.
9720
Wilshire Blvd., Suite 500
Beverly
Hills, CA 90212
December
___, 2024
To
the Stockholders of FAT Brands Inc.:
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
The
2024 Annual Meeting of Stockholders (the “Annual Meeting”) of FAT Brands Inc., a Delaware corporation (the
“Company”), has been scheduled for Tuesday, December 24, 2024 at 10:00 a.m. Pacific Time, to be held
at the Company’s corporate offices located at 9720 Wilshire Blvd., Suite 500, Beverly Hills, CA 90212, for the following purposes:
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1. |
To
elect the 14 nominees for director named in the accompanying proxy statement. |
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2. |
To
approve an amendment to our Certificate of Incorporation to allow for the exculpation of officers. |
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3. |
To
approve, on a non-binding advisory basis, the compensation of the Company’s named executive officers. |
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4. |
To
ratify the appointment of Macias Gini & O’Connell, LLP as the Company’s independent registered public accounting
firm for the fiscal year ending December 29, 2024. |
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5. |
To
transact such other business as may properly come before the Annual Meeting and any adjournment or postponements thereof. |
The
Board of Directors has fixed the close of business on November 21, 2024 as the record date for determining stockholders entitled
to notice of, and to vote at, the Annual Meeting and any adjournment or postponements thereof. It is important that your shares be represented
at the Annual Meeting regardless of the size of your holdings. Whether or not you plan to attend the Annual Meeting, please provide your
proxy by following the instructions described in the accompanying proxy statement. On or about the date of this Notice, we mailed
a proxy card, proxy statement and our Annual Report to our stockholders.
Important
notice regarding the availability of proxy materials for the Annual Meeting of Stockholders to be held on December 24, 2024: The
Proxy Statement and 2023 Annual Report on Form 10-K are available online at http://ir.fatbrands.com/financial-information/annual-reports.
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By
order of the Board of Directors, |
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Allen
Z. Sussman |
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Secretary |
TABLE
OF CONTENTS
FAT
BRANDS INC.
9720
Wilshire Blvd., Suite 500
Beverly
Hills, CA 90212
ANNUAL
MEETING OF STOCKHOLDERS
December
24, 2024
PROXY
STATEMENT
ANNUAL
MEETING AND PROXY SOLICITATION INFORMATION
The
accompanying proxy is solicited by the Board of Directors (the “Board”) of FAT Brands Inc., a Delaware corporation
(“we”, “us”, “our” or the “Company”), for use at our 2024
Annual Meeting of Stockholders (the “Annual Meeting”) to be held on Tuesday, December 24, 2024 at 10:00
a.m. Pacific Time at the Company’s corporate offices located at 9720 Wilshire Blvd., Suite 500, Beverly Hills, CA 90212, and
at any adjournment or postponements thereof.
This
proxy statement and accompanying proxy card were sent to the holders of our Class A Common Stock and Class B Common Stock as of the close
of business on November 21, 2024 (the “record date”). Any proxy given pursuant to this solicitation may be revoked
by the person giving it at any time before its use by delivering to the Company (Attention: Secretary), by no later than 5:00 p.m. Pacific
time on December 23, 2024, a written notice of revocation, delivery of a duly executed proxy card bearing a later date, or by attending
the Annual Meeting and voting in person.
YOUR
VOTE IS IMPORTANT. PLEASE VOTE AS SOON AS POSSIBLE USING ONE OF THE METHODS DESCRIBED IN THE NOTICE.
Who
is entitled to vote?
If
you were a holder of FAT Brands Inc. Class A Common Stock or Class B Common Stock at the close of business on November 21, 2024
(the “record date”), either as a stockholder of record or as the beneficial owner of shares held in street
name, you may direct a vote at the Annual Meeting. As of the record date, we had outstanding and entitled to vote 15,914,340
shares of Class A Common Stock and 1,270,805 shares of Class B Common Stock. Stockholders will have the right to one vote per share of
Class A Common Stock and 2,000 votes per share of Class B Common Stock held as of the record date. Our Class A Common Stock and Class
B Common Stock will vote as a single class on all matters described in this proxy statement for which your vote is being solicited. Stockholders
are not permitted to cumulate votes with respect to the election of directors.
What
does it mean to be a stockholder of record or beneficial holder and who can vote in person at the meeting?
Stockholder
of Record: Shares Registered in Your Name. If on the record date, your shares were registered directly in your name with the Company’s
transfer agent, VStock Transfer, then you are a stockholder of record and you may vote in person at the Annual Meeting or vote
by proxy. Whether or not you plan to attend the Annual Meeting, we urge you to vote to ensure that your vote is counted.
Beneficial
Holder: Owner of Shares Held in Street Name: If, on the record date, your shares were held in an account at a broker, bank, or other
financial institution (collectively referred to as “broker”), then you are the beneficial holder of shares
held in “street name” and these proxy materials are being forwarded to you by that broker. The broker holding your account
is considered the stockholder of record for purposes of voting at the Annual Meeting. As the beneficial holder, you have the right to
direct your broker on how to vote the shares in your account. As a beneficial holder, you are invited to attend the Annual Meeting. However,
since you are not a stockholder of record, you may not vote your shares in person at the Annual Meeting unless you request and obtain
a valid proxy from your broker giving you the legal right to vote the shares at the Annual Meeting.
What
constitutes a quorum?
Our
Bylaws require that a quorum – that is, the holders of a majority of the voting power of the issued and outstanding shares of our
capital stock entitled to vote at the Annual Meeting – be present, in person or by proxy, before any business may be transacted
at the Annual Meeting (other than adjourning the Annual Meeting to a later date to allow time to obtain additional proxies to satisfy
the quorum requirement).
How
do I vote by proxy before the meeting?
Before
the meeting, you may vote your shares in one of the following three ways if your shares are registered directly in your name with our
transfer agent, VStock Transfer.
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By
mail by completing, signing, dating and returning the enclosed proxy card in the postage paid envelope provided. |
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By
Internet at http://www.vstocktransfer.com/proxy. You may log-on using the control number printed on the proxy card. Voting
will be open until 11:59 pm (ET) on December 23, 2024. |
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By
electronic mail at Vote@vstocktransfer.com or facsimile at 646-536-3179. Please mark, sign and date your proxy card and send
a copy via e-mail attachment or facsimile. |
Please
refer to the proxy card for further instructions on voting via the Internet and by telephone. Please follow the directions on your proxy
card carefully.
May
I vote my shares in person at the Annual Meeting?
Attendance
at the Annual Meeting will be limited to stockholders or their proxy holders. If you are a proxy holder for a stockholder of record whose
shares are registered in his or her name, you must provide a copy of a proxy from the stockholder of record authorizing you to vote such
shares. If you are a beneficial holder who holds shares through a broker, bank or similar organization, you must provide proof of beneficial
ownership as of the close of business on the record date, such as a brokerage or bank account statement, a copy of the proxy from the
broker or other agent, or other similar evidence of ownership. Each attendee must also present valid photo identification, such as a
driver’s license or passport. Cameras and recording devices will not be permitted at the Annual Meeting.
How
can I revoke my proxy?
If
you are a stockholder of record and have sent in your proxy, you may change your vote by revoking your proxy by means of any one
of the following actions which, to be effective, must be taken before your proxy is voted at the Annual Meeting:
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Sending
a written notice to revoke your proxy to the Company’s Secretary at our corporate offices. To be effective, we must receive
the notice of revocation before the Annual Meeting commences. |
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Transmitting
a proxy by mail at a later date than your prior proxy. To be effective, the Company must receive the later dated proxy before the
Annual Meeting commences. If you fail to date or to sign that later proxy, however, it will not be treated as a revocation of an
earlier dated proxy. |
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Attending
the Annual Meeting and voting in person or by proxy in a manner different than the instructions contained in your earlier proxy. |
If
you are a beneficial holder you may submit new voting instructions by contacting your broker. You may also change your vote or
revoke your voting instructions in person at the Annual Meeting if you obtain a signed proxy from the broker giving you the right to
vote the shares.
What
will happen if I do not vote on a proposal?
A
properly executed proxy received by us prior to the Annual Meeting, and not revoked, will be voted as directed by the stockholder on
that proxy. If a stockholder provides no specific direction with respect to a proposal, a properly completed proxy returned by a stockholder
will be voted in accordance with the Board of Directors’ recommendations as set forth in this proxy statement. As of the date of
this proxy statement, we are not aware of any matters to be voted on at the Annual Meeting other than as stated in this proxy statement
and the accompanying notice of Annual Meeting. If any other matters are properly brought before the Annual Meeting, the proxy card gives
discretionary authority to the persons named in it to vote the shares in their own discretion.
What
vote is required to approve each item?
Proxies
marked as abstentions or withheld votes will be counted as shares that are present and entitled to vote for purposes of determining whether
a quorum is present. If a broker indicates on its proxy that it does not have discretionary voting authority to vote shares on one or
more proposals at the Annual Meeting (a “broker non-vote”), such shares will still be counted in determining whether
a quorum is present. Brokers or other nominees who hold shares in “street name” for the beneficial owner of those shares
typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions
from the beneficial owner. However, brokers are not allowed to exercise their voting discretion with respect to the election of directors
or other “non-routine” proposals without specific instructions from the beneficial owner. Of the matters on the agenda for
the Annual Meeting, only the ratification of the selection of our auditors is considered to be a “routine” proposal for the
purposes of brokers exercising their voting discretion.
Proposal
No. 1 – Election of Directors. Provided that a quorum of the stockholders is present in person or by proxy at the Annual Meeting,
a plurality of the votes cast is required for the election of directors. As a result, the nominees who receive the highest number of
votes cast for director will be elected. Withheld votes, abstentions and broker non-votes will have no effect on the results of the election
of directors.
Proposal
No. 2 – Approval of Amendment to our Certificate of Incorporation to Allow for Exculpation of Officers. The affirmative vote
of the holders of a majority of the voting power of all outstanding shares of capital stock entitled to vote generally in the election
of directors, voting together as a single class, will be required for the approval of this proposal. This proposal is considered
to be a “non-routine” matter, so if you hold your shares in street name and do not provide voting instructions to your broker,
bank, or other agent that holds your shares, your broker, bank, or other agent will not have discretionary authority to vote your shares
on this proposal. Abstentions and broker non-votes will have the same effect as a vote against this proposal.
Proposal
No. 3 – Non-Binding Advisory Vote on the Compensation of Named Executive Officers. The affirmative vote of the holders of a
majority of the voting power of the shares represented in person or by proxy at the Annual Meeting and entitled to vote on this item
will be required for the approval of this proposal. This proposal is considered to be a “non-routine” matter, so if you hold
your shares in street name and do not provide voting instructions to your broker, bank, or other agent that holds your shares, your broker,
bank, or other agent will not have discretionary authority to vote your shares on this proposal. Abstentions will have the same effect
as a vote against this proposal, and broker non-votes will have no effect on the results of this proposal.
Proposal
No. 4 – Vote for the Ratification of Selection of Independent Public Accounting Firm. The affirmative vote of the holders of
a majority of the voting power of the shares represented in person or by proxy at the Annual Meeting and entitled to vote on this item
will be required for the ratification of the selection of Macias Gini & O’Connell, LLP. This proposal is considered to be a
“routine” matter, so if you hold your shares in street name and do not provide voting instructions to your broker, bank,
or other agent that holds your shares, your broker, bank, or other agent will have discretionary authority to vote your shares on this
proposal. Abstentions will have the same effect as a vote against this proposal.
Other
Items. For any other item of business that may be presented at the Annual Meeting, the affirmative vote of the holders of a majority
of the shares represented in person or by proxy and entitled to vote at the meeting will be required for approval. A properly executed
proxy marked “ABSTAIN” with respect to any such matter will not be voted. Because abstentions represent shares entitled to
vote, the effect of an abstention will be the same as a vote against a proposal. Broker non-votes will have no effect on the results
of such a proposal.
Can
I exercise rights of appraisal or other dissenters’ rights at the Annual Meeting?
No.
Under Delaware law, holders of our voting stock are not entitled to demand appraisal of their shares or exercise similar rights of dissenters
as a result of the approval of any of the proposals to be presented at the Annual Meeting.
Who
is paying for this proxy solicitation?
The
Company will pay the cost of soliciting proxies for the Annual Meeting. Proxies may be solicited by our regular employees in person,
or by mail, courier, telephone or facsimile. Arrangements also may be made with brokerage houses and other custodians, nominees and fiduciaries
for the forwarding of solicitation material to the beneficial owners of stock held of record by such persons. We may reimburse such brokerage
houses, custodians, nominees and fiduciaries for reasonable out-of-pocket expenses incurred by them in connection therewith.
What
does it mean if I receive more than one Notice of Annual Meeting?
Some
stockholders may have their shares registered in different names or hold shares in different capacities. For example, a stockholder may
have some shares registered in his or her name, individually, and others in his or her capacity as a custodian for minor children or
as a trustee of a trust. In that event, you will receive multiple copies of this proxy statement and multiple proxy cards. If you
want all of your votes to be counted, please be sure to sign, date and return all of those proxy cards.
What
does it mean if multiple members of my household are stockholders but we only received one Notice of Annual Meeting or set of proxy materials
in the mail?
