DEF 14A of Smithfield Foods Inc
Filed Apr 18, 2025 · FY20240000091388-25-000027
The Board of Directors recommends that you vote “FOR” the nominees under Proposal 1, “FOR” Proposals 2
The Board of Directors recommends that you vote “FOR” the nominees under Proposal 1, “FOR” Proposals 2 and 3, and “ONE YEAR” for Proposal 4. The record date for the Annual Meeting is April 9, 2025, or the Record Date. Only shareholders of record at the close of business on the Record Date may vote at the Annual Meeting or any adjournment or postponement thereof. This Notice is being mailed to all shareholders of record entitled to vote at the Annual Meeting on or about April 18, 2025. By Order of the Board of Directors Tennille J. Checkovich Chief Legal Officer Smithfield, Virginia April 18, 2025
The Board of Directors recommends that you vote “FOR” the nominees under Proposal 1, “FOR” Proposals 2
| Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be held virtually, via live webcast at www.virtualshareholdermeeting.com/SFD2025, on Tuesday, June 3, 2025 at 8:00 a.m. Eastern Time. The proxy statement and our annual report on Form 10-K for the fiscal year ended December 29, 2024 are available free of charge at proxyvote.com. |
The Board of Directors recommends that you vote “FOR” the nominees under Proposal 1, “FOR” Proposals 2
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BOARD OF DIRECTORS
BOARD OF DIRECTORS Our business and affairs are managed under the direction of our Board. Our Board currently consists of nine directors. In accordance with our amended and restated articles of incorporation, our Board is divided into three classes of directors, with staggered three-year terms, denominated as class I, class II and class III. As a result, approximately one- third of the Board will be elected each year. The class I directors, whose terms will expire at the Annual Meeting, are Mr. Smith, Mr. Zhou and Mr. Quelch. The class II directors, whose terms will expire at our 2026 Annual Meeting of Shareholders, are Mr. Long Wan, Mr. He and Mr. Starling. The class III directors, whose terms will expire at our 2027 Annual Meeting of Shareholders, are Mr. Guo, Mr. Hongwei Wan and Ms. Gallagher. We expect that any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. The division of our Board into three classes with staggered three-year terms may delay or prevent a change of our management or a change of control. We entered into a shareholders agreement dated as of January 21, 2025, with WH Group Limited, which grants WH Group certain rights with respect to the composition of our Board. For so long as WH Group owns, in the aggregate, a majority of our then outstanding common stock, WH Group will have the right to designate, for inclusion in the slate of directors nominated by the Board for election to our Board, a majority of the directors on our Board and to control the composition of our Board and the approval of actions requiring shareholder approval through their voting power. If WH Group ceases to own a majority of our then outstanding shares of common stock, for so long as WH Group continues to own, in the aggregate, at least 10% of our then outstanding shares of common stock, WH Group will have the right to designate, for inclusion in the slate of directors nominated by the Board for election to our Board, a number of the total number of directors entitled to serve on the Board proportionate to the percentage of our outstanding common stock owned, in the aggregate, by WH Group, rounded up to the nearest whole number. Thereafter, WH Group will no longer have any right to designate, for inclusion in the slate of directors nominated by our Board for election to our Board, directors to serve on the Board under the shareholders agreement. For the purpose of determining ownership of our common stock, references to WH Group include WH Group, its successors by way of merger or transfer of all or substantially all of its assets, any entity that is 50% beneficially owned by WH Group, and any entity that acquires a majority of our then outstanding shares of common stock directly from any of the foregoing that is a shareholder of our company. See “Certain Relationships and Related Party Transactions—Relationship with WH Group.”
Directors
Directors The following table sets forth the name, age as of April 10, 2025, and position of each of our directors with terms expiring at the Annual Meeting and for each of the continuing directors, followed by a biography of each director.
Directors
| Name | Age | Position | | Long Wan(3)(4)(5) ............................... | 84 | Chairman | | C. Shane Smith(5) ............................. | 51 | Chief Executive Officer and Director | | Hank Shenghua He(3)(4)(5) ................. | 57 | Director | | Lijun Guo(3)(5) ................................... | 54 | Director | | Hongwei Wan .................................. | 51 | Director | | Xiaoming Zhou(3)(4)(5) ....................... | 39 | Director | | Marie T. Gallagher(1)(2) ..................... | 65 | Director | | John A. Quelch(1)(2)(3) ....................... | 73 | Director | | Raymond A. Starling(1)(2)(4) .............. | 48 | Director |
Directors
________________ (1)Independent director under the rules of Nasdaq. (2)Member of our Audit Committee. (3)Member of our Compensation Committee. 14 Table of Contents (4)Member of our Nominating and Governance Committee. (5)Member of our Executive Committee.
Director Nominees – Class I
Director Nominees – Class I C. Shane Smith has served as President and Chief Executive Officer of Smithfield since July 2021. He joined our company in 2003 and has served in a variety of leadership roles for our U.S. and international operations since then. Mr. Smith served as an executive director at WH Group from August 2021 to January 2025. He served as our Chief Strategy Officer from January 2021 to July 2021. In that role, Mr. Smith was also responsible for our hog production operations, Smithfield Renewables and our European and Mexican operations. Prior to that, Mr. Smith served as Executive Vice President of our European operations from April 2019 to January 2021, President of our Romanian operations from November 2017 to April 2019 and Chief Financial Officer of our European operations from September 2012 to April 2019. Mr. Smith holds a Bachelor of Science in Accounting from Mount Olive College and a Master of Business Administration (MBA) from the College of William and Mary in Virginia. We believe Mr. Smith is qualified to serve as our director because of his extensive experience in the meat processing industry and his leadership and in-depth knowledge of our company. Xiaoming Zhou has served as a member of our Board since January 2025. Mr. Zhou has served as the Vice President of WH Group since May 2023, responsible for investment management of WH Group. Mr. Zhou has more than 15 years of experience in investment banking and corporate finance. Prior to joining WH Group, Mr. Zhou worked in BofA Securities, Inc. from May 2015 to May 2023 and most recently served as Managing Director of Global Investment Banking, advising corporate clients on capital raising and merger and acquisition transactions. Prior to that, he served as Vice President of Morgan Stanley’s investment banking division. Mr. Zhou holds a Bachelor in Economics (major in finance) and Bachelor of Science (major in statistics), both from Peking University. We believe Mr. Zhou is qualified to serve as our director because of his significant knowledge in corporate finance and capital raising, combined with his broad experience in investments in the industry in which we operate. John A. Quelch has served as a member of our Board since January 2025. Mr. Quelch has served as the Executive Vice Chancellor of Duke Kunshan University since January 2024. Mr. Quelch has also held professorship positions at Duke Kunshnan University and Duke University Fuqua School of Business since January 2024. He also has served as Chairman of the consulting firm Globalpraxis since January 2023. Mr. Quelch served as Dean and Vice Provost for Executive Education and the Leonard M. Miller University Chair at the University of Miami from July 2017 to December 2023. Between 2013 and 2017, he served as a professor at both Harvard Business School and Harvard T.H. Chan School of Public Health. Mr. Quelch was a Harvard Business School professor between 1979 and 2013, except for serving as Dean, Vice President and Distinguished Professor of International Management of the China Europe International Business School from 2011 to 2013 and Dean of the London Business School from 1998 to 2001. Mr. Quelch has served as an independent director of several publicly traded and private companies in the United States and the United Kingdom, as well as in nonprofit and public agency boards, including as chairman of the Massachusetts Port Authority. Mr. Quelch holds a Bachelor of Arts in Modern History and a Master of Arts from Exeter College, Oxford University and a Master of Business Administration from the Wharton School of Business at the University of Pennsylvania. He also holds a Master of Science in Nutrition Science from T.H. Chan School of Public Health at Harvard University and a Doctor of Business Administration from Harvard Business School. We believe Mr. Quelch is qualified to serve as our director due to his extensive experience as a director of various public reporting companies, as well as his academic and management expertise.
