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| Dear Fellow Shareholders: | |
We added new talent at the executive and board level and restructured operational responsibilities at our bakeries to drive operating efficiencies and enhance execution of our sales strategy. We also invested in innovation and marketing to further our brands’ competitive advantage. Our portfolio strategy, whereby we aim to transition a greater portion of our sales to higher-margin branded retail products, combined with | ||
We remain focused on the significant longer-term opportunities we see ahead of us, filling in |
DEAR FELLOW SHAREHOLDERS:
We are proud of our strong 2022 results, which reflect the resiliency of our team and the strength of our leading brands. Guided by our four strategic pillars — developing our team, focusing on brands, prioritizing margins, and pursuing smart M&A — we have taken steps to adapt and respond to the challenging macroeconomic environment. Through investments in marketing and innovation, we have enhanced the appeal of our branded product portfolio, and effected price hikes and efficiency initiatives to mitigate inflationary pressures. We also entered into an agreement to acquire Papa Pita Bakery, which we expect to provide additional capacity for our growth products and expand our geographic reach. Looking ahead to 2023, we plan to drive further growth by increasing marketing efforts to support the nationwide launch of our Dave’s Killer Bread snack bars, implementing our enterprise resource planning project, and streamlining our operational processes. We remain optimistic about the future of Flowers and are focused on driving results in line with our long-term financial targets.
Earlier this year, we announced leadership changes to our board of directors in furtherance of the board’s long-term refreshment and leadership transition plans. At the annual meeting, George E. Deese, non-executive chairman of the board, will retire from the chairman role. On behalf of the board and the company, we are extremely grateful for George’s leadership over the past 17 years as chairman and his continued willingness to serve as a director. Additionally, Benjamin H. Griswold, IV, who has served on the board since 2005 and as our independent presiding director since 2011, will retire at the annual meeting. Ben has made significant contributions to the board in his 18 years of service and will be deeply missed.
In connection with these transitions, the board of directors elected A. Ryals McMullian to fill the role of chairman, effective immediately following the annual meeting. In his 20 years with the company, Ryals has demonstrated exceptional leadership capabilities and championed strategic initiatives that have increased long-term shareholder value. Joining Ryals in leading the board will be Thomas C. Chubb, III, whom the independent directors have elected as the next independent presiding director. Tom joined the board of directors in 2020 and, with his extensive executive leadership experience in the consumer goods industry, is perfectly positioned to provide thoughtful and engaged independent leadership.
We are pleased to invite you to attend our annual meeting of shareholders on May 25, 2023 at 11:00 a.m., Eastern Time, via the Internet at http://www.virtualshareholdermeeting.com/FLO2023. During the annual meeting, our senior management team will report on the performance of the company and respond to questions from shareholders.
Your vote is important to us and to our business, and we will make a $1 charitable donation to Boys & Girls Clubs of America for every shareholder account that votes. We encourage you to vote using telephone or Internet voting prior to the annual meeting, so that your shares of Flowers Foods common stock will be represented and voted at the annual meeting even if you cannot attend. If you elected to receive paper copies of the proxy materials by mail, you may vote by signing, dating and mailing the proxy card in the envelope provided.
On behalf of our entire organization, thank you for your continued support.
April 11, 2023
Thomasville, Georgia
On behalf of our entire organization, thank you for your continued support. A. Ryals McMullian Chairman and Chief Executive Officer | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 2 | |
May 25, 2023
11:00 a.m. Eastern Time
Live webcast at www.virtualshareholdermeeting.com/FLO2023
ITEMS OF BUSINESS
| | | May 23, 2024 11:00 a.m. Eastern Time | | | | | Live webcast at www.virtualshareholdermeeting.com/FLO2024 | |
Items of Business | | | Board’s Recommendation | | ||||||
1. | | | Elect as directors of the company the | | | | | FOR EACH DIRECTOR-NOMINEE | |
2. | | Vote on an advisory resolution to approve the compensation of the company’s named executive officers, commonly referred to as a “Say on Pay” vote. | | | | | FOR | |
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Ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for Flowers Foods, Inc. for the fiscal year ending December | | | | | FOR | |
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Only record holders of issued and outstanding shares of our common stock at the close of business on March 21, 2023 are entitled to notice of, and to vote at, the annual meeting. A list of suchThe shareholders will be available at our principal executive offices in Thomasville, Georgia untilalso transact any other business that may properly come before the annual meeting and during the annual meeting on the meeting website.
The proxy statement and the accompanying formany adjournment or postponement of proxy are being furnished to the shareholders of Flowers Foods, Inc. on or about April 11, 2023 in connection with the solicitation of proxies by the board of directors for use at the annual meeting.
April 11, 2023
1919 Flowers Circle
Thomasville, Georgia 31757
By order of the Board of Directors,
STEPHANIE B. TILLMAN
Chief Legal Counsel and Corporate Secretary
Who May Vote | | | | | |
Only record holders of issued and outstanding shares of our common stock at the close of business on March 19, 2024 are entitled to notice of, and to vote at, the annual meeting. A list of such shareholders will be available at our principal executive offices in Thomasville, Georgia until the annual meeting, and during the annual meeting on the meeting website. The proxy statement and the accompanying form of proxy are being furnished to the shareholders of Flowers Foods, Inc. on or about April 9, 2024 in connection with the solicitation of proxies by the board of directors for use at the annual meeting. | | | | April 9, 2024 Flowers Foods, Inc. 1919 Flowers Circle Thomasville, Georgia 31757 By order of the Board of Directors, Stephanie B. Tillman Chief Legal Counsel and Corporate Secretary | |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be held on May 25, 202323, 2024:
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 3 | ||||||||||||||
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| | 14 | | | Board Demographics | | ||||
| | 15 | | | Director-Nominees | | ||||
| | 21 | | | Director Independence | | ||||
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| | 22 | | | | Overview | | |||
| | 23 | | | | Board Leadership Structure | | |||
| | 24 | | | | Director Nomination Process | | |||
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| | 25 | | | | ESG Oversight | | |||
| | 26 | | | | The Board | | |||
| | 29 | | | | Relationships Among Certain Directors | | |||
| | 29 | | | | Attendance at Annual Meetings | | |||
| | 29 | | | | Communicating with the Board | | |||
| | 29 | | | | Transactions with Management and Others | | |||
| | 30 | | | | Director Compensation | | |||
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| | 39 | | | Compensation Discussion and Analysis | | |
| | 52 | | | Compensation Committee Interlocks and Insider Participation | | |
| | 52 | | | Compensation Committee Report | | |
| | 53 | | | Compensation Tables | | |
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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
This proxy statement contains information that may constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to current expectations regarding our future financial condition and results of operations and are often identified by the use of words and phrases such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will,” “would,” “is likely to,” “is expected to” or “will continue,” or the negative of these terms or other comparable terminology. These forward-looking statements are based upon assumptions we believe are reasonable. Forward-looking statements are based on current information and are subject to risks and uncertainties that could cause our actual results to differ, possibly materially, from the expectations or estimates reflected in such forward-looking statements. These risks and uncertainties include, but are not limited to, those described in Part I, Item 1A., Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2022 and subsequent filings with the Securities and Exchange Commission (“SEC”). We caution you not to place undue reliance on forward-looking statements, as they speak only as of the date made and are inherently uncertain. The company undertakes no obligation to publicly revise or update such statements, except as required by law. You are advised, however, to consult any further public disclosures by the company (such as in our filings with the SEC or in company press releases) on related subjects.
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Summary | and Voting Information | Ownership | Audit Committee Report | Voted on | Information | | ||||||||||||
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| | 70 | | | | Questions and Answers about the Annual Meeting and Voting | | |||||||||||
| | 74 | | | | 2025 Shareholder Proposals | | |||||||||||
| | 74 | | | | Delivery of Proxy Materials to Households | | |||||||||||
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| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 4 | |
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VOTING MATTERS AND BOARD RECOMMENDATIONS
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| Election of 12 Director-Nominees | | ( | | | FOR Director-Nominee | | | | ||
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Advisory Vote to Approve Named Executive Officer (“Named Executive”) Compensation | | | FOR | | | | |||||
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Ratification of Appointment of Independent Registered Public Accounting Firm | | | | FOR | | | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 5 | |
FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
BUSINESS HIGHLIGHTS
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Develop Our Team | | | | Pursue targeted innovation and | | | | Orienting asset base to higher margin products, reducing network complexity and | | Ownership | | Pursue disciplined, strategic M&A in grain-based foods that enhance portfolio, margin profile, and broaden geographic reach | |
Long-Term Goals | Voted on | Information | | ||||||||||||
| | GROW EBITDA BY | | | GROW EARNINGS PER SHARE BY | | |||||||||
1% to 2% | | | 4% to 6% | | | 7% to 9% | | ||||||||
annually | | | annually | | | annually | | ||||||||
(excluding any future acquisitions) | | | (excluding any future acquisitions) The company defines EBITDA as earnings before interest, taxes, depreciation and amortization. | | | (includes potential impact of future acquisitions and share repurchases) | |
Financial Highlights from the 52-Week Fiscal 2023
DILUTED EARNINGS
PER SHARE ADJUSTED DILUTED
EARNINGS PER SHARE* $5.091B $0.58 $1.20 NET INCOME ADJUSTED NET INCOME* ADJUSTED EBITDA* $123.4M $256.3M $501.7M
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 6 | |
Additionally, to guide future endeavors, we embarked on a materiality assessment to prioritize environmental, social, and governance (ESG) topics that impact our business and stakeholders and to focus our Corporate Responsibility strategy and reporting.
In 2022, the board of directors implemented a new ESG oversight structure. Under this structure, the board of directors retains ultimate oversight of the company’s ESG and Corporate Responsibility-related risks and priorities and delegates to its committees oversight of various ESG-related topics, as reflected in the committee charters.
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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
CORPORATE GOVERNANCE HIGHLIGHTS
| Corporate Governance Highlights | | |||
| Independence | | | 11 of • | |
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| Board Accountability | | | Annual election of directors • | |
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| Board Evaluation and Effectiveness | | | Annual board and committee self-evaluations • | |
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| Board Refreshment | | | Balance of new and experienced directors, with tenure of independent director-nominees averaging • | |
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| Director Engagement | | | Corporate governance guidelines limit director membership on other public company boards • | |
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| Director Access | | | Significant interaction with senior management team through regular business reviews and board presentations • | |
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| Clawback and Hedging Policies | | | Multiple clawback policies for incentive compensation • | |
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| Share Ownership | | | Robust stock ownership guidelines for directors and executive officers • | |
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| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 7 | |
| Name | | | Age | | | Director Since | | | Independent | | | Committee Memberships | |
| A. Ryals McMullian Chairman and Chief Executive Officer of Flowers Foods, Inc. | | | 54 | | | 2019 | | | No | | | — | |
| Thomas C. Chubb, III Chairman, Chief Executive Officer and President of Oxford Industries, Inc. | | | 60 | | | 2020 | | | Yes | | | • Compensation and Human Capital Committee • Nominating/Corporate Governance Committee (Chair) | |
| Edward J. Casey, Jr. Former Executive Chairman of J&J Worldwide Services, Inc. | | | 66 | | | 2020 | | | Yes | | | • Compensation and Human Capital Committee • Nominating/Corporate Governance Committee | |
| George E. Deese Retired Chairman and Chief Executive Officer of Flowers Foods, Inc. | | | 78 | | | 2004 | | | Yes | | | — | |
| Rhonda O. Gass Vice President and Chief Information Officer of Stanley Black & Decker, Inc. | | | 60 | | | 2016 | | | Yes | | | • Audit Committee • Finance Committee | |
| Brigitte H. King Global Chief Digital Officer of Colgate-Palmolive Company | | | 54 | | | 2023 | | | Yes | | | • Audit Committee • Finance Committee | |
| Margaret G. Lewis Former President of Hospital Corporation of America’s Capital Division | | | 70 | | | 2014 | | | Yes | | | • Compensation and Human Capital Committee (Chair) • Nominating/Corporate Governance Committee | |
| W. Jameson McFadden CEO and Senior Portfolio Manager of Wellington Shields & Co. | | | 42 | | | 2021 | | | Yes | | | • Audit Committee • Finance Committee | |
| Joanne D. Smith Executive Vice President & Chief People Officer of Delta Air Lines, Inc. | | | 65 | | | 2023 | | | Yes | | | • Audit Committee • Finance Committee | |
| James T. Spear Retired Executive Vice President and Chief Financial Officer of Cadence Health | | | 69 | | | 2015 | | | Yes | | | • Audit Committee (Chair) • Finance Committee | |
| Melvin T. Stith, Ph.D. Former Interim President, Norfolk State University; Dean Emeritus, Whitman School of Management, Syracuse University | | | 77 | | | 2004 | | | Yes | | | • Compensation and Human Capital Committee • Nominating/Corporate Governance Committee | |
| C. Martin Wood III Partner of Wood Associates; Retired Senior Vice President and Chief Financial Officer of Flowers Foods, Inc. | | | 80 | | | 2001 | | | Yes | | | • Audit Committee • Finance Committee (Chair) | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 8 | |
| Summary of Our Compensation Practices | | ||||||||||||||||
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Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
DIRECTOR-NOMINEES
NAME | AGE | DIRECTOR SINCE | EXPERIENCE | INDEPENDENT | COMMITTEE MEMBERSHIPS | OTHER BOARD SERVICE | ||||||
George E. Deese | 77 | 2004 | Retired Chairman and Chief Executive Officer of Flowers Foods, Inc. | Yes | — | — | ||||||
Edward J. Casey, Jr. | 65 | 2020 | Executive Chairman of J&J Worldwide Services, Inc. | Yes | NCG, CHC | J&J Worldwide Services, Inc.^ Tyto Athene, LLC^ | ||||||
Thomas C. Chubb, III | 59 | 2020 | Chairman, Chief Executive Officer and President of Oxford Industries, Inc. | Yes | NCG, CHC | Oxford Industries, Inc.* | ||||||
Rhonda Gass | 59 | 2016 | Vice President and Chief Information Officer of Stanley Black & Decker, Inc. | Yes | A, F | — | ||||||
Margaret G. Lewis | 69 | 2014 | Former President of Hospital Corporation of America’s Capital Division | Yes | NCG, CHC (Chair) | W.P. Carey Inc.* | ||||||
W. Jameson McFadden | 41 | 2021 | CEO and Senior Portfolio Manager of Wellington Shields & Co. | Yes | A, F | — | ||||||
A. Ryals McMullian | 53 | 2019 | President and Chief Executive Officer of Flowers Foods, Inc. | No | — | — | ||||||
James T. Spear | 68 | 2015 | Retired Executive Vice President and Chief Financial Officer of Cadence Health | Yes | A (Chair), F | — | ||||||
Melvin T. Stith, Ph.D. | 76 | 2004 | Former Interim President, Norfolk State University; former Dean Emeritus, Whitman School of Management, Syracuse University | Yes | NCG, CHC | — | ||||||
Terry S. Thomas | 53 | 2020 | Global Chief Customer Officer of the Unilever Group | Yes | A, F | — | ||||||
C. Martin Wood III | 79 | 2001 | Partner of Wood Associates; retired Senior Vice President and Chief Financial Officer of Flowers Foods, Inc. | Yes | A, F (Chair) | Archbold Medical Center#; Archbold Foundation# |
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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
2022 EXECUTIVE COMPENSATION
Summary of Our Compensation Practices
Practices We Have Adopted | | | | | | | Practices We Do Not Engage In | | ||
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| Employment agreements
Dividend equivalents on unearned
Income tax gross-ups
Excise tax gross-ups on change of control severance
Backdating or repricing of stock options
Pension credited service for years not worked
Significant employee/director perquisites | |
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| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 9 | ||||||||||||||
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| 2023 EXECUTIVE TOTAL COMPENSATION MIX* | |
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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
ANNUAL MEETING AND VOTING INFORMATION
WHAT IS THE PURPOSE
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 10 | |
| | | Dear Fellow Shareholders: On behalf of the board of directors, thank you for your investment and confidence in Flowers Foods. It is a privilege to serve as your independent presiding director and to work closely with the chairman and my fellow board members as we execute our fiduciary responsibilities to you, our shareholders. Despite the challenging economic and inflationary environment, resulting in a continued shift toward private label products, 2023 was a productive year for the company. Overall, our brands performed well, gaining share and demonstrating our ability to meet consumer preferences. Although we expect 2024 to bring its own set of challenges to the industry and our company, the board of directors is confident that Flowers will continue to deliver strong performance within the context of category headwinds. Additionally, as our company evolves, so does our board. Upon George Deese’s retirement from his role as non-executive chairman in May 2023, the board elected to combine the company’s chief executive officer and board chair roles. We could not be more pleased with the progress Flowers has made under Ryals’ leadership. As chairman, Ryals serves as a bridge between the board of directors and management, providing our board with strong leadership and firsthand knowledge of management’s execution of our strategic priorities. We are confident that Ryals is the right leader to strengthen our competitive position, deliver results and enhance shareholder value. In 2023, we also welcomed two new directors to the board — Brigitte King, global chief digital officer at Colgate-Palmolive Company, and Joanne Smith, executive vice president and chief people officer at Delta Air Lines. Brigitte and Joanne each bring valuable skills, experience and perspective to the board and add significant support for two of our four strategic priorities: focusing on our brands and developing our team. Our executive compensation program aligns our executives’ interests with those of our shareholders by rewarding performance above established goals, with the ultimate objective of improving shareholder value. Our board and the compensation and human capital committee remain committed to our pay-for-performance philosophy. Our board of directors is dedicated to serving your interests in 2024 and beyond. Thank you for your continued support of Flowers Foods. Thomas C. Chubb, III Independent Presiding Director | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 11 | |
| PROPOSAL I Election of Directors | |
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HOW DO I ATTEND THE ANNUAL MEETING?
This year’s annual meeting will be a virtual meeting of the shareholders conducted via live webcast. The meeting will be followed by management remarks and a question and answer session. All shareholders of record on March 21, 2023 are invited to participate in the meeting. We have structured our virtual meeting to provide shareholders the same rights as if the meeting were held in person, including the ability to vote shares electronically during the meeting and ask questions in accordance with the rules of conduct for the meeting.
To attend the meeting please visit www.virtualshareholdermeeting.com/FLO2023. To participate in the annual meeting, you will need the 16-digit control number included on your notice or in your proxy card. If you are the beneficial owner of shares held in street name, you may contact your bank, broker or other record holder if you have questions about obtaining your 16-digit control number; instructions should also be provided on the notice or voting instruction form provided by your bank, broker or other record holder.
Shareholders may submit questions in advance of the annual meeting at www.proxyvote.com by clicking the “Submit Questions” tab no later than 24 hours before the meeting. To submit questions through www.proxyvote.com, you will need to log in with the 16-digit control number included on your proxy card, voting instruction form or notice of internet availability of proxy materials previously received. Questions pertinent to annual meeting matters may be answered during the annual meeting, subject to time constraints. Questions that are substantially similar may be grouped and answered once to avoid repetition.
Additional information regarding the rules of conduct and other materials for the virtual annual meeting, including the list of our shareholders of record, will be available during the meeting on the meeting website.
If you have any technical difficulties or any questions regarding the virtual meeting website, please call the support team at the numbers listed on the log-in screen. If there are any technical issues in convening or hosting the meeting, we will promptly post information to our Investors website, https://www.flowersfoods.com/investors, including information on when the meeting will be reconvened.
Electronic entry to the meeting will begin at 10:45 a.m. Eastern Time, and the meeting will begin promptly at 11:00 a.m. Eastern Time.
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HOW DOES THE BOARD OF DIRECTORS RECOMMEND THAT I VOTE ON EACH PROPOSAL?
The board of directors recommendsseeks to collectively hold a broad range of professional and educational backgrounds to maintain a board that you vote:
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WHAT IS A PROXY?
A proxy is your legal designation of another person to vote the shares of Flowers Foods common stock you own as of the record date for the annual meeting. If you appoint someone as your proxystrong in a written document, that document is also called a proxy or a proxy card. We have designated three of our executive officers as proxies for the annual meeting. These three officers are A. Ryals McMullian, our president and chief executive officer, R. Steve Kinsey, our chief financial officer and chief accounting officer, and Stephanie B. Tillman, our chief legal counsel.
ARE THE PROXY MATERIALS AVAILABLE ELECTRONICALLY?
Yes. Under SEC rules and regulations, Flowers Foods is making this proxy statement and its 2022 annual report available to its shareholders electronically on the Internet at www.proxyvote.com. On or about April 11, 2023, we mailed to our shareholders a notice (the “Notice”) containing instructions on how to access this proxy statement and our 2022 annual report online. If you received a Notice by mail, you will not receive a printed copy of the proxy materials in the mail. Rather, the Notice instructs you on how to access and review all of the important information contained in this proxy statement and our 2022 annual report on the Internet. The Notice also instructs you on how you may submit your proxy vote over the Internet.
If you received a Notice by mail but would like to receive a printed copy of this proxy statement and our 2022 annual report, please follow the instructions contained on the Notice.
WHO CAN VOTE?
To be eligible to vote, you must have been a shareholder of record of the company’s common stock at the close of business on March 21, 2023, which is the record date for the annual meeting. There were 211,826,570 shares of our common stock outstanding and entitled to vote on the record date.
HOW MANY VOTES DO I HAVE?
You are entitled to one vote on each of the 11 director-nominees, and one vote on each other matter to be voted upon at the annual meeting, for each share of common stock you held on the record date for the annual meeting. For example, if you owned 100 shares of our common stock on the record date, you would be entitled to 100 votes for each of the 11 director-nominees and for each other matter to be voted upon at the annual meeting.
HOW DO I VOTE?
You can vote in the following ways:
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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
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By executing and returning your proxy (either by returning the proxy card or by submitting your proxy electronically by the Internet or telephone or during the annual meeting), you appoint A. Ryals McMullian, R. Steve Kinsey and Stephanie B. Tillman to represent you at the annual meeting and to vote your shares at the annual meeting in accordance with your voting instructions. The Internet, telephone, and virtual annual meeting voting procedures are designed to authenticate shareholder identities, allow shareholders to give voting instructions, and confirm that shareholders’ instructions have been recorded properly. Any shareholder voting by Internet, telephone, or during the annual meeting should understand that there may be costs associated with electronic access, like usage charges from Internet access and telephone or cable service providers, that must be paid by the shareholder.
IF I AM A REGISTERED SHAREHOLDER, WHAT IF I DO NOT GIVE ANY INSTRUCTIONS ON A PARTICULAR MATTER DESCRIBED IN THIS PROXY STATEMENT WHEN VOTING BY MAIL?
Registered shareholders should specify their choice for each matter on the proxy card. If no specific instructions are given, proxies that are signed and returned will be voted:
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CAN I CHANGE MY VOTE AFTER I HAVE MAILED MY PROXY CARD OR AFTER I HAVE AUTHORIZED THE VOTING OF MY SHARES BY INTERNET OR TELEPHONE?
Yes. You can change your vote and revoke your proxy at any time before the polls close at the annual meeting by doing any one of the following things:
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HOW DO I VOTE MY 401(k) SHARES?
If you participate in the Flowers Foods, Inc. 401(k) Retirement Savings Plan (the “401(k) Plan”) and you received the Notice, you may vote by the Internet or telephone as previously described in this proxy statement. If you elect to receive your proxy materials by mail, you may vote by completing and signing the enclosed proxy card and promptly mailing it in the enclosed postage-paid envelope. In addition, if you received a Notice by mail but would like to receive a printed copy of this proxy statement and our 2022 annual report, please follow the instructions contained on the Notice. By voting, you will direct Great- West Trust Company, LLC, as trustee of the 401(k) Plan (the “Trustee”), how to vote the shares of Flowers Foods common stock allocated to your account. Any unvoted or unallocated shares will be voted by the Trustee in the same proportion on each proposal as the Trustee votes the shares of common stock credited to the 401(k) Plan participants’
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Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
accounts for which the Trustee receives voting instructions from the 401(k) Plan participants. The number of shares you are eligible to vote is based on the number of shares of Flowers Foods common stock in your account on the record date for the annual meeting.
CAN I VOTE IF MY SHARES ARE HELD IN “STREET NAME” BY A BANK, BROKER OR OTHER RECORD HOLDER?
If your shares of Flowers Foods common stock are held in “street name” by a bank, broker or other record holder, you will receive instructions from the registered holder that you must follow in order for your shares to be voted for you by that bank, broker or other record holder. Internet and telephone voting are offered to shareholders who own their shares of Flowers Foods common stock through certain banks and brokers.
The election of directors (Proposal I), the advisory vote on the compensation of the Named Executives (Proposal II), the advisory vote on the frequency of future advisory votes to approve the compensation of the Named Executives (Proposal III), and the vote on the approval of the amendment and restatement of the Flowers Foods, Inc. 2014 Omnibus Equity and Incentive Compensation Plan (Proposal IV) are considered non-discretionary matters under applicable New York Stock Exchange (“NYSE”) rules. A broker or other nominee cannot vote without instructions on non-discretionary matters, and therefore there may be broker “non-votes” on Proposal I, Proposal II, Proposal III and Proposal IV. The ratification of the appointment of our independent registered public accounting firm for the fiscal year ending December 30, 2023 (Proposal V) is considered a discretionary matter under applicable NYSE rules, and a broker or other nominee may (but is not required to) vote “FOR” Proposal V without instructions. Accordingly, it is important that you follow the voting instructions sent to you by the registered holder of your shares held in “street name” if you want your vote to be counted.
HOW WILL ABSTENTIONS BE TREATED?
Abstentions will be counted as present in determining whether the quorum requirement is satisfied, but will not be included in vote totals and will not affect the outcome of the vote with respect to Proposals I, II, III, IV and V.
WHAT CONSTITUTES A QUORUM?
The holders of at least a majority of the shares of our common stock entitled to vote at the annual meeting are required to be present in person or represented by proxy to constitute a quorum for the transaction of business at the annual meeting. Abstentions and broker “non-votes” will be counted as present in determining whether the quorum requirement is satisfied. The aggregate number of votes cast by all shareholders present in person or represented by proxy at the annual meeting, whether those shareholders vote for or against the proposals, and the total number of votes cast for each of these proposals will be counted for purposes of determining whether the proposals have been approved by the shareholders.
WHAT IF A QUORUM IS NOT PRESENT AT THE MEETING?
If a quorum is not present at the scheduled time of the annual meeting, we may adjourn or postpone the annual meeting until a quorum is present. The time and place of the adjourned or postponed annual meeting will be announced at the time the adjournment or postponement is taken, and, unless such adjournment or postponement is for more than 120 days, no other notice will be given. An adjournment or postponement will not affect the business that may be conducted at the annual meeting.
11
FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
WHAT VOTE IS REQUIRED FOR EACH MATTER TO BE VOTED UPON AT THE ANNUAL MEETING?
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HOW WILL BROKER “NON-VOTES” BE TREATED?
Broker “non-votes” will be counted as present in determining whether the quorum requirement is satisfied but will not be included in vote totals and generally will not affect the outcome of the vote. A “non-vote” occurs when a nominee holding shares for a beneficial owner does not vote on a proposal because the nominee has not received instructions from the beneficial owner and does not have discretionary power to vote.
