DEF 14A of BRC Inc.
Filed Mar 18, 2024 · FY20230001140361-24-013942
March 18, 2024
| Corporate Governance Guidelines | 23 | | Prohibition of Hedging and Pledging | 23 | | Communications with the Board | 24 | | Director Compensation | 25 | | Non-Employee Director Compensation Program | 25 | | Director Compensation Table | 25 | | Outstanding Equity Awards for Directors at Fiscal Year-End | 26 | | Proposal No. 2: Ratification of Appointment of Independent Registered Public Accounting Firm | 27 | | Independent Registered Public Accounting Firm Fees | 28 | | Audit Committee Pre-Approval Policies and Procedures | 28 | | Audit Committee Report | 29 | | Proposal No. 3: Approval of An Amendment to Our Amended And Restated Certificate of Incorporation to Limit the Liability of Certain Officers of the Company | 30 | | Executive Compensation | 33 | | 2023 Summary Compensation Table | 35 | | Compensation Philosophy | 35 | | Elements of NEO Compensation | 36 | | Agreements with Named Executive Officers | 38 | | Outstanding Equity Awards at Fiscal Year-End | 41 | | Equity Compensation Plan Information | 42 | | Ownership of our Common Stock | 43 | | Certain Relationships and Related Party Transactions | 47 | | Related Person Policy of the Company | 47 | | Additional Information | 49 | | Availability of Certain Information | 49 | | Householding | 49 | | Stockholder Proposals and Nominations to be Included in Next Year’s Proxy Statement | 49 | | Other Matters | 50 |
Proposal No. 1: Election of Director Nominee
Proposal No. 1: Election of Director Nominee We are asking you to vote for the election of Thomas Davin as a Class II director, to serve for a three-year term expiring at our 2027 Annual Meeting. George Muñoz, a Class II director, will not be standing for re-election at the Annual Meeting. Our Board currently consists of seven members and is divided into three classes, each of which has a three-year term.
Proposal No. 1: Election of Director Nominee
Proposal No. 1: Election of Director Nominee You may vote “FOR,” “AGAINST”, or “ABSTAIN” with respect to the director nominee. For a director to be elected, the director must receive a majority of the votes cast at the annual meeting. Abstentions and broker non-votes shall not count as a vote cast.
Class II Director Nominee for a Term Expiring in 2027
Class II Director Nominee for a Term Expiring in 2027
Class II Director Nominee for a Term Expiring in 2027
| Thomas Davin Age 66 Director Since September 2018 | Thomas Davin served as Co-Chief Executive Officer of the Company from January 2019 to January 2024 and as a Director since September 2018. Prior to joining the Company, Mr. Davin served as the Chief Executive Officer of 5.11 Tactical from 2011 to September 2018 and as Chief Executive Officer for Panda Restaurant Group from August 2004 to November 2009. He also served as Chief Operating Officer for the Taco Bell Corporation from 1997 to 2000. Mr. Davin first began his business career working in the merger groups at Goldman Sachs and PepsiCo. He is presently on the board of directors of Backcountry.com, the Infinite Hero Foundation, and Pear Sports, LLC, and has previously served on the boards of Oakley and Zumiez. Mr. Davin has military service experience as a U.S. Marine Corps infantry officer, a Recon Marine, obtaining the rank of Captain. Mr. Davin graduated magna cum laude from Duke University and earned an MBA from Harvard Business School. | | | MR. DAVIN IS QUALIFIED TO SERVE ON OUR BOARD BASED ON HIS ROLE AS CO-CHIEF EXECUTIVE OFFICER OF THE COMPANY AND PRIOR EXTENSIVE EXECUTIVE EXPERIENCE. |
Class II Director Nominee for a Term Expiring in 2027
| BRC Inc. | 15 | 2024 Proxy Statement |
Class II Director Not Standing for Re-Election
Class II Director Not Standing for Re-Election
Class II Director Not Standing for Re-Election