Directors Continuing in Office – Class II (Term Ending in 2026)
Directors Continuing in Office – Class II (Term Ending in 2026) Long Wan has served as a member of our Board since September 2013. Mr. Long Wan has served as a director of WH Group since October 2007, as the Chairman of the board of directors since November 2010 and as an Executive Director since December 2013. Mr. Long Wan has also served as a director of Shuanghui Development since August 2012. Mr. Long Wan also holds directorships in various subsidiaries of WH Group. He served as the Chief Executive Officer of WH Group from October 2013 to August 2021. He served as the Chairman of the board of directors of 15 Table of Contents Shuanghui Development from August 2012 to August 2024. Mr. Long Wan has over 50 years of experience in the meat processing industry, and under his leadership, the business under WH Group has grown from a local state-owned enterprise in Henan Province, China into an international company with operations spanning various continents. He was appointed as an Executive Director of the China Meat Association from December 2006 to December 2011 and a senior consultant of the China Meat Association in 2001. Mr. Long Wan received his professional certificate in Business Management from the Henan University of Animal Husbandry and Economy (previously named the Henan Business College) and was awarded the senior economist professional qualification issued by the Henan Province Advanced Professional Titles Adjudication Committee (Economic Disciplines). We believe Mr. Long Wan is qualified to serve as our director because of his extensive experience in the meat processing industry, outstanding accomplishments in the meat industry and his in-depth knowledge of our company. Mr. Long Wan is the father of Mr. Hongwei Wan. Hank Shenghua He has served as a member of our Board since January 2016. He has served as our Vice President and Chief Operating Coordinate Officer, among other roles, since January 2014. Mr. He has extensive experience in mechanical engineering and food industry operations. After our company was acquired by WH Group in 2013, Mr. He played an important role in the post-acquisition transition. Prior to joining our company, Mr. He served in various positions with Shuanghui Development for more than a decade, including as the assistant to the Chairman of Shuanghui Development from September 2012 to January 2014 and as Vice President from June 2005 to August 2012. He also served as the manager of Shuanghui Group’s Commerce and Logistic Division from August 2008 to June 2011. Mr. He obtained his Bachelor’s Degree in Engineering from University of Chongqing in China and a Master of Business Administration (MBA) from the College of William and Mary in Virginia. We believe Mr. He is qualified to serve as our director because of his exceptional expertise in corporate strategy, communication and leadership. Raymond A. Starling has served as a member of our Board since January 2025. Mr. Starling has served as General Counsel to the North Carolina Chamber of Commerce and President of the North Carolina Chamber Legal Institute since July 2019. He has also served as Executive Advisor for Aimpoint Research since July 2022. Prior to these roles, Mr. Starling served as Chief of Staff to the U.S. Secretary of Agriculture from June 2018 to June 2019. Mr. Starling also previously served as a principal agriculture advisor to the President of the United States at the White House from February 2017 to June 2018. Mr. Starling served in various roles for North Carolina Speaker of the House and later U.S. Senator Thom Tillis from November 2012 to February 2017, and Mr. Starling served as General Counsel for the North Carolina Department of Agriculture & Consumer Services from February 2007 to November 2012. Prior to his career in public service, Mr. Starling worked as an Associate for Hunton & Williams LLP from August 2003 to February 2007. Mr. Starling has taught several agricultural and food law courses at the University of North Carolina at Chapel Hill and Campbell University, taught a public lawyering course at Regent University and is currently a member of the extended faculty of High Point University School of Law. Mr. Starling holds a Bachelor of Science in Agricultural and Extension Education from North Carolina State University and a Juris Doctor (JD) from the University of North Carolina School of Law. We believe Mr. Starling is qualified to serve as our director due to his substantial knowledge of the agriculture industry, as well as his broad government and private sector experience.
