DEF 14A of First Watch Restaurant Group, Inc.
Filed Apr 8, 2024 · FY20230001789940-24-000077
Class III Nominees for Election for a Three-year Term Expiring at the 2027 Annual Meeting
Class III Nominees for Election for a Three-year Term Expiring at the 2027 Annual Meeting
Ralph Alvarez
Ralph Alvarez Mr. Alvarez has served as a director and as chair of the Board since December 2019. Mr. Alvarez has served as an operating partner of Advent since July 2017. Previously, Mr. Alvarez served as the executive chairman of Skylark Co., Ltd., a leading restaurant operator in Japan, from January 2013 to March 2018. Mr. Alvarez served as President and Chief Operating Officer of McDonald’s Corporation, a leading global foodservice retailer, from August 2006 until his retirement in December 2009. Mr. Alvarez joined McDonald’s in 1994 and held a variety of leadership positions during his tenure with the company. Prior to joining McDonald’s, he held leadership positions at Wendy’s International, Inc. and Burger King Corporation. Mr. Alvarez currently serves as a director of Lowe’s Companies, Inc., Traeger, Inc. and Eli Lilly & Company and previously served as a director of Dunkin’ Brands Group from May 2012 to December 2020 and as a director of Realogy Holdings Corp. from August 2013 to May 2018. Mr. Alvarez’s qualifications to serve on our Board include his extensive management expertise and leadership experience on several boards of directors across multiple industries.
Tricia Glynn
Tricia Glynn Ms. Glynn has served as a director since August 2017. Ms. Glynn has served as a managing partner of Advent International, L.P. (“Advent”) since January 2023 and previously served as a managing director of Advent from October 2016 to December 2022. Previously, she served as principal of Bain Capital Private Equity from August 2004 to July 2016. Ms. Glynn has served as director of Olaplex, Inc. since January 2020 and Orveon, Inc. since December 2021. Ms. Glynn also is a member of the board of directors of Harvard Management Company. Ms. Glynn previously served as a director of SavageXFenty, Inc. from May 2021 to December 2022, lululemon athletica inc. from August 2017 to June 2021 and Burlington Stores, Inc. from August 2012 to June 2018. Ms. Glynn’s qualifications to serve on our Board include her extensive management, investment, and leadership expertise in public companies. Mr. Tomasso has served as a director since December 2019, and has served as our President and Chief Executive Officer since August 2017 and December 2019, respectively. Mr. Tomasso has also served as director, president and chief executive officer of First Watch Restaurants, Inc., a wholly-owned subsidiary of the Company, since October 2017, December 2015 and June 2018, respectively. In addition, Mr. Tomasso served as chief marketing officer of First Watch Restaurants, Inc. from August 2006 to December 2015. Mr. Tomasso’s qualifications to serve on our Board include his extensive management, investment, marketing, and corporate strategy expertise.
Class II Directors Continuing in Office Until the 2026 Annual Meeting
Class II Directors Continuing in Office Until the 2026 Annual Meeting
Julie M.B. Bradley
Julie M.B. Bradley Ms. Bradley has served as a director since January 2020. Since July 2022, she has served as the chief executive officer and chairperson of the board of RegimenMD, an online skincare marketplace. Ms. Bradley served as chief financial officer, chief accounting officer and treasurer of TripAdvisor, Inc., a public company that operates an online travel planning website and mobile app, from 2011 to 2015. Ms. Bradley currently serves on the boards of directors of GoodRx Holdings, Inc. since August 2020, ContextLogic Inc. (d/b/a Wish) since October 2020 and BitSight Technologies, Inc. since April 2022. Ms. Bradley previously served as a director of Wayfair Inc. from 2012 to May 2021, Blue Apron Holdings, Inc. from 2015 to October 2020 and Constant Contact, Inc. from 2015 to 2016. Ms. Bradley’s qualifications to serve on our Board include her extensive operational and financial management and leadership expertise in public companies.
Irene Chang Britt
Irene Chang Britt Ms. Britt has served as a director since July 2023. Ms. Britt served as President and Divisional CEO of Pepperidge Farm, Inc. and Senior Vice President, Global Baking and Snacking for the Campbell Soup Company from 2012 until her retirement in 2015. Irene joined Campbell Soup Company in 2005 and held a variety of leadership positions during her tenure with the company. Prior to joining Campbell Soup Company, Ms. Britt held a number of leadership positions within Kraft Foods Group, Inc. and Nabisco, Inc. Before that, she spent more than a decade at Kimberly-Clark Corporation, where she held key assignments in marketing, sales and R&D leadership. She currently serves on the boards of IDEXX Laboratories, Inc. and Victoria’s Secret and Co. Previously, she also served on the boards of Brighthouse Financial, Inc., Dunkin’ Brands Group, Inc., Tailored Brands, Inc., TerraVia Holdings, Inc. and Sunoco, Inc. Ms. Britt’s qualifications to serve on our Board include her extensive management expertise and leadership experience on several boards of directors across multiple industries.
David Paresky
David Paresky Mr. Paresky has served as a director since April 2023. He has served as principal of Advent since January 2023. Previously, Mr. Paresky served as vice president of Advent from August 2019 to December 2022, as vice president of Thomas H. Lee Partners, L.P. from August 2018 to July 2019, and as senior associate of Thomas H. Lee Partners, L.P. from August 2017 to July 2018. Mr. Paresky previously served on the board of System One, Inc. from April 2019 to July 2019. Mr. Paresky’s qualifications to serve on our Board include his extensive investment and management expertise.
Class I Directors Continuing in Office Until the 2025 Annual Meeting
Class I Directors Continuing in Office Until the 2025 Annual Meeting
INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Indemnification of Directors and Officers
Indemnification of Directors and Officers Our amended and restated certificate of incorporation provides that we will indemnify our directors and officers to the fullest extent permitted by the Delaware General Corporation Law (the “DGCL”). We have entered into indemnification agreements with each of our executive officers and directors. The indemnification agreements provide the executive officers and directors with contractual rights to indemnification, expense advancement and reimbursement, to the fullest extent permitted under the DGCL, subject to certain exceptions contained in those agreements.
Summary Compensation Table
Summary Compensation Table The following table presents information regarding the total compensation awarded to, earned by, and paid to the named executive officers of First Watch for services rendered to First Watch in all capacities for the fiscal year indicated.