In order for your shares to be voted on all matters presented at the annual meeting, including the election of directors, we urge all shareholders whose shares are held in street name by a bank, broker or other record holder to provide voting instructions to the bank, broker or other record holder.
WILL ANY OTHER BUSINESS BE CONDUCTED AT THE ANNUAL MEETING OR WILL OTHER MATTERS BE VOTED ON?
At this time,collective knowledge. While the board of directors considers deep and diverse experience to be a strength of the board, we consider the following skills and experiences to be particularly valuable to support the oversight and execution of our corporate strategy and fulfill board duties and responsibilities:
| • Business Operations Leadership • Food or Consumer Products Industry • Accounting & Finance • M&A | | | • Public Company Board / Corporate Governance • Brand Management & Sales • Innovation & Technology • Human Capital Management | |
| Skills and Experience | | | | MCMULLIAN | | | | CASEY | | | | CHUBB | | | | DEESE | | | | GASS | | | | KING | | | | LEWIS | | | | MCFADDEN | | | | SMITH | | | | SPEAR | | | | STITH | | | | WOOD | | ||||
| | | | Business Operations Leadership | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||
| | | | Food or Consumer Products Industry | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||
| | | | Accounting & Finance | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||
| | | | M&A | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||
| | | | Public Company Board / Corporate Governance | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||
| | | | Brand Management & Sales | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||
| | | | Innovation & Technology | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||
| | | | Human Capital Management | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 13 | |
WHERE CAN I FIND THE VOTING RESULTS FROM THE ANNUAL MEETING?
We will report the voting results from the annual meeting on a Current Report on Form 8-K, which we expect to file with the SEC on or before June 1, 2023.
HOW AND WHEN MAY I SUBMIT A SHAREHOLDER PROPOSAL FOR THE 2024 ANNUAL MEETING?
For information on how and when you may submit a shareholder proposal for the 2024 annual meeting, please see “Additional Information—2024 Shareholder Proposals” in this proxy statement.
WHO PAYS THE COSTS OF SOLICITING PROXIES?
We will pay the cost11 of soliciting proxies. We have engaged Morrow Sodali LLC, 333 Ludlow St, 5th Floor, South Tower, Stamford, CT 06902, to assist in the solicitation of votes for a fee of $12,000, plus out-of-pocket expenses. In addition, our directors and officers may solicit proxies in person, by telephone or email, but will not receive additional compensation for these services. Brokerage houses, nominees, custodians and fiduciaries will be requested to forward soliciting material to beneficial owners of common stock held of record by them, and we will reimburse those persons for their reasonable expenses in doing so.12 director-nominees are independent.
HOW CAN I OBTAIN AN ANNUAL REPORT ON FORM 10-K?
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| | | | | Female | | | | Male | | | | Non-binary | | | | Did not disclose gender | |
| Part I: Gender Identity | | | | | | | | | | | | | | | | | |
| Directors | | | | 4 | | | | 8 | | | | 0 | | | | 0 | |
| Part II: Demographic Background | | | | | | | | | | | | | | | | | |
| African American or Black | | | | 0 | | | | 1 | | | | 0 | | | | 0 | |
| Alaskan Native or Native American | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| Asian | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| Hispanic or Latinx | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| Native Hawaiian or Pacific Islander | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| White | | | | 4 | | | | 7 | | | | 0 | | | | 0 | |
| Two or More Races or Ethnicities | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| LGBTQ+ | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| Did Not Disclose Demographic Background | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 14 | ||||||||||||||
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Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
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The annual report does not form any part of the material for the solicitation of proxies.
CAN I ELECT TO RECEIVE FUTURE NOTICES AND PROXY MATERIALS ELECTRONICALLY?
Yes. If you are a registered shareholder or if you participate in the 401(k) Plan, go to the company’s website, Director-Nomineeswww.flowersfoods.com, and follow the instructions for signing up for electronic delivery of proxy materials. Those shareholders signing up for this service will receive all future proxy materials, including the Notice, proxy statement and annual report electronically. Please contact Brenda Smith, our compliance manager, at compliancemanager@flocorp.com or (229) 226-9116, if you need assistance.
If you hold your shares in a brokerage account or bank you may also have the opportunity to receive these documents electronically. Please contact your brokerage service, bank or financial advisor to make arrangements for electronic delivery of your proxy materials.
WHO SHOULD I CONTACT IF I HAVE ANY QUESTIONS?
If you have any questions about the annual meeting or your ownership of our common stock, please contact Brenda Smith, our compliance manager, at the above address or by emailing compliancemanager@flocorp.com or calling (229) 226-9116.
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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
DIRECTORS AND CORPORATE GOVERNANCE
DIRECTORS
The board of directors currently consists of 12 directors whose terms expire at the 2024 annual meeting. In accordance with the board’s long-term succession plan, Mr. Griswold will retire upon the expirationmeeting of his current term, at which time the size of the board of directors will be reduced to 11. The company would like to express its genuine gratitude for Mr. Griswold’s service to the company and its shareholders.
Based on the recommendation of the nominating/corporate governance committee, the board has nominated 11the 12 current directors for election at the 2023 annual meeting. If elected, eachEach of the director-nominees will serve untilwas elected by shareholders at the 20242023 annual meeting of shareholders, or until their successors have been dulyother than Mses. King and Smith who were elected and qualified.
to the board after the meeting. The following biographies provide information on each of our director-nominees, including principal occupation, businessprofessional experience, skillshighlights and qualifications, and other public board service.
| A. RYALS MCMULLIAN | | | | Chairman | | ||||
| Chairman and Chief Executive Officer of Flowers Foods, Inc. Age 54 Director Board Committees None | | | | Professional Experience • Flowers Foods, Inc. (2003 – present) • Chairman and Chief Executive Officer (May 2023 – present) • President and Chief Executive Officer (May 2019 – May 2023) • Chief Operating Officer (June 2018 – May 2019) • Chief Strategy Officer (May 2017 – June 2018) • Vice President of M&A and Deputy General Counsel (2015 – 2017) • Various legal roles Other Public Boards • None | | | | Director Highlights & Qualifications As our chairman and chief executive officer, Mr. McMullian provides the board with strategic and operational leadership experience and critical perspective on the company and industry. Mr. McMullian has extensive M&A experience and led the acquisition of two of the company’s top brands, Dave’s Killer Bread and Canyon Bakehouse. Additionally, Mr. McMullian provides key insights on corporate governance and the legal and regulatory environment in which we operate, gained through his previous roles in the company’s legal department and at Jones Day, a global law firm. | |
| THOMAS C. CHUBB, III | | | | Independent Presiding Director | | ||||
| Chairman, Chief Executive Officer and President of Oxford Industries, Inc. Age 60 Director since 2020 Board Committees • Compensation and Human Capital Committee • Nominating/Corporate Governance Committee (Chair) | | | | Professional Experience • Oxford Industries, Inc. (1988 – present) • Chairman, Chief Executive Officer and President (2015 – present) • Chief Executive Officer and President (2013 – 2015) • President (2009 – 2013) • Executive Vice President (2004 – 2009) • Vice President, General Counsel, and Secretary (1999 – 2004) • Various roles Other Public Boards • Oxford Industries, Inc. (NYSE) (2012 – present; Chairman since 2015) | | | | Director Highlights & Qualifications Our board benefits from Mr. Chubb’s significant public company leadership experience in the consumer products space, including his experience in leading Oxford Industries, Inc. through its transformation from a domestic private label manufacturing company into a leading branded lifestyle apparel company. Mr. Chubb also provides key insights on M&A, corporate governance, sales and brand management, and human capital management from his various roles and more than three decades of service at Oxford Industries. | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 15 | |
| EDWARD J. CASEY, JR. | | | | Independent Director | | ||||
| Former Executive Chairman of J&J Worldwide Services, Inc. Age 66 Director since 2020 Board Committees • Compensation and Human Capital Committee • Nominating/Corporate Governance Committee | | | | Professional Experience • J&J Worldwide Services, Inc. • Former Executive Chairman of the Board of Directors (March 2022 – February 2024) • IDEMIA • Chief Executive Officer of North American business (January 2018 – February 2021) • Secro Group plc • Acting Chief Executive Officer and Chief Operating Officer (2013 – 2017) • Chairman and Chief Executive Officer of North American business (2005 – 2013) Other Public Boards • Talen Energy (NYSE) (2015 – 2016) • Serco Group plc (LSE) (2013 – 2017) | | | | Director Highlights & Qualifications Mr. Casey brings significant executive leadership and public company experience to the board of directors based on various c-suite leadership roles and service on other public company boards, including his recent role as Executive Chairman of J&J Worldwide Services, Inc., a provider of mission essential support services to US DOD military bases and other governmental facilities, which was acquired by CBRE Group in February 2024. Additionally, he contributes valuable insights gained from his experience in the technology industry as chief executive officer of IDEMIA North America, a global leader in identity and digital security technologies, and as a director of Tyto Athene, LLC, a provider of IT modernization services. | |
| GEORGE E. DEESE | | | | Independent Director | | ||||
| Retired Chairman and Chief Executive Officer of Flowers Foods, Inc. Age 78 Director since 2004 Board Committees • None | | | | Professional Experience • Flowers Foods, Inc. • Non-Executive Chairman (January 2015 – May 2023) • Executive Chairman (May 2013 – December 2014) • Chief Executive Officer (January 2004 – May 2013) • President and Chief Operating Officer (May 2002 – January 2004) • President and Chief Operating Officer of Flowers Bakeries (1983 – May 2002) Other Public Boards • None | | | | Director Highlights & Qualifications Mr. Deese |
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Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
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| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 16 | |
| RHONDA O. GASS | | | | Independent Director | | |||||
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| | | | Professional Experience • Stanley Black & Decker, Inc. • Vice President and • Dell (2001 – 2012) • Vice President of Strategy, Technology, and Governance • Various positions of increasing scope and responsibility Other Public Boards • W.P. Carey Inc. (NYSE) (March 2024 – present) | | | | Director Highlights & Qualifications As the | |
| BRIGITTE H. KING | | | | Independent Director | | ||||
| Global Chief Digital Officer of Colgate-Palmolive Company Age 54 Director Board Committees • Audit Committee Finance Committee | | | | Professional Experience • Colgate-Palmolive Company • Global Chief Digital Officer (May 2020 – present) • PVH Corp. • Chief Consumer Officer / EVP Digital Commerce (April 2019 – May 2020) • L’Oreal • Chief Consumer Officer (July 2017 – March 2019) • Various consumer marketing management roles Other Public Boards • None | | | | Director Highlights & Qualifications Ms. King brings strong consumer products industry experience to the board of directors from her work across multiple consumer products companies, including Colgate-Palmolive Company, PVH Corp., and | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 17 | |
| MARGARET G. LEWIS | | | | Independent Director | | ||||
| Former President of Hospital Corporation of America’s Capital Division Age 70 Director since
Board Committees • Compensation and • Nominating/Corporate Governance Committee | | | | Professional Experience • HCA Healthcare (1976 – 2013) • President of • Chief Executive Officer of CJW Medical Center (2001 – 2004) • Chief Operating Officer of CJW Medical Center • Chief Nursing Officer of Richmond Division • Various positions in nursing management and quality management Other Public Boards • W.P. Carey Inc. (NYSE) • Chair of | | | | Director Highlights & Qualifications Ms. Lewis brings valuable insights to | |
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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
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| W. JAMESON MCFADDEN | | | | Independent Director | | ||||
| Chief Executive Officer and Senior Portfolio Manager of Wellington Shields & Co. Age 42 Director since 2021 Board Committees • Audit Committee • Finance Committee | | | | Professional Experience • Wellington Shields & Co. • Chief Executive Officer and Senior Portfolio Manager (January 2023 – present) • President and Senior Portfolio Manager (January 2017 – December 2022) • Research Analyst • Blue Quail Wines • Director of Sales and Marketing (June 2010 – present) Other Public Boards • None | | | | Director Highlights & Qualifications As chief executive officer of Wellington Shields & Co., a dual-registered broker dealer and investment advisor with over $3 billion in assets under management, Mr. McFadden brings executive experience | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 18 | |
| JOANNE D. SMITH | | | | Independent Director | | |||||
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| | | | Professional Experience • Delta Air Lines, Inc. • Executive Vice President & Chief People Officer (2014 – present) • Various product development and Other Public Boards • None | | | | Director Highlights & Qualifications As the | |
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| JAMES T. SPEAR | | | | Independent Director | | ||||
| Retired Executive Vice President and Chief Financial Officer of Cadence Health Age 69 Director since 2015 Board Committees • Audit Committee (Chair) • Finance Committee | | | | Professional Experience • Self-Employed Independent Advisor (2012 – 2022) • Cadence Health • Executive Vice President & Chief Financial Officer (2006 – 2012) • Keebler Foods Company • Vice President Finance (1992 – 2001) Other Public Boards • None | | | | Director Highlights & Qualifications As a former CPA and CMA, Mr. Spear | |
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| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 19 | ||||||||||||||
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Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
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| MELVIN T. STITH, PH.D. | | | | Independent Director | | ||||
| Former Interim President, Norfolk State University; Age 77 Director since
Board Committees • Compensation and Human Capital Committee • Nominating/Corporate Governance Committee | | | | Professional Experience • Norfolk State University • Interim President (2006 – 2012) • Syracuse University, Whitman School of Management • Dean Emeritus • Dean (2005 – 2013) • Professor of Marketing (2013 – 2005) • Florida State University (1987 – 2005) • Dean, College of Business • Jim Moran Professor of Business Administration • Chair, Department of Marketing Other Public Boards • Aflac Incorporated (NYSE) (2012 – May 2022) • Synovus Financial Corp. (NYSE) (1998 – April 2019) • Keebler Foods Company (NYSE) (1999 – 2001) | | | | Director Highlights & Qualifications Dr. Stith | |
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| C. MARTIN WOOD III | | | | Independent Director | | ||||
| Partner of Wood Associates; Age 80 Director since 2001 Board Committees • Audit Committee • Finance Committee (Chair) | | | | Professional Experience • Wood Associates • Partner (January 2000 – present) • Flowers Industries, Inc. (1970 – 2000) • Senior Vice President and Chief Financial Officer (1978 – January 2000) • Various management roles Other Public Boards • None | | | | Director Highlights & Qualifications Mr. Wood | |
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| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 20 | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 21 | |
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11 out of •
Annual election of directors •
Majority voting standard in uncontested director elections •
Independent presiding director •
Independent directors regularly meet in executive session •
Fully independent board committees • “Overboarding” limits
Robust stock ownership guidelines for non-employee directors and executive officers | | | Multiple clawback policies that require or allow for •
Shareholder ability to act by written consent and call a special meeting •
Annual shareholder ratification of independent auditors •
Board orientation and continuing education program for directors •
Annual board and committee self-evaluations •
Annual independent director evaluation of the CEO •
Anti-hedging policy for executives and outside directors | |
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| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 22 | ||||||||||||||
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Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
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| Chairman A. Ryals McMullian | | | Independent Presiding Director Thomas C. Chubb, III | |
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| | | The presiding director: • Presides over executive sessions in which non-independent directors and other members of management do not participate • Serves as the liaison between the chairman and the independent, non-management directors of the company • Approves information sent by the company to directors • Reviews and approves meeting agendas and schedules for the board of directors • Calls meetings of the independent, non-management directors • Is available for consultation and director communication with shareholders | |
At this time, the
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| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 23 | |
The following matrix summarizes certain diversity attributes of our 11 director-nominees, based on the director-nominees’ self-identification:
FEMALE | MALE | NON- BINARY | DID NOT DISCLOSE GENDER | |||||||||||||
Part I: Gender Identity |
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Directors | 2 | 9 | 0 | 0 | ||||||||||||
Part II: Demographic Background |
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African American or Black | 0 | 2 | 0 | 0 | ||||||||||||
Alaskan Native or Native American | 0 | 0 | 0 | 0 | ||||||||||||
Asian | 0 | 0 | 0 | 0 | ||||||||||||
Hispanic or Latinx | 0 | 0 | 0 | 0 | ||||||||||||
Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | ||||||||||||
White | 2 | 7 | 0 | 0 | ||||||||||||
Two or More Races or Ethnicities | 0 | 0 | 0 | 0 | ||||||||||||
LGBTQ+ | 0 | 0 | 0 | 0 | ||||||||||||
Did Not Disclose Demographic Background | 0 | 0 | 0 | 0 |
Determination of Independence
Pursuant to our corporate governance guidelines, the nominating/corporate governance committeehas retained and the board of directors are required to annually review the independence of each director and director-nominee. During this review, transactions and relationships among each director and director-nominee orbackground information such firm provides on any member of his or her immediate family and the company are considered, including, among others, all commercial, industrial, banking, consulting, legal, accounting, charitable, and familial relationships and those reported in this proxy statement under the section entitled “Transactions with Management and Others.” In addition, transactions and relationships among directors or director-nominees or their affiliates and members of senior management and their affiliates are examined.
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Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
The purpose of this annual review is to determine whether each director and director-nominee meets the applicable criteriaperson it recommends for independence in accordance with the SEC rules and regulations, NYSE rules and our corporate governance guidelines. Only those directors who meet the applicable criteria for independence and the board of directors affirmatively determines to have no direct or indirect material relationship with the company are considered independent directors.consideration.
The nominating/corporate governance committee and the board of directors conducted the required annual independence review in February 2023.
Upon the recommendation of the nominating/corporate governance committee, the board of directors affirmatively determined that a majority of our directors and director-nominees are independent of the company and its management as required by the SEC rules and regulations, NYSE rules and our corporate governance guidelines. Messrs. Deese, Casey, Chubb, Griswold, McFadden, Spear, Thomas and Wood, Dr. Stith and Mses. Lewis and Gass are independent directors and all, with the exception of Mr. Griswold, are independent director-nominees. Mr. McMullian is an inside director because he is currently the president and chief executive officer of the company. In determining the independence of Mr. Deese, the board of directors considered the employment by the company of his family members. Each director and director-nominee abstained from voting on his or her own independence.
The foregoing discussion of director independence is applicable only to service as a member of the board of directors, the compensation and human capital committee and the nominating/corporate governance committee.
Additional guidelines apply to the members of the audit committee under the SEC rules and regulations and NYSE rules.
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 24 | |
ORPORATE GOVERNANCE
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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
In connection with our strong founding values, management –— at the direction and subject to the oversight of our board of directors and its committees –— oversees the prioritization of ESG topics that impact our business and stakeholders and the focus of our Corporate Responsibility strategy and reporting. Recently, we formalizedAdditionally, our ESG governance framework to include aincludes an ESG Executive Committee and ESG Steering Committee as illustrated below.
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| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 25 | ||||||||||||||
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Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
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The board of directors held nineseven meetings in fiscal 2022,2023, and no incumbent director attended fewer than 75% of the aggregate of:
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AUDIT COMMITTEE | NOMINATING/ CORPORATE GOVERNANCE COMMITTEE | COMPENSATION AND HUMAN CAPITAL COMMITTEE | FINANCE COMMITTEE | |||||||||||||
George E. Deese* | ||||||||||||||||
Edward J. Casey, Jr.* | X | X | ||||||||||||||
Thomas C. Chubb, III* | X | X | ||||||||||||||
Rhonda Gass* | X | X | ||||||||||||||
Benjamin H. Griswold, IV*(1) | Chair | X | ||||||||||||||
Margaret G. Lewis* | X | Chair | ||||||||||||||
W. Jameson McFadden* | X | X | ||||||||||||||
A. Ryals McMullian | ||||||||||||||||
James T. Spear* | Chair | X | ||||||||||||||
Melvin T. Stith, Ph.D.* | X | X | ||||||||||||||
Terry S. Thomas* | X | X | ||||||||||||||
C. Martin Wood III* | X | Chair | ||||||||||||||
NUMBER OF MEETINGS | 8 | 5 | 4 | 4 |
| | | | | Audit Committee | | | | Nominating/ Corporate Governance Committee | | | | Compensation and Human Capital Committee | | | | Finance Committee | |
| A. Ryals McMullian | | | | | | | | | | | | | | | | | |
| Edward J. Casey, Jr.* | | | | | | | | | | | | | | | | ||
| Thomas C. Chubb, III* | | | | | | | | | | | | | | | | ||
| George E. Deese* | | | | | | | | | | | | | | | | | |
| Rhonda O. Gass* | | | | | | | | | | | | | | | | ||
| Brigitte H. King* | | | | | | | | | | | | | | | | ||
| Margaret G. Lewis* | | | | | | | | | | | | | | | | ||
| W. Jameson McFadden* | | | | | | | | | | | | | | | | ||
| Joanne D. Smith* | | | | | | | | | | | | | | | | ||
| James T. Spear* | | | | | | | | | | | | | | | | ||
| Melvin T. Stith, Ph.D.* | | | | | | | | | | | | | | | | ||
| C. Martin Wood III* | | | | | | | | | | | | | | | | ||
| NUMBER OF MEETINGS | | | | 8 | | | | 5 | | | | 5 | | | | 4 | |
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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
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Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
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Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
• making recommendations to the board of directors with respect to (i) management’s capital expenditure plans |
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– leverage and debt service/other uses of the company’s cash flow;flows (including the financial impact of stock repurchases, acquisitions and the payment of dividends), (ii) the company’s credit facilities, (iii) commodities hedging and (iv) liquidity matters;
– access
– deploymentthe board of capital;
– mergersdirectors with respect to the approval, adoption and acquisitions;
–any significant amendment of all defined benefit plan funding and multi-employer pension plan funding;defined contribution retirement plans;
– use
– global procurement
– volatility of inventory because of inflation or deflation; and
– energy availability and cost, including unstable fuel costs.
In accordance with
25, 2023.
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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
Transactions with Management and Others
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 29 | |
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| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 30 | |
| COMPENSATION ELEMENT | | | 2023 PROGRAM | | |||
| Annual Cash Retainer | | | | $ | 100,000(1) | | |
| Committee Chair Retainers: | | | | | | | |
| • Audit Committee | | | | $ | 25,000(2) | | |
| • Compensation and Human Capital Committee | | | | $ | 20,000 | | |
| • Nominating/Corporate Governance Committee | | | | $ | 15,000 | | |
| • Finance Committee | | | | $ | 15,000 | | |
| Audit Committee Member Retainer | | | | $ | 10,000 | | |
| Presiding Director Retainer | | | | $ | 25,000 | | |
| Non-Executive Chairman Retainer | | | | $ | 100,000(3)(4) | | |
| Annual Stock Award | | | | $ | 155,000(5) | | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 31 | |
| NAME | | | FEES EARNED OR PAID IN CASH ($)(1) | | | STOCK AWARDS ($)(2) | | | CHANGE IN PENSION VALUE AND NONQUALIFIED DEFERRED COMPENSATION EARNINGS ($)(3) | | | ALL OTHER COMPENSATION ($) | | | TOTAL ($) | | |||||||||||||||
| Edward J. Casey, Jr. | | | | | 100,000 | | | | | | 155,093 | | | | | | — | | | | | | — | | | | | | 255,093 | | |
| Thomas C. Chubb, III | | | | | 123,333 | | | | | | 155,093 | | | | | | — | | | | | | — | | | | | | 278,426 | | |
| George E. Deese(4) | | | | | 141,667 | | | | | | 155,093 | | | | | | — | | | | | | — | | | | | | 296,760 | | |
| Rhonda O. Gass | | | | | 108,958 | | | | | | 155,093 | | | | | | 10,204 | | | | | | — | | | | | | 274,255 | | |
| Benjamin H. Griswold, IV(5) | | | | | 56,250 | | | | | | — | | | | | | — | | | | | | — | | | | | | 56,250 | | |
| Brigitte H. King(6) | | | | | 25,000 | | | | | | 103,359 | | | | | | — | | | | | | — | | | | | | 128,359 | | |
| Margaret G. Lewis | | | | | 120,000 | | | | | | 155,093 | | | | | | 7,305 | | | | | | — | | | | | | 282,398 | | |
| W. Jameson McFadden | | | | | 108,958 | | | | | | 155,093 | | | | | | — | | | | | | — | | | | | | 264,051 | | |
| Joanne D. Smith(6) | | | | | 25,000 | | | | | | 103,359 | | | | | | — | | | | | | — | | | | | | 128,359 | | |
| James T. Spear | | | | | 123,958 | | | | | | 155,093 | | | | | | — | | | | | | — | | | | | | 279,051 | | |
| Melvin T. Stith, Ph.D. | | | | | 100,000 | | | | | | 155,093 | | | | | | — | | | | | | — | | | | | | 255,093 | | |
| C. Martin Wood III | | | | | 123,958 | | | | | | 155,093 | | | | | | — | | | | | | — | | | | | | 279,051 | | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 32 | |
| NAME | | | DEFERRED STOCK (#) | | ||||||||||||||
| Edward J. Casey, Jr. | | | | | 5,940 | | | |||||||||||
| Summary | | and Voting Information | | 5,940 | Ownership | Voted on | Information | | ||||||||||
| George E. Deese | | | | | | | ||||||||||||
| Rhonda O. Gass | | | | | 45,131 | | | |||||||||||
| Benjamin H. Griswold, IV | | | | | — | | | |||||||||||
| Brigitte H. King | | | | | 4,660 | | | |||||||||||
| Margaret G. Lewis | | | | | 5,940 | | | |||||||||||
| W. Jameson McFadden | | | | | 5,940 | | | |||||||||||
| Joanne D. Smith | | | | | 4,660 | | | |||||||||||
| James T. Spear | | | | | 35,325 | | | |||||||||||
| Melvin T. Stith, Ph.D. | | | | | 105,022 | | | |||||||||||
| C. Martin Wood III | | | | | 5,940 | | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 33 | |
NAME AND ADDRESS OF BENEFICIAL OWNER | SHARES OF COMMON STOCK BENEFICIALLY OWNED | PERCENT OF CLASS(1) | ||||||
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355(2) | 21,799,194 | 10.29% | ||||||
BlackRock, Inc. 55 East 52nd Street New York, NY 10055(3) | 19,070,133 | 9.00% | ||||||
T. Rowe Price Associates, Inc. 100 E. Pratt Street Baltimore, MD 21202(4) | 15,175,507 | 7.16% |
| Name and Address of Beneficial Owner | | | Shares of Common Stock Beneficially Owned | | | Percent of Class(1) | | ||||||
| The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355(2) | | | | | 20,148,077 | | | | | | 9.54% | | |
| BlackRock, Inc. 55 East 52nd Street New York, NY 10055(3) | | | | | 18,400,645 | | | | | | 8.72% | | |
| T. Rowe Price Associates, Inc. 100 E. Pratt Street Baltimore, MD 21202(4) | | | | | 11,852,645 | | | | | | 5.61% | | |
| | | 34 | |
|
|
|
NAME OF BENEFICIAL OWNER | AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP(1) | PERCENT OF CLASS | ||||||
Bradley K. Alexander | 402,900 | * | ||||||
Edward J. Casey, Jr. | 14,446 | (2) | * | |||||
Thomas C. Chubb, III | 29,467 | (3) | * | |||||
George E. Deese | 3,063,792 | (4) | 1.45 | % | ||||
Rhonda Gass | 39,691 | (5) | * | |||||
Benjamin H. Griswold, IV | 347,462 | (6) | * | |||||
R. Steve Kinsey | 404,250 | * | ||||||
Margaret G. Lewis | 64,223 | (7) | * | |||||
W. Jameson McFadden | 8,913,562 | (8) | 4.21 | % | ||||
A. Ryals McMullian | 1,053,273 | (9) | * | |||||
James T. Spear | 96,317 | (10) | * | |||||
Melvin T. Stith, Ph.D. | 141,994 | (11) | * | |||||
Terry S. Thomas | 14,800 | (12) | * | |||||
Stephanie B. Tillman | 26,025 | (13) | * |
29
FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
NAME OF BENEFICIAL OWNER | AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP(1) | PERCENT OF CLASS | ||||||
D. Keith Wheeler | 120,148 | * | ||||||
C. Martin Wood III | 10,097,336 | (14) | 4.77 | % | ||||
All Directors and Executive Officers as a Group (16 persons) | 24,369,304 | (15) | 11.49 | % |
| Name of Beneficial Owner | | | Amount and Nature of Beneficial Ownership | | | Percent of Class | | ||||||
| Edward J. Casey, Jr. |
|
|
| | 20,280(2) |
| | | | | * | | |
| Thomas C. Chubb, III | | | | | 35,301(3) |
| | | | | * | | |
| George E. Deese | | | | | 3,069,626(4) | | | | | | 1.45 | | |
| Rhonda O. Gass | | | | | 53,509(5) |
| | | | | * | | |
| Brigitte H. King | | | | | 3,883(6) |
| | | | | * | | |
| R. Steve Kinsey | | | | | 453,920 | | | | | | * | | |
| Margaret G. Lewis | | | | | 72,434(7) |
| | | | | * | | |
| W. Jameson McFadden | | | | | 8,988,085(8) | | | | | | 4.26 | | |
| A. Ryals McMullian | | | | | 1,227,403(9) |
| | | | | * | | |
| Joanne D. Smith | | | | | 4,623(10) |
| | | | | * | | |
| James T. Spear | | | | | 96,317(11) | | | | | | * | | |
|
| | | | 151,044(12) |
| | | | | * | | |
| Terry S. Thomas | | | | | 79,317 | | | | | | * | | |
| Stephanie B. Tillman | | | | | 50,104(13) |
| | | | | * | | |
| Heeth Varnedoe IV | | | | | 51,144 | | | | | | * | | |
| D. Keith Wheeler | | | | | 120,254 | | | | | | * | | |
| C. Martin Wood III | | | | | 10,102,570(14) | | | | | | 4.78% | | |
|
| | | | 24,119,430(15) | | | | | | 11.42 | | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 35 | ||||||||||||||
| ||||||||||||||||||
Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
|
WNERSHIP
Additionally, due to administrative errors, Mr. Varnedoe filed two amendments to his Form 3, originallyMarch 2, 2023 was filed on January 7, 2021,March 10, 2023; a late Form 4 reporting the partial vesting of a deferred stock award to Mr. Thomas that should have been reported by September 5, 2023 was filed on March 9, 2021September 14, 2023; a late Form 4 reporting a grant of deferred stock to Ms. King that should have been reported by October 3, 2023 was filed on October 4, 2023; and January 21, 2022,a late Form 4 reporting a gift of shares by Mr. Wood that should have been reported by September 22, 2023 was filed on October 4, 2023.