| George Muñoz Independent Age 72 Director Since July 2020 Committee Service: • Audit Committee (Chair) • Compensation Committee Other Public Boards: • Marriott International, Inc. • Laureate Education, Inc. • Altria Group, Inc. | George Muñoz has been a director of the Company since July 2020. He has over eighteen years of experience in public company corporate governance serving as a member of the board of directors and as a member or chair of audit committees, compensation committees, and corporate ESG committees. Mr. Muñoz currently serves on the audit committees of Laureate Education, Inc., Altria Group, and National Geographic Society. From 1993 to 1997, Mr. Muñoz served as an Assistant Secretary and Chief Financial Officer of the U.S. Treasury Department in Washington, DC., and from 1997 to 2001, he served as President and Chief Executive Officer of the Overseas Private Investment Corporation. Mr. Muñoz has a law degree from Harvard Law School, Masters in Public Policy from Harvard University, a bachelor’s in accounting from the University of Texas at Austin, an LL. M. from DePaul University, and a Master of Arts in Theology from Catholic Distance University. He is a currently licensed attorney and a certified public accountant in several states, and, since 2001, has served as a principal of Muñoz Investment Banking Group, LLC and the law firm Tobin & Muñoz, PLLC. |
Continuing Directors - Class I Directors with Terms Expiring in 2026
Continuing Directors - Class I Directors with Terms Expiring in 2026
Continuing Directors - Class I Directors with Terms Expiring in 2026
| Kathryn Dickson Lead Independent Director Independent Age 58 Director Since August 2020 Committee Service: • Compensation Committee (Chair) • Nominating and Corporate Governance Committee Other Public Boards: • Flexsteel Industries, Inc. | Kathryn Dickson is the Lead Independent Director of our Board. Ms. Dickson served as President of Manitoba Harvest, a global company that manufactures and markets plant-based-protein foods and beverages, from 2019 through 2020, and has since served in professional director roles as described below. Prior to Manitoba Harvest, Ms. Dickson served as Senior Vice President at Mattel, Inc., and President of its American Girl subsidiary from 2016 through 2018. Prior to American Girl, Ms. Dickson served as Chief Marketing Officer for News America Marketing Inc., a subsidiary of global media and information services company, News Corp, from 2015 to 2016. Ms. Dickson spent the majority of her career, more than 23 years, with General Mills, Inc. serving in marketing leadership and general management roles of increasing responsibility for some of the world’s best-known brands, concluding with her service as Vice President/Business Unit Director for the Betty Crocker, Pillsbury and Old El Paso global brands. Ms. Dickson served on the board of directors of Cooper Tire & Rubber Company from October 2018 until July 2021, and is currently on the board of Flexsteel Industries, Inc. where she has been an independent director since July 2021, and serves on their compensation committee and as Chairperson of their nominating and corporate governance committee. Ms. Dickson has served on our Board since August 2020, and is currently Lead Independent Director, Chair of the compensation committee, and a member of the nominating and corporate governance committee. Ms. Dickson earned a Bachelor of Science degree from the United States Air Force Academy, and a Master of Business Administration (MBA) degree from the University of California, Los Angeles. She served as an officer in the U.S. Air Force, where she achieved the rank of Captain. | | | MS. DICKSON IS QUALIFIED TO SERVE ON OUR BOARD BASED ON HER EXTENSIVE EXPERTISE IN DRIVING GROWTH THROUGH OMNICHANNEL AND DIGITAL STRATEGIES, BRAND BUILDING, MARKETING AND PRODUCT INNOVATION. |
Continuing Directors - Class I Directors with Terms Expiring in 2026
| BRC Inc. | 16 | 2024 Proxy Statement |
Continuing Directors - Class I Directors with Terms Expiring in 2026
| Chris Mondzelewski Age 50 Director Since January 1, 2024 | Chris Mondzelewski is the President and Chief Executive Officer of BRCC and has served as a director of the Company since January 2024. Prior to his appointment as Chief Executive Officer, Mr. Mondzelewski served President of the Company from June 2023 and as the Company's Chief Marketing Officer from May 2023 to January 2024. Mr. Mondzelewski came to Black Rifle with more than 28 years of consumer marketing, business and leadership experience. Prior to his time at BRCC, Mr. Mondzelewski was at Mars Inc. for thirteen years, and held multiple leadership positions of increasing responsibility across the company including Chief Growth Officer, Senior VP North America Customer Development, and VP of Marketing. Prior to that, Mr. Mondzelewski spent 12 years at Kraft Foods where he led businesses in North America and China. Before his business career, Mr. Mondzelewski was a Marine for five years, deploying in support of Operation Desert Freedom. Chris has a strong personal connection to the military and first-responder community. Chris has a bachelor’s degree in chemical engineering from Vanderbilt University and an MBA in economics and marketing from the Kellogg School of Management at Northwestern University. | | | MR. MONDZELEWSKI IS QUALIFIED TO SERVE ON OUR BOARD BASED ON HIS YEARS OF EXPERIENCE IN THE CONSUMER PACKAGED GOODS INDUSTRY, HIS EXECUTIVE LEADERSHIP EXPERIENCE, AND HIS ROLE AS CHIEF EXECUTIVE OFFICER OF THE COMPANY. |