Directors Continuing in Office – Class III (Term Ending in 2027)
Directors Continuing in Office – Class III (Term Ending in 2027) Lijun Guo has served as a member of our Board since May 2015. Mr. Guo has served as an Executive Director of WH Group since December 2013 and as the Chief Executive Officer of WH Group since August 2021. Mr. Guo has also served as a director of Shuanghui Development since August 2021. He also holds directorships in various subsidiaries of WH Group. He also served as an Executive Vice President and the Chief Financial Officer of WH Group from April 2016 to August 2021. Prior to this, Mr. Guo was WH Group’s Vice President and Chief Financial Officer from January 2014 to March 2016 and served as the Deputy Chief Executive Officer from October 2013 to January 2014. Mr. Guo was the Executive Vice President of Shuanghui Development from August 2012 to October 2013. Prior to that, he held various positions in Shuanghui Group, including serving as deputy director, director of the finance department and Chief Financial Officer. Mr. Guo has over 30 years of experience overseeing the financial operations 16 Table of Contents of various companies. Mr. Guo obtained his adult higher education diploma in financial accounting from Henan Radio and Television University in July 1994 and obtained the completion certificate for the master of business administration program of the Graduate School of Renmin University of China in December 2004. Mr. Guo received his assistant accountant certificate awarded by the Ministry of Personnel of the People’s Republic of China in October 1994. We believe Mr. Guo is qualified to serve as our director because of his substantial experience in business management, accounting and financial operations and comprehensive knowledge of the industry. Hongwei Wan has served as a member of our Board since January 2025. Mr. Hongwei Wan has served as an Executive Director and the Deputy Chairman of the board of directors of WH Group since August 2021. He has also served as a director of Shuanghui Development since August 2018 and the Chairman of the board of directors of Shuanghui Development since August 2024. He also holds directorships in various subsidiaries of the Group. Mr. Hongwei Wan served as an assistant to the Chief Executive Officer of WH Group from January 2014 to August 2021 and was in charge of WH Group’s public relations department. He served as the Vice Chairman of the board of directors of Shuanghui Development from August 2018 to August 2024. Prior to that, he served as the secretary to the Chairman of Shuanghui Group. Mr. Hongwei Wan holds a Bachelor of Arts from York University in Toronto, Ontario. We believe Mr. Hongwei Wan is qualified to serve as our director because of his exceptional expertise in the industry we operate in and comprehensive understanding of our company. Mr. Hongwei Wan is the son of Mr. Long Wan. Marie T. Gallagher has served as a member of our Board since January 2025. Ms. Gallagher has spent nearly two decades at PepsiCo, Inc., where she has served as Senior Vice President and Controller since May 2011 after serving in various other roles at PepsiCo since 2005. As PepsiCo’s Chief Accounting Officer, Ms. Gallagher is responsible for PepsiCo’s global financial reporting and Sarbanes-Oxley processes and provides guidance on accounting and business issues, including strategic M&A activity in emerging markets and cybersecurity matters. Prior to joining PepsiCo, Ms. Gallagher served in various control roles of increasing responsibility at Altria Corporate Services, Inc. from 1992 to 2005, ending as Assistant Controller. Ms. Gallagher served as a director of Glatfelter Corporation (NYSE: GLT) from February 2020 to November 2024, where she served as a member of the Audit Committee from February 2020 to February 2021 and the Audit Committee chair and a member of the Nominating and Governance Committee from February 2021 to November 2024. She currently serves on the boards of various not-for-profit companies. Ms. Gallagher is a Certified Public Accountant and holds a Bachelor’s Degree in Business Administration in Accounting from Pace University. We believe Ms. Gallagher is qualified to serve as our director because of her significant knowledge in corporate finance, financial reporting and accounting, as well as her broad experience in the food and beverage industry. 17 Table of Contents
Consideration of Director Nominees
Consideration of Director Nominees
Director Qualifications
Director Qualifications Our Board believes that director candidates recommended for a position on our Board should have certain minimum qualifications to be met, including being able to read and understand basic financial statements and having the highest personal integrity and ethics. In considering candidates recommended by the Nominating and Governance Committee and otherwise, the Board may consider a potential director candidate’s relevant experience and expertise to enable the director candidate to be able to offer germane advice and guidance to our management; proven achievement and competence in their field; the ability to exercise sound business judgment; an understanding of the fiduciary responsibilities required of a director; a commitment to devoting time and energy to the affairs of our company; and a commitment to vigorously represent the long-term interests of our shareholders. The Nominating and Governance Committee retains the right to modify these criteria from time to time.
Shareholder Nominations
Shareholder Nominations The Nominating and Governance Committee will consider director candidates recommended by our shareholders. The Nominating and Governance Committee does not alter the manner in which it evaluates candidates, including the criteria set forth above, based on whether a candidate is recommended by a shareholder or not. Shareholders who wish to recommend individuals for consideration by the Nominating and Governance Committee to become nominees for election to our Board at the 2026 Annual Meeting of Shareholders must do so by delivering a written recommendation to the Nominating and Governance Committee, c/o Smithfield Foods, Inc., 200 Commerce Street, Smithfield, VA 23430, no earlier than the close of business on April 4, 2026, but no later than May 4, 2026, unless the meeting date is more than 30 days before or after June 3, 2026, in which case the written recommendation must be received by our Corporate Secretary no later than the close of business not earlier than the close of business on the 120th day prior to the date of the 2026 Annual Meeting of Shareholders, and no later than the close of business on the later of (1) the 90th day before the date of the 2026 Annual Meeting of Shareholders, or (2) the 10th day following the day on which we first publicly announce (by press release or a filing with the SEC) the date of the 2026 Annual Meeting of Shareholders. Each written recommendation must set forth, among other information: •the name and address of such shareholder as they appear on our company’s books, and of such beneficial owner, if any, and any of their affiliates or associates or others acting in concert therewith; •(i) the class or series and number of shares of our company and any other equity or debt securities of our company that are, directly or indirectly, owned beneficially and of record by such shareholder, such beneficial owner or their respective affiliates or associates or others acting in concert therewith and the names and number of shares of our company held by any nominees on behalf of any such persons; (ii) any Derivative Instrument (as defined in our Bylaws); (iii) any proxy (other than a revocable proxy given in response to a solicitation made pursuant to, and in accordance with, Section 14(a) of the Exchange Act by way of a solicitation statement filed on Schedule 14A), contract, arrangement or understanding pursuant to which such shareholder, beneficial owner, if any, or affiliates or associates or others acting in concert therewith has a right to vote any class or series of shares or other securities of our company; (iv) any Short Interests (as defined in our Bylaws); (v) any rights to dividends or other distributions on the shares of our company owned 22 Table of Contents beneficially by such shareholder, beneficial owner, if any, or affiliates or associates or others acting in concert therewith that are separated or separable from the underlying shares of our company; (vi) any proportionate interest in shares of our company or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such shareholder, beneficial owner, if any, or affiliates or associates or others acting in concert therewith is a general partner or, directly or indirectly, beneficially owns an interest in a general partner of such general or limited partnership; (vii) any material transaction occurring during the prior twelve (12) months between such shareholder or beneficial owner, if any, on the one hand, and we or any of our affiliates or any of their officers or directors, on the other hand, and (viii) any other material relationship between such shareholder or beneficial owner, if any, on the one hand, and us, any of our affiliates or any of their respective officers or directors, on the other hand; •a representation that the shareholder is a holder of