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 36 | |
| PROPOSAL II ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION | |
31
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 37 | |
VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
| | | Your board of directors unanimously recommends that you vote “FOR” Proposal II. | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 38 | |
2022 Named Executive Officers
32
| 2023 Named Executive Officers | | ||||||||||||||||||||||
| | | | | | |||||||||||||||||||
Summary | A. Ryals McMullian Chairman and Chief Executive Officer(1) Years with the company: 21 | and Voting Information | | R. Steve Kinsey Chief Accounting Officer Years with the company: 34 | | Ownership | Terry S. Thomas Chief Growth Officer Years with the company: <1(2) | Voted on | Information | | ||||||||||||||
| | | | | ||||||||||||||||||||
| Heeth Varnedoe IV President and Chief Operating Officer(3) Years with the company: 22 | | | Stephanie B. Tillman Chief Legal Counsel Years with the company: 28 | | | D. Keith Wheeler Former Senior Advisor and Former Chief Sales Officer(4) Years with the company: 36 | |
FINANCIAL HIGHLIGHTS FROM THE 52-WEEK FISCAL 2023 | | ||||||
SALES | | | DILUTED EARNINGS PER SHARE | | | ADJUSTED DILUTED EARNINGS PER SHARE* | |
| | | | | | | |
$5.091B | | | $0.58 | | | $1.20 | |
NET INCOME | | | ADJUSTED NET INCOME* | | | ADJUSTED EBITDA* | |
| | | | | | | |
$123.4M | | | $256.3M | | | $501.7M | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 39 | |
| ||||||||
WHAT WE PAY | | | WHY WE PAY IT | | | KEY FEATURES | | |
| Base Salary | | | Attract and retain talent; reward experience and expertise, functional progression, career development, skills and competencies | | | Established after consideration of external competitive market base salaries and the internal relationships of these positions | |
| Annual Cash Incentive Awards | | | Motivate achievement of annual performance metrics critical to continued company growth and shareholder value creation | | | Only earned if we meet certain performance goals | |
| Long-term Stock-based Incentive Compensation | | | Align significant portion of Named Executive compensation with the long-term success of the company and the enhancement of shareholder value | | | Equity-based awards generally allocated between two types of | |
| Employee Benefits | | | Attract and retain talent | | | • Customary retirement and health and welfare benefits to all of our salaried employees, including our Named Executives • Nonqualified deferred compensation plan to help attract and retain qualified executives | |
20222023 Say on Pay Vote20222023 annual meeting of shareholders, more than 99%98% of the shares voted were cast in support of our named executive compensation program.officer compensation. As a result of the significant level of approval, we continued to apply similar principles to our executive compensation decisions during the remainder of 2022 and earlyfiscal 2023. Shareholders will have an opportunity to cast an advisory vote on the frequency of future say on pay votes at least every 6 years. The next required advisory vote on the frequency of future say on pay votes is expected to occur no later than the company’s annual meeting.34
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 40 | |
| Summary of Our Compensation Practices | | ||||||||||||||||||
| Practices We Have Adopted | | | | | | | Practices We Do Not Engage In | | |||||||||||
Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||||
Summary of Our Compensation Practices
Long-term incentives that are
Multiple performance measures used in incentive plans
Capped incentive payouts
Clawback
Stock ownership guidelines for executives and outside directors and share retention requirements for executives
Moderate change of control severance arrangements
Double-trigger equity vesting upon a change of control
Annual review of tally sheets by the compensation and human capital committee
Incentives that are risk-mitigated through plan design and administration
Compensation and human capital committee comprised solely of independent directors
Independent compensation consultant who reports directly to the compensation and human capital committee
Anti-hedging policy for executives and outside directors | | | | | |
| Employment agreements
Dividend equivalents on unearned performance
Income tax gross-ups
Excise tax gross-ups on change of control severance
Backdating or repricing of stock options
Pension credited service for years not worked
Significant employee/director perquisites | |
35
FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
EXECUTIVE COMPENSATION GENERALLY
Objectives of Executive Compensation
| |
| 41 | |
|
|
36
| ||||||||||||||||||
Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
Mix of Compensation Opportunity
| 2023 EXECUTIVE TOTAL COMPENSATION MIX* | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 42 | |
37
FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
The president and chief executive officer, with the assistance of the chief human resources officer, consults with and advises the compensation and human capital committee with respect to the company’s compensation philosophy and makes recommendations regarding the compensation of other executive officers including the Named Executives, but not regarding his own compensation. All recommendations of the president and chief executive officer to the compensation and human capital committee regarding the compensation of other executive officers are independently evaluated by the committee.
| Willis Towers Watson Executive Compensation Database — Food & Beverage Companies | | ||||||||
| ||||||||||
American Sugar Refining | | Ferrara Candy Company | | Mondelez | | |||||
Barry Callebaut | | | | Niagara Bottling | | |||||
Beam Suntory | | | | PepsiCo | | |||||
Beyond Meat | | | | Pernod Ricard | | |||||
BlueTriton Brands | | High Liner Foods | | | Rich Products | | ||||
Brown-Forman | | Hormel Foods | | | Saputo | | ||||
| Bush Brothers & Company | | | Ilitch Holdings | | | Sargento Foods | | ||
| Campbell Soup | | | J.M. Smucker | | | Sazerac Company | | ||
| Cargill | | | Kellogg | | | Schreiber Foods | | ||
| Coca-Cola | | | Kent Corporation | | | Smithfield Foods | | ||
| Compass Group, North America Division | | | Kerry Group | | | Southern Glazer’s Wine and Spirits | | ||
| ConAgra Brands | | | Keurig Dr Pepper | | | Tyson Foods | | ||
| Dairy Farmers of America | | | Land O’Lakes | | | Ventura Foods | | ||
| Danone | | | Mars Incorporated | | | Viscofan | | ||
| Danone North America | | McCain Foods | | Wells Enterprises | | ||||
E.A. Sween Company | | |||||||||
| | |||||||||
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 43 | |
38
| ||||||||||||||||||
Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
Data may vary based on tenure, years of experience in role, individual and company performance, future potential, or other factors. This approach sets executive pay opportunities at levels we believe are competitive and help attract, retain and motivate the most qualified executives.
NAMED EXECUTIVE | FISCAL 2021 | FISCAL 2022 SALARY RATE(1) | PERCENT CHANGE | |||||||||
A. Ryals McMullian, President and Chief Executive Officer | $ | 900,000 | $ | 918,000 | 2 | % | ||||||
R. Steve Kinsey, Chief Financial Officer and Chief Accounting Officer | $ | 619,212 | $ | 637,788 | 3 | % | ||||||
Bradley K. Alexander, Former Chief Operating Officer | $ | 577,843 | $ | 595,178 | 3 | % | ||||||
D. Keith Wheeler, Chief Sales Officer | $ | 493,506 | $ | 508,311 | 3 | % | ||||||
Stephanie B. Tillman, Chief Legal Counsel | $ | 425,000 | $ | 450,500 | 6 | % |
| | | 44 | |
| Named Executive | | | End of Fiscal 2022 Salary Rate | | | End of Fiscal 2023 Salary Rate | | | Percent Change | | |||||||||
| A. Ryals McMullian, Chairman and Chief Executive Officer(1) | | | | $ | 918,000 | | | | | $ | 955,000 | | | | | | 4.0% | | |
| R. Steve Kinsey, Chief Financial Officer and Chief Accounting Officer(2) | | | | $ | 637,788 | | | | | $ | 700,000 | | | | | | 9.8% | | |
| Terry S. Thomas, Chief Growth Officer(3) | | | | $ | — | | | | | $ | 650,000 | | | | | | —% | | |
| Heeth Varnedoe IV, President and Chief Operating Officer(4) | | | | $ | 391,400 | | | | | $ | 700,000 | | | | | | 78.8% | | |
| D. Keith Wheeler, Former Senior Advisor and Former Chief Sales Officer(5) | | | | $ | 508,311 | | | | | $ | 523,561 | | | | | | 3% | | |
| Stephanie B. Tillman, Chief Legal Counsel(6) | | | | $ | 450,500 | | | | | $ | 495,550 | | | | | | 10% | | |
39
FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
For 2022,2023, the compensation and human capital committee established target annual cash incentive levels under the Omnibus Plan, which are expressed as a percentage of each Named Executive’s base salary (the “Target Annual Incentive Percentage”). Target Annual Incentive Percentages for each Named Executive for fiscal 20222023 were as follows:
| Named Executive | | | Target Annual Incentive Percentage (as % of base salary) | | |||||
|
| |||||||||
A. Ryals McMullian, | | | | | 125 | | | |||
| R. Steve Kinsey, Chief Financial Officer and Chief Accounting Officer | | | | | 80% | | |||
| | | | | 70% | | | |||
| Heeth Varnedoe IV, President and Chief Operating Officer | (2) | | | | | 80 | | | |
| D. Keith Wheeler, Former Senior Advisor and Former Chief Sales Officer | | | | | 70% | | |||
| Stephanie B. Tillman, Chief Legal Counsel | | | | | 70% | |
|
| |
| 45 | |
|
|
LEVEL OF ACHIEVEMENT | % OF ADJUSTED EBITDA GOAL ACHIEVED | APPLICABLE ANNUAL CASH INCENTIVE PERCENTAGE OF TARGET | ||||||
Maximum | 115.0% | 200.0% | ||||||
Target | 100.0% | 100.0% | ||||||
Threshold | 90.0% | 30.0% | ||||||
Actual | 95.0% | 64.3% |
| Level of Achievement | | | % of Adjusted EBITDA Goal Achieved | | | Applicable Annual Cash Incentive Percentage of Target | | ||||||
| Maximum | | | | | 115.0% | | | | | | 200.0% | | |
| Target | | | | | 100.0% | | | | | | 100.0% | | |
| Threshold | | | | | 90.0% | | | | | | 30.0% | | |
| Actual | | | | | 93.8% | | | | | | 56.5% | | |
40
| ||||||||||||||||||
Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
Equity and Performance Compensation Awards
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 46 | |
NAMED EXECUTIVE | TOTAL TARGET DOLLAR VALUE OF LTI GRANT | |||
A. Ryals McMullian | $ | 4,360,500 | ||
R. Steve Kinsey | $ | 1,145,542 | ||
Bradley K. Alexander | $ | 1,069,010 | ||
D. Keith Wheeler | $ | 789,610 | ||
Stephanie B. Tillman | $ | 595,000 |
| Named Executive | | | Total Target Dollar Value of Performance Share Grant | | |||
| A. Ryals McMullian | | | | $ | 4,452,301(1) | | |
| R. Steve Kinsey | | | | $ | 1,179,908(2) | | |
| Terry S. Thomas | | | | $ | 1,250,000(3) | | |
| Heeth Varnedoe IV | | | | $ | 925,000(4) | | |
| D. Keith Wheeler | | | | $ | 813,298(5) | | |
| Stephanie B. Tillman | | | | $ | 842,435(6) | | |
NAMED EXECUTIVE | TARGET NUMBER OF ROIC- BASED PERFORMANCE- CONTINGENT RESTRICTED SHARES GRANTED | TARGET NUMBER OF TSR-BASED PERFORMANCE-CONTINGENT RESTRICTED SHARES GRANTED | ||||||
A. Ryals McMullian | 73,360 | 73,360 | ||||||
R. Steve Kinsey | 19,270 | 19,270 | ||||||
Bradley K. Alexander | 17,980 | 17,980 | ||||||
D. Keith Wheeler | 13,280 | 13,280 | ||||||
Stephanie B. Tillman | 10,010 | 10,010 |
| Named Executive | | | Target Number of ROIC-Based Performance Shares Granted | | | Target Number of TSR-Based Performance Shares Granted | | ||||||
| A. Ryals McMullian | | | | | 71,510 | | | | | | 71,510 | | |
| R. Steve Kinsey | | | | | 18,950 | | | | | | 18,950 | | |
| Terry S. Thomas | | | | | 25,040 | | | | | | 25,040 | | |
| Heeth Varnedoe IV | | | | | 14,860 | | | | | | 14,860 | | |
| D. Keith Wheeler | | | | | 13,060 | | | | | | 13,060 | | |
| Stephanie B. Tillman | | | | | 13,530 | | | | | | 13,530 | | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 47 | |
41
FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
ROIC-Based Performance-Contingent Restricted Stock Awards.Performance Shares. Similar to our 20212022 awards, the Performance Restricted StockShares Agreement provides that, as to 50% of the restricted stockshares underlying each executive’s performance-contingent restricted stockPerformance Share award (the “ROIC-Based Award”), vesting will occur in the manner set forth below, if the company’s ROIC exceeds its WACC by the following levels during the ROIC Performance Period:
| ROIC Minus WACC | | | Payment Percentage (% of target) | | |||
|
| |||||||
Less than 175 basis points | | | | | 0% | | ||
| 175 basis points | | | | | 50% | | |
| 375 basis points | | | | | 100% | | |
| 475 basis points or above | | | | | 125% | |
|
TSR is based on the following formula:
|
|
| |||||
B&G Foods, Inc. | | | The J.M. Smucker Company | | |
| Campbell Soup Company | | | Kellogg Company | |
| Conagra Brands, Inc. | | | The Kraft Heinz Company | |
| General Mills, Inc. | | | Lancaster Colony Corporation | |
| The Hain Celestial Group, Inc. | | | McCormick & Company, Incorporated | |
| The Hershey Company | | | Mondelez International, Inc. | |
| Hormel Foods Corporation | | | Post Holdings, Inc. | |
| Hostess Brands, Inc. | | | Treehouse Foods, Inc. | |
| J&J Snack Foods Corp. | | | | |
42
| ||||||||||||||||||
Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
Hypothetical payouts based on the TSR for the company and each member of the TSR Peer Group are calculated at the end of each of the final four quarters of the TSR Performance Period using the performance/payout schedule below and then averaged to determine the actual payout:
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 48 | |
| Percentile of Company TSR vs. Peer Group TSR | | | Payment percentage (% of target) | | ||||
| (% OF TARGET) | ||||||||
Less than 30th | | | | | 0 | | | ||
| | 30th | | | | | 50 | | |
| | 50th | | | | | 100 | | |
| | 70th | | | | | 150 | | |
| 90th or above | | | | | 200% | |
Recoupment (“Clawback”) Provision
The Omnibus Plan providescompany’s equity grant practices compared to market norms, as well as management’s desire for certain changes to better align with the overall business strategy and ability to attract and retain talent, the compensation and human capital committee approved certain changes to the 2024 long-term incentive program for our executive officers. The material changes include: (1) updating the equity award mix for executive officers to be 30% RSUs and 70% Performance Shares (equally divided between ROIC and TSR Performance Shares), rather than 100% Performance Shares as in prior years, and (2) updating the “retirement” definition in the awards
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 49 | |
The recoupment provision provides that ifnew rules promulgated by NYSE and SEC requirements, the board of directors has reliable evidenceadopted an executive compensation recoupment policy effective as of knowing misconduct by a participant that results in an overstatement of the company’s earnings or other financial measurements that were taken into
43
FLOWERS FOODS, INC. |November 16, 2023, PROXY STATEMENT
consideration in awarding grants or annual cash incentive awards and, as a result of such overstatement, the participant (i) received an annual cash incentive award and/or (ii) either received a grant or had a prior grant vest or become nonforfeitable, the participant shall be required to reimburse (or forfeit, as the case may be) the full amount of any grants or annual cash incentive awards that resulted from the overstatement.
On November 15, 2019, the board adopted a standalone clawback policy (the “Clawback Policy”), which was incorporated in long-term incentive awards beginningcomplies with the 2020 grants.required standards (the “NYSE Clawback Policy”). The NYSE Clawback Policy applies toprovides for the prompt recovery (or clawback) of certain excess incentive-based compensation received during an applicable three-year recovery period by current or former executive officers and provides for mandatory recoupment in the event ofwe are required to prepare an accounting restatement due to material noncompliance with any financial reporting requirementsrequirement under the securities laws. Triggering events include accounting restatements to correct an error in previously issued financial statements that is material to such previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. Excess incentive-based compensation for these purposes generally means the amount of incentive-based compensation received (on or after October 2, 2023) by such executive officer that exceeds the amount of incentive-based compensation that would have been received by such executive officer had it been determined based on the restated amounts, without regard to any taxes paid. Incentive-based compensation potentially subject to recovery under the NYSE Clawback Policy is in general limited to any compensation granted, earned or vested based wholly or in part on the attainment of one or more financial reporting measures.
In the wake of the SEC’s recent promulgation of final Dodd-Frank Act clawback rules, we expect to review and consider changes to our clawback provisions.a required accounting restatement.
In connection with his retirement, Mr. AlexanderWheeler entered into a transition and consulting agreement, pursuant to which he began serving as a consultant to the
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 50 | |
44
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Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
The EDCP tracking account will be credited with dividends paid on company common stock for the number of shares deemed held in such account, and such dividends will then be deemed to be invested in the cash account and will earn interest as described above.
The holdings of each of the Named Executives are currently either at the guideline or on track to meet it, and progress toward the guidelines is reviewed annually by the compensation and human capital committee.
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 51 | |
| NAMED EXECUTIVE | | | STOCK OWNERSHIP GUIDELINE | |
|
| ||||
| | | 6 times base salary | | |
| Chief Financial Officer and Chief Accounting Officer | | | 3 times base salary | |
| Chief | | | 3 times base salary | |
| President and Chief Operating Officer | | | 3 times base salary | |
| Former Senior Advisor and Former Chief Sales Officer | | | 2 times base salary | |
| Chief Legal Counsel | | | 3 times base salary | |
45
FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
COMPENSATION COMMITTEE REPORT
The compensation and human capital committee is responsible for evaluating and approving the company’s compensation plans, policies and programs. The compensation and human capital committee has reviewed and discussed the Compensation Discussion and Analysis contained in this proxy statement with the company’s management and based on this review and discussion, recommended to the board of directors that the Compensation Discussion and Analysis be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022,30, 2023, filed with the SEC and included in the proxy statement for the 20232024 annual meeting of shareholders.
Edward J. Casey, Jr.
Thomas C. Chubb, III
Benjamin H. Griswold, IV
Melvin T. Stith, Ph.D.