Continuing Directors – Class III Directors with Terms Expiring in 2025
Continuing Directors – Class III Directors with Terms Expiring in 2025
Continuing Directors – Class III Directors with Terms Expiring in 2025
| Evan Hafer Age 47 Director Since October 2014 Committee Service: • Nominating and Corporate Governance Committee (Chair) | Evan Hafer founded the Company in 2014 and was Chief Executive Officer since its inception through the end of December 2023, when he transitioned to the position of Founder and Executive Chairman. He is a director and previously served as Chairman of the Board from October 2014 to July 2022. Prior to founding the Company, Mr. Hafer had fifteen years of service in the U.S. military and worked as a contractor for the CIA. As a member of the military, he served as a Green Beret with the 19th Special Forces Group and was deployed overseas multiple times. Mr. Hafer attended the University of Idaho and has been roasting coffee since 2006. | | | MR. HAFER IS QUALIFIED TO SERVE ON OUR BOARD BASED ON HIS ROLE AND EXPERIENCE AS FOUNDER, AND PREVIOUSLY CHIEF EXECUTIVE OFFICER, OF THE COMPANY. |
Continuing Directors – Class III Directors with Terms Expiring in 2025
| Steven Taslitz Independent Age 65 Director Since 2018 Committee Service: • Audit Committee • Nominating and Corporate Governance Committee | Steven Taslitz is a director of our Board. Mr. Taslitz joined the Company as a director in 2018. Mr. Taslitz is also currently on the board of directors of Datacubed Health, Stella, Fancy Sprinkles and We Are Giant. He co-founded Sterling Partners in 1983 and is Chairman of the firm. Sterling Partners has invested in and owned upwards of 100+ companies over time, many of which Mr. Taslitz has served on the Board of Directors and also on their audit committees. Mr. Taslitz is a significant stockholder in the Company, as are certain other employees of Sterling Partners. Mr. Taslitz has supported and served on a number of educational, non-profit boards, including the Illinois Board of Higher Education, the Glencoe Educational Foundation, and the Investment Committee of the Jewish United Fund. He received a BS in Accountancy with Honors from the University of Illinois. | | | MR. TASLITZ IS QUALIFIED TO SERVE ON OUR BOARD BASED ON HIS ROLE AS CO-FOUNDER OF STERLING PARTNERS, A SIGNIFICANT STOCKHOLDER IN THE COMPANY, HIS EXTENSIVE KNOWLEDGE ABOUT OUR BUSINESS, AND HIS EXTENSIVE EXPERIENCE AS A DIRECTOR OF A DIVERSE RANGE OF COMPANIES. |
Continuing Directors – Class III Directors with Terms Expiring in 2025
| BRC Inc. | 17 | 2024 Proxy Statement |
Continuing Directors – Class III Directors with Terms Expiring in 2025
| Glenn Welling Independent Age 53 Director Since February 2022 Committee Service: • Audit Committee • Compensation Committee | Glenn Welling is a director of our Board and a member of the Audit Committee and the Compensation Committee. Mr. Welling is the founder and CIO of Engaged Capital, a constructive activist fund that invests in small and mid-cap public companies, a position that he has held since 2012. Previously, Mr. Welling was a Principal and Managing Director at Relational Investors, a $6B activist fund. He was responsible for managing the fund’s consumer, healthcare and utility investments. Prior to Relational, Mr. Welling spent 7 years as a Managing Director at Credit Suisse and Head of the Investment Banking Department’s Advisory Business. Mr. Welling joined Credit Suisse when the firm acquired HOLT Value Associates, where he was a Partner and Managing Director. Prior to HOLT, Mr. Welling was the Managing Director of Valuad U.S., a financial software and advisory business. Prior to Valuad U.S., he worked at leading consulting firms including A.T. Kearney and Marakon Associates. From 2022 to 2023, Mr. Welling was a member of the Board of Directors of NCR Corporation, a NYSE listed software- and services-led enterprise technology provider for the financial, retail, and hospitality industries where he