record of stock of our company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such nomination or other business; •a description of any agreement, arrangement or understanding with respect to the director nomination or business proposal(s), existing presently or existing during the prior twenty-four (24) months, between or among the shareholder or the beneficial owner, if any, on the one hand, and any of their respective affiliates and associates, on the other hand, including, without limitation, any agreements that would be required to be disclosed pursuant to Item 5 or Item 6 of Schedule 13D under the Exchange Act (regardless of whether the requirement to file a Schedule 13D is applicable); •any other information relating to such shareholder and beneficial owner, if any, that would be required to be disclosed in a proxy statement and form of proxy or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; •all information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder (including such person’s written consent to being named in a proxy statement as a nominee and to serving as a director if elected) and a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such shareholder and beneficial owner, if any, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee, on the other hand, including all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the shareholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant; •a statement whether or not the shareholder or beneficial owner, if any, proposing to nominate directors for election or reelection to our Board will deliver a proxy statement and form of proxy to holders of at least 67 percent of the voting power of all of the shares of capital stock of our company entitled to vote on the election of directors or otherwise solicit proxies or votes from shareholders in support of such nomination and, if so, naming the participants (as defined in Item 4 of Schedule 14A under the Exchange Act) in any such solicitation; and •a completed and signed questionnaire, representation and agreement required by Section 9 of our Bylaws. If a proposed director candidate is recommended by a security holder in accordance with the procedural requirements discussed above, our Corporate Secretary will provide the foregoing information to the Nominating and Corporate Governance Committee. 23 Table of Contents In addition, pursuant to Rule 14a-19 of the Exchange Act, the SEC’s universal proxy rule, notices of a solicitation of proxies in support of director nominees other than our own nominees must be postmarked or electronically submitted no later than April 4, 2026, and each nomination must comply with the SEC regulations under Rule 14a-19, which requires, among other things, that such notice include a statement that such person intends to solicit the holders of shares representing at least 67% of the voting power of shares entitled to vote on the election of directors. If, however,
Shareholder Nominations
the date of the 2026 Annual Meeting of Shareholders is more than 30 days before or after June 3, 2026, then the Rule 14a-19 deadline shall be the later of 60 calendar days prior to the date of the 2026 Annual Meeting of Shareholders or the 10th calendar day following the day on which we first make a public announcement of the date of the 2026 Annual Meeting of Shareholders. A nomination that does not comply with the requirements set forth in the Charter and Bylaws will not be considered for presentation at the Annual Meeting. We intend to file a proxy statement and white proxy card with the SEC in connection with our solicitation of proxies for our 2026 Annual Meeting of Shareholders.
Evaluating Nominees for Director
Evaluating Nominees for Director Our Nominating and Governance Committee will consider director candidates who are suggested by members of the committee, other members of our Board, members of management, advisors and our shareholders who submit recommendations in accordance with the requirements set forth above. The Nominating and Governance Committee may, in the future, also retain a third-party search firm to identify candidates on terms and conditions acceptable to the Nominating and Governance Committee, but to date it has not paid a fee to any third party to assist in the process of identifying or evaluating director candidates. The Nominating and Governance Committee will review candidates for director nominees in the context of the current composition of our Board, any specific needs of committees of the Board, our operating requirements, the long-term interests of our shareholders, independence requirements, service on other boards of directors and applicable laws, regulations, exchange listing requirements and contractual obligations of our company. In conducting this assessment, the Nominating and Governance Committee may consider the director nominee’s qualifications, skills and such other factors as it deems appropriate given the current needs of our Board, the committees and our company, to maintain a balance of knowledge, experience, and capability. In the case of an incumbent director whose term of office is set to expire, the Board reviews such director’s overall service to our company during the term, including the number of meetings attended, level of participation, quality of performance and, where necessary for the director’s membership on the Audit Committee while we are a “controlled company,” any other relationships and transactions that might impair such director’s independence. In the case of a new director candidate, the Board also determines whether the nominee must be independent for Nasdaq and SEC purposes, which determination will be based upon applicable Nasdaq listing standards and applicable SEC rules and regulations. The Nominating and Governance Committee will evaluate the proposed director’s candidacy, including proposed candidates recommended by shareholders, and recommend whether our Board should nominate the proposed director candidate for election by our shareholders.
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION We provide competitive compensation to our independent directors that enables us to attract and retain high quality directors and fosters their ownership of Smithfield equity, which further aligns their interests with those of our shareholders. On an annual basis, our Compensation Committee reviews compensation levels for our independent directors, informed by a summary of director compensation trends and a competitive analysis of peer company director compensation levels and practices, prepared by our company’s independent compensation consultant. The Compensation Committee makes recommendations to our Board on the compensation of independent directors. In connection with of our IPO, we adopted an independent director compensation program consisting of: •an annual cash retainer of $110,000; •an annual grant of restricted stock units with a grant value of $180,000; and •an additional annual cash retainer for the chair of the Audit Committee of $25,000 and for the members of the Audit Committee of $10,000. Cash retainers are paid quarterly in arrears. Restricted stock units are generally granted on the date that we hold our annual shareholder meeting and vest on the earlier of the subsequent annual shareholder meeting or one year after the grant date, except with respect to the initial grant. Independent directors who join our Board between annual meetings will have their annual retainers for the term prorated. Directors who are also employees of the company or directors or employees of any of our affiliates do not receive any compensation for their service as directors. Restricted stock units are administered under the 2025 Incentive Plan. In connection with the closing of our IPO, our independent directors received an initial annual grant of restricted stock units (27,000 restricted stock units in the aggregate, based on a grant date value of $540,000 and the initial public offering price of $20.00 per share), which will vest at our 2026 Annual Meeting of Shareholders. In addition, we paid each of our independent directors approximately $25,000 in consulting fees related to advisory services provided to us in the month preceding the pricing of our IPO. Payments under the consulting agreements terminated once the appointment of our independent directors to our Board became effective in January 2025, and our independent directors now receive only the independent director compensation described above. 26 Table of Contents
Annual Incentive Program