46
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 52 | ||||||||||||||
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Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
|
OMPENSATION
NAME AND PRINCIPAL POSITION | YEAR | SALARY ($)(2) | STOCK AWARDS ($)(3) | NON-EQUITY INCENTIVE PLAN ($)(4) | CHANGE IN PENSION NONQUALIFIED DEFERRED EARNINGS ($)(5) | ALL OTHER COMPENSATION ($)(6) | TOTAL ($) | |||||||||||||||||||||
A. Ryals McMullian | 2022 | 917,654 | 4,360,518 | 737,843 | 53,851 | 185,493 | 6,255,359 | |||||||||||||||||||||
President and | 2021 | 896,490 | 3,599,802 | 1,341,360 | 38,286 | 103,967 | 5,979,905 | |||||||||||||||||||||
Chief Executive Officer | 2020 | 726,452 | 2,600,146 | 1,674,293 | 31,380 | 54,499 | 5,086,770 | |||||||||||||||||||||
R. Steve Kinsey | 2022 | 632,787 | 1,145,409 | 325,689 | 31,974 | 120,908 | 2,256,767 | |||||||||||||||||||||
Chief Financial Officer and | 2021 | 615,146 | 1,117,469 | 611,497 | 29,174 | 66,236 | 2,439,522 | |||||||||||||||||||||
Chief Accounting Officer | 2020 | 611,760 | 1,090,444 | 979,268 | 34,806 | 45,450 | 2,761,728 | |||||||||||||||||||||
Bradley K. Alexander | 2022 | 590,511 | 1,068,731 | 303,930 | 78,883 | 174,779 | 2,216,835 | |||||||||||||||||||||
Former Chief Operating Officer | 2021 | 574,049 | 1,042,906 | 570,644 | 66,537 | 61,698 | 2,315,834 | |||||||||||||||||||||
2020 | 570,889 | 1,017,530 | 913,846 | 71,583 | 41,996 | 2,615,844 | ||||||||||||||||||||||
D. Keith Wheeler | 2022 | 504,325 | 789,363 | 227,125 | 7,737 | 87,571 | 1,616,122 | |||||||||||||||||||||
Chief Sales Officer | 2021 | 490,265 | 770,328 | 426,438 | 6,491 | 43,895 | 1,737,417 | |||||||||||||||||||||
2020 | 487,563 | 751,579 | 682,904 | 6,938 | 35,352 | 1,964,336 | ||||||||||||||||||||||
Stephanie B. Tillman (1) | 2022 | 443,635 | 594,994 | 173,344 | 4,139 | 41,787 | 1,257,899 | |||||||||||||||||||||
Chief Legal Counsel |
| Name and Principal Position | | | | Year | | | | Salary ($)(3) | | | | Bonus ($) | | | | Stock Awards ($)(4) | | | | Non-Equity Incentive Plan Compensation ($)(6) | | | | Change In Pension Value and Nonqualified Deferred Compensation Earnings ($)(7) | | | | All Other Compensation ($)(8) | | | | Total ($) | | ||||||||||||||||||||||||
| A. Ryals McMullian Chairman and Chief Executive Officer | | | | | | 2023 | | | | | | | 954,289 | | | | | | | — | | | | | | | 4,452,212 | | | | | | | 674,469 | | | | | | | 53,133 | | | | | | | 258,937 | | | | | | | 6,393,039 | | |
| | | 2022 | | | | | | | 917,654 | | | | | | | — | | | | | | | 4,360,518 | | | | | | | 737,843 | | | | | | | 53,851 | | | | | | | 185,493 | | | | | | | 6,255,359 | | | ||||
| | | 2021 | | | | | | | 896,490 | | | | | | | — | | | | | | | 3,599,802 | | | | | | | 1,341,360 | | | | | | | 38,286 | | | | | | | 103,967 | | | | | | | 5,979,905 | | | ||||
| R. Steve Kinsey Chief Financial Officer and Chief Accounting Officer | | | | | | 2023 | | | | | | | 665,025 | | | | | | | — | | | | | | | 1,179,827 | | | | | | | 301,132 | | | | | | | 30,764 | | | | | | | 108,309 | | | | | | | 2,285,058 | | |
| | | 2022 | | | | | | | 632,787 | | | | | | | — | | | | | | | 1,145,409 | | | | | | | 325,689 | | | | | | | 31,974 | | | | | | | 120,908 | | | | | | | 2,256,767 | | | ||||
| | | 2021 | | | | | | | 615,146 | | | | | | | — | | | | | | | 1,117,469 | | | | | | | 611,497 | | | | | | | 29,174 | | | | | | | 66,236 | | | | | | | 2,439,522 | | | ||||
| Terry S. Thomas(1) Chief Growth Officer | | | | | | 2023 | | | | | | | 202,500 | | | | | | | 350,000 | | | | | | | 2,558,856(5) | | | | | | | 85,033 | | | | | | | — | | | | | | | 80,917 | | | | | | | 3,277,306 | | |
| Heeth Varnedoe IV(1) President and Chief Operating Officer | | | | | | 2023 | | | | | | | 560,219 | | | | | | | — | | | | | | | 925,184 | | | | | | | 255,901 | | | | | | | 1,105 | | | | | | | 42,222 | | | | | | | 1,784,631 | | |
| D. Keith Wheeler Former Senior Advisor and Former Chief Sales Officer | | | | | | 2023 | | | | | | | 519,455 | | | | | | | — | | | | | | | 813,115 | | | | | | | 205,561 | | | | | | | 10,303 | | | | | | | 78,518 | | | | | | | 1,626,952 | | |
| | | 2022 | | | | | | | 504,325 | | | | | | | — | | | | | | | 789,363 | | | | | | | 227,125 | | | | | | | 7,737 | | | | | | | 87,571 | | | | | | | 1,616,122 | | | ||||
| | | 2021 | | | | | | | 490,265 | | | | | | | — | | | | | | | 770,328 | | | | | | | 426,438 | | | | | | | 6,491 | | | | | | | 43,895 | | | | | | | 1,737,417 | | | ||||
| Stephanie B. Tillman(2) Chief Legal Counsel | | | | | | 2023 | | | | | | | 483,421 | | | | | | | — | | | | | | | 842,378 | | | | | | | 191,536 | | | | | | | 4,555 | | | | | | | 52,055 | | | | | | | 1,573,945 | | |
| | | 2022 | | | | | | | 443,635 | | | | | | | — | | | | | | | 594,994 | | | | | | | 173,344 | | | | | | | 4,139 | | | | | | | 41,787 | | | | | | | 1,257,899 | | |
| NAME | | | SALARY DEFERRALS INTO 401(K) PLAN ($) | | | SALARY DEFERRALS TO EDCP ($) | | | TOTAL ($) | | |||||||||
| A. Ryals McMullian | | | | | 29,554 | | | | | | 269,067 | | | | | | 298,621 | | |
| R. Steve Kinsey | | | | | 30,000 | | | | | | 53,202 | | | | | | 83,202 | | |
| Terry S. Thomas | | | | | 13,750 | | | | | | — | | | | | | 13,750 | | |
| Heeth Varnedoe IV | | | | | 27,300 | | | | | | — | | | | | | 27,300 | | |
| D. Keith Wheeler | | | | | 30,000 | | | | | | 100,631 | | | | | | 130,631 | | |
| Stephanie B. Tillman | | | | | 30,000 | | | | | | 17,929 | | | | | | 47,929 | | |
| | | 53 | |
| NAME | | | EMPLOYER CONTRIBUTIONS TO SECTION 401(K) PLAN ($) | | | EMPLOYER CONTRIBUTIONS TO EDCP ($) | | | DIRECTOR COMPENSATION* ($) | | | TOTAL ($) | | ||||||||||||
| A. Ryals McMullian | | | | | 21,039 | | | | | | 237,898 | | | | | | — | | | | | | 258,937 | | |
| R. Steve Kinsey | | | | | 19,800 | | | | | | 88,509 | | | | | | — | | | | | | 108,309 | | |
| Terry S. Thomas | | | | | 8,625 | | | | | | — | | | | | | 72,292 | | | | | | 80,917 | | |
| Heeth Varnedoe IV | | | | | 19,800 | | | | | | 22,422 | | | | | | — | | | | | | 42,222 | | |
| D. Keith Wheeler | | | | | 19,946 | | | | | | 58,572 | | | | | | — | | | | | | 78,518 | | |
| Stephanie B. Tillman | | | | | 19,800 | | | | | | 32,255 | | | | | | — | | | | | | 52,055 | | |
| | | 54 | |
NAME | SALARY DEFERRALS INTO 401(K) PLAN ($) | SALARY DEFERRALS TO EDCP ($) | TOTAL ($) | |||||||||
A. Ryals McMullian | 27,000 | 448,291 | 475,291 | |||||||||
R. Steve Kinsey | 27,000 | 44,295 | 71,295 | |||||||||
Bradley K. Alexander | 27,000 | 407,398 | 434,398 | |||||||||
D. Keith Wheeler | 27,000 | 50,432 | 77,432 | |||||||||
Stephanie B. Tillman | 27,000 | 14,846 | 41,846 |
|
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|
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NAME | EMPLOYER CONTRIBUTIONS TO SECTION 401(K) ($) | EMPLOYER CONTRIBUTIONS TO EDCP ($) | CONTINUED ($) | TOTAL ($) | ||||||||||||
A. Ryals McMullian | 18,300 | 167,193 | — | 185,493 | ||||||||||||
R. Steve Kinsey | 18,300 | 102,608 | — | 120,908 | ||||||||||||
Bradley K. Alexander | 18,300 | 86,479 | 70,000 | 174,779 | ||||||||||||
D. Keith Wheeler | 18,300 | 69,271 | — | 87,571 | ||||||||||||
Stephanie B. Tillman | 18,300 | 23,487 | — | 41,787 |
FISCAL 2022 GRANTS OF PLAN-BASED AWARDS
ESTIMATED POSSIBLE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS(1) | ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN | ALL | GRANT | |||||||||||||||||||||||||||||||||
NAME | GRANT DATE | THRESHOLD ($) | TARGET ($) | MAXIMUM ($) | THRESHOLD (#) | TARGET (#) | MAXIMUM (#) | |||||||||||||||||||||||||||||
A. Ryals McMullian | ||||||||||||||||||||||||||||||||||||
Non-Equity Incentive Plan Award | 344,250 | 1,147,500 | 2,295,000 | — | ||||||||||||||||||||||||||||||||
ROIC-Based Performance Contingent Restricted Stock Grant | 1/2/2022 | 36,680 | 73,360 | 91,700 | 2,015,199 | |||||||||||||||||||||||||||||||
TSR-Based Performance Contingent Restricted Stock Grant | 1/2/2022 | 36,680 | 73,360 | 146,720 | 2,345,319 | |||||||||||||||||||||||||||||||
R. Steve Kinsey | ||||||||||||||||||||||||||||||||||||
Non-Equity Incentive Plan Award | 153,069 | 510,230 | 1,020,460 | — | ||||||||||||||||||||||||||||||||
ROIC-Based Performance Contingent Restricted Stock Grant | 1/2/2022 | 9,635 | 19,270 | 24,088 | 529,347 | |||||||||||||||||||||||||||||||
TSR-Based Performance Contingent Restricted Stock Grant | 1/2/2022 | 9,635 | 19,270 | 38,540 | 616,062 |
48
| | | | | | | | | | | | ESTIMATED POSSIBLE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS(1) | | | | ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS | | | | ALL OTHER STOCK AWARDS: NUMBER OF SHARES OF STOCK OR UNITS (#) | | | | GRANT DATE FAIR VALUE OF STOCK AND OPTION AWARDS ($)(2) | | ||||||||||||||||||||||||||||||||||||||||
| NAME | | | | GRANT DATE | | | | THRESHOLD ($) | | | | TARGET ($) | | | | MAXIMUM ($) | | | | THRESHOLD (#) | | | | TARGET (#) | | | | MAXIMUM (#) | | | ||||||||||||||||||||||||||||||||||
| A. Ryals McMullian | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-Equity Incentive Plan Award | | | | | | | | | | | | | 358,125 | | | | | | | 1,193,750 | | | | | | | 2,387,500 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | |
| ROIC-Based Performance Shares | | | | | | 1/1/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 35,755 | | | | | | | 71,510 | | | | | | | 89,388 | | | | | | | | | | | | | | 2,055,197 | | |
| TSR-Based Performance Shares | | | | | | 1/1/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 35,755 | | | | | | | 71,510 | | | | | | | 143,020 | | | | | | | | | | | | | | 2,397,015 | | |
| R. Steve Kinsey | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-Equity Incentive Plan Award | | | | | | | | | | | | | 159,893 | | | | | | | 532,977 | | | | | | | 1,065,955 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | |
| ROIC-Based Performance Shares | | | | | | 1/1/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,475 | | | | | | | 18,950 | | | | | | | 23,688 | | | | | | | | | | | | | | 544,623 | | |
| TSR-Based Performance Shares | | | | | | 1/1/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,475 | | | | | | | 18,950 | | | | | | | 37,900 | | | | | | | | | | | | | | 635,204 | | |
| Terry S. Thomas | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-Equity Incentive Plan Award | | | | | | | | | | | | | 45,150 | | | | | | | 150,500 | | | | | | | 301,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | |
| ROIC-Based Performance Shares | | | | | | 9/1/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 12,520 | | | | | | | 25,040 | | | | | | | 31,300 | | | | | | | | | | | | | | 576,922 | | |
| TSR-Based Performance Shares | | | | | | 9/1/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 12,520 | | | | | | | 25,040 | | | | | | | 50,080 | | | | | | | | | | | | | | 576,922 | | |
| Time- Based Restricted Stock Units | | | | | | 9/1/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 54,250 | | | | | | | 1,249,920 | | |
| Deferred Stock | | | | | | 5/25/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,940 | | | | | | | 155,093 | | |
| Heeth Varnedoe IV | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-Equity Incentive Plan Award | | | | | | | | | | | | | 135,877 | | | | | | | 452,923 | | | | | | | 905,846 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | |
| ROIC-Based Performance Shares | | | | | | 1/1/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7,430 | | | | | | | 14,860 | | | | | | | 18,575 | | | | | | | | | | | | | | 427,076 | | |
| TSR-Based Performance Shares | | | | | | 1/1/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7,430 | | | | | | | 14,860 | | | | | | | 29,720 | | | | | | | | | | | | | | 498,107 | | |
| D. Keith Wheeler | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-Equity Incentive Plan Award | | | | | | | | | | | | | 109,147 | | | | | | | 363,824 | | | | | | | 727,648 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | |
| ROIC-Based Performance Shares | | | | | | 1/1/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,530 | | | | | | | 13,060 | | | | | | | 16,325 | | | | | | | | | | | | | | 375,344 | | |
| TSR-Based Performance Shares | | | | | | 1/1/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,530 | | | | | | | 13,060 | | | | | | | 26,120 | | | | | | | | | | | | | | 437,771 | | |
| Stephanie B. Tillman | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-Equity Incentive Plan Award | | | | | | | | | | | | | 101,700 | | | | | | | 339,001 | | | | | | | 678,003 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | |
| ROIC-Based Performance Shares | | | | | | 1/1/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,765 | | | | | | | 13,530 | | | | | | | 16,913 | | | | | | | | | | | | | | 388,852 | | |
| TSR-Based Performance Shares | | | | | | 1/1/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,765 | | | | | | | 13,530 | | | | | | | 27,060 | | | | | | | | | | | | | | 453,526 | | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 55 | ||||||||||||||
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Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
|
ESTIMATED POSSIBLE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS(1) | ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN | ALL | GRANT | |||||||||||||||||||||||||||||||||
NAME | GRANT DATE | THRESHOLD ($) | TARGET ($) | MAXIMUM ($) | THRESHOLD (#) | TARGET (#) | MAXIMUM (#) | |||||||||||||||||||||||||||||
Bradley K. Alexander | ||||||||||||||||||||||||||||||||||||
Non-Equity Incentive Plan Award | 142,843 | 476,142 | 952,284 | — | ||||||||||||||||||||||||||||||||
ROIC-Based Performance Contingent Restricted Stock Grant | 1/2/2022 | 8,990 | 17,980 | 22,475 | 493,911 | |||||||||||||||||||||||||||||||
TSR-Based Performance Contingent Restricted Stock Grant | 1/2/2022 | 8,990 | 17,980 | 35,960 | 574,821 | |||||||||||||||||||||||||||||||
D. Keith Wheeler | ||||||||||||||||||||||||||||||||||||
Non-Equity Incentive Plan Award | 106,745 | 355,818 | 711,636 | — | ||||||||||||||||||||||||||||||||
ROIC-Based Performance Contingent Restricted Stock Grant | 1/2/2022 | 6,640 | 13,280 | 16,600 | 364,802 | |||||||||||||||||||||||||||||||
TSR-Based Performance Contingent Restricted Stock Grant | 1/2/2022 | 6,640 | 13,280 | 26,560 | 424,562 | |||||||||||||||||||||||||||||||
Stephanie B. Tillman | ||||||||||||||||||||||||||||||||||||
Non-Equity Incentive Plan Award | 81,090 | 270,300 | 540,600 | |||||||||||||||||||||||||||||||||
ROIC-Based Performance Contingent Restricted Stock Grant | 1/2/2022 | 5,005 | 10,010 | 12,513 | 274,975 | |||||||||||||||||||||||||||||||
TSR-Based Performance Contingent Restricted Stock Grant | 1/2/2022 | 5,005 | 10,010 | 20,020 | 320,020 |
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OUTSTANDING EQUITY AWARDS AT 2022 FISCAL YEAR END
STOCK AWARDS
| ||||||||||||||||||||
NAME AND GRANTS | GRANT DATE FOR EQUITY- BASED AWARDS(1) | NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED (#) | MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED ($) | 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 ($) | |||||||||||||||
A. Ryals McMullian | ||||||||||||||||||||
ROIC-Based Performance Contingent Restricted | 1/2/2022 | — | — | 73,360 | 2,108,366 | |||||||||||||||
TSR-Based Performance Contingent Restricted | 1/2/2022 | — | — | 73,360 | 2,108,366 | |||||||||||||||
ROIC-Based Performance Contingent Restricted | 1/3/2021 | — | — | 72,900 | 2,095,146 | |||||||||||||||
TSR-Based Performance Contingent Restricted | 1/3/2021 | — | — | 72,900 | 2,095,146 | |||||||||||||||
ROIC-Based Performance Contingent Restricted | 12/29/2019 | 69,537 | 1,998,493 | — | — | |||||||||||||||
TSR-Based Performance Contingent Restricted | 12/29/2019 | 82,332 | 2,366,222 | — | — | |||||||||||||||
Time-Based | 5/23/2019 | 43,330 | 1,245,304 | — | — |
50
| | | | | STOCK AWARDS | | |||||||||||||||||||||||||||||||
| NAME AND GRANTS | | | | GRANT DATE | | | | NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED (#) | | | | MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED ($) | | | | 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 ($) | | |||||||||||||||
| A. Ryals McMullian | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ROIC-Based Performance Shares(1) | | | | | | 1/1/2023 | | | | | | | — | | | | | | | — | | | | | | | 71,510 | | | | | | | 1,609,690 | | |
| TSR-Based Performance Shares(1) | | | | | | 1/1/2023 | | | | | | | — | | | | | | | — | | | | | | | 71,510 | | | | | | | 1,609,690 | | |
| ROIC-Based Performance Shares(2) | | | | | | 1/2/2022 | | | | | | | — | | | | | | | — | | | | | | | 73,360 | | | | | | | 1,651,334 | | |
| TSR-Based Performance Shares(2) | | | | | | 1/2/2022 | | | | | | | — | | | | | | | — | | | | | | | 73,360 | | | | | | | 1,651,334 | | |
| ROIC-Based Performance Shares(3) | | | | | | 1/3/2021 | | | | | | | — | | | | | | | — | | | | | | | 72,900 | | | | | | | 1,640,979 | | |
| TSR-Based Performance Shares(3) | | | | | | 1/3/2021 | | | | | | | — | | | | | | | — | | | | | | | 72,900 | | | | | | | 1,640,979 | | |
| R. Steve Kinsey | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ROIC-Based Performance Shares(1) | | | | | | 1/1/2023 | | | | | | | — | | | | | | | — | | | | | | | 18,950 | | | | | | | 426,565 | | |
| TSR-Based Performance Shares(1) | | | | | | 1/1/2023 | | | | | | | — | | | | | | | — | | | | | | | 18,950 | | | | | | | 426,565 | | |
| ROIC-Based Performance Shares(2) | | | | | | 1/2/2022 | | | | | | | — | | | | | | | — | | | | | | | 19,270 | | | | | | | 433,768 | | |
| TSR-Based Performance Shares(2) | | | | | | 1/2/2022 | | | | | | | — | | | | | | | — | | | | | | | 19,270 | | | | | | | 433,768 | | |
| ROIC-Based Performance Shares(3) | | | | | | 1/3/2021 | | | | | | | — | | | | | | | — | | | | | | | 22,630 | | | | | | | 509,401 | | |
| TSR-Based Performance Shares(3) | | | | | | 1/3/2021 | | | | | | | — | | | | | | | — | | | | | | | 22,630 | | | | | | | 509,401 | | |
| Terry S. Thomas(4) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ROIC-Based Performance Shares(1) | | | | | | 9/1/2023 | | | | | | | — | | | | | | | — | | | | | | | 25,040 | | | | | | | 563,650 | | |
| TSR-Based Performance Shares(1) | | | | | | 9/1/2023 | | | | | | | — | | | | | | | — | | | | | | | 25,040 | | | | | | | 563,650 | | |
| Restricted Stock Units(5) | | | | | | 9/1/2023 | | | | | | | 54,250 | | | | | | | 1,221,168 | | | | | | | — | | | | | | | — | | |
| Heeth Varnedoe IV | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ROIC-Based Performance Shares(1) | | | | | | 1/1/2023 | | | | | | | — | | | | | | | — | | | | | | | 14,860 | | | | | | | 334,499 | | |
| TSR-Based Performance Shares(1) | | | | | | 1/1/2023 | | | | | | | — | | | | | | | — | | | | | | | 14,860 | | | | | | | 334,499 | | |
| ROIC-Based Performance Shares(2) | | | | | | 1/2/2022 | | | | | | | — | | | | | | | — | | | | | | | 7,670 | | | | | | | 172,652 | | |
| TSR-Based Performance Shares(2) | | | | | | 1/2/2022 | | | | | | | — | | | | | | | — | | | | | | | 7,670 | | | | | | | 172,652 | | |
| ROIC-Based Performance Shares(3) | | | | | | 1/3/2021 | | | | | | | — | | | | | | | — | | | | | | | 9,230 | | | | | | | 207,768 | | |
| TSR-Based Performance Shares(3) | | | | | | 1/3/2021 | | | | | | | — | | | | | | | — | | | | | | | 9,230 | | | | | | | 207,768 | | |
| D. Keith Wheeler | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ROIC-Based Performance Shares(1) | | | | | | 1/1/2023 | | | | | | | — | | | | | | | — | | | | | | | 4,353 | | | | | | | 97,986 | | |
| TSR-Based Performance Shares(1) | | | | | | 1/1/2023 | | | | | | | — | | | | | | | — | | | | | | | 4,353 | | | | | | | 97,986 | | |
| ROIC-Based Performance Shares(2) | | | | | | 1/2/2022 | | | | | | | — | | | | | | | — | | | | | | | 8,853 | | | | | | | 199,281 | | |
| TSR-Based Performance Shares (2) | | | | | | 1/2/2022 | | | | | | | — | | | | | | | — | | | | | | | 8,853 | | | | | | | 199,281 | | |
| ROIC-Based Performance Shares(3) | | | | | | 1/3/2021 | | | | | | | — | | | | | | | — | | | | | | | 15,600 | | | | | | | 351,156 | | |
| TSR-Based Performance Shares(3) | | | | | | 1/3/2021 | | | | | | | — | | | | | | | — | | | | | | | 15,600 | | | | | | | 351,156 | | |
| Stephanie B. Tillman | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ROIC-Based Performance Shares(1) | | | | | | 1/1/2023 | | | | | | | — | | | | | | | — | | | | | | | 13,530 | | | | | | | 304,560 | | |
| TSR-Based Performance Shares(1) | | | | | | 1/1/2023 | | | | | | | — | | | | | | | — | | | | | | | 13,530 | | | | | | | 304,560 | | |
| ROIC-Based Performance Shares(2) | | | | | | 1/2/2022 | | | | | | | — | | | | | | | — | | | | | | | 10,010 | | | | | | | 225,325 | | |
| TSR-Based Performance Shares(2) | | | | | | 1/2/2022 | | | | | | | — | | | | | | | — | | | | | | | 10,010 | | | | | | | 225,325 | | |
| ROIC-Based Performance Shares(3) | | | | | | 1/3/2021 | | | | | | | — | | | | | | | — | | | | | | | 7,980 | | | | | | | 179,630 | | |
| TSR-Based Performance Shares(3) | | | | | | 1/3/2021 | | | | | | | — | | | | | | | — | | | | | | | 7,980 | | | | | | | 179,630 | | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 56 | ||||||||||||||
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STOCK AWARDS
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NAME AND GRANTS | GRANT DATE FOR EQUITY- BASED AWARDS(1) | 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 ($) | |||||||||||||||
R. Steve Kinsey | ||||||||||||||||||||
ROIC-Based Performance Contingent Restricted | 1/2/2022 | — | — | 19,270 | 553,820 | |||||||||||||||
TSR-Based Performance Contingent Restricted | 1/2/2022 | — | — | 19,270 | 553,820 | |||||||||||||||
ROIC-Based Performance Contingent Restricted | 1/3/2021 | — | — | 22,630 | 650,386 | |||||||||||||||
TSR-Based Performance Contingent Restricted | 1/3/2021 | — | — | 22,630 | 650,386 | |||||||||||||||
ROIC-Based Performance Contingent Restricted | 12/29/2019 | 29,162 | 838,116 | — | — | |||||||||||||||
TSR-Based Performance Contingent Restricted | 12/29/2019 | 34,528 | 992,335 | — | — | |||||||||||||||
Bradley K. Alexander | ||||||||||||||||||||
ROIC-Based Performance Contingent Restricted | 1/2/2022 | — | — | 5,993 | 172,239 | |||||||||||||||
TSR-Based Performance Contingent Restricted | 1/2/2022 | — | — | 5,993 | 172,239 | |||||||||||||||
ROIC-Based Performance Contingent Restricted | 1/3/2021 | — | — | 14,080 | 404,659 | |||||||||||||||
TSR-Based Performance Contingent Restricted | 1/3/2021 | — | — | 14,080 | 404,659 | |||||||||||||||
ROIC-Based Performance Contingent Restricted | 12/29/2019 | 27,212 | 782,073 | — | — | |||||||||||||||
TSR-Based Performance Contingent Restricted | 12/29/2019 | 32,219 | 925,974 | — | — |
STOCK AWARDS
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NAME AND GRANTS | GRANT DATE FOR EQUITY- BASED AWARDS(1) | NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED (#) | MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED ($) | 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 ($) | |||||||||||||||
D. Keith Wheeler | ||||||||||||||||||||
ROIC-Based Performance Contingent Restricted | 1/2/2022 | — | — | 13,280 | 381,667 | |||||||||||||||
TSR-Based Performance Contingent Restricted | 1/2/2022 | — | — | 13,280 | 381,667 | |||||||||||||||
ROIC-Based Performance Contingent Restricted | 1/3/2021 | — | — | 15,600 | 448,344 | |||||||||||||||
TSR-Based Performance Contingent Restricted | 1/3/2021 | — | — | 15,600 | 448,344 | |||||||||||||||
ROIC-Based Performance Contingent Restricted | 12/29/2019 | 20,100 | 577,674 | — | — | |||||||||||||||
TSR-Based Performance Contingent Restricted | 12/29/2019 | 23,798 | 683,955 | — | — | |||||||||||||||
Stephanie B. Tillman | ||||||||||||||||||||
ROIC-Based Performance Contingent Restricted | 1/2/2022 | — | — | 10,010 | 287,687 | |||||||||||||||
TSR-Based Performance Contingent Restricted | 1/2/2022 | — | — | 10,010 | 287,687 | |||||||||||||||
ROIC-Based Performance Contingent Restricted | 1/3/2021 | — | — | 7,980 | 229,345 | |||||||||||||||
TSR-Based Performance Contingent Restricted | 1/3/2021 | — | — | 7,980 | 229,345 | |||||||||||||||
ROIC-Based Performance Contingent Restricted | 12/29/2019 | 8,987 | 258,286 | — | — | |||||||||||||||
TSR-Based Performance Contingent Restricted | 12/29/2019 | 10,641 | 305,822 | — | — |
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(3)
STOCK AWARDS | ||||||||
NAME | NUMBER OF SHARES ACQUIRED ON VESTING (#) | VALUE REALIZED ON VESTING ($) | ||||||
A. Ryals McMullian | 97,542 | 2,777,021 | ||||||
R. Steve Kinsey | 69,874 | 1,989,313 | ||||||
Bradley K. Alexander | 56,749 | 1,615,644 | ||||||
D. Keith Wheeler | 48,181 | 1,371,713 | ||||||
Stephanie B. Tillman | 6,745 | 191,637 |
| | | | STOCK AWARDS | | |||||||||
| NAME | | | NUMBER OF SHARES ACQUIRED ON VESTING (#) | | | VALUE REALIZED ON VESTING ($) | | ||||||
| A. Ryals McMullian | | | | | 195,199 | | | | | | 5,441,612 | | |
| R. Steve Kinsey | | | | | 63,690 | | | | | | 1,809,433 | | |
| Terry S. Thomas | | | | | 1,980 | | | | | | 46,649 | | |
| Heeth Varnedoe IV | | | | | 12,280 | | | | | | 349,202 | | |
| D. Keith Wheeler | | | | | 43,898 | | | | | | 1,247,142 | | |
| Stephanie B. Tillman | | | | | 19,628 | | | | | | 557,631 | | |
NAME | EXECUTIVE CONTRIBUTIONS IN FY 2022 ($)(1) | REGISTRANT CONTRIBUTIONS IN FY 2022 ($)(2) | AGGREGATE EARNINGS ($)(3) | AGGREGATE WITHDRAWALS/ DISTRIBUTIONS IN FY 2022 ($) | AGGREGATE BALANCE AT 12/31/2022 ($)(4) | |||||||||||||||
A. Ryals McMullian | 448,291 | 167,193 | 128,522 | — | 2,409,041 | |||||||||||||||
R. Steve Kinsey | 44,295 | 102,608 | 75,715 | — | 1,398,272 | |||||||||||||||
Bradley K. Alexander | 407,398 | 86,479 | 186,823 | — | 3,372,577 | |||||||||||||||
D. Keith Wheeler | 50,432 | 69,271 | 18,942 | — | 410,979 | |||||||||||||||
Stephanie B. Tillman | 14,846 | 23,487 | 9,922 | — | 195,134 |
| NAME | | | EXECUTIVE CONTRIBUTIONS IN FY 2023 ($)(1) | | | REGISTRANT CONTRIBUTIONS IN FY 2023 ($)(2) | | | AGGREGATE EARNINGS IN FY 2023 ($)(3) | | | AGGREGATE WITHDRAWALS/ DISTRIBUTIONS IN FY 2023 ($) | | | AGGREGATE BALANCE AT 12/30/2023 ($)(4) | | |||||||||||||||
| A. Ryals McMullian | | | | | 269,067 | | | | | | 237,898 | | | | | | 175,525 | | | | | | — | | | | | | 2,813,970 | | |
| R. Steve Kinsey | | | | | 53,202 | | | | | | 88,509 | | | | | | 100,442 | | | | | | — | | | | | | 1,565,737 | | |
| Terry S. Thomas | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Heeth Varnedoe IV | | | | | — | | | | | | 22,422 | | | | | | 3,865 | | | | | | — | | | | | | 78,421 | | |
| D. Keith Wheeler | | | | | 100,631 | | | | | | 58,572 | | | | | | 34,596 | | | | | | — | | | | | | 603,931 | | |
| Stephanie B. Tillman | | | | | 17,929 | | | | | | 32,255 | | | | | | 15,178 | | | | | | — | | | | | | 260,573 | | |
| | | 57 | |
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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
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Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 58 | |
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NAME | DEATH/ DISABILITY ($) | RETIREMENT ($) | CHANGE OF CONTROL WITHOUT TERMINATION ($) | QUALIFYING TERMINATION FOLLOWING CHANGE OF CONTROL(1) ($) | ||||||||||||
A. Ryals McMullian | ||||||||||||||||
Cash Severance | — | — | — | 6,058,800 | ||||||||||||
Equity Vesting | 11,604,637 | N/A | — | 13,262,550 | ||||||||||||
Other Benefits(2) | — | — | — | 57,729 | ||||||||||||
TOTAL | 11,604,637 | N/A | — | 19,379,079 | ||||||||||||
R. Steve Kinsey | ||||||||||||||||
Cash Severance | — | — | — | 2,296,037 | ||||||||||||
Equity Vesting | 3,749,420 | 3,066,871 | — | 4,416,295 | ||||||||||||
Other Benefits(2) | — | — | — | 51,383 | ||||||||||||
TOTAL | 3,749,420 | 3,066,871 | — | 6,763,715 | ||||||||||||
Bradley K. Alexander | ||||||||||||||||
Cash Severance | — | — | — | 2,080,235 | ||||||||||||
Equity Vesting | 3,498,808 | 2,861,894 | — | 4,121,167 | ||||||||||||