Chaired the Special Committee and served on the Compensation and Human Resources Committee and the Audit Committee. From 2017 to 2022, Mr. Welling was a member of the Board of Directors of The Hain Celestial Group, a NASDAQ listed leading marketer, manufacturer and seller of organic and natural better-for-you-products where he was the Chair of the Compensation Committee and member of the Strategy Committee. From 2015 to 2020 Mr. Welling was a member of the Board of Directors of TiVo Corporation, a NASDAQ listed provider of digital entertainment technology solutions where he was the Chair of the Compensation Committee and a member of the Strategy Committee and the Corporate Governance and Nominating Committee. From 2015 to 2018, Mr. Welling served on the Board of Medifast, Inc., a NYSE listed manufacturer of medically based, proprietary healthy living and meal replacement products where he was a member of the Audit, Compensation, and Mergers and Acquisitions Committees. From January 2015 to August 2018, Mr. Welling served on the Board of Jamba, Inc., a NASDAQ listed leading restaurant retailer of better-for-you food and beverage offerings where he was the Chair of the Compensation Committee and a member of the Finance Committee. Mr. Welling was recognized by The National Association of Corporate Directors (NACD) as one of the 100 most influential directors in corporate boardrooms in 2018. From 2017 to 2019 he also served on the Corporate Governance Advisory Council of the Council of Institutional Investors. Mr. Welling also taught executive education courses at the Wharton School of Business, his alma mater. He previously served as Chairman of the Board of Directors for the university’s tennis program and as a member of the Wharton Executive Education Board. | | | MR. WELLING IS WELL-QUALIFIED TO SERVE ON OUR BOARD DUE TO SIGNIFICANT EXPERIENCE IN THE AREAS OF INVESTMENTS, FINANCE AND CORPORATE GOVERNANCE. |
Continuing Directors – Class III Directors with Terms Expiring in 2025
| BRC Inc. | 18 | 2024 Proxy Statement |
Continuing Directors – Class III Directors with Terms Expiring in 2025
Corporate Governance and our Board of Directors
Compensation Committee
| • | reviewing and recommending the compensation of our directors; |
Non-Employee Director Compensation Program
Non-Employee Director Compensation Program We pay only non-employee directors for their services as directors. Directors who are also officers or employees of the Company, including our Executive Chairman, are not eligible to receive any of the compensation described below. Both equity and cash compensation paid to our directors during 2023 was determined using benchmark data from our peer companies provided by our compensation committee’s independent compensation consultant, Pearl Meyer. For 2023, our directors were eligible for the following compensation:
Non-Employee Director Compensation Program
| • | an annual cash retainer of $50,000; |
Non-Employee Director Compensation Program
| • | an additional annual cash retainer of $10,000, $6,000 and $5,000 for service as members of our audit committee, compensation committee and nominating and corporate governance committee, respectively; |
Non-Employee Director Compensation Program
| • | an additional annual cash retainer of $20,000, $10,000 and $9,000 for service as chair of our audit committee, compensation committee and nominating and corporate governance committee, respectively; |
Non-Employee Director Compensation Program
| • | an initial grant of restricted stock units (“RSUs”) having a grant date fair value of $150,000 on the date of each such director’s appointment to our Board of Directors, vesting in full on the third anniversary of the date of grant; and |
Non-Employee Director Compensation Program
| • | an annual grant of RSUs having a grant date fair value of $125,000, vesting in full on the first anniversary of the date of grant. |
Non-Employee Director Compensation Program
Our directors may elect to receive all or a portion of their annual cash compensation in the form of RSUs. In 2023, each of our directors voluntarily elected to receive an equivalent RSU grant in lieu of their cash compensation. Our annual grants to directors are made on the date of our annual meeting of stockholders, with vesting to occur on the first anniversary of the date of grant. We reimburse all directors for their reasonable out-of-pocket costs and expenses incurred in attending board meetings.