Annual Incentive Program We have historically provided performance-based annual cash incentive opportunities to certain of our executives, including our NEOs. The performance criteria applied to such awards were designed to tie executives’ performance directly to the amount of incentive compensation earned, and to encourage executives to coordinate their management efforts among business units within the same operating segment, in addition to the company as a whole. Awards generally used formulas based on our net income or pre-tax profits—either company-wide or for a particular operating segment, depending on the executive’s scope of responsibility. An executive who was responsible for an individual business unit may have received a cash incentive award based on the operating results or other performance measures of that business unit where that business unit operated to a significant degree independently of other business units. For fiscal year 2024, WH Group selected the performance criteria and cash incentive award formulas after considering the performance of our company and the respective segments and business units in recent years. For fiscal year 2024, where the determination was made following our IPO, our Compensation Committee evaluated NEO performance and had discretion to take into account additional criteria when evaluating bonus outcomes where targets were not met and to award additional cash bonuses where the executives out-performed their target criteria, or to reduce cash bonuses that would otherwise have been earned even if targets were met. Individual Target Annual Cash Incentive Opportunities Each NEO’s annual incentive target, as a percentage of base salary, for fiscal year 2024 was as follows: 28 Table of Contents
Annual Incentive Program
| NEO | Incentive Target | | C. Shane Smith .................................................................................................................................... | 667% | | Mark L. Hall ........................................................................................................................................ | 400% | | Steven J. France ................................................................................................................................... | 400% | | Keller D. Watts .................................................................................................................................... | 400% | | Doug Sutton ......................................................................................................................................... | 300% |
Annual Incentive Program
Annual Cash Incentive Program Design for Fiscal Year 2024 For fiscal year 2024, the performance of C. Shane Smith, Mark L. Hall, Keller D. Watts, and Doug Sutton was measured against North America Net Income, and the performance of Steven France was measured against Packaged Meats Segment Profit, North America Net Income, and Packaged Meats Volume. For Mr. France, Packaged Meats Segment Profit made up 60% of his target opportunity, North America Net Income made up 20% of his target opportunity, and Packaged Meats Volume made up 20% of his target opportunity. For our NEOs, annual cash incentive payout opportunities were based on attaining a certain target (to receive a payout at target) or a stretch target (to receive a payout above target, with no maximum payout cap) for the relevant financial metrics pre-established by WH Group at the beginning of the fiscal year. For our NEOs with respect to fiscal year 2024, the threshold, target and stretch performance and corresponding payout opportunities relating to North America Net Income were as follows, with non-linear interpolation for performance between threshold and target payout levels:
Annual Incentive Program
| | North America Net Income attributable to Smithfield (in $ millions) | Payout | | Below Threshold ........................................................................................................ | <600 | 0% | | Threshold ................................................................................................................... | 600 | 36% | | Target ......................................................................................................................... | 1,000 | 100% | | Stretch ........................................................................................................................ | >1,000 | >100%(1) |
Annual Incentive Program
________________ (1)For performance above target, our NEOs were entitled to receive a percentage of the amount in excess of the target of $1 billion as follows:
Annual Incentive Program
| NEO | Payout for Amount in Excess of Target | | C. Shane Smith ........................................................................................................ | 1.0% | | Mark L. Hall ............................................................................................................ | 0.4% | | Steven J. France ....................................................................................................... | 0.4% | | Keller D. Watts ........................................................................................................ | 0.4% | | Doug Sutton ............................................................................................................. | 0.3% |
Annual Incentive Program
For Packaged Meats Segment Profit, threshold began at 76% achievement of plan with an approximately 4% target payout; 100% payout when plan was achieved at target; and for every 1.5% increase above the target, Mr. France received an additional 0.012% of the Packaged Meats Segment Profit result, with no maximum payout cap. For Packaged Meats Volume, threshold began at approximately 91% achievement of plan with a 2.5% target payout; 100% payout when plan was achieved at target, and for every approximately 0.4% increase above the target, Mr. France received an additional $20,000, with no maximum payout cap. Award payouts were interpolated between the discrete percentages if performance fell between the above stated levels. SEC rules provide that we do not have to disclose confidential financial information if doing so would result in competitive harm to us. Packaged Meats Segment Profit targets and Packaged Meats Volume targets and Packaged Meats Volume results are competitively sensitive information that we maintain as confidential and proprietary information and do not publicly disclose. We believe that disclosure of such information would result in competitive harm to us. 29 Table of Contents The target-level goals can be characterized as “strong performance,” meaning that based on historical performance, although attainment of this performance level was uncertain, it could be reasonably anticipated that target performance would be achieved, while the threshold goals were more likely to be achieved and the stretch targets represented more aggressive levels of performance. Prior to our IPO, WH Group retained the ability to reduce or eliminate payouts for individual executives, including our NEOs, even if financial metrics were met, as well as to increase payouts based on individual performance or to award bonuses even if financial metrics were not met. In making these decisions, WH Group could consider factors such as the performance of the individual executive against their individual objectives in support of strategic priorities or additional financial metrics applicable to the business or functional area for which the executive was responsible. In addition, following the IPO, when comparing results to the performance targets, our Compensation Committee also had the discretion to make adjustments to our results for unbudgeted items that were not considered part of our ordinary operations and other events that impacted performance. This ensured that our executives were not unfairly rewarded for or penalized by these types of events. 2024 Annual Cash Incentive and Cash Bonus Payments On March 3, 2025, the Compensation Committee approved cash incentive payouts and discretionary cash bonus amounts for our NEOs for the 2024 fiscal year. For further details regarding bonuses awarded in 2024, see “— Summary Compensation Table for Fiscal Year 2024” below.
Post-IPO Components of Executive Compensation
Post-IPO Components of Executive Compensation In connection with our IPO, our Board adopted an equity incentive plan, which we refer to as the Smithfield Foods, Inc. Omnibus Incentive Plan, or the 2025 Incentive Plan. Accordingly, following our IPO, equity incentive awards have become a component of compensation for our NEOs and are intended to align executive rewards with the interests of shareholders through long-term share-price exposure. In connection with the pricing of our IPO on January 27, 2025, we granted equity awards to certain of our employees and certain directors and employees of WH Group who contributed significantly to the success of the offering and our business, including each of our NEOs. Each such award was granted 50% in restricted stock units and 50% in stock options. Such restricted stock units and stock options will vest in equal annual installments over five years from the grant date. Pursuant to such awards, we granted options to purchase an aggregate of 9,822,467 shares with a per-share exercise price equal to the initial public offering price of $20.00 per share and an aggregate of 1,500,000 restricted stock units. The options and the restricted stock units together have an aggregate grant date value of $30.0 million. Of these grants, our NEOs received, in the aggregate, options to purchase 2,160,933 shares and 330,000 restricted stock units. The foregoing numbers of options and restricted stock units were calculated using the initial public offering price of $20.00 per share, with the number of restricted stock units calculated by dividing the aggregate grant date value by the initial public offering price of $20.00 per share and the number of options calculated by dividing the aggregate grant date value by the computed Black-Scholes value of such options.