Other Benefits(2) | — | — | — | 51,383 | ||||||||||||
TOTAL | 3,498,808 | 2,861,894 | — | 6,252,785 |
55
| NAME | | | | DEATH/ DISABILITY ($) | | | | RETIREMENT ($) | | | | CHANGE OF CONTROL WITHOUT TERMINATION ($) | | | | QUALIFYING TERMINATION IN CONNECTION WITH A CHANGE OF CONTROL(1) ($) | | ||||||||||||
| A. Ryals McMullian | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash Severance | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 6,446,250 | | |
| Equity Vesting | | | | | | 9,804,005 | | | | | | | N/A | | | | | | | — | | | | | | | 7,658,674 | | |
| Other Benefits(2) | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 57,607 | | |
| TOTAL | | | | | | 9,804,005 | | | | | | | N/A | | | | | | | — | | | | | | | 14,162,531 | | |
| R. Steve Kinsey | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash Severance | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 2,520,000 | | |
| Equity Vesting | | | | | | 2,739,467 | | | | | | | 2,151,519 | | | | | | | — | | | | | | | 2,186,718 | | |
| Other Benefits(2) | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 51,318 | | |
| TOTAL | | | | | | 2,739,467 | | | | | | | 2,151,519 | | | | | | | — | | | | | | | 4,758,036 | | |
| Terry S. Thomas | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash Severance | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 2,210,000 | | |
| Equity Vesting | | | | | | 2,348,468 | | | | | | | N/A | | | | | | | — | | | | | | | 2,083,553 | | |
| Other Benefits(2) | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 59,655 | | |
FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
NAME | DEATH/ DISABILITY ($) | RETIREMENT ($) | CHANGE OF CONTROL WITHOUT TERMINATION ($) | QUALIFYING TERMINATION FOLLOWING CHANGE OF CONTROL(1) ($) | ||||||||||||
D. Keith Wheeler | ||||||||||||||||
Cash Severance | — | — | — | 1,728,257 | ||||||||||||
Equity Vesting | 2,584,301 | 2,113,877 | — | 3,044,003 | ||||||||||||
Other Benefits(2) | — | — | — | 49,823 | ||||||||||||
TOTAL | 2,584,301 | 2,113,877 | — | 4,822,083 | ||||||||||||
Stephanie B. Tillman | ||||||||||||||||
Cash Severance | — | — | — | 1,441,600 | ||||||||||||
Equity Vesting | 1,447,346 | N/A | — | 1,628,653 | ||||||||||||
Other Benefits(2) | — | — | — | 59,295 | ||||||||||||
TOTAL | 1,447,346 | N/A | — | 3,129,548 |
| | | 59 | |
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| NAME | | | | DEATH/ DISABILITY ($) | | | | RETIREMENT ($) | | | | CHANGE OF CONTROL WITHOUT TERMINATION ($) | | | | QUALIFYING TERMINATION IN CONNECTION WITH A CHANGE OF CONTROL(1) ($) | | ||||||||||||
| TOTAL | | | | | | 2,348,468 | | | | | | | N/A | | | | | | | — | | | | | | | 4,353,208 | | |
| Heeth Varnedoe IV | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash Severance | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 2,520,000 | | |
| Equity Vesting | | | | | | 1,429,835 | | | | | | | 978,853 | | | | | | | — | | | | | | | 1,133,212 | | |
| Other Benefits(2) | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 54,153 | | |
| TOTAL | | | | | | 1,429,835 | | | | | | | 978,853 | | | | | | | — | | | | | | | 3,707,365 | | |
| Stephanie B. Tillman | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash Severance | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 1,684,870 | | |
| Equity Vesting | | | | | | 1,419,030 | | | | | | | N/A | | | | | | | — | | | | | | | 1,079,303 | | |
| Other Benefits(2) | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 59,167 | | |
| TOTAL | | | | | | 1,419,030 | | | | | | | N/A | | | | | | | — | | | | | | | 2,823,340 | | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 60 | |
XECUTIVEPAY RATIO DISCLOSURE COMPENSATION
YEAR | CEO TOTAL ($) | MEDIAN EMPLOYEE ($) | RATIO OF CEO TO MEDIAN EMPLOYEE TOTAL COMPENSATION | |||||||||
2022 | 6,278,511 | 72,646 | 86.4 |
| YEAR | | | CEO TOTAL COMPENSATION ($) | | | MEDIAN EMPLOYEE TOTAL COMPENSATION ($) | | | RATIO OF CEO TO MEDIAN EMPLOYEE TOTAL COMPENSATION | | |||||||||
| 2023 | | | | | 6,416,169 | | | | | | 70,652 | | | | | | 90.8 | | |
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Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
PAY VERSUS PERFORMANCE (1) | ||||||||||||||||||||||||||||||||
FISCAL YEAR (a) | SUMMARY COMPEN- SATION TABLE TOTAL FOR PEO (b) | COMPEN- SATION ACTUALLY PAID TO PEO 1 (c) (2) | AVERAGE SUMMARY COMPEN- SATION TABLE TOTAL FOR NON-PEO NAMED EXECUTIVE OFFICERS (d) | AVERAGE COMPEN- SATION ACTUALLY PAID TO NON-PEO NAMED EXECUTIVE OFFICERS (e) (2) | VALUE OF INITIAL FIXED $100 INVESTMENT BASED ON: | NET INCOME (h) (5) ($ IN THOUSANDS) | ADJUSTED EBITDA (i) (6) ($ IN THOUSANDS) | |||||||||||||||||||||||||
COMPANY TOTAL SHARE- HOLDER RETURN (f) (3) | PEER GROUP TOTAL SHARE- HOLDER RETURN (g) (4) | |||||||||||||||||||||||||||||||
2022 | $ | 6,255,359 | $ | 8,123,687 | $ | 1,836,906 | $ | 2,359,595 | $ | 146.14 | $ | 129.46 | $ | 228,394 | $ | 502,030 | ||||||||||||||||
2021 | $ | 5,979,905 | $ | 7,749,481 | $ | 1,955,812 | $ | 2,505,445 | $ | 135.34 | $ | 118.36 | $ | 206,187 | $ | 490,861 | ||||||||||||||||
2020 | $ | 5,086,770 | $ | 5,109,271 | $ | 2,189,017 | $ | 2,154,414 | $ | 107.73 | $ | 104.67 | $ | 152,318 | $ | 521,690 |
PEO | 2022 | 2021 | 2020 | |||||||||
Summary Compensation Table (SCT) Total for PEO | $ | 6,255,359 | $ | 5,979,905 | $ | 5,086,770 | ||||||
- change in actuarial present value of pension benefits | — | — | — | |||||||||
+ service cost of pension benefits | — | — | — | |||||||||
+ prior service cost of pension benefits | — | — | — | |||||||||
- SCT “Stock Awards” column value | ($ | 4,360,518 | ) | ($ | 3,599,802 | ) | ($ | 2,600,146 | ) | |||
- SCT “Option Awards” column value | — | — | — | |||||||||
+ Covered Year-end fair value of outstanding equity awards granted in Covered Year | $ | 4,216,733 | $ | 4,005,126 | $ | 2,517,814 | ||||||
+/- change in fair value (from prior year-end to CoveredYear-end) of equity awards outstanding at CoveredYear-end that were granted in prior years | $ | 1,304,983 | $ | 1,364,252 | $ | 104,833 | ||||||
+ vesting date fair value of equity awards granted and vested in Covered Year | — | — | — | |||||||||
+/- change in fair value (from prior year-end to vest date in Covered Year) of prior-year equity awards vested in Covered Year | $ | 475,955 | — | — | ||||||||
- prior year-end fair value of prior-year equity awards forfeited in Covered Year | — | — | — | |||||||||
+ includable dividends/earnings paid on equity awards during Covered Year | $ | 231,175 | — | — | ||||||||
Compensation Actually Paid to PEO | $ | 8,123,687 | $ | 7,749,481 | $ | 5,109,271 |
AVERAGE FOR NON-PEO NAMED EXECUTIVE OFFICERS | 2022 | 2021 | 2020 | |||||||||
Average SCT Total for Non-PEO Named Executive Officers | $ | 1,836,906 | $ | 1,955,812 | $ | 2,189,017 | ||||||
- change in actuarial present value of pension benefits | — | — | — | |||||||||
+ service cost of pension benefits | — | — | — | |||||||||
+ prior service cost of pension benefits | — | — | — | |||||||||
- SCT “Stock Awards” column value | ($ | 899,624 | ) | ($ | 855,632 | ) | ($ | 827,415 | ) | |||
- SCT “Option Awards” column value | — | — | — | |||||||||
+ Covered Year-end fair value of outstanding equity awards granted in Covered Year | $ | 869,892 | $ | 951,973 | $ | 769,705 | ||||||
+/- change in fair value (from prior year-end to CoveredYear-end) of equity awards outstanding at CoveredYear-end that were granted in prior years | $ | 329,921 | $ | 462,255 | $ | 32,071 | ||||||
+ vesting date fair value of equity awards granted and vested in Covered Year | — | — | — | |||||||||
+/- change in fair value (from prior year-end to vest date in Covered Year) of prior-year equity awards vested in Covered Year | $ | 211,626 | ($ | 9,281 | ) | ($ | 9,117 | ) | ||||
- prior year-end fair value of prior-year equity awards forfeited in Covered Year | ($ | 96,694 | ) | — | — | |||||||
+ includable dividends/earnings paid on equity awards during Covered Year | $ | 107,568 | $ | 318 | $ | 153 | ||||||
Average Compensation Actually Paid to Non-PEO Named Executive Officers | $ | 2,359,595 | $ | 2,505,445 | $ | 2,154,414 |
| | | | PAY VERSUS PERFORMANCE(1) | | |||||||||||||||||||||||||||||||||||||||||||||
| FISCAL YEAR (a) | | | SUMMARY COMPENSATION TABLE TOTAL FOR PEO (b) | | | COMPENSATION ACTUALLY PAID TO PEO (c)(2) | | | AVERAGE SUMMARY COMPENSATION TABLE TOTAL FOR NON-PEO NAMED EXECUTIVE OFFICERS (d) | | | AVERAGE COMPENSATION ACTUALLY PAID TO NON-PEO NAMED EXECUTIVE OFFICERS (e)(2) | | | VALUE OF INITIAL FIXED $100 INVESTMENT BASED ON: | | | NET INCOME (h)(5) ($ IN THOUSANDS) | | | ADJUSTED EBITDA (i)(6) ($ IN THOUSANDS) | | |||||||||||||||||||||||||||
| COMPANY TOTAL SHAREHOLDER RETURN (f)(3) | | | PEER GROUP TOTAL SHAREHOLDER RETURN (g)(4) | | |||||||||||||||||||||||||||||||||||||||||||||
| 2023 | | | | $ | 6,393,039 | | | | | $ | 4,447,525 | | | | | $ | 2,109,578 | | | | | $ | 1,569,172 | | | | | $ | 146.26 | | | | | $ | 156.66 | | | | | $ | 123,416 | | | | | $ | 501,738 | | |
| 2022 | | | | $ | 6,255,359 | | | | | $ | 8,123,687 | | | | | $ | 1,836,906 | | | | | $ | 2,359,595 | | | | | $ | 146.14 | | | | | $ | 129.46 | | | | | $ | 228,394 | | | | | $ | 502,030 | | |
| 2021 | | | | $ | 5,979,905 | | | | | $ | 7,749,481 | | | | | $ | 1,955,812 | | | | | $ | 2,505,445 | | | | | $ | 135.34 | | | | | $ | 118.36 | | | | | $ | 206,187 | | | | | $ | 490,861 | | |
| 2020 | | | | $ | 5,086,770 | | | | | $ | 5,109,271 | | | | | $ | 2,189,017 | | | | | $ | 2,154,414 | | | | | $ | 107.73 | | | | | $ | 104.67 | | | | | $ | 152,318 | | | | | $ | 521,690 | | |
| PEO | | | 2023 | | |||
| Summary Compensation Table (SCT) Total for PEO | | | | $ | 6,393,039 | | |
| - change in actuarial present value of pension benefits | | | | | — | | |
| + service cost of pension benefits | | | | | — | | |
| + prior service cost of pension benefits | | | | | — | | |
| - SCT “Stock Awards” column value | | | | $ | (4,452,212) | | |
| - SCT “Option Awards” column value | | | | | — | | |
| + Covered Year-end fair value of outstanding equity awards granted in Covered Year | | | | $ | 3,219,380 | | |
| +/- change in fair value (from prior year-end to Covered Year-end) of equity awards outstanding at Covered Year-end that were granted in prior years | | | | $ | (1,935,941) | | |
| + vesting date fair value of equity awards granted and vested in Covered Year | | | | | — | | |
| +/- change in fair value (from prior year-end to vest date in Covered Year) of prior-year equity awards vested in Covered Year | | | | $ | 702,983 | | |
| - prior year-end fair value of prior-year equity awards forfeited in Covered Year | | | | | — | | |
| + includable dividends/earnings paid on equity awards during Covered Year | | | | $ | 520,276 | | |
| Compensation Actually Paid to PEO | | | | $ | 4,447,525 | | |
| AVERAGE FOR NON-PEO NAMED EXECUTIVE OFFICERS | | | 2023 | | |||
| Average SCT Total for Non-PEO Named Executive Officers | | | | $ | 2,109,578 | | |
| - change in actuarial present value of pension benefits | | | | | — | | |
| + service cost of pension benefits | | | | | — | | |
| + prior service cost of pension benefits | | | | | — | | |
| - SCT “Stock Awards” column value | | | | $ | (1,263,872) | | |
| - SCT “Option Awards” column value | | | | | — | | |
| + Covered Year-end fair value of outstanding equity awards granted in Covered Year | | | | $ | 796,044 | | |
| +/- change in fair value (from prior year-end to Covered Year-end) of equity awards outstanding at Covered Year-end that were granted in prior years | | | | $ | (382,865) | | |
| + vesting date fair value of equity awards granted and vested in Covered Year | | | | | — | | |
| +/- change in fair value (from prior year-end to vest date in Covered Year) of prior-year equity awards vested in Covered Year | | | | $ | 240,818 | | |
| - prior year-end fair value of prior-year equity awards forfeited in Covered Year | | | | | — | | |
| + includable dividends/earnings paid on equity awards during Covered Year | | | | $ | 69,469 | | |
| Average Compensation Actually Paid to Non-PEO Named Executive Officers | | | | $ | 1,569,172 | | |
2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 62 | |
Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
| RELATIONSHIP BETWEEN COMPENSATION ACTUALLY PAID AND TOTAL SHAREHOLDER RETURN AND BETWEEN TOTAL SHAREHOLDER RETURN OF THE COMPANY AND PVP PEER GROUP | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 63 | |
| RELATIONSHIP BETWEEN COMPENSATION ACTUALLY PAID AND NET INCOME | |
| RELATIONSHIP BETWEEN COMPENSATION ACTUALLY PAID AND ADJUSTED EBITDA | |
Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 64 | |
| Adjusted EBITDA | |
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| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 65 | |
| PROPOSAL III Ratification of Appointment of Independent Registered Public Accounting Firm | |
FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
DIRECTOR COMPENSATION
Based upon the recommendations of the nominating/corporate governanceOur audit committee theand board of directors considershave appointed PricewaterhouseCoopers LLP (“PwC”) as our independent registered public accounting firm for the fiscal year ending December 28, 2024. The board of directors recommends that this appointment be ratified.
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The nominating/corporate governance committee annually reviews
Meridian concluded that the average director compensation was positioned near the median relative to both peer groups and therefore did not recommend any changes for the 2022 director compensation package. The program, which is the same as the 2021 program, is described below.
Cash and Stock Compensation
Given the above principles and market data, the non-employee director compensation package consisted of the following:
COMPENSATION ELEMENT | 2022 PROGRAM | |||
Annual Cash Retainer | $ | 100,000 | (1) | |
Committee Chair Retainers: | ||||
• Audit Committee | $ | 22,500 | (2) | |
• Compensation and Human Capital Committee | $ | 20,000 | ||
• Nominating/Corporate Governance Committee | $ | 15,000 | ||
• Finance Committee | $ | 15,000 | ||
Audit Committee Member Retainer | $ | 7,500 | ||
Presiding Director Retainer | $ | 20,000 | ||
Non-Executive Chairman Retainer | $ | 100,000 | (3) | |
Annual Stock Award | $ | 145,008 | (4) |
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Additional Compensation Program Details
Non-employee directors are eligible to participate in the Omnibus Plan and the EDCP.
Non-employee directors have the option to convert their annual cash board retainer fees into deferred stock equal in value to the cash payments they would otherwise have received. These deferred shares vest pro rata over a one-year period based on service. Accumulated dividends are paid upon the delivery of the vested shares.
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Non-employee directors may alternatively elect to defer all or any portion of their annual retainers and cash committee fees into an interest-bearing account in the EDCP. Generally, the deferral plus interest is paid to the director upon retirement or termination from the company’s board of directors.
Stock Ownership Guidelines
In order to align the economic interests of directors with those of shareholders, all directors are expected to hold shares of common stock in the company. A non-employee director must own shares of common stock with a value of at least six times the annual cash retainer paid to the non-employee directors. In addition, the non-executive chairman of the board of directors is required to hold six times his annual board retainer plus his additional cash retainer. All direct holdingsreviews of our common stock, certain indirect holdings,Quarterly Reports on Form 10-Q and all vestedAnnual Reports on Form 10-K, accounting consultants in both years, and unvested shares of deferred stock are included for purposes of determining compliance. Directors have five years to meet the required guidelines. All non-employee directors with at least five years of service were in compliance with the guidelines as of March 6, 2023.
Other Arrangements
We reimburse all directors for out-of-pocket expenses costs incurred in connection with attendance at boardthe audit in both years.
FISCAL 2022 DIRECTOR COMPENSATION TABLE
The following table details compensation to non-employee members ofvotes cast opposing the board of directors for the 2022 fiscal year:action.
NAME | FEES EARNED OR PAID IN CASH ($)(1) | STOCK AWARDS ($)(2) | CHANGE IN PENSION VALUE AND NONQUALIFIED DEFERRED COMP. EARNINGS ($)(3) | ALL OTHER COMP. ($) | TOTAL ($) | |||||||||||||||
George E. Deese | 200,000 | 145,008 | — | — | 345,008 | |||||||||||||||
Edward J. Casey, Jr. | 103,125 | (4) | 145,008 | — | — | 248,133 | ||||||||||||||
Thomas C. Chubb, III | 103,125 | (4) | 145,008 | — | — | 248,133 | ||||||||||||||
Rhonda Gass | 107,500 | 145,008 | 12,976 | — | 265,484 | |||||||||||||||
Benjamin H. Griswold, IV | 135,000 | 145,008 | — | — | 280,008 | |||||||||||||||
Margaret G. Lewis | 120,000 | 145,008 | 8,018 | — | 273,026 | |||||||||||||||
W. Jameson McFadden | 107,500 | 145,008 | — | — | 252,508 | |||||||||||||||
James T. Spear | 122,500 | 145,008 | — | — | 267,508 | |||||||||||||||
Melvin T. Stith, Ph.D. | 100,000 | 145,008 | — | — | 245,008 | |||||||||||||||
Terry S. Thomas | 107,500 | 145,008 | — | — | 252,508 | |||||||||||||||
C. Martin Wood III | 122,500 | 145,008 | — | — | 267,508 |
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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
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AUDIT COMMITTEE REPORT
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2022 AUDITED FINANCIAL STATEMENTS
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| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 68 | |
UDIT COMMITTEE REPORT
Rhonda O. Gass
Brigitte H. King
W. Jameson McFadden
Terry S. Thomas
Joanne D. Smith
C. Martin Wood III
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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
ITEMS TO BE VOTED ON
OVERVIEW
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 69 | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 70 | |
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Vote Required
Eachincluded in vote totals and will not affect the outcome of the 11vote with respect to Proposals I, II, and III.
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 72 | |
Your board of directors unanimously recommends that you vote “FOR” each of the above-named director-nominees.
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PROPOSALProposals II ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and Section 14A of the Exchange Act provide shareholders with the right to cast an advisory (non-binding) vote to approve the compensation of the Named Executives as disclosed pursuant to the compensation disclosure rules of the SEC. This proposal is commonly known as the “say-on-pay” vote.
At our 2022 annual meeting of shareholders, more than 99% of the shares voted were cast in support of the company’s executive compensation program.
As described in the Compensation Discussion and Analysis section of this proxy statement, the compensation and human capital committee evaluates both performance and compensation to help ensure that the company maintains its ability to attract and retain the most qualified executives while motivating high company performance.
Highlights of our executive compensation program, as described in the Compensation Discussion and Analysis section of this proxy statement, include:
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The say-on-pay vote gives our shareholders the opportunity to express their views on the compensation of our Named Executives. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executives and the compensation philosophy, policies and practices described in this proxy statement. Accordingly, we are asking shareholders to approve the following resolution:
“RESOLVED, that the shareholders approve the compensation of the company’s Named Executives, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation discussion and analysis, compensation tables and any related material disclosed in this proxy statement.”
Because this vote is advisory, it will not be binding on the compensation and human capital committee, the board of directors or the company. However, the compensation and human capital committee and the board of directors value the opinions of the company’s shareholders and will take into account the outcome of the vote when considering future compensation arrangements for the Named Executives.
We currently hold a say-on-pay vote on an annual basis, and our next say-on-pay vote is expected to occur at our 2024 annual meeting of shareholders.
Vote Required
Proposal IIIII requires the votes cast within the voting group favoring the action to exceed the votes cast opposing the action.
Your board of directors unanimously recommends that you vote “FOR” Proposal II.
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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
PROPOSAL III ADVISORY VOTE ON FREQUENCY OF FUTURE ADVISORY VOTES TO APPROVE EXECUTIVE COMPENSATION
The Dodd-Frank Act and Section 14A of the Exchange Act also require us to provide shareholders the right to cast an advisory (non-binding) vote regarding how frequently the company should include in its proxy materials a proposal similar to Proposal II regarding the approval of the compensation awarded to our executives. Shareholders may vote for the proposal toquorum requirement is satisfied but will not be included in our proxy statement every one, two or three years.vote totals and will not affect the outcome of the vote. A “non-vote” occurs when a nominee holding shares for a beneficial owner does not vote on a proposal because the nominee has not received instructions from the beneficial owner and does not have discretionary power to vote.
The board
You may cast your vote on your preferred voting frequency by choosing the option of 1 year, 2 years, or 3 years, or abstaining from voting, when you vote in response to the resolution set forth below.will other matters be voted on?
“RESOLVED, that the option of once every year, two years or three years that receives the highest number of votes cast for
Because this vote is advisory, it will not be binding on the company ortime, the board of directors does not know of any other business to be brought before the annual meeting, but if any other business is properly brought before the annual meeting, the persons named as proxies, Messrs. McMullian and notwithstandingKinsey and Ms. Tillman, will exercise their judgment in deciding how to vote or otherwise act at the annual meeting with respect to that matter or proposal.
Vote Required
The proxy card provides shareholdersfile with the opportunity to choose among four frequency options (“1 YEAR,” “2 YEARS,” “3 YEARS,”SEC on or “ABSTAIN”),before May 30, 2024.
Recommendation of the Board
Your board of directors unanimously recommends that you vote “1 YEAR” Proposal III.
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PROPOSAL IV VOTE TO APPROVE THE AMENDMENT AND RESTATEMENT OF THE FLOWERS FOODS, INC. 2014 OMNIBUS EQUITY AND INCENTIVE COMPENSATION PLAN
Overview
We are asking shareholders to approve an amendment and restatement of the Flowers Foods, Inc. 2014 Omnibus Equity and Incentive Compensation Plan. On March 6, 2023, upon recommendation by the compensation and human capital committee, the board approved and adopted, subject to the approval of the company’s shareholders at the 20232025 annual meeting of shareholders, please see “— 2025 Shareholder Proposals” below.
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 73 | |
The company’s shareholders approved the 2014 Plan at the company’s 2014 annual meetingreceive your proxy materials by mail, a copy of shareholders. The 2014 Plan affords the compensation and human capital committee the ability to design compensatory awards that are responsive to the company’s needs and includes authorization for a variety of awards designed to advance the interests and long-term success of the company by encouraging stock ownership among officers and other employees of the company and its subsidiaries, certain consultants and other service providers to the company and its subsidiaries, and non-employee directors of the company. You are being asked to approve the Amended 2014 Plan.
Shareholder approval of the Amended 2014 Plan would primarily make available for awards under the Amended 2014 Plan an additional 9,340,000 shares of common stock, par value $0.01 per share, of the company (“Common Stock”), as described below and in the Amended 2014 Plan, with such amount subject to adjustment, including under the share counting rules.
The board recommends that you vote to approve the Amended 2014 Plan. If the Amended 2014 Plan is approved by shareholders at theour 2023 annual meeting of shareholders, it will be effective as of the day of the annual meeting, and future grants will be made on or after such date under the Amended 2014 Plan. If the Amended 2014 Plan is not approved byreport, which includes our shareholders, then it will not become effective, no awards will be granted under the Amended 2014 Plan, and the 2014 Plan will continue in accordance with its terms as previously approved by our shareholders.
The actual text of the Amended 2014 Plan is attached to this proxy statement as Appendix B. The following description of the Amended 2014 Plan is only a summary of its principal terms and provisions and is qualified by reference to the actual text as set forth in Appendix B.
Why We Believe You Should Vote for this Proposal
The Amended 2014 Plan continues to authorize the compensation and human capital committee to provide cash awards and equity-based compensation in the forms described below for the purpose of providing Amended 2014 Plan participants incentives and rewards for performance and/or service. Some of the key features of the Amended 2014 Plan that reflect our commitment to effective management of equity and incentive compensation are set forth below in this subsection.
We believe our future success continues to depend in part on our ability to attract, motivate, and retain high quality employees and directors and that the ability to provide equity-based and incentive-based awards under the Amended 2014 Plan is critical to achieving this success. We would be at a significant competitive disadvantage if we could not use stock-based awards to recruit and compensate our employees and directors. The use of shares of Common Stock as part of our compensation program is also important because equity-based awards continue to be an essential component of our compensation for key employees, as they help link compensation with long-term shareholder value creation and reward participants based on service and/or performance.
In 2014, company shareholders approved 8,000,000 shares of Common Stock to be used for awards under the 2014 Plan. As of December 31, 2022, 897,922 shares of Common Stock remained available for awards under the 2014 Plan (assuming maximum payout with respect to performance-based awards). If the Amended 2014 Plan is not approved, it may be necessary to increase significantly the cash component of our employee and director compensation, which approach may not necessarily align employee and director compensation interests with the investment interests of our shareholders. Replacing equity awards with cash also would increase cash compensation expense and use cash that could be better utilized.