Director Compensation Table
Director Compensation Table The following table sets forth information regarding compensation earned by or paid to our directors for the fiscal year ended December 31, 2023. Messrs. Hafer and Davin, who each served as our co-Chief Executive Officers in 2023, are also members of the Board, but did not receive any additional compensation for their service as directors in 2023.
Director Compensation Table
| BRC Inc. | 25 | 2024 Proxy Statement |
Director Compensation Table
The compensation of Evan Hafer and Thomas Davin as named executive officers is set forth below under “Executive Compensation—2023 Summary Compensation Table.”
Director Compensation Table
| Name | Fees earned or paid in cash(1) ($) | Stock Awards(2) ($) | Total ($) | | Kathryn Dickson | 85,000 | 125,000 | 210,000 | | George Muñoz | 76,000 | 125,000 | 201,000 | | Steven Taslitz | 65,000 | 125,000 | 190,000 | | Glenn Welling | 66,000 | 125,000 | 191,000 |
Director Compensation Table
| 1. | All directors took their cash payments in the form of RSU grants. The assumptions made in calculating the grant date fair value of these awards are set forth in Note 14. Equity-Based Compensation, to the consolidated financial statements in the Company’s 2023 Annual Report on Form 10-K. |
Director Compensation Table
| 2. | Consists of grants of RSUs. The assumptions made in calculating the grant date fair value of these awards are set forth in Note 14. Equity-Based Compensation, to the consolidated financial statements in the Company’s 2023 Annual Report on Form 10-K. |
Outstanding Equity Awards for Directors at Fiscal Year-End
Outstanding Equity Awards for Directors at Fiscal Year-End The following table provides information regarding equity awards held by our non-employee directors that were outstanding as of December 31, 2023:
Outstanding Equity Awards for Directors at Fiscal Year-End
| Name | Stock Awards Outstanding (#)(1) | Option Awards Outstanding (#) | | Kathryn Dickson | 41,134 | — | | George Muñoz | 40,298 | — | | Steven Taslitz | 39,276 | — | | Glenn Welling | 39,368 | — |
Outstanding Equity Awards for Directors at Fiscal Year-End
| 1. | Includes RSUs and Incentive Units. |
Outstanding Equity Awards for Directors at Fiscal Year-End
| BRC Inc. | 26 | 2024 Proxy Statement |
Outstanding Equity Awards for Directors at Fiscal Year-End
Ratification of Appointment of Independent Registered Public Accounting Firm The audit committee of the Board has appointed Ernst & Young LLP (“EY”) as our independent registered public accounting firm to audit our financial statements for the fiscal year ending December 31, 2024 (“fiscal 2024”) and is asking stockholders to ratify this appointment at the Annual Meeting. EY has audited our financial statements annually since 2020. A representative of EY is expected to attend this year’s Annual Meeting, will have the opportunity to make a statement, if desired, and will be available to respond to appropriate questions. In making its recommendation to the Board to select EY as our independent registered public accounting firm for fiscal 2024, the audit committee determined that retention of EY is in the best interests of us and our stockholders. Information regarding fees billed by EY for our 2022 and 2023 fiscal years is set forth under “Independent Registered Public Accounting Firm Fees” below. Our bylaws do not require that stockholders ratify the appointment of our independent registered public accounting firm. However, we are seeking ratification because we believe it is a matter of good corporate governance. In the event that stockholders fail to ratify the appointment, the audit committee will reconsider whether to retain EY, but may ultimately determine to retain EY as our independent registered public accounting firm. Even if the appointment is ratified, the audit committee, in its sole discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that it is advisable to do so.