The
Securities and Exchange Commission, or SEC, has adopted rules that permit companies and intermediaries, such as brokers, to satisfy
the delivery requirements for notices and proxy materials with respect to two or more stockholders sharing the same address by delivering
a single notice or set of proxy materials addressed to those stockholders. In accordance with a prior notice sent to certain brokers,
banks, dealers or other agents, we are sending only one notice or full set of proxy materials to those addresses with multiple stockholders
unless we received contrary instructions from any stockholder at that address. This practice, known as “householding,” allows
us to satisfy the requirements for delivering notices or proxy materials with respect to two or more stockholders sharing the same address
by delivering a single copy of these documents. Householding helps to reduce our printing and postage costs, reduces the amount of mail
you receive and helps to preserve the environment. If you currently receive multiple copies of the notice or proxy materials at your
address and would like to request “householding” of your communications, please contact your broker. Once you have elected
“householding” of your communications, “householding” will continue until you are notified otherwise or until
you revoke your consent. To receive a separate copy, or, if a stockholder is receiving multiple copies, to request that we only send
a single copy of the proxy materials, you may contact us at our corporate offices at 9720 Wilshire Blvd., Suite 500, Beverly Hills,
CA 90212, Attention: Corporate Secretary.
PROPOSAL
NO. 1
ELECTION
OF DIRECTORS
At
the Annual Meeting, the stockholders will be asked to elect the entire Board of Directors, consisting of 14 persons, to serve until the
2025 Annual Meeting of Stockholders and until their respective successors are elected and qualified. The names of the 14 nominees
for director and their current positions and offices with the Company are set forth below. Detailed biographical information regarding
each of these nominees is provided in this proxy statement below under the heading “The Board of Directors.”
| Director | |
Positions with FAT Brands | |
| Director Since | | |
Independent under NASDAQ independence standard |
| Andrew A. Wiederhorn | |
Chairman of the Board, outside consultant (C) | |
| 2017 | | |
No |
| John S. Allen | |
Director (C) | |
| 2023 | | |
Yes |
| Donald J. Berchtold | |
Director, Chief Concept Officer | |
| 2023 | | |
No |
| Lynne L. Collier | |
Director (A) (C) | |
| 2022 | | |
Yes |
| Tyler B. Child | |
Director (A) (C) | |
| 2023 | | |
Yes |
| Mark Elenowitz | |
Director
(Lead Independent Director) (A) (C) | |
| 2023 | | |
Yes |
| James G. Ellis | |
Director (A) (C) | |
| 2023 | | |
Yes |
| Peter R. Feinstein | |
Director (A) (C) | |
| 2023 | | |
Yes |
| Matthew H. Green | |
Director (A) (C) | |
| 2023 | | |
Yes |
| John C. Metz | |
Director (C) | |
| 2023 | | |
No |
| Carmen Vidal | |
Director, International Legal Counsel | |
| 2023 | | |
No |
| Mason A. Wiederhorn | |
Director, Chief Brand Officer | |
| 2023 | | |
No |
| Taylor A. Wiederhorn | |
Director, Chief Development Officer | |
| 2023 | | |
No |
| Thayer D. Wiederhorn | |
Director, Chief Operating Officer | |
| 2023 | | |
No |
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(A) |
Member
of the Audit Committee of the Board |
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(C) |
Member
of the Compensation Committee of the Board |
If
a nominee is unable or unwilling to serve, the shares to be voted for such nominee that are represented by proxies will be voted for
any substitute nominee designated by the Board of Directors. The Company did not receive any stockholder nominations for director. If
a quorum is present at the Annual Meeting, the 14 nominees receiving the highest number of votes cast, in person or by proxy, will be
elected to serve. Abstentions and broker nonvotes will have no effect on the election of directors. If not otherwise specified, proxies
will be voted “FOR” the nominees for director named above.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE
“FOR”
ELECTION OF EACH NOMINEE NAMED ABOVE.
PROPOSAL
NO. 2
APPROVAL
OF AMENDMENT TO OUR CERTIFICATE OF INCORPORATION TO
ALLOW FOR EXCULPATION OF OFFICERS
Background
The
State of Delaware, which is our state of incorporation, recently enacted legislation that enables Delaware companies to limit the liability
of certain officers in limited circumstances under Section 102(b)(7) of the Delaware General Corporation Law (“DGCL”).
Historically, DGCL Section 102(b)(7) enabled corporations to limit the liability of directors in limited circumstances, and the Company
adopted exculpation provisions in its Certificate of Incorporation since its inception. With the recent amendment, DGCL Section 102(b)(7)
now permits exculpation for officers, but only for direct claims brought by stockholders for breach of an officer’s fiduciary duty
of care, including class actions, but does not eliminate officers’ monetary liability for breach of fiduciary duty claims brought
by the corporation itself or for derivative claims brought by stockholders in the name of the corporation. Furthermore, the limitation
on liability does not apply to breaches of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of law, or any transaction in which the officer derived an improper personal benefit.
The
Board of Directors believes it is important to provide protection from certain liabilities and expenses that may discourage prospective
or current directors from accepting or continuing membership on corporate boards and prospective or current officers from serving corporations.
In the absence of such protection, qualified directors and officers might be deterred from serving as directors or officers due to exposure
to personal liability and the risk that substantial expense will be incurred in defending lawsuits, regardless of merit. Our current
Second Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) provides for exculpation
and limitations of liability for directors pursuant to the DGCL. In considering whether to extend exculpation and limitations of liability
to officers pursuant to DGCL Section 102(b)(7), the Board of Directors took into account the narrow class and type of claims that such
officers would be exculpated from liability pursuant to DGCL Section 102(b)(7), the limited number of officers that would be impacted,
and the benefits the Board of Directors believes would accrue to the Company by providing exculpation in accordance with DGCL Section
102(b)(7), including, without limitation, the ability to attract and retain key officers and the potential to reduce litigation costs
associated with frivolous lawsuits.
The
Board of Directors determined that it is advisable and in the best interests of the Company and our stockholders to amend the current
exculpation and liability provisions in Section 8.01 of our Certificate of Incorporation to extend such protection to our officers, in
addition to our directors. We refer to this proposed amendment to our Certificate of Incorporation as the “Certificate Amendment”
in this proxy statement.
Text
of Proposed Certificate Amendment
Our
Certificate of Incorporation currently provides for the exculpation of directors and does not include a provision allowing for the exculpation
of officers. We propose to amend Section 8.01 of our Certificate of Incorporation so that it would state in its entirety as follows:
“SECTION
8.01 Limitation of Personal Liability. No director or officer of the Corporation shall be personally liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, except to the extent such exemption from
liability or limitation thereof is not permitted under the DGCL, as it presently exists or may hereafter be amended from time to time.
If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors or officers,
then the liability of a director or officer of the Corporation shall be eliminated or limited to the fullest extent permitted by the
DGCL, as so amended. No amendment to or repeal of this provision shall apply to or have any effect on the liability or alleged liability
of any director or officer of the Corporation for or with respect to any acts or omissions of such director or officer occurring prior
to such amendment or repeal.”
The
full text of the proposed “Certificate of Amendment of the Restated Certificate of Incorporation” reflecting the foregoing
Certificate Amendment is attached as Appendix A to this proxy statement.
Reasons
for the Proposed Certificate Amendment
The
Board of Directors adopted the proposed Certificate Amendment to maintain provisions of the Certificate of Incorporation in keeping with
the governing statutes contained in the DGCL. The Board of Directors believes that DGCL 102(b)(7) and the Certificate Amendment remedy
the inconsistent treatment of officers and directors under the DGCL and the Certificate of Incorporation, despite directors and officers
having similar fiduciary duties. The Board of Directors also noted that several other states already permit corporations to eliminate
or limit officer liability, and the Board of Directors believes it is appropriate for public companies in states that allow exculpation
of officers to include exculpation clauses in their certificates of incorporation. The nature of the role of directors and officers often
requires them to make decisions on crucial matters. Frequently, directors and officers must make decisions in response to time-sensitive
opportunities and challenges, which can create substantial risk of investigations, claims, actions, suits or proceedings seeking to impose
liability on the basis of hindsight. Limiting concern about personal risk empowers both directors and officers to best exercise their
business judgment in furtherance of stockholder interests. Many Delaware companies have already adopted exculpation clauses limiting
the personal liability of officers in their certificates of incorporation and we expect this trend to continue. Failing to adopt the
proposed Certificate Amendment could impact our recruitment and retention of exceptional officer candidates who may conclude that the
potential exposure to liabilities, costs of defense and other risks of proceedings exceeds the benefits of serving as an officer of the
Company.
For
the reasons stated above, the Board of Directors determined that the proposed Certificate Amendment is advisable and in the best interest
of our Company and our stockholders and authorized and approved the proposed Certificate Amendment and directed that it be considered
at the Annual Meeting. The Certificate Amendment is not being proposed in response to any specific resignation, threat of resignation
or refusal to serve by any officer nor is it being proposed in response to any litigation or threat of litigation.
Timing
and Effect of the Certificate Amendment
If
the proposed Certificate Amendment is approved by our stockholders, it will become effective immediately upon the filing of the Certificate
of Amendment with the Secretary of State of the State of Delaware, which we expect to file promptly after the Annual Meeting. Other than
the amendment of the existing Section 8.01 of our Certificate of Incorporation, the remaining provisions of our Certificate of Incorporation
will be unchanged after effectiveness of the Certificate Amendment. If the proposed Certificate Amendment is not approved by our stockholders,
our Certificate of Incorporation will remain unchanged. In accordance with the DGCL, the Board of Directors may elect to abandon the
proposed Certificate Amendment without further action by the stockholders at any time prior to the effectiveness of the filing of the
Certificate of Amendment with the Secretary of State of the State of Delaware, notwithstanding stockholder approval of the proposed Certificate
Amendment.
Required
Vote for Stockholder Approval
The
affirmative vote of the holders of a majority of the voting power of all outstanding shares of capital stock entitled to vote generally
in the election of directors, voting together as a single class, will be required for the approval of this proposal.
Abstentions and broker non-votes will have the same effect as a vote “against” the proposal.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE CERTIFICATE AMENDMENT
PROPOSAL
NO. 3
ADVISORY
VOTE ON THE COMPENSATION OF NAMED EXECUTIVE OFFICERS
In
accordance with Section 14A of the Exchange Act, we are asking stockholders to approve, on an advisory basis, the compensation of the
Company’s named executive officers as disclosed in accordance with the SEC’s rules in the “Executive Compensation”
section of this proxy statement. This proposal, commonly known as a “say-on-pay” proposal, is not intended to address any
specific item of compensation or any specific named executive officer, but rather the overall compensation of all of our named executive
officers and the philosophy, policies and practices described in this proxy statement as a whole.
The
say-on-pay vote is advisory, and therefore not binding on the Company or our Board of Directors. The say-on-pay vote will, however, provide
information to us regarding investor sentiment about our executive compensation philosophy, policies and practices, which the Board will
be able to consider when determining future executive compensation. The Board of Directors values the opinions of our stockholders and
to the extent there is any significant vote against our named executive officer compensation as disclosed in this proxy statement, we
will consider our stockholders’ concerns and the Board will evaluate whether any additional actions are necessary.
Stockholders
are urged to read the Summary Compensation Table and other related compensation tables and narrative under the heading “Executive
Compensation” below, which provide specific information on the compensation of the named executive officers. The Board of Directors
believes that the Company’s policies and procedures are effective in achieving our goals, and that the compensation of the named
executive officers reported in this proxy statement reflects and supports these compensation policies and procedures.
Based
on the above, the Company is asking stockholders to approve the following advisory resolution at the Annual Meeting:
“RESOLVED,
that the stockholders of FAT Brands Inc. approve, on a non-binding advisory basis, the compensation of the Company’s named executive
officers as disclosed in the Summary Compensation Table and the related compensation tables, notes and narrative in the proxy statement
for the Company’s Annual Meeting.”
The
affirmative vote of the holders of a majority of the voting power of the shares represented in person or by proxy at the Annual Meeting
and entitled to vote on this item will be required for the approval of this proposal.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS.
PROPOSAL
NO. 4
RATIFICATION
OF APPOINTMENT OF
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
A
resolution will be presented at the Annual Meeting to ratify the appointment by our Audit Committee of Macias Gini & O’Connell,
LLP (“MGO”) as our independent registered public accounting firm for the fiscal year ending December 29, 2024. MGO
was engaged by the Company as of June 27, 2023. Prior to engaging MGO, neither the Company nor anyone on its behalf consulted with MGO
regarding: (i) the application of accounting principles to a specified transaction, either completed or proposed; (ii) the type of audit
opinion that might be rendered on its financial statements by MGO, and neither a written report or oral advice was provided to the Company
by MGO that MGO concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or
financial reporting issues; or (iii) any other matter that was the subject of a “disagreement” or “reportable event”
(as such terms are described in Items 304(a)(1)(iv) and (v), respectively, of Regulation S-K) between the Company and its former independent
registered public accounting firm.
Our
independent registered public accounting firm for the fiscal year ending December 25, 2022 was Baker Tilly US, LLP (“Baker Tilly”),
which informed the Company on April 18, 2023 that it would not stand for re-election as the Company’s certifying accountant for
the fiscal year ended December 31, 2023. Baker Tilly’s reports on the Company’s financial statements for the fiscal years
ended December 25, 2022 and December 26, 2021 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or
modified as to uncertainty, audit scope, or accounting principles. During the Company’s two most recent fiscal years ended December
25, 2022 and December 26, 2021 and the subsequent interim period through April 24, 2023, there were no disagreements, within the meaning
of Item 304(a)(1)(iv) of Regulation S-K promulgated under the Securities Exchange Act of 1934 (“Regulation S-K”) and
the related instructions thereto, with Baker Tilly on any matter of accounting principles or practices, financial statement disclosure,
or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Baker Tilly, would have caused it to make
reference to the subject matter of the disagreements in connection with its reports. Also during this same period, there were no reportable
events within the meaning of Item 304(a)(1)(v) of Regulation S-K and the related instructions thereto. Baker Tilly did not seek the Company’s
consent to its decision not to stand for re-election. As a result, the Company’s Board of Directors or Audit Committee did not
recommend or approve such decision.