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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
The following includes aggregated information regarding our view of the overhang and dilution associated with the 2014 Plan and the Flowers Foods, Inc. 2001 Equity and Performance Incentive Plan, as amended and restated as of April 1, 2009 (the “EPIP”), and the potential dilution associated with the Amended 2014 Plan. This information is as of December 31, 2022. As of that date, there were approximately 211,133,966 shares of Common Stock outstanding. As of that date, 3,919,189 shares of Common Stock (approximately 1.86% of our outstanding Common Stock) were subject to outstanding awards under the 2014 Plan (restricted stock units, performance shares (assuming maximum performance) and deferred shares), 82,779 shares of Common Stock (approximately 0.04% of our outstanding Common Stock) were subject to outstanding awards under the EPIP (deferred shares) and 897,922 shares of Common Stock (approximately 0.43% of our outstanding Common Stock) were available for future awards under the 2014 Plan. There were no shares available for future awards under the EPIP as of December 31, 2022. As a result, we view the 2014 Plan and the EPIP as representing an overhang percentage (in other words, potential dilution of the holders of shares of Common Stock) of approximately 2.32% as of December 31, 2022.
The proposed additional 9,340,000 shares of Common Stock available for awards under the Amended 2014 Plan represent approximately 4.42% of our outstanding shares of Common Stock as of December 31, 2022, a percentage that reflects the simple dilution of the holders of shares of Common Stock that could occur if the Amended 2014 Plan is approved. Factoring in both those additional shares of Common Stock and the 4,899,890 shares of Common Stock subject to outstanding awards or available for future awards under the EPIP and the 2014 Plan, the approximate total overhang under the Amended 2014 Plan and the EPIP is 14,239,890 shares of Common Stock (or approximately 6.74% of the shares of Common Stock outstanding as of December 31, 2022).
The overhang and dilution calculations described above assume that we continue our current practice of granting only “full-value” awards under the Amended 2014 Plan (which are counted against the share pool on a one-for-one basis). As described below, however, the number of shares available under the Amended 2014 Plan will be reduced by only 0.4 shares of Common Stock for every one share of Common Stock subject to a stock option or stock appreciation right (“SAR”) granted under the Amended 2014 Plan. Although we do not currently grant stock options or SARs under the 2014 Plan, in a hypothetical scenario where all shares available for awards under the 2014 Plan as of December 31, 2022 and all new shares requested under the Amended 2014 Plan (a total of 10,237,922 shares) were used for stock options or SARs, they could result in the issuance of up to 25,594,805 shares (10,237,922 divided by 0.4). When added to the 4,001,968 shares subject to outstanding awards as of December 31, 2022, the approximate total overhang under the Amended 2014 Plan and the EPIP would be 29,596,773 shares of Common Stock (or approximately 14.02% of the shares of Common Stock outstanding as of December 31, 2022).
Based on the closing price on the New York Stock Exchange for our shares of Common Stock on March 15, 2023 of $27.22 per share, the aggregate market value as of March 15, 2023 of the new 9,340,000 shares of Common Stock requested under the Amended 2014 Plan was $254,234,800.
In fiscal years 2020, 2021 and 2022, we granted awards under the 2014 Plan covering 972,406 shares of Common Stock, 1,097,298 shares of Common Stock, and 975,451 shares of Common Stock, respectively. Based on our basic weighted average Common Stock outstanding for those fiscal years of 211,782,000, 211,840,000, and 211,895,000, respectively, for the three-fiscal-year period 2020-2022, our average burn rate, not taking into account forfeitures, was approximately 0.48% (our individual years’ burn rates were 0.46% for fiscal 2020, 0.52% for fiscal 2021 and 0.46% for fiscal 2022).
In determining the number of shares of Common Stock to request for approval under the Amended 2014 Plan, our management worked with the compensation and human capital committee and our outside advisors to evaluate a number of factors, including our recent share usage and criteria expected to be utilized by institutional proxy advisory firms in evaluating our proposal for the Amended 2014 Plan.
If the Amended 2014 Plan is approved, we intend to utilize the shares of Common Stock authorized under the Amended 2014 Plan to continue our practice of incentivizing key individuals through equity grants. We currently anticipate that the shares of Common Stock requested in connection with the approval of the Amended 2014 Plan will last for about nine years, based on our historic grant rates, the approximate current stock price, and an assumption that performance-based awards will vest at the target level, but could last for a different period of time depending on future stock price, participation levels, long-term incentive award vehicles and mix, forfeitures and payouts. As noted below, our compensation and human capital committee (or such other committee serving as administrator) retains full discretion under the Amended 2014 Plan to determine the number and amount of awards to be granted under the Amended 2014 Plan, subject to the terms of the Amended 2014 Plan, and, other than certain director awards that will be made following the 2023 annual meeting of shareholders (as described below), future benefits that may be received by participants under the Amended 2014 Plan are not determinable at this time.
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We believe that we have demonstrated a commitment to sound equity compensation practices in recent years. We recognize that equity compensation awards dilute shareholders’ equity, so we have carefully managed our equity incentive compensation. Our equity compensation practices are intended to be competitive and consistent with market practices, and we believe our historical stock usage has been responsible and mindful of shareholder interests, as described above.
In evaluating this proposal, shareholders should consider all of the information in this proposal.
Material Changes from the 2014 Plan
The Amended 2014 Plan (1) increases the number of shares of Common Stock available for awards under the 2014 Plan by 9,340,000 shares, (2) correspondingly increases the limit on shares that may be issued or transferred upon the exercise of incentive stock options granted under the 2014 Plan, during its duration (as described below), by 9,340,000 shares of Common Stock, (3) adds a new $750,000 limit on the amount of compensation (covering cash and equity awards in the aggregate) a non-employee director may be awarded each calendar year, (4) removes various provisions under the 2014 Plan intended to allow awards granted thereunder to potentially qualify for the “performance-based award” exception to the deductibility limit under Section 162(m) of the Internal Revenue Code of 1986, as amended from time to time (the “Code”), as such provisions are now obsolete following 2017 tax reform, (5) allows for share withholding for taxes above the minimum statutory rate if such higher rate is approved by the compensation and human capital committee and would not result in adverse accounting consequences, (6) revises the minimum vesting provisions to provide for one-year minimum vesting on all award types (rather than one or three years, depending on award type) subject to customary exceptions, extend such restrictions to awards to non-employee directors, and reduce the carveout for awards not subject to such minimum vesting requirement from 10% of the share reserve to 5% of the share reserve, (7) revises the clawback provisions of the 2014 Plan to accommodate anticipated final stock exchange clawback listing standards, (8) revises the change in control definition to clarify that only the specifically listed transactions or events will be a change in control, and (9) extends the term of the 2014 Plan until the 10th anniversary of the date of shareholder approval of the Amended 2014 Plan. The Amended 2014 Plan also makes certain other conforming, clarifying or nonmaterial changes to the terms of the 2014 Plan to implement the Amended 2014 Plan.
Shareholder Friendly Provisions of the Amended 2014 Plan
Below are certain highlights of the Amended 2014 Plan. These features of the Amended 2014 Plan are designed to reinforce alignment between equity compensation arrangements awarded pursuant to the Amended 2014 Plan and shareholders’ interests, consistent with sound corporate governance practices:
Reasonable Amended 2014 Plan Limits. Generally, awards under the Amended 2014 Plan are limited to 17,340,000 shares of Common Stock (consisting of 8 million shares approved by the company’s shareholders in 2014 Plan and 9,340,000 shares added under the Amended 2014 Plan), plus the number of shares of Common Stock that are added (or added back, as applicable) to the aggregate number of shares of Common Stock available under the Amended 2014 Plan pursuant to the share counting rules of the Amended 2014 Plan (as described below). These shares of Common Stock may be shares of original issuance or treasury shares, or a combination of the two. Generally, the aggregate number of shares of Common Stock available under the Amended 2014 Plan will be reduced by (i) .40 shares of Common Stock for every one share of Common Stock subject to a stock option or SAR granted under the Amended 2014 Plan and (ii) one share of Common Stock for every one share of Common Stock subject to an award other than a stock option or SAR granted under the Amended 2014 Plan.
Incentive Stock Option Limit. The Amended 2014 Plan also provides that, subject as applicable to adjustment as described in the Amended 2014 Plan, the aggregate number of shares of Common Stock actually issued or transferred upon the exercise of Incentive Stock Options (as defined below) will not exceed 17,340,000 shares of Common Stock.
Limited Share Recycling Provisions. Subject to certain exceptions described in the Amended 2014 Plan, if any award granted under the Amended 2014 Plan (in whole or in part) is canceled or forfeited, expires, is settled for cash, or is unearned, the shares of Common Stock subject to such award will, to the extent of such cancellation, forfeiture, expiration, cash settlement, or unearned amount, again be available (or continue to be available, as applicable) under the Amended 2014 Plan. Any share of Common Stock that becomes available in accordance with the foregoing will be added (or added back, as applicable) as (i) .40 shares of Common Stock if such share was subject to a stock option or SAR granted under the Amended 2014 Plan or a stock option or stock appreciation right granted under the 2014 Plan, and (ii) one share of Common
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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
Stock if such share was subject to an award other than a stock option or a SAR under the Amended 2014 Plan or a stock option or stock appreciation right granted under the 2014 Plan. Further, the following will not be added (or added back, as applicable) to the aggregate number of shares of Common Stock available under the Amended 2014 Plan:
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Further, if a participant elects to give up the right to receive compensation in exchange for shares of Common Stock based on fair market value, such Common Stock will not count against the aggregate number of shares of Common Stock available under the Amended 2014 Plan.
Minimum Vesting Requirement. The Amended 2014 Plan provides that awards granted to any participant under the Amended 2014 Plan shall vest no earlier than after a minimum one-year vesting period or one-year performance period, as applicable. Notwithstanding the foregoing, the following awards shall not be subject to such minimum vesting requirements: (i) an aggregate of up to 5% of shares of Common Stock that may be issued or transferred under the Amended 2014 Plan, as may be adjusted under the terms of the Amended 2014 Plan, (ii) certain converted, assumed or substituted awards granted under the Amended 2014 Plan, (iii) shares of Common Stock delivered in lieu of fully vested cash obligations, or (iv) awards to non-employee directors that vest on the next annual meeting of the company’s shareholders that is at least 50 weeks after the immediately preceding annual meeting of the company’s shareholders.
Non-Employee Director Compensation Limit. The Amended 2014 Plan provides that in no event will any non-employee director in any one calendar year be granted compensation for such service having an aggregate maximum value (measured at the date of grant as applicable, and calculating the value of any awards based on the grant date fair value for financial reporting purposes) in excess of $750,000.
No Repricing Without Shareholder Approval. Outside of certain corporate transactions or adjustment events described in the Amended 2014 Plan or in connection with a change in control, the exercise or base price of stock options and SARs cannot be reduced, nor can “underwater” stock options or SARs be cancelled in exchange for cash or replaced with other awards with a lower exercise or base price, without shareholder approval under the Amended 2014 Plan.
Change in Control Definition. The Amended 2014 Plan includes a non-liberal definition of “change in control,” in which a change in control would only occur if an underlying transaction is consummated.
Exercise or Base Price Limitation. Except with respect to certain converted, assumed or substituted awards as described in the Amended 2014 Plan, no stock options or SARs will be granted with an exercise or base price less than the fair market value of a share of Common Stock on the date of grant.
Clawback Provisions. The Amended 2014 Plan includes clawback provisions, as described below.
Summary of Other Material Terms of the Amended 2014 Plan
Administration. The Amended 2014 Plan will generally be administered by the compensation and human capital committee (or its successor), or any other committee of the board of directors designated by the board of directors to administer the Amended 2014 Plan. However, at the discretion of the board of directors, the Amended 2014 Plan may be administered by the board of directors, including with respect to the administration of any responsibilities and duties held by the compensation and human capital committee under the Amended 2014 Plan. References to the “committee” in this proposal refer to the compensation and human capital committee, such other committee designated by the board of directors, or the board of directors, as applicable. Subject to applicable law, the committee may delegate certain administrative duties to officers, agents or advisors. In addition, the committee may by resolution, subject to certain restrictions set forth in the
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Amended 2014 Plan, authorize one or more officers of the company to (1) designate employees to be recipients of awards under the Amended 2014 Plan, and (2) determine the size of such awards. However, the committee may not delegate such responsibilities to officers for awards granted to non-employee directors or certain employees, as determined by the committee in accordance with Section 16 of the Exchange Act.
Eligibility. Any person who is selected by the committee to receive benefits under the Amended 2014 Plan and who is at that time an officer or other employee of the company or any of its subsidiaries (including a person who has agreed to commence serving in such capacity within 90 days of the date of grant) is eligible to participate in the Amended 2014 Plan. In addition, persons (including consultants) who provide services to the company or any of its subsidiaries that are equivalent to those typically provided by an employee (provided that such persons satisfy the Form S-8 definition of “employee”), and non-employee directors of the company, may also be selected by the committee to participate in the Amended 2014 Plan. As of December 31, 2022, the company and its subsidiaries had approximately 9,200 employees and 4,100 other service providers who provide employee-type services. As of April 11, 2023, the company had 11 non-employee directors. The basis for participation in the Amended 2014 Plan by eligible persons is the selection of such persons by the committee (or its authorized delegate) in its discretion.
Evidence of Awards. Generally, each grant of an award under the Amended 2014 Plan will be evidenced by an award agreement, certificate, resolution or other type or form of writing or other evidence approved by the committee (an “Evidence of Award”), which will contain such terms and provisions of the awards granted under the Amended 2014 Plan as the committee may approve, consistent with the Amended 2014 Plan.
Treatment of Awards on Termination or Change in Control. Awards under the Amended 2014 Plan may be subject to service-based vesting requirements, and the committee may specify management objectives regarding the vesting of such awards. However, such awards may provide for continued vesting or earlier vesting, including in the event of the retirement (as defined in the Amended 2014 Plan), death or disability of a participant, or in the event of a change in control where either (a) within a specified period the participant is involuntarily terminated for reasons other than for cause or terminates his or her employment for good reason or (b) such awards are not assumed or converted into replacement awards in a manner described in the Evidence of Award.
Types of Awards Under the Amended 2014 Plan. Pursuant to the Amended 2014 Plan, the company may grant restricted stock, restricted stock units (“RSUs”), stock options (including stock options intended to be “incentive stock options” as defined in Section 422 of the Code (“Incentive Stock Options”)), SARs, performance shares, performance units, cash incentive awards, and certain other awards based on or related to our Common Stock. A brief description of the types of awards which may be granted under the Amended 2014 Plan is set forth below.
Restricted Stock. Restricted stock constitutes an immediate transfer of the ownership of shares of Common Stock to the participant in consideration of the performance of services, entitling such participant to dividend, voting and other ownership rights, subject to the substantial risk of forfeiture and restrictions on transfer determined by the committee. Each such grant or sale of restricted stock may be made without additional consideration or in consideration of a payment by the participant that is less than the fair market value per share of Common Stock on the date of grant. Any grant of restricted stock may require that any and all dividends or distributions paid on restricted stock that remain subject to a substantial risk of forfeiture be automatically deferred and/or reinvested in additional restricted stock, which will be subject to the same restrictions as the underlying restricted stock. Any such dividends or other distributions on restricted stock will be deferred until, and paid contingent upon, the vesting of such restricted stock.
RSUs. RSUs awarded under the Amended 2014 Plan constitute an agreement by the company to deliver shares of Common Stock, cash, or a combination of the two, to the participant in the future in consideration of the performance of services, but subject to the fulfillment of such conditions during the restriction period as the committee may specify. Each grant or sale of RSUs may be made without additional consideration or in consideration of a payment by the participant that is less than the fair market value of our Common Stock on the date of grant. During the restriction period applicable to RSUs, the participant will have no right to transfer any rights under the award and will have no rights of ownership in the shares of Common Stock deliverable upon payment of the RSUs and no right to vote them. The committee may, at or after the date of grant, authorize the payment of dividend equivalents on such RSUs on a deferred and contingent basis based upon the vesting of the RSUs. Each grant or sale of RSUs will specify the time and manner of payment of the RSUs that have been earned. An RSU may be paid in cash, shares of Common Stock or any combination of the two.
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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
Stock Options. A stock option is a right to purchase shares of Common Stock upon exercise of the stock option. Stock options granted to an employee under the Amended 2014 Plan may consist of either an Incentive Stock Option, a non-qualified stock option that is not intended to be an “incentive stock option” under Section 422 of the Code, or a combination of both. Each grant will specify the exercise price per share and whether the consideration to be paid in satisfaction of the exercise price will be payable: (1) in cash, or by check acceptable to the company, or by wire transfer of immediately available funds; (2) by the actual or constructive transfer to the company of shares of Common Stock owned by the participant with a value at the time of exercise that is equal to the total exercise price; (3) subject to any conditions or limitations established by the committee, by a net exercise arrangement pursuant to which the company will withhold shares of Common Stock otherwise issuable upon exercise of a stock option; (4) by a combination of the foregoing methods; or (5) by such other methods as may be approved by the committee. To the extent permitted by law, any grant may provide for deferred payment of the exercise price from the proceeds of a sale through a bank or broker of some or all of the shares of Common Stock to which the exercise relates The term of a stock option may not extend more than 10 years from the date of grant, and the committee may provide in an Evidence of Award for the automatic exercise of a stock option. Stock options granted under the Amended 2014 Plan may not provide for dividends or dividend equivalents.
SARs. A SAR is a right to receive from us an amount equal to 100%, or such lesser percentage as the committee may determine, of the spread between the base price of the SAR and the value of our Common Stock on the date of exercise. SARs may be granted in tandem with an option right or be free-standing. A SAR may be paid in cash, shares of Common Stock or any combination of the two. The term of a SAR may not extend more than 10 years from the date of grant, and the committee may provide in an Evidence of Award for the automatic exercise of a SAR. SARs granted under the Amended 2014 Plan may not provide for dividends or dividend equivalents.
Performance Shares, Performance Units and Cash Incentive Awards. A performance share is a bookkeeping entry that records the equivalent of one share of Common Stock, and a performance unit is a bookkeeping entry that records a unit equivalent to $1.00 or such other value as determined by the committee. Each grant of a cash incentive award, performance shares or performance units will specify the number or amount of performance shares or performance units, or the amount payable with respect to a cash incentive award being awarded, which number or amount may be subject to adjustment to reflect changes in compensation or other factors. Each grant will specify management objectives regarding the earning of the award. Each grant will specify the time and manner of payment of performance shares, performance units or a cash incentive award that has been earned. Any grant may specify that the amount payable with respect thereto may be paid by the company in cash, in Common Stock, in restricted stock or RSUs or in any combination thereof.
Any grant of performance shares may provide for the payment of dividend equivalents in cash or in additional shares of Common Stock, subject to deferral and payment on a contingent basis based on the participant’s earning and vesting of the performance shares with respect to which such dividend equivalents are paid. Performance units may not provide for any dividends or dividend equivalents thereon.
Other Awards. The committee may, subject to limits under applicable law and the Amended 2014 Plan, grant to any participant Common Stock or such other awards (“Other Awards”) that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Common Stock or factors that may influence the value of such Common Stock, as further described in the Amended 2014 Plan. The terms and conditions of any such awards will be determined by the committee. In addition, the committee may grant cash awards, as an element of or supplement to any other awards granted under the Amended 2014 Plan. The committee may also authorize the grant of Common Stock as a bonus, or may authorize the grant of Other Awards in lieu of obligations of the company or a subsidiary to pay cash or deliver other property under the Amended 2014 Plan or under other plans or compensatory arrangements, subject to terms determined by the committee in a manner that complies with Section 409A of the Code.
The committee may provide for the payment of dividends or dividend equivalents on Other Awards on a deferred and contingent basis, either in cash or in additional Common Stock based upon the earning and vesting of such awards.
Change in Control. The Amended 2014 Plan includes a definition of “change in control.” In general, a change in control means: (1) any person becomes the beneficial owner, directly or indirectly, of securities of the company representing 35% or more of the company’s voting power; (2) the company consummates a merger or consolidation in which shareholders of the company immediately prior to such transaction beneficially own, immediately following such transaction, securities of the company (or such
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surviving or new corporation) having less than 60% of the voting power; (3) the company consummates a sale, lease, exchange or other transfer or disposition of all or substantially all of its assets to any person other than to a wholly owned subsidiary; (4) the board of directors as of the effective date of the Amended 2014 Plan (and/or their successors) no longer constitute a majority of the board of directors of the company; or (5) approval by our shareholders of a complete liquidation or dissolution of the company.
Management Objectives. The Amended 2014 Plan generally provides that any of the awards set forth above may be granted subject to the achievement of specified management objectives. Management objectives are defined as the measurable performance objective(s) established pursuant to the Amended 2014 Plan for applicable awards. The management objectives may be described in terms of company-wide objectives or objectives that are related to the performance of the individual participant or of one or more of the subsidiaries or subdivisions of the company, and they may be made relative to the performance of other companies (including subdivisions and organizational units within such other companies). The management objectives applicable to an award under the Amended 2014 Plan (if any) will be determined by the committee, and may be based on one or more, or a combination, of the following metrics (including relative or growth achievement regarding such metric), or such other metrics as may be determined by the committee (as further described in the Amended 2014 Plan): (1) profits; (2) cash flow; (3) return on assets, invested capital, net capital employed and equity; (4) working capital; (5) profit margins; (6) liquidity measures; (7) sales growth, gross margin growth, cost initiative and stock price metrics; (8) strategic initiative key deliverable metrics (including product development, strategic partnering, research and development, vitality index, market penetration, geographic business expansion goals, cost targets, customer satisfaction, employee satisfaction, management of employment practices and employee benefits, supervision of litigation and information technology, and goals relating to acquisitions or divestitures of subsidiaries, affiliates and joint ventures).
If the committee determines that a change in the business, operations, corporate structure or capital structure of the company, or the manner in which it conducts its business, or other events or circumstances render the management objectives unsuitable, the committee may in its discretion modify such management objectives or the goals or actual levels of achievement, in whole or in part, as the committee deems appropriate and equitable.
Transferability of Awards. Except as otherwise provided by the committee, and subject to the terms of the Amended 2014 Plan and with respect to Section 409A of the Code, no awards under the Amended 2014 Plan will be transferrable by a participant except by will or the laws of descent and distribution. In no event will any such award granted under the Amended 2014 Plan be transferred for value.
Adjustments; Corporate Transactions. The committee will make or provide for such adjustments in: (1) if applicable, the number and kind of shares of Common Stock covered by awards under the Amended 2014 Plan; (2) the exercise price or base price provided in outstanding stock options and SARs, respectively; (3) cash incentive awards; and (4) other award terms, as the committee in its sole discretion, exercised in good faith, determines is equitably required in order to prevent dilution or enlargement of the rights of participants that otherwise would result from (a) any extraordinary cash dividend, stock dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the company; (b) any merger, consolidation, spin-off, spin-out, split-off, split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities; or (c) any other corporate transaction or event having an effect similar to any of the foregoing.
In the event of any such transaction or event, or in the event of a change in control of the company, the committee may provide in substitution for any or all outstanding awards under the Amended 2014 Plan such alternative consideration (including cash), if any, as it may in good faith determine to be equitable under the circumstances and will require in connection therewith the surrender of all awards so replaced in a manner that complies with Section 409A of the Code. In addition, for each stock option or SAR with an exercise price or base price, respectively, greater than the consideration offered in connection with any such transaction or event or change in control of the company, the committee may elect to cancel such stock option or SAR without any payment to the person holding such stock option or SAR. The committee will also make or provide for such adjustments to the number of shares of Common Stock available under the Amended 2014 Plan and the share limits of the Amended 2014 Plan as the committee, in its sole discretion, exercised in good faith, determines is appropriate to reflect such transaction or event, subject to certain tax-based limitations.
Detrimental Activity and Recapture. Any Evidence of Award may reference a clawback policy of the company or provide for the cancellation or forfeiture of an award or forfeiture and repayment to us of any gain related to an award, or include other
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provisions intended to have a similar effect, upon such terms and conditions as may be determined by the committee or the board of directors from time to time or as required by applicable law, or any applicable rules or regulations promulgated by the Securities and Exchange Commission or ay national securities exchange or national securities association on which the Common Stock may be traded. In addition, any Evidence of Award or such clawback policy may provide for cancellation or forfeiture of an award or the forfeiture and repayment of any shares of Common Stock issued under and/or any other benefit related to an award, or include other provisions intended to have a similar effect, including upon such terms and conditions as may be required by the committee or the board of directors or under Section 10D of the Exchange Act and/or any applicable rules and regulations promulgated by the Securities and Exchange Commission or any national securities exchange or national securities association on which the Common Stock may be traded.
Withholding. To the extent the company is required to withhold federal, state, local or foreign taxes or other amounts in connection with any payment made or benefit realized by a participant or other person under the Amended 2014 Plan, and the amounts available to us for such withholding are insufficient, it will be a condition to the receipt of such payment or the realization of such benefit that the participant or such other person make arrangements satisfactory to the company for payment of the balance of such taxes or other amounts required to be withheld, which arrangements, in the discretion of the committee, may include relinquishment of a portion of such benefit. If a participant’s benefit is to be received in the form of Common Stock, and such participant fails to make arrangements for the payment of taxes or other amounts, then, unless otherwise determined by the committee, we will withhold shares of Common Stock having a value equal to the amount required to be withheld. When a participant is required to pay the company an amount required to be withheld under applicable income, employment, tax and other laws, the participant may elect, unless otherwise determined by the committee, to satisfy the obligation, in whole or in part, by having withheld, from the shares of Common Stock delivered or required to be delivered to the participant, shares of Common Stock having a value equal to the amount required to be withheld, or by delivering to us other shares of Common Stock held by such participant. The stock used for tax or other withholding will be valued at an amount equal to the fair market value of such Common Stock on the date the benefit is to be included in the participant’s income. In no event will the market value of the Common Stock to be withheld and delivered pursuant to the Amended 2014 Plan exceed the minimum amount required to be withheld unless (1) an additional amount can be withheld and not result in adverse accounting consequences, and (2) such additional withholding amount is authorized by the committee.
Amendment and Termination of the Amended 2014 Plan. The board of directors generally may amend the Amended 2014 Plan at any time and from time to time in whole or in part, subject to shareholder approval in certain circumstances as required under the Amended 2014 Plan, applicable law, and/or stock exchange rules.
Further, subject to the Amended 2014 Plan’s prohibition on repricing, the committee generally may amend the terms of any award prospectively or retroactively, subject in certain circumstances to participant consent. If permitted by Section 409A of the Code and subject to certain other limitations set forth in the Amended 2014 Plan, and including in the case of termination of employment or service, or in the case of unforeseeable emergency or other circumstances, or in the event of a change in control, the committee may provide for continued vesting or accelerate the vesting of certain awards granted under the Amended 2014 Plan or waive any other limitation or requirement under any such award.
The board of directors may, in its discretion, terminate the Amended 2014 Plan at any time. Termination of the Amended 2014 Plan will not affect the rights of participants or their successors under any awards outstanding and not exercised in full on the date of termination. No grant will be made under the Amended 2014 Plan on or after the tenth anniversary of the effective date of the Amended 2014 Plan, but all grants made prior to such date will continue in effect thereafter subject to their terms and the terms of the Amended 2014 Plan.
