Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
On
March 28, 2023, the holder of a majority of the voting power of the outstanding voting stock of FAT Brands Inc. (the “Company”)
took action to remove the following directors of the Company pursuant to Section 141(k) of the Delaware General Corporation Law and Section
5.04 of the Company’s Certificate of Incorporation: Kenneth Anderson, Lynne Collier, Amy Forrestal, James Neuhauser and Edward
Rensi.
Following
such action, the sole remaining director of the Company took action to increase the size of the Board of Directors (the “Board”)
and appointed the following individuals to fill vacancies on the Board: Donald Berchtold, Tyler Child, Kenneth Kepp, Carmen Vidal, Mason
Wiederhorn, Taylor Wiederhorn and Thayer Wiederhorn. In addition, on March 29, 2023, Lynne Collier was re-appointed as a director on
the Board, and on April 1, 2023, Mark Elenowitz was appointed as a director on the Board. Edward Rensi was also re-appointed but subsequently
decided not to re-join the Board.
In
connection with these actions, the size of the Board was increased to ten persons, and is currently comprised of Donald Berchtold, Tyler
Child, Lynne Collier, Mark Elenowitz, Kenneth Kepp, Carmen Vidal, Andrew Wiederhorn (Chairman), Mason Wiederhorn, Taylor Wiederhorn and
Thayer Wiederhorn. The members of the Audit Committee were re-appointed and consist of Lynne Collier, Mark Elenowitz and Kenneth Kepp,
each of whom was determined to be independent under the applicable director independence standards of the Securities and Exchange Commission
and The Nasdaq Stock Market.
In
connection with these changes, the Company has elected “controlled company” status for purposes of the corporate governance
rules of The Nasdaq Stock Market, which provide an exemption from the requirement to maintain a Board comprised of majority independent
directors, and the Compensation Committee and Nominating and Corporate Governance Committee of the Board were dissolved.
The
newly constituted Board also approved an amendment to the standard cash compensation for non-employee directors, changing such amount
to $120,000 per year, from $80,000 per year plus $40,000
per year for service on Board committees. The non-employee directors will also continue to receive annual equity awards of stock options
to acquire 30,636 shares of Class A common stock of the Company, with an exercise price set at fair market value at the time of grant
and vesting over three years.
The
following items are reportable under Item 404(a) of Regulation S-K with respect to the newly appointed directors:
| |
● |
Donald
Berchtold – Mr. Berchtold serves as Chief Concept Officer of the Company. Since the beginning of fiscal 2022, Mr. Berchtold
received aggregate cash compensation from the Company of approximately $349,067 in base and $125,000 in bonus compensation, and participated
in the general welfare and benefit plans of the Company. Mr. Berchtold is the father of Tyler Child and the grandfather of Mason
Wiederhorn, Taylor Wiederhorn and Thayer Wiederhorn. |
| |
|
|
| |
● |
Carmen
Vidal – Ms. Vidal serves as the Company’s International Legal Counsel and Director of International Franchise Development
(Europe/Middle East/North Africa). Since the beginning of fiscal 2022, Ms. Vidal received aggregate cash compensation from the Company
of approximately $167,000 in base and $100,000 in bonus compensation, participated in the general welfare and benefit plans of the
Company and vested in stock options to purchase 8,333 shares of the Company’s Class A common stock granted in prior years. |
| |
|
|
| |
● |
Mason
Wiederhorn – Mason Wiederhorn serves as Chief Brand Officer of the Company and is a member of the Board of Managers
of the majority stockholder of the Company. Since the beginning of fiscal 2022, Mr. Wiederhorn received aggregate cash compensation
from the Company of approximately $523,076 in base and $1,220,000 in bonus compensation, participated in the general welfare and
benefit plans of the Company and vested in stock options to purchase 25,000 shares of the Company’s Class A common stock
granted in prior years. Mason Wiederhorn is the son of Andrew Wiederhorn, the brother of Taylor Wiederhorn and Thayer Wiederhorn
and the grandson of Donald Berchtold. |
| |
|
|
| |
● |
Taylor
Wiederhorn – Taylor Wiederhorn serves as Chief Development Officer of the Company and is a member of the Board of Managers
of the majority stockholder of the Company. His compensation during fiscal 2022 was reported in the Company’s Annual Report
on Form 10-K filed on February 24, 2023. Taylor Wiederhorn is the son of Andrew Wiederhorn, the brother of Mason Wiederhorn and Thayer
Wiederhorn and the grandson of Donald Berchtold. |
| |
|
|
| |
● |
Thayer
Wiederhorn – serves as Chief Operating Officer of the Company and is a member of the Board of Managers of the majority
stockholder of the Company. His compensation during fiscal 2022 was reported in the Company’s Annual Report on Form 10-K
filed on February 24, 2023. Thayer Wiederhorn is the son of Andrew Wiederhorn, the brother of Mason Wiederhorn and Taylor Wiederhorn
and the grandson of Donald Berchtold. |