The
Audit Committee reviews the independence of our independent registered public accounting firm on an annual basis and has determined that
MGO is independent. In addition, the Audit Committee pre-approves all work and fees that are performed and billed by our independent
registered public accounting firm.
Representatives
of MGO are expected to attend the Annual Meeting or be available by telephone conference to respond to appropriate questions and will
have the opportunity to make a statement, if desired. Representatives of Baker Tilly are not expected to attend the Annual Meeting.
Although
stockholder ratification of the appointment of our independent registered public accounting firm is not required by our bylaws or otherwise,
we are submitting the selection of MGO to our stockholders for ratification to permit stockholders to participate in this important corporate
decision. If not ratified, the Audit Committee will reconsider the selection, although the Audit Committee will not be required to select
a different independent registered public accounting firm for our Company. The affirmative vote of the holders of a majority of the shares
represented in person or by proxy and entitled to vote on this item will be required to ratify the appointment of MGO. The Board of Directors
recommends a vote “FOR” the ratification of its appointment of MGO as our independent registered public accounting firm.
If not otherwise specified, validly executed proxies will be voted “FOR” this proposal.
The
aggregate fees billed to us by MGO (fiscal 2023) and Baker Tilly (fiscal 2022) for the last two fiscal years in the following
categories were as follows (dollars in thousands):
| | |
December
31, 2023 | | |
December
25, 2022 | |
| Audit fees | |
$ | 992 | | |
$ | 1,068 | |
| Audit related fees | |
$ | – | | |
$ | 215 | |
| Tax fees | |
$ | – | | |
$ | – | |
| All other fees | |
$ | – | | |
$ | – | |
THE
BOARD OF DIRECTORS RECOMMEND A VOTE “FOR” THE RATIFICATION OF
THE
SELECTION OF MACIAS GINI & O’CONNELL, LLP
AS
THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
FOR
THE FISCAL YEAR ENDING DECEMBER 29, 2024.
THE
BOARD OF DIRECTORS
| Name |
|
Age |
|
Business
Experience |
Andrew
A. Wiederhorn
(Chairman) |
|
58 |
|
Mr. Wiederhorn is the founder of FAT Brands and served as a director of the Company since our inception in March 2017. He also served as President and CEO of FAT Brands and our principal operating subsidiaries from March 2017 until May 2023. He currently serves on the board of managers of our majority stockholder, Fog Cutter Holdings LLC, and was previously Chairman and CEO of our former parent company, Fog Cutter Capital Group Inc. Mr. Wiederhorn previously founded and served as the Chairman and Chief Executive Officer of Wilshire Financial Services Group Inc. and Wilshire Credit Corporation. Mr. Wiederhorn received his B.S. degree in Business Administration from the University of Southern California in 1987, with an emphasis in Finance and Entrepreneurship. He previously served on the Board of Directors of Fabricated Metals, Inc., The Boy Scouts of America Cascade Pacific Council, The Boys and Girls Aid Society of Oregon, University of Southern California Associates, Citizens Crime Commission of Oregon, and Economic Development Council for the City of Beverly Hills Chamber of Commerce. Mr. Wiederhorn brings to the Board his more than 20 years of experience with the Company and its predecessors, including as the Company’s founder, as well as his experience with sophisticated financial structures, mergers and acquisitions, strategic planning, and leadership and management of complex organizations.
On May 10, 2024, Mr. Wiederhorn was indicted on
federal charges, alleging that Mr. Wiederhorn caused FAT Brands Inc. and an affiliate to distribute $47 million to him for his personal
use and benefit, mischaracterized these distributions as loans, and failed to disclose the disbursements as reportable compensation.
The indictment also alleges that Mr. Wiederhorn failed to pay personal income taxes in the amount of $7.7 million. Mr. Wiederhorn was
charged with endeavoring to obstruct the administration of the Internal Revenue Code, tax evasion, wire fraud, making false statements
and omitting material facts in statements to accountants in connection with audits and reviews, certifying faulty financial reports,
and causing the Company to extend and maintain credit in the form of personal loan. Mr. Wiederhorn was also charged in a separate indictment
for illegally possessing a firearm and ammunition after being convicted of a felony.
|
| |
|
|
|
|
| John
S. Allen |
|
72 |
|
John
Allen has served as a director of FAT Brands since September 2023. Mr. Allen is a retired restaurant operator, having served as the
owner and operator of Pacific Way Bakery & Café. Mr. Allen received a Bachelor of Arts degree from the University of Illinois.
Mr. Allen brings to the Board his experience and history in restaurant operations, management and finance. |
| |
|
|
|
|
| Donald
J. Berchtold |
|
79 |
|
Donald
Berchtold has served as a director of FAT Brands since March 2023. Mr. Berchtold also serves as Chief Concept Officer of FAT Brands
Inc., a role he has held since February 2018. Mr. Berchtold previously held the position of President and Chief Operating Officer
of Fatburger North America Inc. and President and Chief Operating Officer of Fog Cutter Capital Group Inc. Mr. Berchtold also served
as Senior Vice President of Wilshire Financial Services Group Inc. and its sister company, Wilshire Credit Corporation. Mr. Berchtold
was the owner-operator of his own business that included a dinner house, catering company and other food service concepts and was
an active member in the Restaurants of Oregon Association. Mr. Berchtold holds a Bachelor of Science degree in Finance and Marketing
from Santa Clara University. Mr. Berchtold brings to the Board his more than 20 years of experience with the Company and its predecessors,
his more than 50 years of experience in the restaurant and hospitality industries, his knowledge and experience in strategic planning,
and leadership and management of complex organizations. |
| Name |
|
Age
|
|
Business
Experience |
| Tyler
B. Child |
|
49 |
|
Tyler
Child has served as a director of FAT Brands since March 2023. Ms. Child has approximately 10 years of experience in investment banking,
working in Equity Capital Markets on the Syndicate Desk for JMP Securities LLC, Banc of America Securities, LLC, and Montgomery Securities.
Ms. Child holds a bachelor’s degree in Communications and Spanish from Santa Clara University. Ms. Child brings to the Board
her experience and history in investment banking and capital markets. |
| |
|
|
|
|
| Lynne
L. Collier |
|
57 |
|
Lynne
L. Collier has served as a director of FAT Brands since July 2022. Ms. Collier is an experienced capital market professional, with
nearly 30 years of experience in public capital markets and a focus on the restaurant industry. Ms. Collier currently serves as Head
of Consumer Discretionary for Water Tower Research, LLC, and previously served as a Managing Director in the Investor Relations Division
of ICR Inc. from April 2021 to June 2022. Prior to that, Ms. Collier had a 25-year career in equity research as a sell-side Consumer
Analyst, including for Loop Capital, Canaccord Genuity and Sterne Agee. Ms. Collier received a bachelor’s degree in Finance
from Baylor University and an M.B.A. in Finance from Texas Christian University. Ms. Collier brings to the Board substantial expertise
in financial analysis of companies in the restaurant and hospitality industries, and broad expertise in capital markets and investor
relations generally. |
| |
|
|
|
|
| Mark
Elenowitz |
|
54 |
|
Mark
Elenowitz has served as a director of FAT Brands since April 2023. Mr. Elenowitz is a Wall Street veteran, who co-founded a boutique
investment bank and its online capital formation platform BANQ®. He is a noted speaker at Small Cap and Reg A events, including
the SEC Small Business Forum, and has been profiled in BusinessWeek, CNBC and several other publications. Mr. Elenowitz is also a
member of the Depository Trust & Clearing Corporation (DTCC) Private Markets Executive Advisory Board, tasked with developing
DTCC’s new Digital Securities Management (DSM) platform. Mr. Elenowitz currently serves as managing director of Tripoint Capital
Management, Digital Offering LLC and Cambria Capital LLC, and is the President and co-founder of Horizon Fintex, a fintech company
offering a suite of integrated securities software applications for compliant issuance through secondary trading of electronic securities.
In addition, he is the co-creator of Upstream concept, a MERJ Exchange Market, a global stock exchange for digital securities and
affiliate of the World Federation of Exchanges (WFE). Mr. Elenowitz is also a member of the Board of Directors of the Long Island
Capital Alliance and the National Investment Banking Association, and sits on the advisory boards of several private companies. He
is a graduate of the University of Maryland School of Business and Management with a Bachelor of Science degree in Finance. Mr. Elenowitz
brings to the Board substantial expertise in capital markets, financial and strategic planning, complex financial transactions, mergers
and acquisitions, and leadership of complex organizations. |
| Name
|
|
Age |
|
Business
Experience |
| James
G. Ellis |
|
77 |
|
James
Ellis has served as a director of FAT Brands since September 2023. Mr. Ellis served as the Dean of the Marshall School of Business
at the University of Southern California from 2007 until June 2019. Prior to his appointment as Dean in April 2007, Mr. Ellis was
the Vice Provost, Globalization, for USC and prior to that was Vice Dean, External Relations. Mr. Ellis was also a professor in the
Marketing Department of the Marshall School of Business from 1997 until retiring in 2021. Mr. Ellis continues to serve on the Boards
of Directors of a number of other public and private companies, including Mercury General Corporation and J.G. Boswell Company.
Mr. Ellis received a Bachelor of Business Administration degree from the University of New Mexico and MBA degree from Harvard
Business School. Mr. Ellis brings to the Board substantial expertise in finance, marketing, financial accounting and complex financial
transactions, and leadership and management of complex organizations. |
| |
|
|
|
|
| Peter
R. Feinstein |
|
80 |
|
Peter
Feinstein has served as a director of FAT Brands since July 2023. Mr. Feinstein is an experienced operator of restaurant and entertainment
properties, including SHAC, LLC, Fatburger franchises, Sugar Factory, El Dorado Cantina and Country Star Restaurants. Mr. Feinstein
is also a retired certified public accountant, having served in senior management and audit roles with Kenneth Leventhal & Co.
and Fox & Co. Mr. Feinstein graduated with a Bachelor of Science degree in Accounting from UCLA. Mr. Feinstein brings to the
Board substantial expertise in financial and strategic planning, financial accounting, mergers and acquisitions, hospitality industry
operations and management, and leadership and management of complex organizations. |
| |
|
|
|
|
| Matthew
H. Green |
|
58 |
|
Matthew
Green has served as a director of FAT Brands since July 2023. Mr. Green is an experienced finance professional based in London, with
over 30 years of experience as a merchant banker, focused primarily on the real estate, infrastructure, and energy sectors for clients
including private equity firms, pension funds, sovereign wealth funds and family offices. Mr. Green received a bachelor’s degree
in Business Administration from the University of Washington. Mr. Green brings to the Board his experience and history in debt finance
and capital markets, real estate, and investment banking. |
| |
|
|
|
|
| John
C. Metz |
|
71 |
|
John
Metz has served as a director of FAT Brands since July 2023. Mr. Metz is an experienced owner, operator and developer of restaurants
and hospitality properties. Mr. Metz currently owns and operates approximately 70 franchised restaurants, including Hurricane Dockside
Grill, Denny’s and Wahoo Seafood Grill restaurants. Mr. Metz received a Bachelor of Science degree in Hotel Administration
and an M.B.A. from Cornell University. Mr. Metz brings to the Board his experience and history in restaurant operations and franchising,
and financial and operational management of complex organizations. |
| |
|
|
|
|
| Carmen
Vidal |
|
52 |
|
Carmen
Vidal has served as a director of FAT Brands since March 2023. Ms. Vidal has also served as International Legal Counsel & Director
of International Franchise Development (Europe/Middle East/North Africa) for the Company since October 2021. Prior to that, Ms. Vidal
served as Vice President of International Development for the Company. Ms. Vidal brings to the Board her substantial experience in
international franchising and cross-border transactions, and long history with the Company and its predecessors. |
| Name
|
|
Age |
|
Business
Experience |
| Mason
A. Wiederhorn |
|
34 |
|
Mason
Wiederhorn has served as a director of FAT Brands since March 2023, and serves on the board of managers of the Company’s
majority stockholder, Fog Cutter Holdings LLC. He has also served as the Chief Brand Officer of the Company since December 2021.
Prior to that, Mr. Wiederhorn served as Creative Director of the Company, preceded by his role as Creative Director of Fatburger
North America Inc. and Buffalo’s Franchise Concepts Inc., and Videographer for Fatburger North America Inc. Mr. Wiederhorn
graduated from the Business of Cinematic Arts program at the University of Southern California Marshall School of Business. Mr. Wiederhorn
brings to the Board his participation in the founding and growth of our Company and its predecessors, leadership skills, and background
and education in the creative arts and promotion of our multiple brands. |
| |
|
|
|
|
| Taylor
A. Wiederhorn |
|
36 |
|
Taylor
Wiederhorn has served as a director of FAT Brands since March 2023, and serves on the board of managers of the Company’s
majority stockholder, Fog Cutter Holdings LLC. He has also been the Chief Development Officer of the Company since October
2017. Previously, Mr. Wiederhorn served as Vice President - Franchise Marketing and Development for Fatburger North America from
December 2011 until October 2017. Mr. Wiederhorn graduated from the USC Marshall School of Business with a Bachelor of Science degree
in Business Administration with a concentration in Corporate Finance. Mr. Wiederhorn brings to the Board his participation
in the founding and growth of the Company and its predecessors, leadership skills, management of our sales teams, and business
background and education. |
| |
|
|
|
|
| Thayer
D. Wiederhorn |
|
36 |
|
Thayer
Wiederhorn has served as a director of FAT Brands since March 2023 and serves on the board of managers of the Company’s majority
stockholder, Fog Cutter Holdings LLC. He has also been the Chief Operating Officer of the Company since November 2021, responsible
for day-to-day operations and providing leadership to management to ensure the execution of both short-term and long-term business
strategies. Prior to his role as Chief Operating Officer, Mr. Wiederhorn served as Chief Marketing Officer from March 2017, overseeing
global branding and marketing initiatives. He also held several prior positions, including VP of Marketing for Fatburger North America
Inc. and Buffalo’s Franchise Concepts Inc. from June 2012 to March 2017, and Director of Marketing for Fatburger from July
2011 to June 2012. Additionally, he served as Marketing Coordinator and Brand Development Agent for Fatburger in 2010 and 2011. Mr.
