RELATED PARTY TRANSACTIONS ∎ SAGEWORTH TRUST COMPANY PROFIT SHARING/401(K) PLAN ADVISORY SERVICES
RELATED PARTY TRANSACTIONS
Sageworth Trust Company Profit Sharing/401(k) Plan Advisory Services
On January 1, 2011, Utz Quality Foods, Inc. entered into an engagement letter with Sageworth Trust Company (“Sageworth Trust”) for fiduciary services in connection with the Utz Quality Foods, Inc. Profit Sharing/401(k) Plan. Timothy P. Brown is the Founder and Chief Executive Officer of Sageworth Trust. Sageworth Trust provided plan design, investment and similar services under the engagement letter. On July 31, 2019, Utz Quality Foods and Sageworth Trust entered into a new engagement letter (“October 1, 2019 Engagement Letter”), which became effective October 1, 2019 and replaced a January 1, 2011 engagement letter. Under the October 1, 2019 Engagement Letter, the services provided by Sageworth Trust to the Utz Quality Foods, LLC Profit Sharing/401(k) Plan and its sponsor remained substantially the same as under the 2011 engagement letter. Under the October 1, 2019 Engagement Letter, UBH was required to pay Sageworth Trust $35,000 each calendar quarter during the term, plus out-of-pocket expenses.
In May of 2021, Utz Brands, Inc. and Sageworth Trust entered into a new engagement letter (the “Current Engagement Letter”) which replaced the October 1, 2019 Engagement Letter. Under the Current Engagement Letter, effective in the third quarter of 2021, Utz pays Sageworth Trust an amount equal to 0.01% of the plan assets under management per fiscal quarter, plus out of pocket expenses. In connection with the services provided by Sageworth Trust with respect to the Utz Quality Foods, LLC Profit Sharing/401(k) Plan during fiscal year 2022, Utz paid Sageworth Trust $94,278.26.
Lease Agreement by and between Utz Quality Foods, LLC and Oxford Hill, LLC
On June 21, 2019, Utz Quality Foods, LLC entered into a Non-Exclusive Aircraft Lease Agreement (the “Aircraft Lease”) with Oxford Hill, LLC for the use by Utz Quality Foods, LLC of an aircraft owned by Oxford Hill, LLC. Oxford Hill, LLC, an entity controlled by Michael W. Rice, a member of the Company Board. Pursuant to the terms of the Aircraft Lease, Utz Quality Foods, LLC may lease Oxford Hill, LLC’s private aircraft (the “Aircraft”) on a non-exclusive basis for travel purposes. In accordance with the terms of the Aircraft Lease, Utz Quality Foods, LLC reimburses Oxford Hill, LLC for the costs associated with business travel on the Aircraft in an amount equal to $1,400 per hour. During Fiscal 2022, Utz Quality Foods, LLC paid approximately $130,900 to Oxford Hill, LLC for business travel under the Aircraft Lease. The hourly rate under the lease for fiscal year 2023 has been increased to $1,600 per hour.
Third Amended and Restated Limited Liability Company Agreement
On the Closing Date, the existing second amended and restated limited liability company agreement of UBH was further amended and restated in its entirety to become the Third Amended and Restated Limited Liability Company Agreement.
Rights of the Units
Following the Closing, the Common Company Units are entitled to share in the profits and losses of UBH and to receive distributions as and if declared by our managing member and have no voting rights.
The Third Amended and Restated Limited Liability Company Agreement contains provisions which require that a one-to-one ratio is maintained between interests held by us in UBH and our Common Stock outstanding, subject to certain exceptions (including in respect of management equity which has not been settled in our Common Stock). In addition, the Third Amended and Restated Limited Liability Company Agreement permits us, in our capacity as the managing member, to take actions to maintain such ratio, including in connection with stock splits, combinations, recapitalizations and exercises of the Continuing Members’ exchange rights (described below).
We, as the managing member of UBH, have the authority to create new equity interests in UBH, and establish the rights and privileges of such interests.
Management
We, as the managing member of UBH following the Closing, have the sole authority to manage the business and affairs of UBH in accordance with the Third Amended and Restated Limited Liability Company Agreement or applicable law. The business, property and affairs of UBH is managed solely by the managing member, and the managing member cannot be removed or replaced except by the incumbent managing member.
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2023 PROXY STATEMENT 59 |