What We Do
| • | Independent Compensation Advisor Reports Directly to the Compensation Committee. The compensation committee engages its own compensation consultant to assist with making compensation decisions. |
What We Do
| • | Annual Market Review of Executive Compensation. The compensation committee and its compensation consultant annually assess competitiveness and market alignment of our compensation plans and practices. |
What We Do
| • | Multi-Year Vesting Requirements. The equity awards granted to our NEOs vest over multi-year periods, consistent with current market practice and our retention objectives. |
What We Do
| • | Minimize Inappropriate Risk Taking. Our compensation program is weighted toward long-term incentive compensation to discourage short-term risk taking. |
What We Do
| • | Competitive Peer Group. Our compensation committee selects our peers from companies that are similar to us with respect to market capitalization, business strategy, and revenue. |
Role of the Compensation Consultant
Role of the Compensation Consultant The compensation committee has engaged Pearl Meyer as its independent compensation consultant. Pearl Meyer provides input, analysis, and advice about the Company’s executive compensation philosophy, peer group, pay positioning (by pay component and in total) relative to peer companies, compensation design, equity usage, and risk associated with the current compensation programs.
Benchmarking Compensation
Benchmarking Compensation To attract and retain high-performing talent, the compensation committee references prevailing pay rates when establishing target compensation opportunities for our NEOs. To do this, the compensation committee uses a variety of sources for both the broader market and for a core peer group of companies. The compensation committee, with the advice of Pearl Meyer, considers several criteria to determine our peer group, such as whether companies (1) are in the same or similar lines of business, (2) compete for the same customers with similar products and services, and (3) have comparable financial characteristic (mainly revenue and market capitalization). The compensation committee selected the following companies for the fiscal year 2023 Peer Group:
Benchmarking Compensation
| • | BellRing Brands, Inc. |
Benchmarking Compensation
| • | Beyond Meat, Inc. |
Benchmarking Compensation
| • | Celsius Holdings, Inc. |
Benchmarking Compensation
| • | Dutch Bros Inc. |
Benchmarking Compensation
| • | Freshpet, Inc. |
Benchmarking Compensation
| • | Krispy Kreme, Inc. |
Benchmarking Compensation
| • | NewAge, Inc. |
Benchmarking Compensation
| • | Portillo’s Inc. |
Benchmarking Compensation
| • | Shake Shack Inc. |
Benchmarking Compensation
| • | The Honest Company, Inc. |
Benchmarking Compensation
| • | The Simply Good Foods Company |
Benchmarking Compensation
| • | The Vita Coco Company, Inc. |
Benchmarking Compensation
| • | Vital Farms Inc. |
Benchmarking Compensation
| • | Wingstop Inc. |
Benchmarking Compensation
| • | Zevia PBC |
Benchmarking Compensation
| BRC Inc. | 34 | 2024 Proxy Statement |
2023 Summary Compensation Table
2023 Summary Compensation Table The following table sets forth information concerning the compensation of our NEOs for the years ended December 31, 2023 and 2022:
2023 Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(2) | All Other Compensation ($)(7) | Total ($) | | Evan Hafer(3) Prior Chief Executive Officer | 2023 | 340,000 | — | — | — | 47,596 | 387,596 | | | 2022 | 340,000 | — | 3,892,710 | — | 12,200 | 4,244,910 | | Thomas Davin(4) Prior Co-Chief Executive Officer | 2023 | 360,000 | — | — | — | 66,952 | 426,952 | | | 2022 | 352,039 | — | 256,875 | 767,647 | 12,200 | 1,388,761 | | Chris Mondzelewski(5) President and Chief Executive Officer | 2023 | 285,963 | — | 925,000 | 1,875,000 | 7,271 | 3,093,234 | | | 2022 | — | — | — | — | — | — | | Steve Kadenacy Chief Financial Officer(6) | 2023 | 127,885 | — | 750,000 | 2,250,000 | 18,915(8) | 3,146,800 | | | 2022 | — | — | — | — | — | — |
2023 Summary Compensation Table
| 1. | Amounts shown include the grant date fair values of RSU, PSU and Authentic Brands Incentive Unit awards granted in the year indicated. The assumptions made in calculating the grant date fair value of these awards are set forth in Note 14. Equity-Based Compensation, to the consolidated financial statements in the Company’s 2023 Annual Report on Form 10-K. For the PSUs granted to Mr. Hafer in 2022, if the highest level of performance is achieved for all performance metrics, the grant date fair value would be $25,852,669. |
2023 Summary Compensation Table
| 2. | Stock options granted to employees under the 2022 Plan (as defined below) vest ratably over three years and expire after seven years. The assumptions made in calculating the grant date fair value of the stock options are set forth in Note 14. Equity-Based Compensation, to the consolidated financial statements in the Company’s 2023 Annual Report on Form 10-K. |