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) (1) | Bonus ($) (2) | Non-equity incentive plan compensation ($) (3) | Stock awards ($)(4) | Option awards ($) (4) | All other compensation ($) (5) | Total ($) | | Christopher A. Tomasso, | 2023 | 892,416 | — | 1,509,105 | 2,500,000 | — | 26,797 | 4,928,318 | | President and Chief Executive Officer | 2022 | 625,000 | 54,688 | 515,625 | — | 2,000,000 | 23,984 | 3,219,297 | | | 2021 | 468,394 | — | 843,109 | — | — | 23,301 | 1,334,804 | | Henry Melville Hope, III, | 2023 | 439,761 | — | 520,556 | 800,000 | — | 23,660 | 1,783,977 | | Chief Financial Officer | 2022 | 404,863 | 24,798 | 233,808 | — | 850,000 | 21,776 | 1,535,245 | | | 2021 | 385,584 | — | 647,781 | — | — | 20,048 | 1,053,413 | | Jay Wolszczak, | 2023 | 453,857 | — | 537,241 | 350,000 | — | 28,630 | 1,369,728 | | Chief Legal Officer, General Counsel & Secretary | | | | | | | | |
Summary Compensation Table
____________________________ (1) Salary represents the amounts earned in fiscal 2023, 2022 and 2021, as applicable, pursuant to the terms of each NEO’s respective employment agreement. See “Employment Agreements” below. Salary amounts paid to our NEOs in fiscal 2023 exceeded their annual base salary amounts due to (i) the impact of fiscal 2023 being a 53-week year and (ii) each NEO’s fiscal 2024 base salary taking effect in the 53rd week of fiscal 2023. The base salaries for Messrs. Tomasso, Hope and Wolszczak in fiscal 2023 excluding the 53rd week were $875,000, $431,179 and $445,000, respectively. (2) Amounts reflect portion of cash incentive bonus earned in fiscal 2022 attributable to Compensation Committee’s use of discretion to increase payout on the company-based performance incentive pool from 75% to 87.5%. See “Annual Cash Incentive Bonus” below. (3) Amounts reflect the cash incentive bonuses earned in fiscal 2023, 2022 and 2021. See “Annual Cash Incentive Bonus” below. (4) Amounts reflect the aggregate grant date fair value of restricted stock units granted to our NEOs in fiscal 2023 and stock options granted to our NEOs in fiscal 2022, as computed in accordance with FASB ASC Topic 718. For additional information related to assumptions used in the determination of the fair value of stock-based compensation awards, refer to Note 17 to the financial statements included in our Annual Report on Form 10-K for the years ended December 31, 2023 and December 25, 2022. (5) Payments to our NEOs included in the “All Other Compensation” column for fiscal 2023 include the following:
Summary Compensation Table
| Name | Year | Life insurance premiums ($) | 401 (k) employer match ($) | Long term disability benefit ($) | Health insurance premiums ($) | Executive physical services ($) | Post-closing payment ($) (1) | Total ($) | | Christopher A. Tomasso | 2023 | 1,287 | 4,950 | 3,721 | 9,795 | 4,500 | 2,544 | 26,797 | | | 2022 | 1,017 | 4,575 | 3,721 | 10,171 | 4,500 | — | 23,984 | | | 2021 | 1,350 | 4,500 | 3,721 | 8,110 | 4,500 | 1,120 | 23,301 | | Henry Melville Hope, III | 2023 | 1,287 | 1,990 | 6,088 | 9,795 | 4,500 | — | 23,660 | | | 2022 | 1,017 | — | 6,088 | 10,171 | 4,500 | — | 21,776 | | | 2021 | 1,350 | — | 6,088 | 8,110 | 4,500 | — | 20,048 | | Jay Wolszczak | 2023 | 1,287 | 9,122 | 3,926 | 9,795 | 4,500 | — | 28,630 |
Summary Compensation Table
_____________________________ (1) Amounts reflect the amounts payable to the NEOs in their capacity as optionholders as credit for certain net operating loss or FICA tip credit carryforwards pursuant to the terms of the merger agreement dated as of July 25, 2017 through which we were acquired by funds affiliated with, or managed by, Advent.
Potential Payments upon Termination or Change in Control
Potential Payments upon Termination or Change in Control Equity award agreements Pursuant to the terms of the stock option award agreement and restricted stock unit award agreement entered into with each of our named executive officers in fiscal 2022 and fiscal 2023, upon such person’s termination of service by the Company without “cause” or by such person for “good reason”, on or prior to the first anniversary of a change in control, a portion of the options or restricted stock units that remain unvested as of the date of such termination of service, representing the lower of (i) the number of such person’s options or restricted stock units that remain unvested as of the date of such termination or service and (ii) in the case of Mr. Tomasso and Mr. Hope, 50%, and in the case of Mr. Wolszczak, 37.5%, of such options or restricted stock units granted pursuant to the award agreement, which have not yet become vested as of the date of such termination of service will become fully exercisable and/or vested, as applicable, upon the date of such termination of service. For purposes of the award agreements, “cause” has the meaning as set forth in such person’s employment agreement or offer letter as described above and “good reason” means the occurrence of any of the following events without the consent of such person: (i) the Company materially reduces such person’s annual base salary or annual bonus opportunity percentage; (ii) a material diminution in such person’s responsibilities; or (iii) the Company relocates such person’s principal place of employment more than twenty (20) miles from the existing location as of the date of grant (unless such relocation results in a reduction in such person’s one-way commute). Notwithstanding the foregoing, the events described in clauses (i), (ii) or (iii) shall not constitute “good reason” unless (A) such person has given the Company written notice of such person’s resignation for “good reason,” setting forth the conduct of the Company that is alleged to constitute “good reason,” within thirty (30) days following the first occurrence of such event, and (B) such person has provided the Company at least thirty (30) days following the date on which such notice is provided to cure such conduct and the Company has failed to do so. Except as discussed above, no named executive officer has a contractual or other entitlement to severance or other payments upon termination or a change in control.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END The following table sets forth certain information regarding equity-based awards held by the named executive officers as of December 31, 2023.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| | | Option Awards | | | | | | Stock Awards | | | | | | Name | Equity award grant date | Number of securities under-lying unexer-cised options (#) exercis-able | Number of securities underlying unexercised options (#) unexercisable | Equity incentive plan awards: Number of securities under- lying unexer- cised unearned options (#) | Option exercise price ($) | | Option expiration date | Number of shares or units of stock that have not vested (#) (1) | | Market value of shares or units of stock that have not vested ($) (2) | 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 ($) | | Christopher A. Tomasso | 8/31/2017 | 897,715 | 138,110 | — | 8.45 | | 8/31/2027 | — | — | — | — | — | | | 3/25/2022 | 96,199 | 192,401 | — | 12.58 | | 3/25/2032 | — | — | — | — | — | | | 3/9/2023 | — | — | — | — | | — | 161,082 | | $3,237,748 | — | — | | Henry Melville Hope, III | 7/30/2018 | 153,894 | 23,676 | — | 8.45 | | 7/30/2028 | — | — | — | — | — | | | 7/31/2019 | 51,560 | 17,495 | — | 13.52 | | 7/31/2029 | — | — | — | — | — | | | 3/25/2022 | 40,884 | 81,771 | — | 12.58 | | 3/25/2032 | — | — | — | — | — | | | 3/9/2023 | — | — | — | — | | — | 51,546 | | $1,036,075 | — | — | | Jay Wolszczak | 7/18/2018 | 153,894 | 23,676 | — | 8.45 | | 7/18/2028 | — | — | — | — | — | | | 4/24/2019 | 51,560 | 17,495 | | 12.68 | | 4/24/2029 | — | — | — | — | — | | | 3/25/2022 | 19,239 | 38,481 | — | 12.58 | | 3/25/2032 | — | — | — | — | — | | | 3/9/2023 | — | — | — | — | — | — | 22,551 | | $453,275 | — | — |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
___________________________ (1) Represents time-based restricted stock unit awards held by the NEO as of December 31, 2023 (2) Represents the value of the number of shares of Common Stock underlying the time-based restricted stock unit awards valued based on the $20.10 closing market price of the Company’s Common Stock for December 29, 2023. A portion of the option awards that were granted prior to the Company’s initial public offering on October 5, 2021 (the “IPO”) are subject to time-based vesting in equal installments on each of the first five anniversaries of the applicable grant date, subject to the participant’s continued employment or service on the applicable vesting date and the remaining portion are subject to time-based vesting that vested one-third (1/3rd) on each of the first two anniversaries of the IPO and will vest one-third (1/3rd) on the 273rd day following the second anniversary of the IPO. The option and restricted stock unit awards that were granted following the IPO are subject to time-based vesting in equal installments on each of the first three anniversaries of the applicable grant date, subject to the participant’s continued employment or service on the applicable vesting date.