Employment Agreements
Employment Agreements None of our NEOs is currently party to an employment agreement with us. However, our Board adopted the Executive Severance Plan, or the Severance Plan, in connection with the IPO, pursuant to which certain senior executive employees, including all of our NEOs, are entitled to severance benefits in certain situations. See “—Future Compensation Programs—Executive Severance Plan” for a description of the Severance Plan.
Summary Compensation Table
Summary Compensation Table The following table sets forth the compensation awarded or paid to our NEOs for services rendered in all capacities during fiscal year 2024.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus (1) ($) | Non- Equity Incentive Plan Compensation (2) ($) | Change in Pension Value And Nonqualified Deferred Compensation Earnings (3) ($) | All Other Compensation (4) ($) | Total ($) | | C. Shane Smith Chief Executive Officer | 2024 | 1,500,000 | 3,000,000 | 8,710,000 | 1,630,365 | 62,058 | 14,902,423 | | Mark L. Hall Chief Financial Officer | 2024 | 1,000,000 | 2,500,000 | 3,480,000 | 860,253 | 53,477 | 7,893,730 | | Steven J. France President, Packaged Meats | 2024 | 1,000,000 | 2,500,000 | 3,770,000 | 2,524,228 | 39,433 | 9,833,661 | | Keller D. Watts Chief Business Officer | 2024 | 1,000,000 | 2,000,000 | 3,480,000 | 2,200,257 | 44,622 | 8,724,879 | | Doug Sutton Chief Manufacturing Officer | 2024 | 1,000,000 | 2,000,000 | 2,610,000 | 1,765,578 | 34,825 | 7,410,403 |
Summary Compensation Table
________________ (1)Consists of discretionary bonuses paid to each NEO to reflect overall company performance during 2024. These bonuses were paid in the first quarter of 2025. In connection with discretionary bonuses paid to our NEOs, the Company obtained those executives’ agreement to repay a portion of such cash bonuses to the Company should they resign from employment for any reason, breach their restrictive covenants to the Company, or be terminated for “cause,” as follows: (1) if the repayment event occurs within one year following the bonus payment, the executive will repay 50% of the bonus, and (2) if the repayment event occurs more than one year, but within two years, following the bonus payment, the executive will repay 25% of the bonus. (2)Reflects amounts payable based on the achievement of the pre-established performance targets for 2024 subject to pro rata adjustment for all NEOs to reflect the disposition of our operations in Europe to WH Group Ltd. (3)Amounts in this column represent the aggregate increase, if any, of the accumulated benefit liability relating to the NEO under the Salaried Pension Plan and the Supplemental Pension Plan in 2024. Amounts are calculated by comparing values as of the pension plan measurement date used for the Company’s financial statements for the applicable year. The Company uses the same assumptions it uses for financial reporting under generally accepted accounting principles. The assumed retirement age for the above values is the earliest age at which an executive could retire without any benefit reduction due to 32 Table of Contents age (for the Supplemental Pension Plan) or the normal retirement age designated in the plan (for the Salaried Pension Plan), and the above values are calculated assuming each NEO survives to the assumed retirement age. (4)The amounts shown in this column consist of the components set forth in the table below, which include the contributions made with respect to each NEO under our 401(k) plan and the perquisites provided to each NEO. In addition, Mr. Sutton received a referral bonus of $1,000 during 2024 pursuant to a referral bonus program that applies to all employees of the Company.
Summary Compensation Table
| Name | Year | 401(k) plan contributions ($) | Personal use of aircraft (a) ($) | Personal use of car (b) ($) | Insurance premiums (c) ($) | Tax gross-ups and reimbursements (d) ($) | | C. Shane Smith | 2024 | 23,000 | 15,073 | 19,924 | 812 | 3,249 | | Mark L. Hall | 2024 | 21,835 | 5,028 | 20,520 | 812 | 5,282 | | Steven J. France | 2024 | 21,835 | — | 10,824 | 812 | 5,962 | | Keller D. Watts | 2024 | 23,000 | 817 | 19,993 | 812 | — | | Doug Sutton | 2024 | 17,231 | — | 15,782 | 812 | — |
Summary Compensation Table
_____________ a.Reflects the aggregate incremental cost to the company of providing NEOs with personal use of our company-owned aircraft, based on hours flown for non-business purposes and our fully loaded hourly costs to operate such aircraft. In certain circumstances, our NEOs’ spouses and other family members may be permitted to accompany them on both personal and business travel using our company-owned aircraft. We do not incur any aggregate incremental costs in respect of such spousal and family use. b.We provide a leased automobile to each of Messrs. Smith, Sutton, and Watts, at our cost, and we provide a monthly allowance to each of Messrs. Hall and France to be applied towards personal automobile costs, plus reimbursement for certain fuel, maintenance, and related automobile ownership expenses. The amounts in this column represent our costs of providing such benefits. c.Amounts in this column represent the aggregate premium cost for supplemental umbrella insurance coverage made available to our NEOs. d.Amounts in this column represent certain tax reimbursements made to our NEOs in respect of taxes incurred by them due to the imputation of income for personal and spousal/family use of our company-owned aircraft, and in the case of Messrs. Hall and France, income related to the automobile allowance provided to them.
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table provides information on the annual incentive awards granted to our NEOs in respect of fiscal year 2024. There were no grants of equity awards to our NEOs in fiscal year 2024.
Grants of Plan-Based Awards
| | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards | | | | Name | Threshold ($) | Target ($) | Maximum ($)(1) | | C. Shane Smith .............................................................................. | 3,600,000 | 10,000,000 | — | | Mark L. Hall .................................................................................. | 1,440,000 | 4,000,000 | — | | Steven J. France ............................................................................ | 1,270,000 | 4,000,000 | — | | Keller D. Watts .............................................................................. | 1,440,000 | 4,000,000 | — | | Doug Sutton .................................................................................. | 1,080,000 | 3,000,000 | — |
Grants of Plan-Based Awards
________________ (1)Our NEOs were not subject to a maximum cap with respect to their possible payouts. See “—Components of Executive Compensation—Annual Incentive Program—Annual Cash Incentive Program Design for Fiscal Year 2024” above.