2023 Summary Compensation Table
| 3. | Mr. Hafer ceased serving as the Company’s Chief Executive Officer effective December 31, 2023. Mr. Hafer continues to serve the Company as Founder and Executive Chairman. |
2023 Summary Compensation Table
| 4. | Mr. Davin ceased serving as the Company’s Co-Chief Executive Officer effective December 31, 2023. Mr. Davin continues to serve as a director on the Company’s Board. |
2023 Summary Compensation Table
| 5. | Mr. Mondzelewski commenced employment with BRCC in May of 2023 and was appointed to the position of Chief Executive Officer effective January 1, 2024. |
2023 Summary Compensation Table
| 6. | Mr. Kadenacy commenced employment with BRCC in September of 2023. |
2023 Summary Compensation Table
| 7. | Amounts listed in the “All Other Compensation” column may include 401k funding/match, employer benefit contributions, relocation assistance, housing allowance, or other benefits agreed upon during employment/offer negotiations. |
2023 Summary Compensation Table
| 8. | Mr. Kadenacy received a housing allowance of $12,000 for 2023 for an apartment in Salt Lake City, Utah. |
Equity Incentives
Equity Incentives In connection with the Business Combination, our stockholders approved the Company’s 2022 Omnibus Incentive Plan (the “2022 Plan”), pursuant to which we may grant eligible employees equity compensation awards. The goals of our long-term, equity-based incentive awards are to align the interests of our NEOs and other employees with the interests of our stockholders. Because vesting is based on continued employment over multiple years, our equity-based incentives also encourage the retention of our NEOs through the vesting period of the awards. Our compensation committee typically approves annual equity awards during the first quarter of each year. While we intend that the majority of equity awards to our employees be made pursuant our annual grant program, the compensation committee retains discretion to make equity awards to employees at other times, including in connection with the promotion of an employee, to reward an employee, for retention purposes or for other circumstances recommended by management or the compensation committee. For fiscal year 2023, the compensation committee determined that our NEOs, with the exception of Mr. Hafer, would receive the following types of equity awards:
Equity Incentives
| • | Stock Options (75% of grant value): Provide strong incentives for our executive officers to increase the value of our common stock over the long term, and they tightly align the interests of our executives with those of our stockholders. The stock options we grant vest over three years, with one-third of the shares subject to the option vesting on each anniversary of the vesting commencement date, subject to the recipient’s continued employment or service with us on each vesting date. Options have a term of seven years from the date of grant. |
Equity Incentives
| • | RSU Awards (25% of grant value): Granted because they are less dilutive to our stockholders, as fewer shares of our common stock are granted to achieve an equivalent value relative to stock options, and because RSU awards are an effective retention tool that maintain value even in cases where the share price is trading lower than the initial grant price. The RSUs we grant vest in equal annual increments over three years, subject to the recipient’s continued employment or service with us on each vesting date. |
Equity Incentives
The 2022 Plan provides that Mr. Hafer will be eligible to receive awards with respect to a number of shares of Class A Common Stock equal to up to 4% of the fully-diluted aggregate number of Class A and Class B Common Stock outstanding as of the Business Combination. In lieu of the annual equity awards provided to other NEOs, in December 2022, Mr. Hafer received restricted stock units that vest based on the Company’s achievement of at least a 25% compound annual growth rate, measured for a portion of the units annually over five years and for all of units through April 30, 2027 and in each case subject to Mr. Hafer’s continued employment through April 30, 2027. None of the restricted stock units vested in 2023. Authentic Brands maintained an Equity Incentive Plan (the “Incentive Unit Plan”) pursuant to which its board issued Incentive Units to eligible individuals. The Incentive Units are intended to constitute “profits interests” within the meaning of Revenue Procedures 93-27 and 2001-43, and provided an immediate and significant alignment between our NEOs and our business. As profits interests, the Incentive Units have no value for tax purposes on the date of grant.