Wiederhorn began his career working in Fatburger restaurants and food trucks. He holds a Bachelor of Science degree in Business Administration
with an emphasis in Finance and Business Economics from the University of Southern California. Mr. Wiederhorn brings to the Board
his deep involvement and insight in the founding and growth of the Company and its predecessors, along with his leadership expertise,
marketing experience and formal business education. |
CORPORATE
GOVERNANCE
Board
Composition and Leadership Structure; Controlled Company Status
A
majority of the outstanding voting power of our capital stock is held by one entity, Fog Cutter Holdings LLC, and we are therefore considered
a “controlled company” under the corporate governance rules of The Nasdaq Stock Market LLC (“NASDAQ”).
Under these rules, we are not required to have a majority of our Board of Directors be independent, nor are we required to have a compensation
committee or independent nominating function.
From
the inception of our Company in 2017 until March 2023, a majority of our Board was independent and we had a standalone, fully independent
compensation committee and nominating committee. In March 2023, the Board was refreshed and expanded to ten persons, and all four members
of the board of managers of our majority stockholder joined the Company’s Board of Directors (Andrew Wiederhorn, Mason Wiederhorn,
Taylor Wiederhorn and Thayer Wiederhorn). Since March 2023, the size of our Board was expanded to 14 persons and additional independent
directors were appointed. The Board meets frequently, with scheduled Board meetings generally held every two weeks. Currently, seven
of our 14 directors are considered independent within the meaning of the applicable rules and regulations of the SEC and the director
independence standards of NASDAQ. In addition, Mark Elenowitz serves as the lead independent director on the Board.
In
May 2023, Andrew Wiederhorn, the Company’s founder and Chairman, stepped down as Chief Executive Officer of the Company and transitioned
to a new role as outside consultant and strategic advisor to the Company. At that time, the Board appointed Kenneth Kuick and Robert
Rosen as Co-Chief Executive Officers of the Company.
The
Board believes that the Company and its stockholders are best served by the current leadership structure because it is valuable to have
on the Board the breadth of experience and depth of knowledge of our founder/Chairman and senior operations team, balanced by our independent
directors, who are led by our lead independent director, and our fully independent Audit Committee. While oversight of our Company is
the responsibility of our Board as a whole, our founder and Chairman is most familiar with our business, strategy and complex financing
arrangements, and as Chairman is best positioned to focus our Board’s agenda on the key issues facing our Company. In light of
our status as a controlled company, we believe that the structure of our Board provides an appropriate balance of management leadership
and non-management oversight.
Director
Candidates
In
light of our status as a controlled company, our Board has determined not to establish an independent nominating committee or have its
independent directors solely exercise the nominating function, and has elected instead to have the entire Board be directly responsible
for nominating members of the Board. In considering whether to nominate candidates for election to the Board, the Board considers each
nominee’s qualifications, including business acumen and experience, knowledge of our business and industry, and ability to act
in the best interests of our Company. The Board does not set specific minimum qualifications or assign specific weights to particular
criteria and no particular criterion is a prerequisite for a prospective nominee.
Due
to our status as a controlled company, we do not have a formal policy with respect to the consideration of director candidates recommended
by our stockholders. Stockholder recommendations relating to director nominees or other proposals may be submitted in accordance with
the procedures set forth below under “Stockholder Proposals for 2024 Annual Meeting.”
Board’s
Role in Risk Oversight
Our
Board of Directors believes that open communication between management and the Board of Directors is essential for effective risk management
and oversight. The Board meets with our Co-Chief Executive Officers and other members of senior management at our bi-weekly Board meetings,
where, among other topics, they discuss strategy and risks in the context of reports from the management team and evaluate the risks
inherent in significant transactions. While our Board of Directors is ultimately responsible for risk oversight, our Board committees
assist the Board of Directors in fulfilling its oversight responsibilities in certain areas of risk. The Audit Committee assists the
Board in fulfilling its oversight responsibilities with respect to risk management in the areas of major financial risk exposures, internal
control over financial reporting, disclosure controls and procedures, legal and regulatory compliance. The Compensation Committee assists
the Board in assessing risks created by the incentives inherent in our compensation policies.
Director
Independence
The
Board has determined that seven of our 14 directors are currently considered independent under the applicable rules and regulations of
the SEC and the director independence standards of NASDAQ (Ms. Collier, Ms. Child, and Messrs. Allen, Elenowitz, Ellis, Feinstein, and
Green), and one other director (Mr. Metz) is expected to become independent under these rules in January 2025. Furthermore, the Board
has determined that the current members of the Audit Committee of the Board are each “independent” under the applicable rules
and regulations of the SEC and the director independence standards of NASDAQ applicable to the Audit Committee.
Code
of Ethics
We
have adopted a written code of business ethics that applies to our directors, officers and employees, including our principal executive
officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. We have posted
a current copy of the code under the Corporate Governance section of our website at https://ir.fatbrands.com. In addition, we
intend to post on our website all disclosures that are required by law or the NASDAQ listing standards concerning any amendments to,
or waivers from, any provision of the code.
Anti-Hedging
Policy and Trading Restrictions
The
Company’s Insider Trading Policy restricts certain transactions in our securities and prohibits our directors, executive officers
and certain other key employees (and their respective family and household members) from purchasing or selling any type of security while
aware of material non-public information about the Company or from providing such material non-public information to any person who may
trade while aware of such information. Trading by our officers and directors, as well as other employees who may be expected in the ordinary
course of performing their duties to have access to material non-public information, is restricted to certain quarterly trading windows.
While we do not have a policy that specifically prohibits hedging the economic risk of stock ownership in our stock, we discourage our
officers, directors and employees from entering into certain types of hedges with respect to our securities. Our Insider Trading Policy
also prohibits short-sales and similar transactions and margining of Company stock.
Granting
of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information
The
Company does not grant equity awards in anticipation of the release of material nonpublic information (“MNPI”) that
is likely to result in changes to the price of our Class A Common Stock, and does not time the public release of such information based
on award grant dates. Equity awards are typically granted according to a predetermined schedule or based on an event such as the recipient’s
appointment as an officer or director, to ensure consistency and avoid the appearance of timing based on MNPI. The Board and Compensation
Committee do not consider MNPI in setting the terms of equity awards, such as grant size or vesting conditions. During the last completed
fiscal year, the Company has not made awards to any named executive officer during the period beginning four business days before and
ending one business day after the filing of a periodic report on Form 10-Q or Form 10-K or the filing or furnishing of a current report
on Form 8-K, and it is the Company’s ongoing policy not to time the disclosure of material nonpublic information for the purpose
of affecting the value of executive compensation
Clawback
Policy
In
connection with the recently approved rules requiring adoption of a clawback policy applicable to incentive-based compensation for Section
16 officers of listed companies, the Company has adopted a “Clawback Policy”, and current Section 16 officers of the Company
are subject to the policy. Under such policy, if the Company is required to restate its financial results due to material non-compliance
with financial reporting requirements under applicable securities laws, the Company will recoup any erroneously-awarded incentive-based
compensation from the Company’s Section 16 officers during the three-year period preceding the date on which the Company is
required to prepare such an accounting restatement. The full Board is authorized to administer this policy, or the Board may designate
the Compensation Committee to administer the Clawback Policy.
Communications
with the Board
Correspondence
from our stockholders to the Board of Directors or any individual directors or officers should be sent to our Secretary. Correspondence
addressed to either the Board of Directors as a body, or to all of the directors in their entirety, will be sent to the Chair of the
Audit Committee. Our Secretary will regularly provide to the Board of Directors a summary of all material correspondence from stockholders
that the Secretary receives on behalf of the Board. The Board of Directors has approved this process for stockholders to send communications
to the Board.
Board
Meetings
During
fiscal 2023, our Board of Directors held 32 meetings and the Audit Committee of the Board held six meetings. Each incumbent
director attended at least 75% of the aggregate number of meetings of the Board of Directors and meetings of the committees of the Board
of Directors on which he or she serves. Each Board member is expected to attend our annual meetings of stockholders, either in person
or via electronic communications. Four Board members attended our 2023 annual meeting in person and all other Board members
attended via video conference.
Compensation
Committee
The
Compensation Committee of the Board is responsible for assisting our Board of Directors in discharging its responsibilities relating
to the compensation of our Co-Chief Executive Officers, other executive officers and outside directors, as well as administering stock
incentive plans. During the fiscal year ended December 31, 2023, there were no employee directors on the Compensation Committee and no
Compensation Committee interlocks. The Compensation Committee is required to have a majority of independent directors. The current members
of the Compensation Committee are Lynne Collier, Tyler Child, Mark Elenowitz, James Ellis, Peter Feinstein, Matthew Green, John Metz
and Andrew Wiederhorn.
The
Compensation Committee is responsible for the following, among other matters, as required from time to time:
| |
● |
reviewing
and recommending to our board of directors the compensation of our Co-Chief Executive Officers and other executive officers and the
outside directors; |
| |
● |
conducting
a performance review of our Co-Chief Executive Officers; |
| |
● |
administering
the Company’s incentive-compensation plans and equity-based plans as in effect or as adopted from time to time by the Board
of Directors; |
| |
● |
approving
any new equity compensation plan or material change to an existing plan where stockholder approval has not been obtained; and |
| |
● |
reviewing
our compensation policies. |
In
addition, the Compensation Committee has established a sub-committee of the Compensation Committee comprised solely of “non-employee
directors” within the meaning of Rule 16b-3 of the Exchange Act. The sub-committee is available to administer the Company’s
equity incentive plans if the Board deems it necessary to comply with Rule 16b-3 of the Exchange Act with respect to any equity awards.
The
Board of Directors has adopted a charter for the Compensation Committee, a copy of which is available in the Corporate Governance section
of our website at https://ir.fatbrands.com. The Compensation Committee reviews and reassesses the adequacy of the charter on an
annual basis.
Audit
Committee
The
Board of Directors has delegated certain authority to a standing Audit Committee, comprised of the following persons as of the record
date:
| Director | |
Audit Committee |
| Lynne L. Collier | |
Chair |
| Tyler B. Child | |
Member |
| Mark Elenowitz | |
Member |
| James G. Ellis | |
Member |
| Peter R. Feinstein | |
Member |
| Matthew H. Green | |
Member |
The
Audit Committee is responsible for, among other matters:
| |
● |
appointing,
compensating, retaining, evaluating, terminating and overseeing our independent registered public accounting firm; |
| |
● |
discussing
with our independent registered public accounting firm their independence from management; |
| |
● |
reviewing
with our independent registered public accounting firm the scope and results of their audit; |
| |
● |
approving
all audit and permissible non-audit services to be performed by our independent registered public accounting firm; |
| |
● |
overseeing
the financial reporting process and discussing with management and our independent registered public accounting firm the interim
and annual financial statements that we file with the SEC; |
| |
● |
reviewing
and monitoring our accounting principles, accounting policies, financial and accounting controls and compliance with legal and regulatory
requirements; and |
| |
● |
establishing
procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal controls or auditing
matters. |
Our
Board of Directors has determined that each member of the Audit Committee meets the definition of “independent director”
for purposes of serving on an audit committee under Rule 10A-3 and NASDAQ rules.
The
Board of Directors has determined that each of Ms. Collier, Mr. Elenowitz, Mr. Feinstein and Mr. Ellis qualifies as an “audit committee
financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K.
The
Board of Directors adopted a charter for the Audit Committee. A copy of the Audit Committee charter is available in the Corporate Governance
section of our website at https://ir.fatbrands.com. The Audit Committee reviews and reassesses the adequacy of the charter on
an annual basis.
Audit
Committee Report
The
following is the report of the Audit Committee with respect to our audited financial statements for the fiscal year ended December 31,
2023, which were contained in our Annual Report on form 10-K filed with the SEC on March 12, 2024.
The
information contained in this report shall not be deemed to be “soliciting material” or to be “filed” with the
SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, except to the extent that we specifically incorporate it by reference in such filing.
Management
is responsible for our internal controls and the financial reporting process. The independent registered public accounting firm is responsible
for performing an independent audit of our financial statements in accordance with Public Company Accounting Oversight Board standards
and to issue a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes, including the effectiveness
of the design and operation of our disclosure controls and procedures and our internal controls. The Audit Committee of the Board reviewed
and discussed our audited financial statements for the fiscal year ended December 31, 2023 with management. The Audit Committee was satisfied
that the internal control system is adequate and that the Company employs appropriate accounting and reporting procedures.
The
Audit Committee also discussed with our independent registered public accounting firm for fiscal 2023, Macias Gini & O’Connell,
LLP, matters relating to their judgments about the quality, as well as the acceptability, of our accounting principles as applied in
its financial reporting as required to be discussed by PCAOB Auditing Standard No. 16, “Communications with Audit Committees”.
In addition, the Audit Committee discussed with our accounting firm their independence from management and us, as well as the matters
in the written disclosures received from the independent registered public accounting firm as required by Independence Standards Board
Standard No. 1, Independence Discussions with Audit Committees.