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End We did not maintain any equity incentive plans prior to our IPO. Accordingly, there were no outstanding equity awards held by our NEOs as of December 29, 2024. 33 Table of Contents
Option Exercises and Stock Vested
Option Exercises and Stock Vested We did not maintain any equity incentive plans prior to our IPO. Accordingly, our NEOs did not exercise any option awards or vest into any stock awards in fiscal year 2024.
Pension Benefits
Pension Benefits The following table shows the present value of accumulated benefits that our NEOs are entitled to under the Salaried Pension Plan and the Supplemental Plan.
Pension Benefits
| Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) | | C. Shane Smith ............................................... | Salaried Pension Plan | 18 | 368,822 | | | Supplemental Plan | 21 | 7,070,762 | | Mark L. Hall .................................................. | Salaried Pension Plan | 8 | 208,178 | | | Supplemental Plan | 11 | 2,386,806 | | Steven J. France .............................................. | Salaried Pension Plan | 15.24 | 489,130 | | | Supplemental Plan | 18.24 | 5,715,896 | | Keller D. Watts ............................................... | Salaried Pension Plan | 28 | 630,319 | | | Supplemental Plan | 31 | 4,848,890 | | Doug Sutton .................................................. | Salaried Pension Plan | 21 | 524,775 | | | Supplemental Plan | 24 | 3,546,216 |
Discussion of Pension Plans
Discussion of Pension Plans We sponsor the Salaried Pension Plan, a tax-qualified pension plan that covered substantially all of our salaried employees who were eligible to participate in the Salaried Pension Plan prior to June 30, 2021. Each of the NEOs participates in the Salaried Pension Plan and our non-qualified pension plan, the Supplemental Plan. The Salaried Pension Plan provides for retirement benefits that generally are a function of the participant’s average compensation during the five consecutive calendar years during the last ten years of employment in which the participant’s compensation was the highest, or Final Average Earnings, and aggregate years of service. The Supplemental Plan provides a retirement benefit, which is the benefit calculated under the Salaried Pension Plan without application of compensation and benefit limits under federal tax laws, reduced by the benefit payable from the Salaried Pension Plan. The Supplemental Plan is maintained so that we can provide a retirement benefit for certain salaried employees that is approximately the same percentage of their earnings from the company. The retirement benefit under the Salaried Pension Plan is a lifetime benefit payable at age 65 equal to the sum of (i) 0.8% of Final Average Earnings and (ii) 0.9% of Final Average Earnings in excess of Social Security Covered Compensation, with that sum multiplied by the years of service with the company. Social Security Covered Compensation is determined annually by the Internal Revenue Service and represents an average of the amount of wages subject to Social Security taxes over a period of years. Compensation for purposes of Final Average Earnings is the total compensation shown on the participant’s W-2 reduced by any income from the exercise of stock options. Total compensation includes salary, bonus, non-equity incentive plan payments, stock awards when vested, and taxable perquisites from the company. For NEOs, such compensation includes salary, bonus, and non-equity incentive plan compensation, each as shown in the Summary Compensation Table. For the Salaried Pension Plan, compensation for purposes of calculating accruals is limited to $345,000 for calendar year 2024 as set by the Internal Revenue Service. The Supplemental Plan limits yearly earnings for purposes of calculating accruals to $5,000,000. If a participant does not commence receiving benefits by age 65, the participant is entitled to a late retirement benefit, which is the greater of the benefit calculated at the participant’s normal retirement date actuarially increased to the actual retirement date and the benefit calculated at actual retirement date. A participant is eligible for early retirement 34 Table of Contents after age 55 with five years of vesting service (age 60 for the Supplemental Plan). The early retirement benefit payable is the accrued benefit payable at age 65 reduced by 0.5% for each month that the early retirement date precedes the normal retirement date. The normal form of benefit for the Salaried Pension Plan and the Supplemental Plan is a single life annuity with monthly payments paid over the life of the participant. Married participants receive a joint and 50% survivor annuity with actuarially reduced monthly payments paid until the death of the participant and their spouse. The other optional forms of retirement benefit in the Salaried Pension Plan include joint and 66.67%, 75%, or 100% annuities, and a ten- year certain and continuous annuity with payments guaranteed for ten years even if the participant dies. The Supplemental Plan also includes a five-year installment payment option in which the lump-sum value of the single life annuity is calculated based on factors specified in the Supplemental Plan and mandated by the Internal Revenue Service and then paid in five annual principal installments with interest credited on the unpaid installments at the same interest rate that is used to calculate the lump-sum value (currently segmented rates of 5.50% for the first 5 years, 5.76% for the next 15 years, and 5.83% for 20 or more years). As of June 30, 2021, our company-funded tax-qualified pension plans were frozen for all non-union employees who were eligible for such plans, both for new participants and for future benefit accruals of existing participants. Any non- union employee hired after that date does not participate in such plans, and non-union employees hired before that date participate in those plans but are no longer accruing new benefits. In accordance with SEC rules, the present value of each NEO’s accumulated benefits under the pension plans, as shown in the table above, has been calculated in accordance with the benefit formulas described above and using the same assumptions as are used by us for financial reporting purposes under generally accepted accounting principles (except that retirement age is assumed to be the normal retirement age of 65).
Non-Qualified Deferred Compensation
Non-Qualified Deferred Compensation The table below provides information on benefits available to the NEOs for fiscal year 2024 under the Deferred Compensation Plan and the JM Deferred Compensation Plan, as applicable.
Non-Qualified Deferred Compensation
| Name | Plan | Executive Contributions in Last Fiscal Year ($) (1) | Registrant Contributions in Last Fiscal Year ($) | Aggregate Earnings in Last Fiscal Year ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year- End ($) | | C. Shane Smith ................... | N/A | — | — | — | — | — | | Mark L. Hall ...................... | JM Deferred Compensation Plan | — | — | 3,881 | — | 29,482 | | Steven J. France .................. | Deferred Compensation Plan | — | — | 192,710 | — | 1,011,005 | | Keller D. Watts ................... | Deferred Compensation Plan | 150,000 | — | 170,585 | — | 1,213,215 | | Doug Sutton ....................... | N/A | — | — | — | — | — |
Non-Qualified Deferred Compensation
________________ (1)Amounts in this column are included in the “Salary” and/or “Non-Equity Incentive Plan Compensation” columns of the “Summary Compensation Table for Fiscal Year 2024” above.