Grants to Non-U.S. Based Participants. In order to facilitate the making of any grant or combination of grants under the Amended 2014 Plan, the committee may provide for such special terms for awards to participants who are foreign nationals, who are employed by the company or any of its subsidiaries outside of the United States of America or who provide services to the company or any of its subsidiaries under an agreement with a foreign nation or agency, as the committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. The committee may approve such supplements to, or amendments, restatements or alternative versions of, the Amended 2014 Plan (including sub-plans) (to be considered part of the Amended 2014 Plan) as it may consider necessary or appropriate for such purposes, provided that no
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such special terms, supplements, amendments or restatements will include any provisions that are inconsistent with the terms of the Amended 2014 Plan as then in effect unless the Amended 2014 Plan could have been amended to eliminate such inconsistency without further approval by our shareholders.
Allowances for Conversion Awards and Assumed Plans. Shares of Common Stock issued or transferred under awards granted under the Amended 2014 Plan in substitution for or conversion of, or in connection with an assumption of, stock options, stock appreciation rights, restricted stock, RSUs or other stock or stock-based awards held by awardees of an entity engaging in a corporate acquisition or merger transaction with us or any of our subsidiaries will not count against (or be added to) the aggregate share limits or other Amended 2014 Plan limits described above. Additionally, shares of Common Stock available under certain plans that we or our subsidiaries may assume in connection with corporate transactions from another entity may be available for certain awards under the Amended 2014 Plan, under circumstances further described in the Amended 2014 Plan, but will not count against the aggregate share limits or other Amended 2014 Plan limits described above.
New Plan Benefits
The committee generally expects to grant restricted stock units under the Amended 2014 Plan to our non-employee directors immediately following the 2023 annual meeting of shareholders, provided that the shareholders approve the Amended 2014 Plan. The following table provides information about the non-employee director grants that are expected to occur immediately following the 2023 annual meeting of shareholders.
Other than with respect to the awards set forth in the table below, it is not possible to determine the specific amounts and types of awards that may be awarded in the future under the Amended 2014 Plan because the grant and actual settlement of awards under the Amended 2014 Plan are subject to the discretion of the committee.
Flowers Foods, Inc. 2014 Omnibus Equity and Incentive Compensation Plan (Amended and Restated Effective May 25, 2023)
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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
Historical Grants
The table below shows the number of awards granted under the 2014 Plan to the individuals and groups indicated below since its inception through March 15, 2023.
Flowers Foods, Inc. 2014 Omnibus Equity and Incentive Compensation Plan
NAME AND POSITION/GROUP | NUMBER OF SHARES SUBJECT TO RSUS | NUMBER OF SHARES SUBJECT TO OPTIONS | NUMBER OF SHARES SUBJECT TO PERFORMANCE SHARES | NUMBER OF SHARES SUBJECT TO DEFERRED SHARES | ||||||||||
Named Executive Officers: | ||||||||||||||
A. Ryals McMullian | 43,330 | — | 633,440 | — | ||||||||||
R. Steve Kinsey | — | — | 335,080 | — | ||||||||||
Bradley K. Alexander | — | — | 278,820 | — | ||||||||||
D. Keith Wheeler | — | — | 223,320 | — | ||||||||||
Stephanie B. Tillman | 1,990 | — | 98,160 | — | ||||||||||
All current executive officers, as a group | 54,950 | — | 1,903,090 | — | ||||||||||
All current non-employee directors as a group | 644,023 | — | — | — | ||||||||||
Each nominee for election as a director(1) | ||||||||||||||
George E. Deese | 49,310 | — | — | — | ||||||||||
Edward J. Casey, Jr. | 15,330 | — | — | — | ||||||||||
Thomas C. Chubb, III | 15,330 | — | — | — | ||||||||||
Rhonda Gass | 43,284 | — | — | 20,053 | ||||||||||
Benjamin H. Griswold, IV | 55,340 | — | — | — | ||||||||||
Margaret G. Lewis | 55,340 | — | — | — | ||||||||||
W. Jameson McFadden | 11,350 | — | — | — | ||||||||||
James T. Spear | 51,690 | — | — | 20,682 | ||||||||||
Melvin T. Stith, Ph.D. | 55,340 | — | — | 3,417 | ||||||||||
Terry S. Thomas | 15,330 | — | — | — | ||||||||||
C. Martin Wood | 55,340 | — | — | — | ||||||||||
Each associate of any of the foregoing | — | — | — | — | ||||||||||
Each other person who received at least 5% of all awards | — | — | — | — | ||||||||||
All employees, including all current officers who are not executive officers, as a group | 1,197,578 | — | 6,245,216 | — |
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U.S. Federal Income Tax Consequences
The following is a brief summary of certain of the Federal income tax consequences of certain transactions under the Amended 2014 Plan based on Federal income tax laws in effect. This summary, which is presented for the information of shareholders considering how to vote on this proposal and not for Amended 2014 Plan participants, is not intended to be complete and does not describe Federal taxes other than income taxes (such as Medicare and Social Security taxes), or state, local or foreign tax consequences.
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Tax Consequences to Participants
Restricted Stock. The recipient of restricted stock generally will be subject to tax at ordinary income rates on the fair market value of the restricted stock (reduced by any amount paid by the recipient) at such time as the restricted stock are no longer subject to forfeiture or restrictions on transfer for purposes of Section 83 of the Code. However, a recipient who so elects under Section 83(b) of the Code within 30 days of the date of transfer of the shares will generally have taxable ordinary income on the date of transfer of the shares equal to the excess of the fair market value of such shares over any purchase price.
RSUs, Performance Shares, Performance Units, and Cash Incentive Awards. No income generally will be recognized upon the grant of RSUs, performance shares, performance units or cash incentive awards. Upon payment in respect of such awards, the recipient generally will be required to include as taxable ordinary income in the year of receipt an amount equal to the amount of cash received and the fair market value of any unrestricted shares of Common Stock received (reduced by any amount paid by the recipient).
Nonqualified Stock Options and SARs. In general:
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Incentive Stock Options. No income generally will be recognized by an optionee upon the grant or exercise of an “incentive stock option” as defined in Section 422 of the Code. If shares of Common Stock are issued to the optionee pursuant to the exercise of an incentive stock option, and if no disqualifying disposition of such shares is made by such optionee within two years after the date of grant or within one year after the transfer of such shares to the optionee, then upon sale of such shares, any amount realized in excess of the option price will be taxed to the optionee as a long-term capital gain and any loss sustained will be a long-term capital loss.
If shares of Common Stock acquired upon the exercise of an incentive stock option are disposed of prior to the expiration of either holding period described above, the optionee generally will recognize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of such shares at the time of exercise (or, if less, the amount realized on the disposition of such shares if a sale or exchange) over the exercise price paid for such shares. Any further gain (or loss) realized by the participant generally will be taxed as short-term or long-term capital gain (or loss) depending on the holding period.
Tax Consequences to the Company and its Subsidiaries
To the extent that a participant recognizes ordinary income in the circumstances described above, the company or the subsidiary for which the participant performs services will be entitled to a corresponding deduction provided that, among other things, it is not disallowed by the $1 million limitation on certain executive compensation under Section 162(m) of the Code.
Registration with the SEC
We intend to file a Registration Statement on Form S-8 relating to the issuance of Common Stock under the Amended 2014 Plan with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended, as soon as practicable after approval of the Amended 2014 Plan by our shareholders.
Vote Required
Proposal IV requires the votes cast within the voting group favoring the action to exceed the votes cast opposing the action.
Recommendation of the Board
Your board of directors unanimously recommends that you vote “FOR” Proposal IV.
81
FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
Securities Authorized for Issuance Under Equity Compensation Plans
The following chart sets forth the amounts of securities authorized for issuance under the company’s compensation plans as of December 31, 2022.
NUMBER OF SECURITIES TO BE ISSUED UPON EXERCISE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (1) | WEIGHTED AVERAGE EXERCISE PRICE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (2) | NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE UNDER EQUITY COMPENSATION PLANS (EXCLUDING SECURITIES REFLECTED IN COLUMN(A)) (3) | ||||||||||
PLAN CATEGORY | (a) | (b) | (c) | |||||||||
Equity compensation plans | 4,001,968 | $ | — | 897,922 | ||||||||
Equity compensation plans | — | — | — | |||||||||
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Total | 4,001,968 | $ | — | 897,922 | ||||||||
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Under the company’s 2014 Plan, the board is authorized to grant a variety of stock-based awards, including stock options, restricted stock, restricted stock units, performance shares and deferred stock, to its directors, employees and certain of its other service providers. The number of securities set forth in column (c) above reflects securities available for issuance as stock options, restricted stock, restricted stock units, performance shares and deferred stock under the company’s compensation plans. The number of shares originally available under the 2014 Plan was 8,000,000 shares. The 2014 Plan replaced the EPIP, the Stock Appreciation Rights Plan, and the Annual Executive Bonus Plan. As a result, no additional shares will be issued under the EPIP. See Note 18, Stock-Based Compensation, of Notes to Consolidated Financial Statements of the Annual Report on Form 10-K and our financial statements for the fiscal year ended December 31, 2022 for additional information on equity compensation plans.
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Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
PROPOSAL V RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our audit committee and board30, 2023, is included in the mailing of directors have appointed PricewaterhouseCoopers LLP as our independent registered public accounting firmthis proxy statement.
Representatives of PricewaterhouseCoopers LLPservice will be presentreceive all future proxy materials, including the Notice, proxy statement and annual report electronically. Please contact Brenda Smith, our corporate legal manager, at the 2023 annual meeting of shareholders and willcompliancemanager@flocorp.com or (229) 226-9116 if you need assistance.
WeI have been advised by PricewaterhouseCoopers LLP that neitherany questions?
If the shareholders of the company do not ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 30, 2023, the audit committee will reconsider the appointment.
Fiscal 2022 and Fiscal 2021 Audit Firm Fee Summary
During fiscal 2022 and fiscal 2021, we retained our principal accountant, PricewaterhouseCoopers LLP, to provide services in the following categories and amounts:
Audit Fees. Fees for audit services totaled approximately $3,118,000 in 2022 and $2,956,000 in 2021, including fees associated with annual audits, the reviewsyour ownership of our Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K, accounting consultants in both years, and out-of-pocket costs incurred in connection withcommon stock, please contact Brenda Smith, our corporate legal manager, at the audit in both years.
Audit Related Fees. Fees for audit related services totaled approximately $104,000 in 2022 and $101,000 in 2021. Audit related services principally include services related to audits of certain employee benefit plans in both years.
Tax Fees. Fees for tax services, including tax compliance, tax advice and tax planning, totaled approximately $897,743 in 2022 and $609,054 in 2021.
All Other Fees. Fees for all other services not described above totaled approximately $583,250 in 2022, associated with the implementation of a new enterprise resource planning system and a software licensing agreement, and $2,000 in 2021, related to a software licensing agreement.
All non-audit services were reviewedaddress or by the audit committee, which concluded that the provision of such services by PricewaterhouseCoopers LLP was compatible with the maintenance of that firm’s independence in the conduct of its auditing function. On an ongoing basis all audit and permissible emailing compliancemanager@flocorp.com or calling (229) 226-9116.
Vote Required
Proposal V requires the votes cast within the voting group favoring the action to exceed the votes cast opposing the action.
Recommendation of the Board
Your board of directors unanimously recommends that you vote “FOR” Proposal V.
83
FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
ADDITIONAL INFORMATION
2024 SHAREHOLDER PROPOSALS
In order to properly submit a shareholder proposal for inclusion in the proxy statement for the 20242025 annual meeting of shareholders, you must follow the procedures outlined in Rule 14a-8 of the Exchange Act. To be eligible for inclusion, we must receive your shareholder proposal at our principal corporate offices in Thomasville, Georgia as set forth below no later than December 13, 2023.10, 2024.
Chief Legal Counsel
Flowers Foods, Inc.
1919 Flowers Circle
Thomasville, Georgia 31757
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 74 | |
84
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | 75 | ||||||||||||||
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Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
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APPENDICES
A-1
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | A-1 | |
-GAAP FINANCIAL MEASURES
(DOLLARS IN THOUSANDS) | 2021 | |||
Net income | $ | 206,187 | ||
Income tax expense | 64,585 | |||
Interest expense, net | 8,001 | |||
Loss on extinguishment of debt | 16,149 | |||
Depreciation and amortization | 136,559 | |||
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EBITDA | 431,481 | |||
Business process improvement consulting costs | 31,293 | |||
Pension plan settlement costs | 403 | |||
Multi-employer pension plan withdrawal costs | 3,300 | |||
Loss on inferior ingredients | 944 | |||
Legal settlements and related costs | 23,089 | |||
Lease termination gain | (2,644 | ) | ||
Other pension (benefit) cost | (405 | ) | ||
Acquisition consideration adjustment | 3,400 | |||
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Adjusted EBITDA | $ | 490,861 | ||
Sales | $ | 4,330,767 | ||
Adjusted EBITDA margin
| 11.3 | % |
Net Income to Adjusted EBITDA
(DOLLARS IN THOUSANDS) | 2022 | |||
Net income | $ | 228,394 | ||
Income tax expense | 70,317 | |||
Interest expense, net | 5,277 | |||
Depreciation and amortization | 141,957 | |||
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EBITDA | 445,945 | |||
Business process improvement consulting costs | 33,169 | |||
Plant closure costs and impairment of assets | 7,825 | |||
FASTER Act and loss on inferior ingredients | 236 | |||
Legal settlements and related costs | 7,500 | |||
Gain on sale, severance costs, and lease termination (gain) loss | (4,390 | ) | ||
Other pension (benefit) cost | (773 | ) | ||
Acquisition-related costs | 12,518 | |||
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Adjusted EBITDA | $ | 502,030 | ||
Sales | $ | 4,805,822 | ||
Adjusted EBITDA margin
| 10.4 | % |
A-2
| (DOLLARS IN THOUSANDS) | | | 2022 | | |||
| Net income | | | | $ | 228,394 | | |
| Income tax expense | | | | | 70,317 | | |
| Interest expense, net | | | | | 5,277 | | |
| Depreciation and amortization | | | | | 141,957 | | |
| EBITDA | | | | | 445,945 | | |
| Business process improvement costs | | | | | 33,169 | | |
| Plant closure costs and impairment of assets | | | | | 7,825 | | |
| FASTER Act, net of recovery on inferior ingredients | | | | | 236 | | |
| Legal settlements and related costs | | | | | 7,500 | | |
| Gain on sale, severance costs, and lease termination (gain) loss | | | | | (4,390) | | |
| Other pension benefit | | | | | (773) | | |
| Acquisition-related costs | | | | | 12,518 | | |
| Adjusted EBITDA | | | | $ | 502,030 | | |
| Sales | | | | $ | 4,805,822 | | |
| Adjusted EBITDA margin | | | | | 10.4% | | |
| (DOLLARS IN THOUSANDS) | | | 2023 | | |||
| Net income | | | | $ | 123,416 | | |
| Income tax expense | | | | | 33,691 | | |
| Interest expense, net | | | | | 16,032 | | |
| Depreciation and amortization | | | | | 151,709 | | |
| EBITDA | | | | | 324,848 | | |
| Business process improvement costs | | | | | 21,521 | | |
| Plant closure costs and impairment of assets | | | | | 7,298 | | |
| FASTER Act, net of recovery on inferior ingredients | | | | | — | | |
| Legal settlements and related costs | | | | | 137,529 | | |
| Gain on sale, severance costs, and lease termination (gain) loss | | | | | — | | |
| Other pension benefit | | | | | (269) | | |
| Acquisition-related costs | | | | | 3,712 | | |
| Restructuring charges | | | | | 7,099 | | |
| Adjusted EBITDA | | | | $ | 501,738 | | |
| Sales | | | | $ | 5,090,830 | | |
| Adjusted EBITDA margin | | | | | 9.9% | | |
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Summary | and Voting Information | Ownership | Voted on | Information | ||||||||||||||
Earnings Per Diluted Share to Adjusted Earnings Per Diluted Share
2021 | ||||
Earnings per diluted common share | $ | 0.97 | ||
Business process improvement consulting costs | 0.11 | |||
Multi-employer pension plan withdrawal costs | 0.01 | |||
Loss on inferior ingredients | NM | |||
Legal settlements and related costs | 0.08 | |||
Lease termination gain | (0.01 | ) | ||
Pension plan settlement loss | NM | |||
Acquisition consideration adjustment | 0.01 | |||
Loss on extinguishment of debt | 0.06 | |||
Adjusted earnings per diluted share | $ | 1.24 |
| | | | 2022 | | |||
| Earnings per diluted common share | | | | $ | 1.07 | | |
| Business process improvement costs | | | | | 0.12 | | |
| Plant closure costs and impairment of assets | | | | | 0.03 | | |
| Gain on sale, severance costs, and lease termination (gain) loss | | | | | (0.02) | | |
| FASTER Act, net of recovery on inferior ingredients | | | | | NM | | |
| Legal settlements and related costs | | | | | 0.03 | | |
| Acquisition-related costs | | | | | 0.04 | | |
| Adjusted earnings per diluted share | | | | $ | 1.27 | | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | A-2 | |
2022 | ||||
Earnings per diluted common share | $ | 1.07 | ||
Business process improvement consulting costs | 0.12 | |||
Plant closure costs and impairment of assets | 0.03 | |||
Gain on sale, severance costs, and lease termination (gain) loss | (0.02 | ) | ||
FASTER Act and loss on inferior ingredients | NM | |||
Legal settlements and related costs | 0.03 | |||
Acquisition-related costs | 0.04 | |||
Adjusted earnings per diluted share | $ | 1.27 |
ONNM – Not meaningful.-GAAP FINANCIAL
MEASURES
| | | | 2023 | | |||
| Earnings per diluted common share | | | | $ | 0.58 | | |
| Business process improvement costs | | | | | 0.08 | | |
| Plant closure costs and impairment of assets | | | | | 0.03 | | |
| Restructuring charges | | | | | 0.02 | | |
| Legal settlements and related costs | | | | | 0.48 | | |
| FASTER Act, net of recovery on inferior ingredients | | | | | — | | |
| Gain on sale, severance costs and lease termination (gain) loss | | | | | — | | |
| Acquisition-related costs | | | | | 0.01 | | |
| Adjusted earnings per diluted share | | | | $ | 1.20 | | |
(DOLLARS IN THOUSANDS) | 2021 | |||
Net income | $ | 206,187 | ||
Business process improvement consulting costs | 23,470 | |||
Pension plan settlement costs | 302 | |||
Multi-employer pension plan withdrawal costs | 2,475 | |||
Loss on inferior ingredients | 708 | |||
Legal settlements and related costs | 17,316 | |||
Lease termination gain | (1,983 | ) | ||
Acquisition consideration adjustment | 2,550 | |||
Loss on extinguishment of debt | 12,112 | |||
Adjusted net income | $ | 263,137 |
A-3
| (DOLLARS IN THOUSANDS) | | | 2022 | | |||
| Net income | | | | $ | 228,394 | | |
| Business process improvement costs | | | | | 24,877 | | |
| Plant closure costs and impairment of assets | | | | | 5,869 | | |
| Gain on sale, severance costs, and lease termination (gain) loss | | | | | (3,292) | | |
| FASTER Act, net of recovery on inferior ingredients | | | | | 177 | | |
| Acquisition-related costs | | | | | 9,388 | | |
| Legal settlements and related costs | | | | | 5,625 | | |
| Adjusted net income | | | | $ | 271,038 | | |
| (DOLLARS IN THOUSANDS) | | | 2023 | | |||
| Net income | | | | $ | 123,416 | | |
| Business process improvement costs | | | | | 16,141 | | |
| Plant closure costs and impairment of assets | | | | | 5,473 | | |
| Gain on sale, severance costs, and lease termination (gain) loss | | | | | — | | |
| FASTER Act, net of recovery on inferior ingredients | | | | | — | | |
| Acquisition-related costs | | | | | 2,784 | | |
| Legal settlements and related costs | | | | | 103,147 | | |
| Restructuring charges | | | | | 5,324 | | |
| Adjusted net income | | | | $ | 256,285 | | |
| 2024 PROXY STATEMENT / FLOWERS FOODS, INC. | | | A-3 | |
Net Income1919 FLOWERS CIRCLE SCAN TO VIEW MATERIALS & VOTE THOMASVILLE, GA 31757 VOTE BY INTERNET Before The Meeting - Go to Adjusted Net Income
(DOLLARS IN THOUSANDS) | 2022 | |||
Net income | $ | 228,394 | ||
Business process improvement consulting costs | 24,877 | |||
Plant closure costs and impairment of assets | 5,869 | |||
Gain on sale, severance costs, and lease termination (gain) loss | (3,292 | ) | ||
FASTER Act and loss on inferior ingredients | 177 | |||
Acquisition-related costs | 9,388 | |||
Legal settlements and related costs | 5,625 | |||
Adjusted net income | $ | 271,038 |
A-4
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APPENDIX B (FLOWERS FOODS, INC. 2014 OMNIBUS EQUITY AND INCENTIVE COMPENSATION PLAN (AMENDED AND RESTATED EFFECTIVE MAY 25, 2023))
FLOWERS FOODS, INC.
2014 OMNIBUS EQUITY AND INCENTIVE COMPENSATION PLAN
(Amendedwww.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and Restated Effectivefor electronic delivery of information up until 11:59 P.M. Eastern Time on May 25, 2023)
1. Purpose. The purpose of this 2014 Omnibus Equity22, 2024 (May 21, 2024 for 401(k) plan participants). Have your proxy card in hand when you access the web site and Incentive Compensation Plan is permit award grantsfollow the instructions to non-employee Directors, officers, and other key employees of the Company and its Subsidiaries, and certain consultants to the Company and its Subsidiaries,obtain your records and to providecreate an electronic voting instruction form. During The Meeting - Go to such persons incentiveswww.virtualshareholdermeeting.com/FLO2024 You may attend the meeting via the Internet and rewards for service and/or performance.
2. Definitions. As usedvote during the meeting. Have the information that is printed in this Plan:
(a) “Appreciation Right” means a right granted pursuant to Section 5 of this Plan, and will include both Free-Standing Appreciation Rights and Tandem Appreciation Rights.
(b) “Base Price” means the price to be used as the basis for determining the Spread upon the exercise of a Free-Standing Appreciation Right or a Tandem Appreciation Right.
(c) “Board” means the Board of Directors of the Company.
(d) “Cash Incentive Award” means a cash award granted pursuant to Section 8 of this Plan.
(e) “Change in Control” has the meaning set forth in Section 12 of this Plan.
(f) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations thereunder, as such law and regulations may be amended from time to time.
(g) “Committee” means the Compensation and Human Capital Committee of the Board (or its successor(s)), or any other committee of the Board designatedbox marked by the Boardarrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to administer this Plan pursuanttransmit your voting instructions up until 11:59 P.M. Eastern Time on May 22, 2024 (May 21, 2024 for 401(k) plan participants). Have your proxy card in hand when you call and then follow the simple instructions the Vote Voice provides you. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it toSection 16 of this Plan.
(h) “Common Stock” means the common stock of the Company, $0.01 par value per share, or any security into which such common stock may be changed by reason of any transaction or event of the type referred to in Section 11 of this Plan.
(i) “Company” means Flowers Foods, Inc., a Georgia corporation, and its successors.
(j) “Date of Grant” means the date provided for by the Committee on which a grant of Option Rights, Appreciation Rights, Performance Shares, Performance Units, Cash Incentive Awards or other awards contemplated by Section 9 of this Plan, or a grant or sale of Restricted Stock, Restricted Stock Units, or other awards contemplated by Section 9 of this Plan, will become effective (which date will not be earlier than the date on which the Committee takes action with respect thereto).
(k) “Disability” means, exceptc/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: V39515-P06127 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE "FOR" ALL DIRECTOR-NOMINEES IN PROPOSAL 1 AND "FOR" PROPOSALS 2 AND 3. 1. Elect as otherwise provided in an Evidence of Award, disability as defined in a group long-term disability plan maintained by the Company as determined by the plan’s claims fiduciary, or if no such plan is applicable, disability means Social Security disabled as determined by the Social Security Administration, provided, however, for non-employee Directors, disability means a disability as determined under procedures established by the Committee for purposes of this Plan.
(l) “Director” means a memberdirectors of the Board.
(m) “Effective Date” means May 21, 2014.
(n) “Evidencecompany the 12 nominees identified in the proxy statement, each to serve for a term of Award” means an agreement, certificate, resolution or other type or form of writing or other evidence approved byone year: Nominees: For Against Abstain 1a. A. Ryals McMullian For Against Abstain 1b. Edward J. Casey, Jr. 1k. Melvin T. Stith, Ph.D. 1c. Thomas C. Chubb, III 1l. C. Martin Wood III 1d. George E. Deese 2. Advisory vote to approve the Committee that sets forth the terms and conditionscompensation of the awards granted under this Plan. An Evidencecompany’s named executive officers; and 1e. 1f. Rhonda O. Gass Brigitte H. King 3. Ratify the appointment of Award may be in an electronic medium, may be limitedPricewaterhouseCoopers LLP as the independent registered public accounting firm for Flowers Foods, Inc. for the fiscal year ending December 28, 2024. 1g. Margaret G. Lewis NOTE: In their discretion, the proxies are authorized to notationvote on the books and records of the Company and, unless otherwise determined by the Committee, need not be signed by a representative of the Companyany adjournment or a Participant.
(o) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, as such law, rules and regulations may be amended from time to time.
(p) “Free-Standing Appreciation Right” means an Appreciation Right granted pursuant to Sectionpostponement thereof. 1h. W. Jameson McFadden 1i. Joanne D. Smith 1j. James T. Spear 5 of this Plan that is not granted in tandem with an Option Right.
B-1
(q) “Incentive Stock Options” means Option Rights that are intended to qualify as “incentive stock options” under Section 422 of the Code or any successor provision.
(r) “Management Objectives” means the measurable performance objective or objectives established pursuant to this Plan for Participants who have received grants of Performance Shares, Performance Units or Cash Incentive Awards or, when so determined by the Committee, Option Rights, Appreciation Rights, Restricted Stock, Restricted Stock Units, dividend equivalents or other awards pursuant to this Plan. Management Objectives may be described in terms of Company-wide objectives or objectives that are related to the performance of the individual Participant or of one or more of the Subsidiaries, divisions, departments, regions, functions or other organizational units within the Company or its Subsidiaries. The Management Objectives may be made relative to the performance of other companies or subsidiaries, divisions, departments, regions, functions or other organizational units within such other companies, and may be made relative to an index or one or more of the performance objectives themselves. The Management Objectives may be based on one or more, or a combination, of the following metrics (including relative or growth achievement regarding such metrics), or such other metrics as may be determined by the Committee:
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If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which it conducts its business, or other events or circumstances render the Management Objectives unsuitable, the Committee may in its discretion modify such Management Objectives or the goals or actual levels of achievement regarding the Management Objectives, in whole or in part, as the Committee deems appropriate and equitable.