Equity Incentives
| BRC Inc. | 37 | 2024 Proxy Statement |
Equity Incentives
Mr. Davin was previously granted Incentive Units pursuant to the terms and conditions set forth in the Incentive Unit Plan and the Third Amended and Restated Limited Liability Company Agreement of Authentic Brands, in each case prior to the Business Combination. The number of Incentive Units granted to Mr. Davin was not determined pursuant to any formulaic equation or benchmarking to any peer groups; rather, the number of Incentive Units was determined by the compensation committee of the board of Authentic Brands in its sole discretion. The unvested Incentive Units held by our NEOs generally vest over a four-year period — 25% on the first anniversary of the date of grant and then in equal installments at the end of each subsequent quarter over the next three years, in each case, subject to continued employment through such date. In connection with the Business Combination, certain prior Incentive Units that were vested (including those that vested in connection with the Business Combination) were converted into Common Units of Authentic Brands on a net-basis. Incentive Units that remained unvested continue to vest in accordance with their terms. However, no additional awards will be granted under the Incentive Unit Plan. The grant date fair value of the equity awards is set forth above in the “2023 Summary Compensation Table” under the columns entitled “Stock Awards” and “Option Awards” with accompanying footnotes.
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table provides information regarding equity awards held by our NEOs that were outstanding as of December 31, 2023:
Outstanding Equity Awards at Fiscal Year-End
| | | Option Awards(1) | | | Stock Awards(2) | | | | | Name | Grant Date | 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 ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($) | | Evan Hafer, Prior Chief Executive Officer | 12/29/2022 | — | — | — | — | — | 4,231,206 | 25,852,669 | | Thomas Davin, Prior Co-Chief Executive Officer | 2/9/2022 | 88,236 | 10.00 | 2/9/2029 | 12,500 | 45,375 | — | — | | Chris Mondzelewski, President and Chief Executive Officer | 5/5/2023 | 152,628 | 5.38 | 5/5/2030 | 83,643 | 303,624 | — | — | | | 8/15/2023 | 573,230 | 4.45 | 8/15/2030 | 106,742 | 387,473 | — | — | | Steve Kadenacy, Chief Financial Officer | 9/18/2023 | 1,004,982 | 4.00 | 9/18/2030 | 187,500 | 680,625 | — | — |
Outstanding Equity Awards at Fiscal Year-End
| 1. | Stock options granted vest ratably over three years on an annual basis and expire after seven years. |
Outstanding Equity Awards at Fiscal Year-End
| 2. | Stock awards include RSU, PSU and Incentive Unit awards. RSU awards vest annually over three years. The PSU awards were granted to Evan Hafer and vest based on significant market capitalization CAGR targets through April 30, 2027, subject to Mr. Hafer’s continued employment through such date, as described more fully above under “Equity Incentives.” All PSUs were unvested as of December 31, 2023, and the number of shares shown assumes achievement of the target performance level. The unvested Incentive Units held by our NEOs generally vest over a four-year period — 25% on the first anniversary of the date of grant and then in equal installments at the end of each subsequent quarter over the next three years, in each case, subject to continued employment through such date. The value for each award was calculated by multiplying the number of shares of common stock underlying the unvested portion of the award by $3.63, the closing price for our Class A Common Stock on the NYSE on the last trading day of 2023. |
Outstanding Equity Awards at Fiscal Year-End
| BRC Inc. | 41 | 2024 Proxy Statement |