Based
on the Audit Committee’s review and discussions referred to above, the Audit Committee recommended to our Board of Directors that
our audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for filing
with the SEC.
| SUBMITTED
BY THE AUDIT COMMITTEE: |
| |
| Lynne
L. Collier |
|
Tyler
B. Child |
| Mark
Elenowitz |
|
James
G. Ellis |
| Peter
R. Feinstein |
|
Matthew
H. Green |
Board
Diversity
Pursuant
to NASDAQ’s rules on board diversity disclosure, below is information about the diversity of the current Board of Directors:
| Board Diversity Matrix (as of November
21, 2024) |
| | |
| | |
| | |
| | |
| |
| Total Number of Directors | |
14 | |
| Part I: Gender Identity | |
| Female | | |
| Male | | |
| Non-Binary | | |
| Did Not Disclose Gender | |
| Directors | |
| 3 | | |
| 11 | | |
| – | | |
| – | |
| Part II: Demographic Background | |
| | | |
| | | |
| | | |
| | |
| African American or Black | |
| – | | |
| – | | |
| – | | |
| – | |
| Alaskan Native or American Indian | |
| – | | |
| – | | |
| – | | |
| – | |
| Asian | |
| – | | |
| – | | |
| – | | |
| – | |
| Hispanic or Latinx | |
| 1 | | |
| – | | |
| – | | |
| – | |
| Native Hawaiian or Pacific Islander | |
| – | | |
| – | | |
| – | | |
| – | |
| White | |
| 2 | | |
| 11 | | |
| – | | |
| – | |
| Two or More Races or Ethnicities | |
| – | | |
| – | | |
| – | | |
| – | |
| LGBTQ+ | |
| | | |
| – | | |
| | | |
| | |
| Did Not Disclose Demographic Background | |
| | | |
| – | | |
| | | |
| | |
EXECUTIVE
OFFICERS
Below
is a list of the names and ages, as of the record date, of our executive officers and a description of the business experience of each
of them.
| Name
|
|
Age
|
|
Position
|
| Kenneth
J. Kuick |
|
55 |
|
Co-Chief
Executive Officer, Chief Financial Officer |
| Robert
G. Rosen |
|
58 |
|
Co-Chief
Executive Officer, Head of Debt Capital Markets |
| Thayer
D. Wiederhorn |
|
36 |
|
Chief
Operating Officer |
| Taylor
A. Wiederhorn |
|
36 |
|
Chief
Development Officer |
| Allen
Z. Sussman |
|
60 |
|
Executive
Vice President and General Counsel, Secretary |
| Ron
Roe |
|
47 |
|
Senior
Vice President of Finance |
Kenneth
J. Kuick has served as the Company’s Co-Chief Executive Officer since May 2023, and Chief Financial Officer since May 31, 2021.
Prior to joining the Company, Mr. Kuick served as Chief Financial Officer of Noodles & Company, a national fast-casual restaurant
concept, from November 2018 to August 2020, where he was responsible for leading the Company’s finance, accounting and supply chain
operations. Prior to that, Mr. Kuick served as Chief Accounting Officer of VICI Properties Inc., a real estate investment trust specializing
in casino properties, from October 2017 to August 2018, where he was responsible for accounting, consolidated financial operations, capital
markets transactions, treasury, internal audit, tax and external reporting. Prior to that, Mr. Kuick served as Chief Accounting Officer
of Caesars Entertainment Operating Company, a subsidiary of Caesars Entertainment Corporation, and as Vice President, Assistant Controller
for Caesars Entertainment Corporation. Mr. Kuick is a Certified Public Accountant and earned his Bachelor of Science degree in Accounting
and Business Systems from Taylor University.
Robert
G. Rosen has served as the Company’s Co-Chief Executive Officer and Head of Debt Capital Markets since May 2023. Prior to that,
he served as Executive Vice President of Capital Markets since April 2021. Prior to joining the Company, he had been the Managing Member
of Kodiak Financial Group LLC since 2004. Kodiak invests in credit classes of ABS and MBS securities, purchases individual real estate
loans and portfolios, purchases and manages real estate developments and invests in private equity transactions as well as venture capital
transactions. Mr. Rosen began his career in commercial banking, focusing on direct lending for Fleet Bank (then Fleet Norstar Bank) in
Albany NY after completing their extensive management training program. This was followed in 1990 by a career on Wall Street, working
for Bankers Trust (now Deutsche Bank) and Kidder Peabody in structured finance and investment banking focusing primarily on credit derivatives
including securitizations, asset-based lending as well as financing and banking commercial banks and other originators of securitizable
assets. After Kidder, Mr. Rosen joined Black Diamond Advisors and Black Diamond Securities (and ultimately Black Diamond Capital Management).
He served as a Director and FINOP of the Black Diamond entities, with a continued focus on structured finance transactions and credit
as well as portfolio management (banking, sales and trading) and servicing. Mr. Rosen continued his career at Bank of Tokyo Mitsubishi
and several buy side firms. He continues to be a long-term consultant to Black Diamond Capital Management and serves on multiple advisory
boards and committees of Black Diamond. Mr. Rosen holds an MBA and a BA degree from Union College in Managerial Economics.
Thayer
Wiederhorn has served as the Company’s Chief Operating Officer since November 2021. For a description of Mr. Wiederhorn’s
background, please see “The Board of Directors” above.
Taylor
Wiederhorn has served as the Company’s Chief Development Officer since October 2017. For a description of Mr. Wiederhorn’s
background, please see “The Board of Directors” above.
Allen
Z. Sussman has served as the Company’s General Counsel, Secretary and EVP for Corporate Development since March 2021. Prior
to that time, Mr. Sussman was a partner at the law firm of Loeb & Loeb LLP in Los Angeles, California, specializing in corporate
and securities law, and served as the primary outside corporate and securities counsel of FAT Brands. Prior to private practice, in the
early 1990s Mr. Sussman served as an attorney with the Division of Enforcement of the U.S. Securities and Exchange Commission in Washington,
DC. Mr. Sussman holds a B.S. degree in Industrial and Labor Relations from Cornell University and a J.D. degree from Boston University
School of Law.
Ron
Roe currently serves as the Company’s Senior Vice President of Finance. Prior to August 16, 2018, Mr. Roe served as the Chief
Financial Officer since 2009 and served as the Vice President of Finance from 2007 to 2009. Prior to 2007, Mr. Roe was an acquisitions
associate for Fog Cutter Capital Group Inc. He began his career as an investment banking analyst with Piper Jaffray. Mr. Roe attended
UC Berkeley, where he earned a Bachelor of Arts degree in Economics.
Delinquent
Section 16(a) Reports
Based
solely on a review of Forms 3, 4 and 5 and amendments thereto furnished to us for the year ended December 31, 2023, our directors,
officers, or beneficial owners of more than 10% of our common stock timely furnished reports on all Forms 3, 4 and 5, except that (i)
the following directors filed one late Form 3: John Allen, Donald Berchtold, Tyler Child, Mark Elenowitz, James Ellis, Peter
Feinstein, Matthew Green, Kenneth Kepp, John Metz, Carmen Vidal and Mason Wiederhorn; and (ii) the following directors, officers
and/or 10% beneficial owners filed one late Form 4 for one transaction each: John Allen, Tyler Child, Mark Elenowitz, James Ellis,
Kenneth Kepp, Ken Kuick, Peter Feinstein, Matthew Green, John Metz, Robert Rosen and Fog Cutter Holdings LLC.
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The
following table sets forth the compensation for the fiscal years ended December 31, 2023 and December 25, 2022 awarded to, earned by,
or paid to each individual who served as principal executive officer of the Company during fiscal 2023 and the other two most highly
compensated executive officers. We refer to the individuals included in the Summary Compensation Table as our “named executive
officers.” Andrew A. Wiederhorn served as Chief Executive Officer of the Company until May 5, 2023, at which time Robert G.
Rosen and Kenneth K. Kuick began serving as Co- Chief Executive Officers.
SUMMARY
COMPENSATION TABLE
Name and
Principal
Position | |
Fiscal
Year | |
Salary ($) | | |
Bonus ($) | | |
Stock Awards (1) ($) | | |
Option Awards (1) ($) | | |
All Other Compensation ($) | |
Total ($) | |
| Andrew A. Wiederhorn | |
2023 | |
| 288,462 | | |
| — | | |
| — | | |
| — | | |
| 4,170,205 | (2) |
| 4,458,667 | |
| Chief Executive Officer (Former) | |
2022 | |
| 750,000 | | |
| 2,250,000 | | |
| — | | |
| — | | |
| 551,040 | |
| 3,551,040 | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
| Robert G. Rosen | |
2023 | |
| 550,000 | | |
| 2,200,000 | | |
| — | | |
| 2,148,000 | | |
| — | |
| 4,898,000 | |
| Co-Chief Executive Officer, Co-President and Head of Debt Capital Markets | |
2022 | |
| 550,000 | | |
| 1,650,000 | | |
| — | | |
| — | | |
| — | |
| 2,200,000 | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
| Kenneth J. Kuick | |
2023 | |
| 532,439 | | |
| 1,000,000 | | |
| — | | |
| 268,495 | | |
| 1,669 | |
| 1,802,603 | |
| Co-Chief Executive Officer, Co-President and Chief Financial Officer | |
2022 | |
| 500,000 | | |
| 500,000 | | |
| — | | |
| — | | |
| 45,440 | |
| 1,045,440 | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
| Taylor A. Wiederhorn | |
2023 | |
| 550,000 | | |
| 1,100,000 | | |
| — | | |
| — | | |
| — | |
| 1,650,000 | |
| Chief Development Officer | |
2022 | |
| 550,000 | | |
| 1,110,000 | | |
| — | | |
| — | | |
| — | |
| 1,660,000 | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
| Thayer D. Wiederhorn | |
2023 | |
| 550,000 | | |
| 1,100,000 | | |
| — | | |
| — | | |
| — | |
| 1,650,000 | |
| Chief Operating Officer | |
2022 | |
| 550,000 | | |
| 1,110,000 | | |
| — | | |
| — | | |
| — | |
| 1,660,000 | |
Explanatory
Notes:
| (1) |
Amounts
shown represent the aggregate grant date fair value computed in accordance with Accounting Standards Codification 718. Assumptions
used in the calculation of this amount for fiscal year ended December 31, 2023 are included in Note 14 to the Company’s audited
consolidated financial statements for the fiscal year ended December 31, 2023, included in Part IV of this Annual Report on Form
10-K. |
| (2) |
The
amount reflects $3,699,000 of fees earned pursuant to Mr. Wiederhorn’s consulting agreement, $411,205 of aggregate incremental
cost to the Company of providing him with certain personal use of leased aircraft (based on the applicable hourly rate charged to
the Company), and $60,000 of standard Board of Directors fees. |
Executive
Employment Agreements
There
are no written employment agreements between the Company and any of its employees, other than Kenneth J. Kuick and Robert G. Rosen.
On
May 5, 2023, the Company entered into an Employment Agreement (the “Kuick Agreement”) with Kenneth J. Kuick, who has served
as the Company’s Co-Chief Executive Officer, Co-President and Chief Financial Officer since May 5, 2023. Pursuant to the Kuick
Agreement, Mr. Kuick’s term as Co-Chief Executive Officer, Co-President and Chief Financial Officer will continue on an at-will
basis, unless terminated as provided in the Kuick Agreement.
Pursuant
to the Kuick Agreement, Mr. Kuick’s annual base salary is $550,000, subject to an annual merit-based increases in the sole discretion
of the Board of Directors of the Company (the “Board”). Mr. Kuick will also be eligible for an annual discretionary bonus
in the sole discretion of the Board, except that the annual bonus is guaranteed to be no less than $270,000 annually. Mr. Kuick’s
eligibility to receive a bonus for any particular calendar year is subject to the achievement by him and the Company, as applicable,
of personal and Company-wide targets to be established by the Company in the discretion of the Board.
Pursuant
to the Kuick Agreement, Mr. Kuick will be eligible to receive awards of equity from time to time in the form of stock options, stock
purchase rights and/or restricted stock awards. Such awards will be subject to the achievement by Mr. Kuick and the Company, as applicable,
of personal and Company-wide targets to be established by the Company, on such terms and subject to such conditions as the Board shall
determine as of the date of any such grant. In the event of a change in control (as defined in the Employment Agreement), Mr. Kuick’s
continuous employment is involuntarily terminated without “cause” (as defined in the Employment Agreement), or Mr. Kuick
resigns from continuous employment for “good reason” (as defined in the Kuick Agreement), and in any case other than as a
result of his death or disability, then 100% of the equity awards that are then unvested will become fully vested. In addition, in the
event that Mr. Kuick’s employment is terminated by the Company without “cause” or by Mr. Kuick for “good reason,”
Mr. Kuick will be entitled to receive severance of six months of base salary payable on the Company’s regular payroll schedule.
The
Kuick Agreement also entitles Mr. Kuick to participate in the benefit plans or programs that the Company may make available to employees
and their families from time to time. The Kuick Agreement also provides for certain other ancillary benefits, including the reimbursement
of all reasonable business expenses. In addition, Mr. Kuick is entitled to 15 days of paid time off during each twelve-month period of
employment.
On
May 5, 2023, the Company entered into an Employment Agreement (the “Rosen Agreement”) with Robert G. Rosen, who has served
as the Company’s Co-Chief Executive Officer, Co-President and Head of Debt Capital Markets since May 5, 2023. Pursuant to the Rosen
Agreement, Mr. Rosen’s term as Co-Chief Executive Officer, Co-President and Head of Debt Capital Markets will continue on an at-will
basis, unless terminated as provided in the Rosen Agreement.