Discussion of Non-Qualified Deferred Compensation
Discussion of Non-Qualified Deferred Compensation Deferred Compensation Plan Pursuant to the Deferred Compensation Plan, eligible employees, including our NEOs, are entitled to defer up to 80% of their annual base salary and earned cash bonuses. We may also make discretionary contributions to participants’ deferral accounts under the Deferred Compensation Plan from time to time. The portion of a participant’s deferral 35 Table of Contents account that is attributable to employer contributions vests generally based on the participant’s years of service with the company—with 20% vesting credit applied per year of service—and will vest earlier upon the first to occur of a change in control of the company and the participant’s 65th birthday, death, or disability. Each participant may choose to have their deferral account notionally invested in one or more investment options that we make available from time to time, and deferral account values will track the investment performance of those deemed investment options selected by the participant. The vested portion of a participant’s account under the Deferred Compensation Plan will be distributed to the participant upon a separation from service with the company, or if earlier and elected by the participant in connection with making a deferral election under the plan, upon the participant’s disability, a change in control of the company, or a fixed in-service date elected by the participant. Distributions will be made in a lump sum or, for distributions upon a separation from service and if elected by the participant in connection with making a deferral election under the plan, in up to ten annual installments. A participant may elect that in-service distributions be made in a lump sum or in up to four annual installments. JM Deferred Compensation Plan Pursuant to the JM Deferred Compensation Plan, which has been frozen to new contributions since 2016, eligible employees were entitled to defer up to 80% of their annual base salary and earned cash bonuses. Despite the JM Deferred Compensation Plan being frozen to new contributions, there is still opportunity for earnings on contributions made prior to the plan being frozen. Each participant may choose to have their deferral account notionally invested in one or more investment options that we make available from time to time, and deferral account values track the investment performance of those deemed investment options selected by the participant. Distributions from the participant’s account under the JM Deferred Compensation Plan will commence as of the first day of the month coinciding with or next following the date that is six months after such participant’s separation from service with the company, or if earlier upon the participant’s death or certain emergencies. Distributions will be made in a lump sum or, if elected by the participant in writing in connection with making a deferral election under the plan, in no fewer than 24 and no more than 120 monthly installments. Our Chief Financial Officer, Mark L. Hall, had elected to defer a portion of his pay prior to the plan being frozen, and there have been earnings on the account in fiscal year 2024, as shown in the above table.
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control
Executive Severance Plan
Executive Severance Plan Our Board adopted an Executive Severance Plan effective upon the completion of our IPO. Pursuant to the Severance Plan, certain senior executive employees are entitled to severance benefits, or the Severance Benefits, upon a termination of employment by us without “cause” or a voluntary resignation for “good reason,” as such terms are defined in the Severance Plan, or a Qualifying Termination. Severance Benefits are contingent upon the executive’s (i) compliance with all restrictive covenants to which the executive is then subject and (ii) timely execution and delivery of an irrevocable general release of claims against our company and related parties. Participation in the Severance Plan is conditioned upon the executive’s agreeing to customary restrictive covenants in favor of our company and our affiliates, including covenants of non-disclosure, non-competition, non-solicitation, and non-disparagement (subject to any limitations under applicable local law). We may amend or terminate the Severance Plan at any time; however, no such action will become effective for 180 days, or if a change in control of our company has occurred prior to the effectiveness of such amendment or termination, until the 24-month anniversary of such change in control. The Severance Benefits consist of (i) base salary continuation for 18 months (or for the Chief Executive Officer, two years), (ii) a prorated bonus for the year of termination based on actual company performance through the separation date, and (iii) a company subsidy of COBRA insurance premiums under our health plans to provide the executive participation at the active-employee rate for the duration of COBRA coverage (up to 18 months). If the Qualifying Termination occurs within two months prior to a change in control of Smithfield, or within two years following a change in control, the prorated bonus will be based on the executive’s target bonus for the year of termination. 36 Table of Contents Because the Executive Severance Plan was not in place as of the last day of our 2024 fiscal year, none of our NEOs would have been entitled to any severance benefits in connection with a termination of their employment had it occurred on December 29, 2024.
Deferred Compensation Plan
Deferred Compensation Plan Our Deferred Compensation Plan provides for the potential accelerated vesting of the employer-contribution portion of any deferral accounts. All our NEOs are currently fully vested in their Deferred Compensation Plan accounts and, as a result, none of them is entitled to any vesting acceleration in connection with a change in control of our company.
Treatment of Equity Awards
Treatment of Equity Awards Pursuant to the terms of our standard forms of award agreement under our 2025 Incentive Plan, an award-holder’s outstanding stock options and restricted stock units will remain outstanding and eligible to vest in accordance with the award’s regular vesting schedule following the award-holder’s “retirement” or involuntary termination of employment without “cause” (each, as defined in the 2025 Incentive Plan). Pursuant to the terms of our forms of award agreement for awards made under our 2025 Incentive Plan in connection with the IPO, an award-holder’s outstanding stock options and restricted stock units will remain outstanding and eligible to vest in accordance with the award’s regular vesting schedule following the award-holder’s “retirement” (as defined in the 2025 Incentive Plan). Pursuant to the terms of all of our current forms of award agreement under our 2025 Incentive Plan, an award-holder’s outstanding awards will vest in full upon the earlier to occur of the award-holder’s death and a “change in control” (as defined in the 2025 Incentive Plan) of the Company. We did not maintain any equity incentive plans, and no awards were outstanding, prior to our IPO. Accordingly, there were no outstanding equity awards held by our NEOs and eligible for vesting as of any termination or employment or change in control occurring as of December 29, 2024.
Equity Award Grant Practices
Equity Award Grant Practices We expect that grants to executive officers will generally be made by our Compensation Committee in the first quarter of each year, after results for the preceding fiscal year become available and after review and evaluation of each executive officer’s performance, which enables the Compensation Committee to consider both the prior year’s performance and expectations for the succeeding year in making grant decisions. However, the Compensation Committee may make grants at any time during the year it deems appropriate. The Compensation Committee does not take material nonpublic information into account when determining the timing and terms of equity awards, and we do not time the disclosure of such material nonpublic information for purposes of affecting the exercise price of such awards or the value of executive compensation. 37 Table of Contents
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS