Lifeway Foods, Inc. Amends Employment Agreement with CEO Julie Smolyansky

On December 23, 2024, Lifeway Foods, Inc. (NASDAQ:LWAY) disclosed in an 8-K filing that the company entered into an Amended and Restated Employment Agreement with Julie Smolyansky, the Chief Executive Officer (CEO). The agreement stipulates that Smolyansky will continue in her role and undertake responsibilities corresponding to her position, including President and Secretary roles as assigned by the Board of Directors.

The Employment Agreement does not escalate Smolyansky’s annual base salary, bonus entitlement, or equity grant from the 2023 levels outlined in the proxy statement submitted to the Securities and Exchange Commission for the 2024 shareholder meeting. Pursuant to the new agreement, Smolyansky is poised to receive an annual base salary of $1,000,000, subject to annual evaluation. Additionally, she will be eligible for an annual bonus depending on performance targets determined by the Compensation Committee.

Moreover, the agreement allows Smolyansky to partake in the Lifeway Foods, Inc. 2022 Omnibus Incentive Plan or any successor plan, under the conditions set by the Compensation Committee. The document specifies that Smolyansky shall get an annual grant under the Plan equating to 75% of her annual base salary, with the company having the option to offer cash if the shares cannot be delivered upon vesting.

The company reserves the right under the Employment Agreement to review and adjust Smolyansky’s base salary based on performance. The terms of the agreement dictate that it terminates upon Smolyansky’s death, Disability as defined in the agreement, or by either party’s termination.

In case of termination by the company without Cause or by Smolyansky for Good Reason, the company will pay her a Severance Pay equal to two times her base salary and two times her highest annual bonus in the prior two years. In a Change in Control termination scenario, the Severance Pay increases to three times the base salary and highest bonus figures.

Furthermore, the agreement details restrictive covenants favoring the company, like a non-competition and non-solicitation provision. In the event of a non-competition obligation, the company will compensate Smolyansky accordingly.

The document also clarifies the ownership of intellectual property generated by Smolyansky during her employment, excluding “The Kefir Cookbook,” for which a royalty-free license is provided to the company for marketing purposes.

Alongside the Employment Agreement, a Retention Bonus Agreement was signed on the same day, entailing a one-time cash payment to Smolyansky of $2,000,000, subject to specific conditions regarding employment termination.

The full documentation of the Employment Agreement and the Retention Bonus Agreement can be found in Exhibits 10.1 and 10.2, respectively, attached to the filing.

Item 9.01 of the filing declares the inclusion of Financial Statements and Exhibits, with Exhibits 10.1 and 10.2 being the Amended and Restated Employment Agreement and the Retention Bonus Agreement, respectively.

Lifeway Foods, Inc. executed these agreements aiming to ensure continued operational efficiency alongside defined compensation terms for its CEO.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Lifeway Foods’s 8K filing here.

Lifeway Foods Company Profile

Lifeway Foods, Inc produces and markets probiotic-based products in the United States and internationally. Its primary product is drinkable kefir, a cultured dairy product in various organic and non-organic sizes, flavors, and types. The company offers European-style soft cheeses; cream and other products; ProBugs, a line of kefir products designed for children; drinkable yogurt; and fresh made butter and sour cream.