Pursuant
to the Rosen Agreement, Mr. Rosen’s annual base salary is $550,000, subject to an annual merit-based increases in the sole discretion
of the Board of Directors of the Company (the “Board”). Mr. Rosen will also be eligible for an annual discretionary bonus
in the sole discretion of the Board, except that the annual bonus is guaranteed to be no less than $270,000 annually. Mr. Rosen’s
eligibility to receive a bonus for any particular calendar year is subject to the achievement by him and the Company, as applicable,
of personal and Company-wide targets to be established by the Company in the discretion of the Board.
Pursuant
to the Rosen Agreement, Mr. Rosen will be eligible to receive awards of equity from time to time in the form of stock options, stock
purchase rights and/or restricted stock awards. Such awards will be subject to the achievement by Mr. Rosen and the Company, as applicable,
of personal and Company-wide targets to be established by the Company, on such terms and subject to such conditions as the Board shall
determine as of the date of any such grant. In the event of a change in control (as defined in the Rosen Agreement), Mr. Rosen’s
continuous employment is involuntarily terminated without “cause” (as defined in the Rosen Agreement), or Mr. Rosen resigns
from continuous employment for “good reason” (as defined in the Rosen Agreement), and in any case other than as a result
of his death or disability, then 100% of the equity awards that are then unvested will become fully vested. In addition, in the event
that Mr. Rosen’s employment is terminated by the Company without “cause” or by Mr. Rosen for “good reason,”
Mr. Rosen will be entitled to receive severance of twelve months of base salary payable on the Company’s regular payroll schedule.
The
Rosen Agreement also entitles Mr. Rosen to participate in the benefit plans or programs that the Company may make available to employees
and their families from time to time. The Rosen Agreement also provides for certain other ancillary benefits, including the reimbursement
of all reasonable business expenses. In addition, Mr. Rosen is entitled to 20 days of paid time off during each twelve-month period of
employment.
OUTSTANDING
EQUITY AWARDS AT FISCAL 2023 YEAR END
The
following table summarizes the outstanding equity award holdings of our named executive officers as of December 31, 2023.
| | |
Option Awards | |
Stock Awards | |
| Name | |
Number of Securities
Underlying Unexercised
Options (#) Exercisable | | |
Number of Securities
Underlying Unexercised
Options (#) Unexercisable | | |
Option Exercise Price ($) | | |
Option Expiration Date | |
Number of Shares or Units of Stock That Have Not Vested (#) | | |
Market Value of Shares or Units of Stock That Have Not Vested ($) | |
| Andrew A. Wiederhorn | |
| 15,318 | | |
| — | | |
| 10.68 | | |
10/20/2027 | |
| — | | |
| — | |
| Former Chief Executive Officer | |
| 15,318 | | |
| — | | |
| 4.80 | | |
12/10/2028 | |
| | | |
| | |
| | |
| 66,667 | | |
| 33,333 | | |
| 11.43 | | |
11/16/2031 | |
| | | |
| | |
| Robert G. Rosen | |
| 66,667 | | |
| 33,333 | | |
| 11.43 | | |
11/16/2031 | |
| 100,000 | | |
| 597,000 | |
| Co-Chief Executive Officer, Co-President and Head of Debt Capital Markets | |
| 400,000 | | |
| — | | |
| 5.37 | | |
4/26/2033 | |
| | | |
| | |
| Kenneth J. Kuick | |
| 66,667 | | |
| 33,333 | | |
| 11.43 | | |
11/16/2031 | |
| 100,000 | | |
| 597,000 | |
| Co-Chief Executive Officer, Co-President and Chief Financial Officer | |
| 50,000 | | |
| — | | |
| 5.37 | | |
4/26/2033 | |
| | | |
| | |
| Taylor A. Wiederhorn | |
| 15,318 | | |
| — | | |
| 10.68 | | |
10/20/2027 | |
| — | | |
| — | |
| Chief Development Officer | |
| 15,318 | | |
| — | | |
| 4.80 | | |
12/10/2028 | |
| | | |
| | |
| | |
| 66,667 | | |
| 33,333 | | |
| 11.43 | | |
11/16/2031 | |
| | | |
| | |
| Thayer D. Wiederhorn | |
| 15,318 | | |
| — | | |
| 10.68 | | |
10/20/2027 | |
| — | | |
| — | |
| Chief Operating Officer | |
| 15,318 | | |
| — | | |
| 4.80 | | |
12/10/2028 | |
| | | |
| | |
| | |
| 66,667 | | |
| 33,333 | | |
| 11.43 | | |
11/16/2031 | |
| | | |
| | |
The
terms of the equity awards described above are set forth in the Company’s 2017 Omnibus Equity Incentive Plan (the “Plan”).
The Plan is a comprehensive incentive compensation plan under which we can grant equity-based and other incentive awards to officers,
employees and directors of, and consultants and advisers to, FAT Brands and its subsidiaries. The Plan, as amended, provides for a maximum
of 5,000,000 shares available for grant and is administered by the Compensation Committee of the Board of Directors and its sub-committee
described above under Item 10 – Compensation Committee.
Option
Exercises and Stock Vested
None
of the named executive officers acquired shares of the Company’s stock through exercise of options during the year ended December
31, 2023.
DIRECTOR
COMPENSATION
The
Company uses a combination of cash and stock-based incentive compensation to attract and retain qualified candidates to serve on the
Board of Directors. In setting director compensation, the Company considers the significant amount of time that our directors expend
in fulfilling their duties to the Company as well as the skill-level required by the Company of members of the Board of Directors.
We
pay each non-employee director serving on our Board of Directors $120,000 in annual cash compensation and an annual equity award of stock
options to acquire 30,636 shares of our Class A common stock. The stock options issued to directors are awarded under our 2017 Omnibus
Equity Incentive Plan. The non-employee director compensation policy may be amended, modified or terminated at any time by our Board
of Directors or Compensation Committee.
At
various times upon the quarterly payment dates of the cash component of director compensation, the Board has allowed non-employee directors
to receive their cash compensation in the form of Class A common stock of the Company at fair market value at the time the election is
made. Under such arrangement, during fiscal 2023, the non-employee directors elected to receive only cash compensation.
The
following table sets forth a summary of the compensation we paid or accrued to our directors for the fiscal year ended December 31, 2023.
The compensation paid or accrued to directors Andrew A. Wiederhorn, Taylor D. Wiederhorn and Thayer A. Wiederhorn for 2023 is included
in the Summary Compensation Table above. The compensation paid or accrued to directors Donald J. Berchtold, Carmen Vidal and Mason A.
Wiederhorn for 2023 is disclosed below under the caption “Certain Relationships and Related Transactions”.
| Name | |
Fees Earned
or Paid in Cash
($) | | |
Stock
Awards
($) | |
Option
Awards
($) (1) | | |
Total
($) | |
| John S. Allen (2) | |
| 30,000 | | |
— | |
| 86,233 | | |
| 116,233 | |
| Kenneth A. Anderson (3) | |
| 30,000 | | |
— | |
| — | | |
| 30,000 | |
| Tyler B. Child (4) | |
| 90,000 | | |
— | |
| 58,013 | | |
| 148,013 | |
| Lynne L. Collier (12) | |
| 170,000 | | |
— | |
| 63,340 | | |
| 233,340 | |
| Mark Elenowitz (5)(12) | |
| 140,000 | | |
— | |
| 58,013 | | |
| 198,013 | |
| James G. Ellis (6) | |
| 30,000 | | |
— | |
| 86,233 | | |
| 116,233 | |
| Peter R. Feinstein (7) | |
| 60,000 | | |
— | |
| 56,043 | | |
| 116,043 | |
| Amy V. Forrestal (3) | |
| 30,000 | | |
— | |
| — | | |
| 30,000 | |
| Matthew H. Green (8) | |
| 60,000 | | |
— | |
| 56,043 | | |
| 116,043 | |
| Kenneth Kepp (9) | |
| 70,000 | | |
— | |
| — | | |
| 70,000 | |
| John C. Metz (10) | |
| 60,000 | | |
— | |
| 56,043 | | |
| 116,043 | |
| James Neuhauser (11) | |
| 169,231 | | |
— | |
| — | | |
| 169,231 | |
| Edward H. Rensi (3) | |
| 30,000 | | |
— | |
| — | | |
| 30,000 | |
Explanatory
Notes:
| (1) |
Amounts
shown represent the grant date fair value calculated in accordance with Accounting Standards Codification 718. Assumptions used in
the calculation of this amount are included in footnote 14 to the Company’s audited consolidated financial statements included
in Part IV of this Annual Report on Form 10-K. During 2023, with the exception of Andrew A. Wiederhorn, Kenneth A. Anderson, Amy
V. Forrestal, James Neuhauser and Edward H. Rensi, the directors were each granted options to purchase 30,636 shares of common stock.
Kenneth Kepp was granted an option to purchase 30,636 shares of common stock with a grant date fair value of $58,013 that was subsequently
canceled. |
| (2) |
Mr.
Allen joined the Board of Directors in September 2023. |
| (3) |
Mr.
Anderson, Ms. Forrestal and Mr. Rensi served on the Board of Directors until March 2023. |
| (4) |
Ms.
Child joined the Board of Directors in March 2023. |
| (5) |
Mr.
Elenowitz joined the Board of Directors in April 2023. |
| (6) |
Mr.
Ellis joined the Board of Directors in September 2023. |
| (7) |
Mr.
Feinstein joined the Board of Directors in July 2023. |
| (8) |
Mr.
Green joined the Board of Directors in July 2023. |
| (9) |
Mr.
Kepp served on the Board of Directors from March 28, 2023 until his passing in June 2023. |
| (10) |
Mr.
Metz joined the Board of Directors in July 2023. |
| (11) |
Mr.
Neuhauser served as Executive Chairman of the Board of Directors until March 2023. |
| (12) |
Includes
fees for services on a special litigation committee of the Board of Directors formed in April 2023. |
PAY
VERSUS PERFORMANCE
As
required by Section 953(a) of the Dodd-Frank Act and Item 402(v) of Regulation S-K, we are providing the following disclosure about the
relationship between “compensation actually paid” for our principal executive officers, or PEO’s, and non-PEO named
executive officers, or Non-PEO NEOs, and certain financial performance of the Company. As a smaller reporting company, we are permitted
and have elected to provide scaled pay versus performance disclosure. Andrew Wiederhorn served as CEO for 2021, 2022 and a portion of
2023 (through March 2023), after which Kenneth Kuick and Robert Rosen were appointed as co-CEO’s. Each of them is presented as
a PEO only for the year(s) that they served as a CEO.
The
following table presents the pay versus performance information for our named executive officers. The amounts set forth below have been
calculated in accordance with Item 402(v) of Regulation S-K. Use of the term “compensation actually paid” is required by
the SEC’s rules and, as a result of the calculation methodology required by the SEC. Such amounts differ from compensation actually
received by the individuals.
| Fiscal Year | |
Summary Compensation Table Total for Andrew Wiederhorn ($)(1) | | |
Summary Compensation Table Total for Kenneth Kuick ($)(1) | | |
Summary Compensation Table Total for Robert Rosen ($)(1) | | |
Compensation Actually Paid to Andrew Wiederhorn ($)(2) | | |
Compensation Actually Paid to Kenneth Kuick ($)(2) | | |
Compensation Actually Paid to Robert Rosen ($)(2) | | |
Average Summary Compensation Table Total for Non-PEO NEOs ($)(3) | | |
Average Compensation Actually Paid to Non-PEO NEOs ($)(4) | | |
Year-End Value of $100 Investment Based On Total Stockholder Return ($)(5) | | |
Net Income (Loss) (thousand $)(6) | |
| (a) | |
| (b) | | |
| (b) | | |
| (b) | | |
| (c) | | |
| (c) | | |
| (c) | | |
| (d) | | |
| (e) | | |
| (f) | | |
| (g) | |
| 2023 | |
| 4,458,667 | | |
| 1,802,603 | | |
| 4,898,000 | | |
| 4,469,250 | | |
| 1,684,468 | | |
| 3,878,802 | | |
| 1,650,000 | | |
| 1,660,583 | | |
| 142 | | |
| (90,110 | ) |
| 2022 | |
| 3,551,040 | | |
| — | | |
| — | | |
| 3,239,914 | | |
| — | | |
| — | | |
| 1,930,000 | | |
| 1,397,374 | | |
| 119 | | |
| (126,188 | ) |
| 2021 | |
| 2,874,909 | | |
| — | | |
| — | | |
| 2,805,204 | | |
| — | | |
| — | | |
| 2,232,472 | | |
| 2,195,408 | | |
| 195 | | |
| (31,583 | ) |
| |
(1) |
The
dollar amounts reported in column (b) are the amounts of total compensation reported for our PEO’s for each corresponding year
in the “Total” column of the Summary Compensation Table. |
| |
(2) |
The
dollar amounts reported in column (c) represent the amount of “compensation actually paid” to our PEO’s, as computed
in accordance with Item 402(v) of Regulation S-K. In accordance with the requirements of Item 402(v) of Regulation S-K, the adjustments
in the table below were made to the compensation reported in the Summary Compensation Table for each year to determine the compensation
actually paid. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time
of grant. |
| | |
| |
Kenneth Kuick | | |
Robert Rosen | | |
Andrew Wiederhorn | |
| | |
| |
2023 | | |
2023 | | |
2023 | | |
2022 | | |
2021 | |
| | |
Summary Compensation Table Total | |
$ | 1,802,603 | | |
$ | 4,898,000 | | |
$ | 4,458,667 | | |
$ | 3,551,040 | | |
$ | 2,874,909 | |
| Less: | |
Equity Award Values Reported in Summary Compensation Table for the Covered Year | |
$ | (268,495 | ) | |
$ | (2,148,000 | ) | |
| - | | |
| - | | |
| (607,000 | ) |
| Plus: | |
Fair Value of Equity Awards Granted During Covered Year | |
$ | 139,777 | | |
$ | 1,118,219 | | |
| - | | |
| - | | |
| 523,436 | |
| | |
Change in Fair Value of Outstanding Unvested Equity Awards from Prior Years | |
$ | 5,536 | | |
$ | 5,536 | | |
$ | 5,536 | | |
| (228,523 | ) | |
| - | |
| | |
Change in Fair Value of Equity Awards from Prior Years that Vested in the Covered Year | |
$ | 5,047 | | |
$ | 5,047 | | |
$ | 5,047 | | |
| - | | |
| 13,859 | |
| | |
Compensation Actually Paid | |
$ | 1,684,468 | | |
$ | 3,878,802 | | |
$ | 4,469,250 | | |
$ | 3,239,914 | | |
$ | 2,805,204 | |
| |
(3) |
The
dollar amounts reported in column (d) represent the average of the amounts reported for the NEOs as a group (excluding our PEO) in
the “Total” column of the Summary Compensation Table in each applicable year. The Non-PEO NEOs included for purposes
of calculating the average amounts in 2022 are Robert G. Rosen and Taylor Wiederhorn and in 2021 are Robert G. Rosen and Kenneth
J. Kuick. |
| |
(4) |
The
dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the Non-PEO NEOs
as a group, as computed in accordance with Item 402(v) of Regulation S-K. In accordance with the requirements of Item 402(v) of Regulation
S-K, the adjustments in the table below were made to average total compensation for the Non-PEO NEOs as a group for each year to
determine the compensation actually paid, using the same methodology described above in Note (2). |
| | |
| |
Average of Non-PEO NEOs | |
| | |
| |
2023 | | |
2022 | | |
2021 | |
| | |
Summary Compensation Table Total | |
$ | 1,650,000 | | |
$ | 1,930,000 | | |
$ | 2,232,472 | |
| Less: | |
Equity Award Values Reported in Summary Compensation Table for the Covered Year | |
| - | | |
| - | | |
| (1,555,500 | ) |
| Plus: | |
Fair Value of Equity Awards Granted During Covered Year | |
| - | | |
| - | | |
| 1,518,436 | |
| | |
Change in Fair Value of Outstanding Unvested Equity Awards from Prior Years | |
$ | 5,536 | | |
| (450,023 | ) | |
| - | |
| | |
Change in Fair Value of Equity Awards from Prior Years that Vested in the Covered Year | |
$ | 5,047 | | |
| (82,603 | ) | |
| - | |
| | |
Compensation Actually Paid | |
$ | 1,660,583 | | |
$ | 1,397,374 | | |
$ | 2,195,408 | |
| |
(5) |
Cumulative
TSR is calculated based on the value of an initial fixed investment of $100 in our common stock as of December 31, 2020. |
| |
(6) |
The
dollar amounts reported represent the amount of net income (loss) reflected in the Company’s audited financial statements for
the applicable fiscal year. |
Analysis
of the Information Presented in the Pay Versus Performance Table
In
accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the relationships between information presented
in the Pay Versus Performance table above.
Compensation
Actually Paid and Net Income (Loss)
The
following chart shows the relationship between the compensation actually paid to our PEO and the average compensation actually paid to
our Non-PEO NEOs, on the one hand, to the Company’s net income (loss), on the other hand.
Compensation
Actually Paid and Cumulative TSR
The
following chart shows the relationship between the compensation actually paid to our PEO and the average compensation actually paid to
our Non-PEO NEOs, on the one hand, to the Company’s cumulative total stockholder return, or TSR, over the two years presented in
the table, on the other.
All
information provided above under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference
into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether
made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent
the Company specifically incorporates such information by reference.
PRINCIPAL
STOCKHOLDERS
Common
Stock
The
following table sets forth information, as of the record date, with respect to the beneficial ownership of our Class A Common Stock and
our Class B Common Stock held by: (i) each person known by us to beneficially own more than 5% of our Class A Common Stock or Class B
Common Stock; (ii) each of our directors; (iii) each of our named executive officers; and (iv) all of our executive officers and directors
as a group.
The
number of shares beneficially owned by each stockholder is determined under rules issued by the SEC and includes voting power (if applicable)
or investment power with respect to securities. Under these rules, beneficial ownership includes any shares as to which the individual
or entity has sole or shared voting power (if applicable) or investment power. In computing the number of shares beneficially owned by
an individual or entity and the percentage ownership of that person, shares subject to options, or other rights held by such person that
are currently exercisable or will become exercisable within 60 days of the effective date of the disclosure, are considered outstanding,
although these shares are not considered outstanding for purposes of computing the percentage ownership of any other person. Unless otherwise
indicated, the address of all listed stockholders is c/o FAT Brands Inc., 9720 Wilshire Blvd., Suite 500, Beverly Hills, California 90212.
Each of the stockholders listed below has sole voting power (if applicable) and sole investment power with respect to the shares beneficially
owned by such stockholder unless noted otherwise, subject to community property laws where applicable.
As
of the record date, there were issued and outstanding 15,914,340 shares of Class A Common Stock and 1,270,805 shares of Class
B Common Stock.
| | |
Class
A Common Stock Beneficially
Owned | | |
Class
B Common Stock Beneficially
Owned | | |
Percent
of Total Voting | |
| Name
of beneficial owner | |
Number | | |
% | | |
Number | | |
% | | |
Power
† | |
| Greater
than 5% Stockholders | |
| | | |
| | | |
| | | |
| | | |
| | |
| Fog
Cutter Holdings LLC | |
| 7,015,249 | (1) | |
| 44.1 | % | |
| 707,534 | | |
| 55.7 | % | |
| 55.6 | % |
| HOT
GFG LLC | |
| 2,259,594 | (2) | |
| 14.2 | % | |
| — | | |
| * | | |
| * | |
| Gregory
Fortunoff and certain persons | |
| 1,236,623 | (3) | |
| 7.7 | % | |
| 10,454 | | |
| * | | |
| * | |
| Named
Executive Officers and Directors | |
| | | |
| | | |
| | | |
| | | |
| | |
| Andrew
A. Wiederhorn | |
| 285,180 | (4) | |
| 1.8 | % | |
| 10,079 | | |
| * | | |
| * | |
| Kenneth
J. Kuick | |
| 216,667 | (5) | |
| 1.4 | % | |
| 10,000 | | |
| * | | |
| * | |
| Robert
G. Rosen | |
| 333,333 | (6) | |
| 2.1 | % | |
| 10,000 | | |
| * | | |
| * | |
| John
S. Allen | |
| 10,212 | (7) | |
| * | | |
| — | | |
| * | | |
| * | |
| Donald
J. Berchtold | |
| 233,727 | (8) | |
| 1.5 | % | |
| 20,309 | | |
| 1.6 | % | |
| 1.6 | % |
| Tyler
B. Child | |
| 11,755 | (7) | |
| * | | |
| 154 | | |
| * | | |
| * | |
| Lynne
L. Collier | |
| 40,636 | (9) | |
| * | | |
| — | | |
| * | | |
| * | |
| Mark
Elenowitz | |
| 12,776 | (7) | |
| * | | |
| — | | |
| * | | |
| * | |
| James
G. Ellis | |
| 10,212 | (7) | |
| * | | |
| — | | |
| * | | |
| * | |
| Peter
R. Feinstein | |
| 10,212 | (7) | |
| * | | |
| — | | |
| * | | |
| * | |
| Matthew
H. Green | |
| 10,212 | (7) | |
| * | | |
| — | | |
| * | | |
| * | |
| John
C. Metz | |
| 10,212 | (7) | |
| * | | |
| — | | |
| * | | |
| * | |
| Carmen
Vidal | |
| 30,015 | (10) | |
| * | | |
| — | | |
| * | | |
| * | |
| Mason
A. Wiederhorn | |
| 146,735 | (11) | |
| * | | |
| 4,109 | | |
| * | | |
| * | |
| Taylor
A. Wiederhorn | |
| 287,345 | (12) | |
| 1.8 | % | |
| 14,989 | | |
| 1.2 | % | |
| 1.2 | % |
| Thayer
D. Wiederhorn | |
| 277,258 | (12) | |
| 1.7 | % | |
| 14,652 | | |
| 1.2 | % | |
| 1.2 | % |
| All
directors and executive officers as a group (18 persons) | |
|
2,364,304
| (13) | |
| 13.7 | % | |
| 111,944 | | |
| 8.8 | % | |
| 8.8 | % |
| † |
Represents
the voting power with respect to all shares of our Class A Common Stock and Class B Common Stock, voting as a single class, beneficially
owned by the holder. Each share of Class A Common Stock is entitled to one vote per share and each share of Class B Common Stock
is entitled to 2,000 votes per share. |
| * |
Represents
beneficial ownership of less than 1% of the class. |
| (1) |
Based
in part on a Schedule 13D/A filed on September 26, 2024 by Fog Cutter Holdings LLC, a limited liability company controlled
by a board of managers comprised of Andrew A. Wiederhorn, Taylor A. Wiederhorn, Thayer D. Wiederhorn and Mason A. Wiederhorn. The
address of Fog Cutter Holdings LLC is 9720 Wilshire Blvd., Suite 500, Beverly Hills, CA 90212. |
| (2) |
Based
on a Schedule 13G filed jointly on March 8, 2022 by HOT GFG LLC and Ms. Rachel Serruya. Ms. Serruya is the sole Director and President
of HOT GFG LLC and may be deemed to have voting and investment power over these shares. Ms. Serruya disclaims beneficial ownership
of such securities except to the extent of her indirect pecuniary interest therein, if any. The address provided by HOT GFG LLC is
210 Shields Court, Markham, Ontario, Canada L3R8V2. |
| (3) |
Based
in part on a Schedule 13D/A filed on August 25, 2022 by Gregory Fortunoff, with an address at 49 West 37th Street, New York, NY 10018.
Includes warrants to purchase 165,600 shares of Class A Common Stock. Mr. Fortunoff expressly disclaims beneficial ownership
for all purposes of the shares beneficially owned by other persons. |
| (4) |
Includes
options to purchase 140,848 shares of Class A Common Stock that have vested or will vest within 60 days of the effective date
of the disclosure, and warrants that are exercisable for an additional 120,000 shares of Class A Common Stock, including warrants
for 100,000 shares owned by Mr. Wiederhorn’s spouse, to which he disclaims beneficial ownership except to the extent of his
pecuniary interest therein. Does not include unvested options to purchase an additional 51,060 shares of Class A Common Stock. |
| (5) |
Includes options to purchase 116,667 shares of Class
A Common Stock that have vested or will vest within 60 days of the effective date of the disclosure. Does not include unvested options
to purchase an additional 33,333 shares of Class A Common Stock. |
| (6) |
Includes
options to purchase 233,333 shares of Class A Common Stock that have vested or will vest within 60 days of the effective date
of the disclosure. Does not include unvested options to purchase an additional 266,667 shares of Class A Common Stock. |
| (7) |
Includes options to purchase 10,212
shares of Class A Common Stock that have vested or will vest within 60 days of the effective
date of the disclosure. Does not include unvested options to purchase an additional 51,060
shares of Class A Common Stock. |
| (8) |
Includes
options to purchase 30,636 shares of Class A Common Stock that have vested or will vest within 60 days of the effective date of the
disclosure. |
| (9) |
Includes
options to purchase 30,636 shares of Class A Common Stock that have vested or will vest within 60 days of the effective date
of the disclosure. Does not include unvested options to purchase an additional 61,272 shares of Class A Common Stock. |
| (10) |
Includes
options to purchase 30,015 shares of Class A Common Stock that have vested or will vest within 60 days of the effective date
of the disclosure. |
| (11) |
Includes
options to purchase 105,636 shares of Class A Common Stock that have vested or will vest within 60 days of the effective date
of the disclosure. |
| (12) |
Includes
options to purchase 130,636 shares of Class A Common Stock that have vested or will vest within 60 days of the effective date
of the disclosure. |
| (13) |
Includes
options to purchase an aggregate of 1,181,799 shares of Class A Common Stock that have vested or will vest within 60 days
of the effective date of the disclosure. Does not include unvested options to purchase an aggregate of 769,752 shares of
Class A Common Stock. |
Preferred
Stock
The
following table sets forth information, as of the record date, with respect to the beneficial ownership of our non-voting Series B Cumulative
Preferred Stock (the “Series B Preferred Stock”) held by: (i) each of our directors; (ii) each of our named executive
officers; and (iii) all of our executive officers and directors as a group. As of the record date, there were issued and outstanding
8,019,933 shares of Series B Preferred Stock.
| | |
Series B Preferred Stock
Beneficially Owned | |
| Name of beneficial owner | |
| Shares | | |
| % | |
| Named Executive Officers and Directors | |
| | | |
| | |
| Andrew A. Wiederhorn | |
| 1,642.6 | | |
| * | |
| Kenneth J. Kuick | |
| 2,000 | | |
| * | |
| Robert G. Rosen | |
| 232 | | |
| * | |
| John S. Allen | |
| — | | |
| * | |
| Donald J. Berchtold | |
| — | | |
| * | |
| Tyler B. Child | |
| — | | |
| * | |
| Lynne L. Collier | |
| — | | |
| * | |
| Mark Elenowitz | |
| 9,686 | | |
| * | |
| James G. Ellis | |
| — | | |
| * | |
| Peter R. Feinstein | |
| — | | |
| * | |
| Matthew H. Green | |
| — | | |
| * | |
| John C. Metz | |
| 71,306 | | |
| * | |
| Carmen Vidal | |
| — | | |
| * | |
| Mason A. Wiederhorn | |
| — | | |
| * | |
| Taylor A. Wiederhorn | |
| 885 | | |
| * | |
| Thayer D. Wiederhorn | |
| 1,689 | | |
| * | |
| All directors and executive officers as a group (18 persons) | |
| 90,936 | | |
| 1.1 | % |
| * |
Represents
beneficial ownership of less than 1% of the class. |
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
The
following is a summary of (i) family relationships among our directors, director nominees, and executive officers, and (ii) reportable
related person transactions since the beginning of our 2022 fiscal year (which began on December 27, 2021) or currently proposed to which
we were or will be a party:
| |
● |
in
which the amount involved exceeds $120,000; and |
| |
● |
in
which any director, director nominee, executive officer, stockholder who beneficially owns 5% or more of our common stock or any
member of their immediate family had or will have a direct or indirect material interest. |
Andrew
Wiederhorn, our current Chairman of the Board and former President and Chief Executive Officer, entered into a written Separation, Cooperation,
and Release Agreement (the “Separation Agreement”) and Consulting Agreement (the “Consulting Agreement”)
with the Company on July 19, 2023. Under the Separation Agreement, Mr. Wiederhorn was entitled to receive any accrued but unpaid
base salary and the value of any accrued and unused vacation through his resignation date in accordance with his Employment Agreement.
In addition, Mr. Wiederhorn was entitled to receive a final bonus under his Employment Agreement for such portion of 2023 through
his separation date in the amount of $950,000. Mr. Wiederhorn’s stock options will continue to vest after his resignation date
as long as he continues to provide services to the Company as a consultant. Under the Separation Agreement, Mr. Wiederhorn provided a
general release of the Company, and the Company released Mr. Wiederhorn from certain claims related to his employment and separation
from the Company, subject in each case to certain exceptions. Mr. Wiederhorn also agreed to assist and cooperate with the Company in
transitioning his duties, as well as with any investigations, legal claims, or other matters related to his past employment. In addition,
the Company agreed that, unless otherwise prohibited by applicable law, any attorney fees and expenses advanced to Mr. Wiederhorn by
the Company in connection with the Company’s pending litigation and governmental investigations are awarded to him under the Separation
Agreement. The Consulting Agreement provides that Mr. Wiederhorn will provide specified non-executive consulting services to the Company,
including advice regarding corporate strategy, acquisitions, capital allocation, financing and restaurant/franchise operations. In consideration
for such services, the Consulting Agreement provides that the Company will pay to Fog Cutter Consulting Corp., a company affiliated with
Mr. Wiederhorn, an hourly fee of $1,850. In addition, while Mr. Wiederhorn remains a director of the Company, he will receive standard
Board fees as a non-employee director. The Consulting Agreement also contains customary confidentiality obligations by Mr. Wiederhorn
and an assignment to the Company of intellectual property developed by Mr. Wiederhorn in the course of providing consulting services
to the Company. Andrew Wiederhorn’s compensation for fiscal 2022 and 2023 is reported above under “Executive Compensation
– Summary Compensation Table.” For fiscal year 2024 (through October 31, 2024), Mr. Wiederhorn received gross cash compensation
from the Company of $5,338,638. Since the beginning of fiscal 2022, he also vested in stock options to purchase an aggregate of 110,212
shares of the Company’s Class A common stock granted in previous years.
John
C. Metz joined our Board of Directors on July 11, 2023. Mr. Metz is the President and owner of RREMC Restaurants, LLC, which franchisees
certain of the Company’s Hurricane Dockside Grill restaurants under standard franchise terms for the Company’s Hurricane
brand. Under such arrangements, RREMC Restaurants, LLC pays to the Company a standard royalty rate on net sales plus marketing fees,
which totaled approximately $1,626,981 since the beginning of our 2022 fiscal year through October 31, 2024. In
addition, in January 2022 the Company paid to Mr. Metz a consulting fee of $160,000 in connection with the Company’s acquisition
of Native Grill & Wings.
Thayer
Wiederhorn serves as Chief Operating Officer and a member of the Board of Directors of the Company. He is the son of Andrew Wiederhorn,
grandson of Donald Berchtold, nephew of Tyler Child and Jacob Berchtold, and brother of Taylor Wiederhorn and Mason Wiederhorn,
none of whom have a material interest in Thayer Wiederhorn’s employment or share a household with him. Thayer Wiederhorn’s
compensation for 2022 and 2023 is reported above under “Executive Compensation – Summary Compensation Table.”
For fiscal year 2024 (through October 31, 2024), Mr. Wiederhorn received gross cash compensation from the Company, including base salary
and bonus, before tax withholding and other deductions, of approximately $465,385. Since the beginning of fiscal 2022, he also participated
in the general welfare and benefit plans of the Company and vested in stock options to purchase an aggregate of 100,000 shares
of the Company’s Class A common stock granted in previous years.
Taylor
Wiederhorn serves as Chief Development Officer and a member of the Board of Directors of the Company. He is the son of Andrew Wiederhorn,
grandson of Donald Berchtold, nephew of Tyler Child and Jacob Berchtold, and brother of Thayer Wiederhorn and Mason Wiederhorn,
none of whom have a material interest in Taylor Wiederhorn’s employment or share a household with him. Taylor Wiederhorn’s
compensation for 2022 and 2023 is reported above under “Executive Compensation – Summary Compensation Table.”
For fiscal year 2024 (through October 31, 2024), Mr. Wiederhorn received gross cash compensation from the Company, including base salary
and bonus, before tax withholding and other deductions, of approximately $465,385. Since the beginning of fiscal 2022, he also participated
in the general welfare and benefit plans of the Company and vested in stock options to purchase an aggregate of 100,000 shares
of the Company’s Class A common stock granted in previous years.
Mason
Wiederhorn serves as Chief Brand Officer and a member of the Board of Directors of the Company. He is the son of Andrew Wiederhorn, grandson
of Donald Berchtold, nephew of Tyler Child and Jacob Berchtold, and brother of Thayer Wiederhorn and Taylor Wiederhorn, none of
whom have a material interest in Mason Wiederhorn’s employment or share a household with him. For fiscal years 2022, 2023 and 2024
(through October 31, 2024), Mason Wiederhorn received gross cash compensation from the Company, including base salary and bonus,
before tax withholding and other deductions, of approximately $1,275,000, $1,497,116 and $423,077. Since the beginning of fiscal
2022, he also participated in the general welfare and benefit plans of the Company and vested in stock options to purchase an aggregate
of 75,000 shares of the Company’s Class A common stock granted in previous years.
Donald
Berchtold serves as Chief Creative Officer and a member of the Board of Directors of the Company. He is the father of director Tyler
Child and grandfather of Thayer Wiederhorn, Taylor Wiederhorn and Mason Wiederhorn, none of whom have a material interest in Mr. Berchtold’s
employment or share a household with him. For fiscal years 2022, 2023 and 2024 (through October 31, 2024), Donald Berchtold received
gross cash compensation from the Company, including base salary and bonus, before tax withholding and other deductions, of approximately
$339,445, $350,023 and $232,710. Since the beginning of fiscal 2022, he also participated in the general welfare and benefit
plans of the Company.
Jacob
Berchtold serves as Chief Operating Officer of the Fast Casual Division of the Company, and has been involved in restaurant operations
of the Company and its predecessors since 2005. He is the son of Donald Berchtold, brother of Tyler Child and uncle of Thayer
Wiederhorn, Taylor Wiederhorn and Mason Wiederhorn, none of whom have a material interest in Jacob Berchtold’s employment or share
a household with him. For fiscal years 2022, 2023 and 2024 (through October 31, 2024), Jacob Berchtold received gross cash compensation
from the Company, including base salary and bonus, before tax withholding and other deductions, of approximately $450,023, $450,023
and $296,171. Since the beginning of fiscal 2022, he also participated in the general welfare and benefit plans of the Company
and vested in stock options to purchase an aggregate of 75,000 shares of the Company’s Class A common stock granted in previous
years.
Carmen
Vidal serves as the Company’s International Legal Counsel and Director of International Franchise Development (Europe/Middle East/North
Africa). For fiscal years 2022, 2023 and 2024 (through October 31, 2024), Ms. Vidal received gross cash compensation from the
Company, including base salary and bonus, before tax withholding and other deductions, of approximately $210,000, $197,045 and
$197,000. Since the beginning of fiscal 2022, she also participated in the general welfare and benefit plans of the Company and
vested in stock options to purchase an aggregate of 25,000 shares of the Company’s Class A common stock granted in previous
years.
OTHER
MATTERS
The
Board of Directors is not aware of any other matters to come before the Annual Meeting. If any other matter should properly come before
the Annual Meeting, the persons named in the enclosed proxy intend to vote the shares according to their best judgment.
2023
ANNUAL REPORT ON FORM 10-K
Our
Annual Report on Form 10-K for the fiscal year ending December 31, 2023 (the “Annual Report”) was filed with the SEC
on March 12, 2024. A copy of the Annual Report is available free of charge online at http://ir.fatbrands.com/financial-information/annual-reports,
or from the SEC at its website at www.sec.gov. You may also obtain a copy of our Annual Report, free of charge, by sending a written
request to FAT Brands Inc., 9720 Wilshire Blvd., Suite 500, Beverly Hills, CA 90212, Attention: Corporate Secretary. The Annual Report
and any information contained on or accessed through our website is not incorporated by reference into this proxy statement and is not
considered proxy solicitation material.
STOCKHOLDER
PROPOSALS FOR 2025 ANNUAL MEETING
Under
SEC Rule 14a-8, any stockholder desiring to submit a proposal for inclusion in our proxy materials for our 2025 Annual Meeting of Stockholders
must provide the Company with a written copy of that proposal by no later than 120 days before the first anniversary of the date of this
proxy statement, or December ___, 2025, and meet the other requirements of the SEC in effect at that time. However, if the date of
our 2025 Annual Meeting changes by more than 30 days from the anniversary of the date on which our 2024 Annual Meeting of Stockholders
is held, then the deadline would be a reasonable time before we begin to print and mail our proxy materials for our 2025 Annual Meeting.
Matters pertaining to such proposals, including the number and length thereof, eligibility of persons entitled to have such proposals
included and other aspects are governed by the Securities Exchange Act of 1934, and the rules of the SEC thereunder and other laws and
regulations to which interested stockholders should refer. The Secretary of the Company must receive timely stockholder proposals or
nominations in writing at the principal executive offices of the Company at FAT Brands Inc., 9720 Wilshire Blvd., Suite 500, Beverly
Hills, CA 90212, Attention: Corporate Secretary.
Stockholders
wishing to make a director nomination or bring a proposal to be considered at the 2025 Annual Meeting of Stockholders (but not include
it in the Company’s proxy materials) must provide written notice of such proposal to the Secretary of the Company at the principal
executive offices of the Company indicated above not less than ninety (90) days nor more than one hundred and twenty (120) days prior
to the first anniversary of the 2024 Annual Meeting of Stockholders, or between August 26, 2025 and September 25, 2025, provided that
if the date of the 2025 Annual Meeting is advanced by more than thirty (30) days, or delayed by more than seventy (70) days, from the
anniversary date of the 2024 Annual Meeting, or if no Annual Meeting is held in 2025, notice must be delivered not earlier than one hundred
and twenty (120) days prior to the 2025 Annual Meeting and not later than the close of business on the later of the ninetieth (90th)
day prior to the 2025 Annual Meeting and the tenth (10th) day following the day on which public announcement of the date of the 2025
Annual Meeting is first made. Any matter so submitted must also comply with the other provisions of the Company’s Amended and Restated
Bylaws and be submitted in writing to the Secretary at the corporate offices of the Company indicated above.
ANNEX
A
CERTIFICATE
OF AMENDMENT
TO
THE
SECOND
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
FAT
BRANDS INC.
Pursuant
to Section 242 of the General
Corporation
Law of the State of Delaware
FAT
Brands Inc., a Delaware corporation (hereinafter called the “Corporation”), does hereby certify as follows:
FIRST:
The name of the Corporation is FAT Brands Inc.
SECOND:
Section 8.01 of Article VIII of the Corporation’s Second Amended and Restated Certificate of Incorporation is hereby amended to
read in its entirety as set forth below:
“SECTION
8.01 Limitation of Personal Liability. No director or officer of the Corporation shall be personally liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, except to the extent such exemption from
liability or limitation thereof is not permitted under the DGCL, as it presently exists or may hereafter be amended from time to time.
If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors or officers,
then the liability of a director or officer of the Corporation shall be eliminated or limited to the fullest extent permitted by the
DGCL, as so amended. No amendment to or repeal of this provision shall apply to or have any effect on the liability or alleged liability
of any director or officer of the Corporation for or with respect to any acts or omissions of such director or officer occurring prior
to such amendment or repeal.”
THIRD:
Pursuant to resolutions adopted at a meeting of the Board of Directors of the Corporation approving the proposed amendment to the Amended
and Restated Certificate of Incorporation of the Corporation, declaring the amendment to be advisable and calling a meeting of the stockholders
of the Corporation for consideration thereof, the special meeting of the stockholders of the Corporation was duly called and held, upon
notice in accordance with Section 222 of the General Corporation Law of the State of Delaware, at which meeting the necessary number
of shares as required by statute were voted in favor of the amendment.
FOURTH:
The foregoing amendments were duly adopted in accordance with Section 242 of the General Corporation Law of the State of Delaware.
IN
WITNESS WHEREOF, FAT Brands Inc. has caused this Certificate to be duly executed in its corporate name this [●] day of [●],
2024.
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FAT
BRANDS INC. |
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Title: |
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