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION The Board has approved a compensation framework for our directors that are not employees of the Company and not employees of Advent (“Non-Employee Director Compensation”) for their service on the Board and its committees following the closing of the IPO. The cash component of the Non-Employee Director Compensation framework includes a $75,000 base retainer; $10,000 for service as a member of the Audit Committee and $20,000 for service as the Audit Committee Chair; $7,500 for service as a member of the Compensation Committee and $15,000 for service as the Compensation Committee Chair; $6,000 for service as a member of the Nominating and Corporate Governance Committee and $10,000 for service as the Nominating and Corporate Governance Committee Chair. The equity component of the Non-Employee Director Compensation framework includes restricted stock units awarded to our non-employee directors that are not employees of Advent with a base $100,000 grant date fair value together with an additional $50,000 grant date fair value for our Chair. On the day following the annual meeting of stockholders, each eligible director receives a number of restricted stock units with a value equal to the amount indicated above, calculated by using the closing price of our Common Stock on the day following the annual meeting of stockholders. On July 20, 2023, in connection her appointment to the Board, Ms. Chang received restricted stock units with a $100,000 grant date fair value. On December 6, 2023, in connection with his appointment to the Board, Mr. Solheim received restricted stock units with a $100,000 grant date fair value. The restricted stock units vest on the first anniversary of the grant date, subject to a director’s continued membership on the Board as of such date. The number of restricted stock units are calculated by dividing the grant date fair value by the closing price of our Common Stock on the grant date ($18.00 on May 24, 2023 for Mr. Alvarez, Ms. Bradley, and Mr. Kussell, $18.84 on July 20, 2023 for Ms. Britt and $18.71 on December 6, 2023 for Mr. Solheim) and rounding down to the nearest whole number. The following table sets forth information concerning the compensation of our directors (other than our CEO and our directors that are employees of Advent who do not participate in the Company’s Non-Employee Director Compensation framework) for fiscal 2023. Compensation information for Mr. Tomasso is included in the “Summary Compensation Table” above. Other than as set forth in the table and described herein, during fiscal 2023, we did not pay any fees to, make any equity awards or non-equity awards to, or pay any other compensation to the non-employee members of our Board. We also reimburse each of our directors for all reasonable out-of-pocket expenses incurred in connection with attendance at board and committee meetings.
DIRECTOR COMPENSATION
| Name | Fees earned or paid in cash ($) | Stock awards ($) (1) | All other compensation ($) | Total ($) | | Ralph Alvarez | 98,500 | 150,000 | — | 248,500 | | Julie M.B. Bradley | 95,000 | 100,000 | — | 195,000 | | Irene Chang Britt (2) | 34,476 | 100,000 | — | 134,476 | | William Kussell | 85,000 | 100,000 | — | 185,000 | | Stephanie Lilak | 93,003 | 100,000 | — | 193,003 | | Lisa Price (3) | 20,250 | — | — | 20,250 | | Jostein Solheim (4) | 4,832 | 100,000 | — | 104,832 |
DIRECTOR COMPENSATION
___________________________ (1) Reflects the grant date fair value of restricted stock units granted to our non-employee directors that are not employees of Advent in fiscal 2023, determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Stock Compensation (“FASB ASC Topic 718”). (2) Irene Chang Britt joined our Board on July 19, 2023 and received a pro rata portion of the annual cash retainer paid to non-employee directors. (3) Effective March 24, 2023, Lisa Price resigned from her position as a director of the Company for personal reasons. (4) Jostein Solheim joined our Board on December 6, 2023 and received a pro rata portion of the annual cash retainer paid to non-employee directors. As of December 31, 2023, our non-employee directors held the following aggregate number of restricted stock units as well as stock options received as compensation for their service on the Board prior to our IPO:
DIRECTOR COMPENSATION
| Name | Restricted stock units (#) | Nonqualified stock options (#) | | Ralph Alvarez | 8,333 | 197,300 | | Julie M.B. Bradley | 5,555 | 61,655 | | Irene Chang Britt | 5,307 | — | | William Kussell | 5,555 | 98,650 | | Stephanie Lilak | 5,555 | — | | Jostein Solheim | 5,263 | — |