CHEF - The Chefs' Warehouse Inc. Reaches Cooperation Agreement with Legion Partners Asset Management | Benzinga
Three New Independent Directors Join the Board with Five Incumbent Directors Who Have Served for Five Years or Longer Stepping off by the 2025 Annual Meeting
Operational and Financial Performance Task Force Will be Formed to Support Identifying Margin Improvement Opportunities
RIDGEFIELD, Conn., March 04, 2024 (GLOBE NEWSWIRE) -- The Chefs' Warehouse, Inc. (the "Company") (NASDAQ:CHEF), a premier distributor of specialty food products in the United States, the Middle East and Canada, announced today that it has entered into an agreement (the "Cooperation Agreement") with Legion Partners Asset Management, LLC and certain of its affiliates (collectively, "Legion Partners"). Legion Partners beneficially owns approximately 3.3% of the Company's outstanding common stock.
As contemplated by the Cooperation Agreement, on March 4, 2024, the Company temporarily increased the size of the Company's Board of Directors (the "Board") to fourteen members and appointed two new independent directors, Richard N. Peretz and Wendy M. Weinstein, to the Board. The Company has agreed to nominate Mr. Peretz and Ms. Weinstein for election at the Company's 2024 annual meeting of stockholders (the "2024 Annual Meeting"). Further, as provided in the Cooperation Agreement, a third new independent director, Lester Owens, was appointed to the Board on March 4, 2024 and will be nominated for election at the Company's 2024 Annual Meeting.
Mr. Peretz was appointed as a member of the Compensation and Human Capital Committee of the Board and Ms. Weinstein was appointed as a member of the Nominating and Corporate Governance Committee of the Board. In addition, Mr. Owens was appointed as a member of the Audit Committee of the Board. Also, pursuant to the Cooperation Agreement, the size of the Board will be reduced from fourteen to eleven members, with three incumbent directors who have served on the Board for five years or longer as of the date of the Cooperation Agreement no longer serving on the Board immediately following the Company's 2024 Annual Meeting, and from eleven to nine members, with two incumbent directors who have served on the Board for five years or longer as of the date of the Cooperation Agreement no longer serving on the Board immediately following the Company's 2025 annual meeting of stockholders.
Further, pursuant to the Cooperation Agreement, the Board has agreed to form an Operational and Financial Performance Task Force with the purpose of improving the Company's operational and financial performance, including identifying and making recommendations to the Board and management on margin improvement opportunities, which will include Mr. Peretz and Ms. Weinstein. The Board will, upon consultation with the Operational and Financial Performance Task Force, retain a nationally recognized independent consulting firm to assist with the activities of the Operational and Financial Performance Task Force. In addition, Legion Partners has agreed to vote its shares in support of any director nominated and recommended by the Board at the Company's 2024 Annual Meeting, in addition to certain customary standstill provisions and other voting agreements for the duration of the standstill period.
The Cooperation Agreement will be extended for a second year if the Company achieves certain financial metrics, including if the Company achieves an Adjusted EBITDA margin percentage of no less than 5.7% for fiscal year 2024 and if the mid-point of the Company's guidance for ...