(s) “Market Value per Share” means, as of any particular date, the closing price of a share of Common Stock as reported for that date on the New York Stock Exchange or, if the Common Stock is not then listed on the New York Stock Exchange, on any other national securities exchange on which the Common Stock is listed, or if there are no sales on such date, on the next preceding trading day during which a sale occurred. If there is no regular public trading market for the Common Stock, then the Market Value per Share shall be the fair market value as determined in good
B-2
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faith by the Committee. The Committee is authorized to adopt another fair market value pricing method provided such method is stated in the applicable Evidence of Award and is in compliance with the fair market value pricing rules set forth in Section 409A of the Code.
(t) “Optionee” means the optionee named in an Evidence of Award evidencing an outstanding Option Right.
(u) “Option Price” means the purchase price payable on exercise of an Option Right.
(v) “Option Right” means the right to purchase Common Stock upon exercise of an option granted pursuant to Section 4 of this Plan.
(w) “Participant” means a person who is selected by the Committee to receive benefits under this Plan and who is at the time (i) an officer or other key employee of the Company or any Subsidiary, including a person who has agreed to commence serving in such capacity within 90 days of the Date of Grant, (ii) a person, including a consultant, who provides services to the Company or a Subsidiary that are equivalent to those typically provided by an employee (provided that such person satisfies the Form S-8 definition of an “employee”), or (iii) a non-employee Director.
(x) “Performance Period” means, in respect of a Cash Incentive Award, Performance Share or Performance Unit, a period of time established pursuant to Section 8 of this Plan within which the Management Objectives relating to such Cash Incentive Award, Performance Share or Performance Unit are to be achieved.
(y) “Performance Share” means a bookkeeping entry that records the equivalent of one share of Common Stock awarded pursuant to Section 8 of this Plan.
(z) “Performance Unit” means a bookkeeping entry awarded pursuant to Section 8 of this Plan that records a unit equivalent to $1.00 or such other value as is determined by the Committee.
(aa) “Plan” means this Flowers Foods, Inc. 2014 Omnibus Equity and Incentive Compensation Plan, as may be amended or amended and restated from time to time. This Plan was last amended and restated effective May 25, 2023.
(bb) “Predecessor Plan” means either the Company’s 2001 Equity and Performance Incentive Plan, as amended and restated April 1, 2009 or the Executive Bonus Incentive Plan, as amended and restated April 1, 2009, or both, as applicable, based on the context of the Plan provision.
(cc) “Restricted Stock” means Common Stock granted or sold pursuant to Section 6 of this Plan as to which neither the substantial risk of forfeiture nor the prohibition on transfers has expired.
(dd) “Restricted Stock Unit” means an award made pursuant to Section 7 of this Plan of the right to receive Common Stock, cash, or a combination thereof at the end of a specified period.
(ee) “Restriction Period” means the period of time during which Restricted Stock Units are subject to restrictions, as provided in Section 7 of this Plan.
(ff) “Retirement” means termination of employment on or after attainment of age 65, or if earlier, termination of employment after attainment of age 55 having earned ten years of service, provided, however, for non-Employee Directors “retirement” means termination of service on or after attainment of age 65. Notwithstanding the above, the Committee may specify a different definition of retirement in the Evidence of Award.
(gg) “Spread” means the excess of the Market Value per Share on the date when an Appreciation Right is exercised over the Option Price or Base Price provided for in the related Option Right or Free-Standing Appreciation Right, respectively.
(hh) “Subsidiary” means a corporation, company or other entity (i) more than 50 percent of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture, limited liability company, unincorporated association or similar entity), but more than 50 percent of whose ownership interest representing the right generally to make decisions for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the Company; provided, however, that for purposes of determining whether any person may be a Participant for purposes of any grant of Incentive Stock Options, “Subsidiary” means any corporation
B-3
FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
in which the Company at the time owns or controls, directly or indirectly, more than 50 percent of the total combined Voting Power represented by all classes of stock issued by such corporation.
(ii) “Tandem Appreciation Right” means an Appreciation Right granted pursuant to Section 5 of this Plan that is granted in tandem with an Option Right.
(jj) “Voting Power” means at any time, the combined voting power of the then-outstanding securities entitled to vote generally in the election of Directors in the case of the Company, or members of the board of directors or similar body in the case of another entity.
3. Shares Available Under this Plan.
(a) Maximum Shares Available Under Plan.
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B-4
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(c) Limit on Incentive Stock Options. Notwithstanding anything to the contrary contained in this Section 3 or elsewhere in this Plan, and subject to adjustment as provided in Section 11 of this Plan, the aggregate number of shares of Common Stock actually issued or transferred by the Company upon the exercise of Incentive Stock Options will not exceed 17,340,000 shares of Common Stock.
(d) Individual Participant Limit on Option Rights and Appreciation Rights. Notwithstanding anything in this Section 3, or elsewhere in this Plan, to the contrary, and subject to adjustment as provided in Section 11 of this Plan, no Participant will be granted Option Rights or Appreciation Rights, in the aggregate, for more than 2,000,000 shares of Common Stock during any calendar year assuming an award payout at target.
(e) Non-Employee Director Compensation Limit. Notwithstanding anything to the contrary contained in this Plan, in no event will any non-employee Director in any one calendar year be granted compensation for such service having an aggregate maximum value (measured at the Date of Grant as applicable, and calculating the value of any awards based on the grant date fair value for financial reporting purposes) in excess of $750,000.
(f) Minimum Vesting. Notwithstanding anything in this Plan (outside of this Section 3(f)) to the contrary, awards granted under this Plan on or after the Amendment and Restatement Date (other than cash-based awards) shall vest no earlier than the one year anniversary of the applicable Date of Grant; provided, however, that, notwithstanding the foregoing, the following awards shall not be subject to the foregoing minimum vesting requirement: any (i) awards granted in connection with awards that are assumed, converted or substituted pursuant to Section 22(a) of this Plan; (ii) shares of Common Stock delivered in lieu of fully vested cash obligations; (iii) awards to non-employee Directors that vest on the earlier of the one-year anniversary of the applicable Date of Grant and the next annual meeting of the Company’s shareholders, which is at least 50 weeks after the immediately preceding year’s annual meeting of the Company’s shareholders; and (iv) any additional awards the Committee may grant, up to a maximum of 5% of the available share reserve authorized for issuance under this Plan pursuant to Section 3(a) (subject to adjustment under Section 11). Nothing in this Section 3(f) or otherwise in this Plan, however, shall preclude the Committee, in its sole discretion, from (x) providing for continued vesting or accelerated vesting for any award under this Plan upon certain events, including in connection with or following a Participant’s death, disability, or termination of service or a Change in Control or (y) exercising its authority under Section 17(c) at any time following the grant of an award.
4. Option Rights. The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting to Participants of Option Rights. Each such grant may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
(a) Each grant will specify the number of shares of Common Stock to which it pertains subject to the limitations set forth in Section 3 of this Plan.
(b) Each grant will specify an Option Price per share, which (except with respect to awards under Section 22 of this Plan) may not be less than the Market Value per Share on the Date of Grant.
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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
(c) Each grant will specify whether the Option Price will be payable (i) in cash or by check acceptable to the Company or by wire transfer of immediately available funds, (ii) by the actual or constructive transfer to the Company of Common Stock owned by the Optionee having a value at the time of exercise equal to the total Option Price, (iii) subject to any conditions or limitations established by the Committee, by the Company’s withholding of Common Stock otherwise issuable upon exercise of an Option Right pursuant to a “net exercise” arrangement (it being understood that, solely for purposes of determining the number of treasury shares held by the Company, the Common Stock so withheld will not be treated as issued and acquired by the Company upon such exercise), (iv) by a combination of such methods of payment, or (v) by such other methods as may be approved by the Committee.
(d) To the extent permitted by law, any grant may provide for deferred payment of the Option Price from the proceeds of sale through a bank or broker on a date satisfactory to the Company of some or all of the shares to which such exercise relates.
(e) Successive grants may be made to the same Participant whether or not any Option Rights previously granted to such Participant remain unexercised.
(f) Each grant will specify the period or periods of continuous service by the Optionee with the Company or any Subsidiary, if any, that is necessary before any Option Rights or installments thereof will vest. Option Rights may provide for continued vesting or the earlier vesting of such Option Rights, including (i) in the event of the Retirement, death or Disability of a Participant or (ii) in the event of a Change in Control where either (A) within a specified period the Participant is involuntarily terminated for reasons other than for cause or terminates his or her employment for good reason or (B) such Option Rights are not assumed or converted into replacement awards in a manner described in the Evidence of Award.
(g) Any grant of Option Rights may specify Management Objectives regarding the vesting of such rights.
(h) Option Rights granted under this Plan may be (i) options, including Incentive Stock Options, that are intended to qualify under particular provisions of the Code, (ii) options that are not intended to so qualify, or (iii) combinations of the foregoing. Incentive Stock Options may only be granted to Participants who meet the definition of “employees” under Section 3401(c) of the Code.
(i) The exercise of an Option Right will result in the cancellation on a share-for-share basis of any Tandem Appreciation Right authorized under Section 5 of this Plan.
(j) No Option Right will be exercisable more than 10 years from the Date of Grant. The Committee may provide in any Evidence of Award for the automatic exercise of an Option Right upon such terms and conditions as established by the Committee.
(k) Option Rights granted under this Plan may not provide for any dividends or dividend equivalents thereon.
(l) Each grant of Option Rights will be evidenced by an Evidence of Award. Each Evidence of Award will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve.
5. Appreciation Rights.
(a) The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting (i) to any Optionee, of Tandem Appreciation Rights in respect of Option Rights granted hereunder, and (ii) to any Participant, of Free-Standing Appreciation Rights. A Tandem Appreciation Right will be a right of the Optionee, exercisable by surrender of the related Option Right, to receive from the Company an amount determined by the Committee, which will be expressed as a percentage of the Spread (not exceeding 100 percent) at the time of exercise. Tandem Appreciation Rights may be granted at any time prior to the exercise or termination of the related Option Rights; provided, however, that a Tandem Appreciation Right awarded in relation to an Incentive Stock Option must be granted concurrently with such Incentive Stock Option. A Free-Standing Appreciation Right will be a right of the Participant to receive from the Company an amount determined by the Committee, which will be expressed as a percentage of the Spread (not exceeding 100 percent) at the time of exercise.
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(b) Each grant of Appreciation Rights may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
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(c) Any grant of Tandem Appreciation Rights will provide that such Tandem Appreciation Rights may be exercised only at a time when the related Option Right is also exercisable and at a time when the Spread is positive, and by surrender of the related Option Right for cancellation. Successive grants of Tandem Appreciation Rights may be made to the same Participant regardless of whether any Tandem Appreciation Rights previously granted to the Participant remain unexercised. For the avoidance of doubt, the Option Price of an Option Right to which a Tandem Appreciation Right relates (except with respect to awards under Section 22 of this Plan) will be equal to or greater than the Market Value per Share on the Date of Grant of such related Option Right.
(d) Appreciation Rights granted under this Plan may not provide for any dividends or dividend equivalents thereon.
(e) Regarding Free-Standing Appreciation Rights only:
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6. Restricted Stock. The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the grant or sale of Restricted Stock to Participants. Each such grant or sale may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
(a) Each such grant or sale will constitute an immediate transfer of the ownership of Common Stock to the Participant in consideration of the performance of services, entitling such Participant to voting, dividend and other ownership rights (subject in particular to Section 6(g) of this Plan), but subject to the substantial risk of forfeiture and restrictions on transfer hereinafter described.
(b) Each such grant or sale may be made without additional consideration or in consideration of a payment by such Participant that is less than the Market Value per Share on the Date of Grant.
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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
(c) Each such grant or sale will provide that the Restricted Stock covered by such grant or sale will be subject to a “substantial risk of forfeiture” within the meaning of Section 83 of the Code for a period to be determined by the Committee on the Date of Grant or until achievement of Management Objectives referred to in Section 6(e) of this Plan.
(d) Each such grant or sale will provide that during or after the period for which such substantial risk of forfeiture is to continue, the transferability of the Restricted Stock will be prohibited or restricted in the manner and to the extent prescribed by the Committee on the Date of Grant (which restrictions may include rights of repurchase or first refusal of the Company or provisions subjecting the Restricted Stock to a continuing substantial risk of forfeiture while held by any transferee).
(e) Any grant of Restricted Stock may specify Management Objectives regarding the vesting of such Restricted Stock.
(f) Notwithstanding anything to the contrary contained in this Plan, Restricted Stock may provide for continued vesting or the earlier vesting of such Restricted Stock, including (i) in the event of the Retirement, death or Disability of a Participant or (ii) in the event of a Change in Control where either (A) within a specified period the Participant is involuntarily terminated for reasons other than for cause or terminates his or her employment for good reason or (B) such Restricted Stock is not assumed or converted into replacement awards in a manner described in the Evidence of Award.
(g) Any such grant or sale of Restricted Stock may require that any and all dividends or other distributions paid thereon during the period of such restrictions be automatically deferred and/or reinvested in additional shares of Restricted Stock, which will be subject to the same restrictions as the underlying award. For the avoidance of doubt, any such dividends or other distributions on Restricted Stock will be deferred until and paid contingent upon the vesting of such Restricted Stock.
(h) Each grant or sale of Restricted Stock will be evidenced by an Evidence of Award. Each Evidence of Award will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve. Unless otherwise directed by the Committee, (i) all certificates representing shares of Restricted Stock will be held in custody by the Company until all restrictions thereon will have lapsed, together with a stock power or powers executed by the Participant in whose name such certificates are registered, endorsed in blank and covering such shares, or (ii) all shares of Restricted Stock will be held at the Company’s transfer agent in book entry form with appropriate restrictions relating to the transfer of such shares of Restricted Stock.
7. Restricted Stock Units. The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting or sale of Restricted Stock Units to Participants. Each such grant or sale may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
(a) Each such grant or sale will constitute the agreement by the Company to deliver Common Stock, cash or a combination thereof to the Participant in the future in consideration of the performance of services, but subject to the fulfillment of such conditions (which may include achievement regarding Management Objectives) during the Restriction Period as the Committee may specify.
(b) Each such grant or sale may be made without additional consideration or in consideration of a payment by such Participant that is less than the Market Value per Share on the Date of Grant.
(c) Notwithstanding anything to the contrary contained in this Plan, Restricted Stock Units may provide for continued vesting or the earlier lapse or other modification of the Restriction Period, including (i) in the event of the Retirement, death or Disability of a Participant or (ii) in the event of a Change in Control where either (A) within a specified period the Participant is involuntarily terminated for reasons other than for cause or terminates his or her employment for good reason or (B) such Restricted Stock Units are not assumed or converted into replacement awards in a manner described in the Evidence of Award.
(d) During the Restriction Period, the Participant will have no right to transfer any rights under his or her award and will have no rights of ownership in the Common Stock deliverable upon payment of the Restricted Stock
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Units and will have no right to vote them, but the Committee may, at or after the Date of Grant, authorize the payment of dividend equivalents on such Restricted Stock Units on a deferred and contingent basis based upon the vesting of such Restricted Stock Units.
(e) Each grant or sale of Restricted Stock Units will specify the time and manner of payment of the Restricted Stock Units that have been earned. Each grant or sale will specify that the amount payable with respect thereto will be paid by the Company in Common Stock or cash, or a combination thereof.
(f) Each grant or sale of Restricted Stock Units will be evidenced by an Evidence of Award. Each Evidence of Award will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve.
8. Cash Incentive Awards, Performance Shares and Performance Units. The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting of Cash Incentive Awards, Performance Shares and Performance Units. Each such grant may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
(a) Each grant will specify the number or amount of Performance Shares or Performance Units, or amount payable with respect to a Cash Incentive Award, to which it pertains, which number or amount may be subject to adjustment to reflect changes in compensation or other factors.
(b) The Performance Period with respect to each Cash Incentive Award, Performance Share or Performance Unit will be such period of time as will be determined by the Committee, which may be subject to continued vesting or earlier lapse or other modification, including (i) in the event of the Retirement, death or Disability of a Participant or (ii) in the event of a Change in Control where either (A) within a specified period the Participant is involuntarily terminated for reasons other than for cause or terminates his or her employment for good reason or (B) such Cash Incentive Awards, Performance Shares and Performance Units are not assumed or converted into replacement awards in a manner described in the Evidence of Award.
(c) Each grant of Cash Incentive Awards, Performance Shares or Performance Units will specify any Management Objectives regarding the earning of the award.
(d) Each grant will specify the time and manner of payment of Cash Incentive Awards, Performance Shares or Performance Units that have been earned. Any grant may specify that the amount payable with respect thereto may be paid by the Company in cash, in Common Stock, in Restricted Stock or Restricted Stock Units or in any combination thereof.
(e) Any grant of Cash Incentive Awards, Performance Shares or Performance Units may specify that the amount payable or the number of shares of Common Stock or Restricted Stock or Restricted Stock Units payable with respect thereto may not exceed maximums specified by the Committee on the Date of Grant.
(f) The Committee may, on the Date of Grant of Performance Shares, provide for the payment of dividend equivalents to the holder thereof either in cash or in additional Common Stock, which dividend equivalents will be subject to deferral and payment on a contingent basis based on the Participant’s earning and vesting of the Performance Shares with respect to which such dividend equivalents are paid. Performance Units granted under this Plan may not provide for any dividends or dividend equivalents thereon.
(g) Each grant of Cash Incentive Awards, Performance Shares or Performance Units will be evidenced by an Evidence of Award. Each Evidence of Award will be subject to this Plan and will contain such other terms and provisions, consistent with this Plan, as the Committee may approve.
9. Other Awards.
(a) The Committee may, subject to limitations under applicable law and Section 3 of this Plan, authorize the grant to any Participant Common Stock or such other awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Common Stock or factors that may influence the value of such shares, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into Common Stock, purchase rights for Common Stock, awards with value and payment contingent
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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
upon performance of the Company or specified Subsidiaries, affiliates or other business units thereof or any other factors designated by the Committee, and awards valued by reference to the book value of the Common Stock or the value of securities of, or the performance of specified Subsidiaries or affiliates or other business units of the Company. The Committee will determine the terms and conditions of such awards. Common Stock delivered pursuant to an award in the nature of a purchase right granted under this Section 9 will be purchased for such consideration, paid for at such time, by such methods, and in such forms, including, without limitation, cash, Common Stock, other awards, notes or other property, as the Committee determines.
(b) Cash awards, as an element of or supplement to any other award granted under this Plan, may also be granted pursuant to this Section 9.
(c) The Committee may authorize the grant of Common Stock as a bonus, or may authorize the grant of other awards in lieu of obligations of the Company or a Subsidiary to pay cash or deliver other property under this Plan or under other plans or compensatory arrangements, subject to such terms as will be determined by the Committee in a manner that complies with Section 409A of the Code.
(d) The Committee may, at or after the Date of Grant, authorize the payment of dividends or dividend equivalents on awards granted under this Section 9 on a deferred and contingent basis, either in cash or in additional Common Stock based upon the earning and vesting of such awards.
(e) Notwithstanding anything to the contrary contained in this Plan, any award under this Section 9 may provide for the earning or vesting of, or earlier elimination of restrictions applicable to, such award upon certain events, including (i) in the event of the Retirement, death or Disability of a Participant or (ii) in the event of a Change in Control where either (A) within a specified period the Participant is involuntarily terminated for reasons other than for cause or terminates his or her employment for good reason or (B) such awards are not assumed or converted into replacement awards in a manner described in the Evidence of Award.
(f) Each grant of an award under this Section 9 will be evidenced by an Evidence of Award. Each such Evidence of Award will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve, and will specify the time and terms of delivery of the applicable award.
10. Transferability.
(a) Except as otherwise determined by the Committee, and subject to compliance with Section 18(b) of this Plan and Section 409A of the Code, no Option Right, Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Share, Performance Unit, Cash Incentive Award, award contemplated by Section 9 of this Plan or dividend equivalents paid with respect to awards made under this Plan will be transferable by the Participant except by will or the laws of descent and distribution, and in no event will any such award granted under this Plan be transferred for value. Where transfer is permitted, references to “Participant” shall be construed, as the Committee deems appropriate, to include any permitted transferee to whom such award is transferred. Except as otherwise determined by the Committee, Option Rights and Appreciation Rights will be exercisable during the Participant’s lifetime only by him or her or, in the event of the Participant’s legal incapacity to do so, by his or her guardian or legal representative acting on behalf of the Participant in a fiduciary capacity under state law and/or court supervision.
(b) The Committee may specify at the Date of Grant that part or all of the Common Stock that is (i) to be issued or transferred by the Company upon the exercise of Option Rights or Appreciation Rights, upon the termination of the Restriction Period applicable to Restricted Stock Units or upon payment under any grant of Performance Shares or Performance Units or other awards under this Plan or (ii) no longer subject to the substantial risk of forfeiture and restrictions on transfer referred to in Section 6 of this Plan, will be subject to further restrictions on transfer, including minimum holding periods.
11. Adjustments. The Committee will make or provide for such adjustments in the number and kind of shares of Common Stock covered by outstanding Option Rights, Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares and Performance Units granted hereunder and, if applicable, in the number and kind of shares of Common Stock covered by other awards granted pursuant to Section 9 hereof, in the Option Price and Base Price provided in outstanding Option Rights and Appreciation Rights, respectively, in Cash Incentive Awards, and in other award terms, as
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the Committee, in its sole discretion, exercised in good faith, determines is equitably required to prevent dilution or enlargement of the rights of Participants that otherwise would result from (a) any extraordinary cash dividend, stock dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Company, (b) any merger, consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities, or (c) any other corporate transaction or event having an effect similar to any of the foregoing. Moreover, in the event of any such transaction or event or in the event of a Change in Control, the Committee may provide in substitution for any or all outstanding awards under this Plan such alternative consideration (including cash), if any, as it, in good faith, may determine to be equitable in the circumstances and will require in connection therewith the surrender of all awards so replaced in a manner that complies with Section 409A of the Code. In addition, for each Option Right or Appreciation Right with an Option Price or Base Price, respectively, greater than the consideration offered in connection with any such transaction or event or Change in Control, the Committee may in its sole discretion elect to cancel such Option Right or Appreciation Right without any payment to the person holding such Option Right or Appreciation Right. The Committee will also make or provide for such adjustments in the numbers of shares specified in Section 3 of this Plan as the Committee in its sole discretion, exercised in good faith, determines is appropriate to reflect any transaction or event described in this Section 11; provided, however, that any such adjustment to the number specified in Section 3(c) will be made only if and to the extent that such adjustment would not cause any Option Right intended to qualify as an Incentive Stock Option to fail to so qualify.
12. Change in Control. “Change in Control” means:
(a) any “Person” (as such term is defined in Sections 13(d) or 14(d)(2) of the Exchange Act; hereafter, a “Person”) is on the date hereof or becomes the beneficial owner, directly or indirectly, of securities of the Company representing 35% or more of the Voting Power; provided, however, that for purposes of this Section 12(a), the following acquisitions shall not constitute a Change in Control:
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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
(b) The Company consummates a merger or consolidation in which shareholders of the Company immediately prior to entering into such agreement will beneficially own immediately after the effective time of the merger or consolidation securities of the Company or any surviving or new corporation, as the case may be, having less than 60% of the Voting Power or any surviving or new corporation, as the case may be, including Voting Power exercisable on a contingent or deferred basis as well as immediately exercisable Voting Power, excluding any merger or combination of a wholly owned Subsidiary into the Company, or the Company into a wholly owned Subsidiary; or
(c) The Company consummates a sale, lease, exchange or other transfer or disposition of all or substantially all of its assets to any Person other than to a wholly owned Subsidiary, but not including (i) a mortgage or pledge of assets granted in connection with a financing or (ii) a spin-off or sale of assets if the Company continues in existence and its common shares are listed on a national securities exchange, quoted on the automated quotation system of a national securities association or traded in the over-the-counter market; or
(d) the Original Directors and/or their Successors as defined above in Section 12(a)(1)(A) of this definition do not constitute a majority of the whole Board as the case may be; or
(e) approval by the shareholders of the Company of a complete liquidation or dissolution of the Company as the case may be.
13. Detrimental Activity and Recapture Provisions. Any Evidence of Award may reference a clawback policy of the Company or provide for the cancellation or forfeiture of an award or the forfeiture and repayment to the Company of any gain related to an award, or include other provisions intended to have a similar effect, upon such terms and conditions as may be determined by the Committee or the Board from time to time or as required by applicable law or any applicable rules or regulations promulgated by the Securities and Exchange Commission or any national securities exchange or national securities association on which the Common Stock may be traded. In addition, notwithstanding anything in this Plan to the contrary, any Evidence of Award or such clawback policy may also provide for the cancellation or forfeiture of an award or the forfeiture and repayment to the Company of any shares of Common Stock issued under and/or any other benefit related to an award, or include other provisions intended to have a similar effect, including upon such terms and conditions as may be required by the Committee or the Board or under Section 10D of the Exchange Act and/or any applicable rules or regulations promulgated by the Securities and Exchange Commission or any national securities exchange or national securities association on which the Common Stock may be traded.
14. Withholding Taxes. To the extent that the Company is required to withhold federal, state, local or foreign taxes or other amounts in connection with any payment made or benefit realized by a Participant or other person under this Plan, and the amounts available to the Company for such withholding are insufficient, it will be a condition to the receipt of such payment or the realization of such benefit that the Participant or such other person make arrangements satisfactory to the Company for payment of the balance of such taxes or other amounts required to be withheld, which arrangements (in the discretion of the Committee) may include relinquishment of a portion of such benefit. If a Participant’s benefit is to be received in the form of Common Stock, and such Participant fails to make arrangements for the payment of taxes or other amounts, then, unless otherwise determined by the Committee, the Company will withhold shares of Common Stock having a value equal to the amount required to be withheld. Notwithstanding the foregoing, when a Participant is required to pay the Company an amount required to be withheld under applicable income, employment, tax and other laws, the Participant may elect, unless otherwise determined by the Committee, to satisfy the obligation, in whole or in part, by having withheld, from the shares required to be delivered to the Participant, shares of Common Stock having a value equal to the amount required to be withheld, or by delivering to the Company other shares of Common Stock held by such Participant. The shares used for tax or other withholding will be valued at an amount equal to the fair market value of such Common Stock on the date the benefit is to be included in the Participant’s income. In no event will the market value of the Common Stock to be withheld and delivered pursuant to this Section 14 exceed the minimum amount required to be withheld unless (a) an additional amount can be withheld and not result in adverse accounting consequences, and (b) such additional withholding amount is
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authorized by the Committee. Participants will also make such arrangements as the Company may require for the payment of any withholding tax or other obligation that may arise in connection with the disposition of Common Stock acquired upon the exercise of Option Rights.
15. Non U.S. Participants. In order to facilitate the making of any grant or combination of grants under this Plan, the Committee may provide for such special terms for awards to Participants who are foreign nationals or who are employed by the Company or any Subsidiary outside of the United States of America or who provide services to the Company or any Subsidiary under an agreement with a foreign nation or agency, as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Moreover, the Committee may approve such supplements to or amendments, restatements or alternative versions of this Plan (including without limitation, sub-plans) (to be considered part of this Plan) as it may consider necessary or appropriate for such purposes, without thereby affecting the terms of this Plan as in effect for any other purpose, and the Secretary or other appropriate officer of the Company may certify any such document as having been approved and adopted in the same manner as this Plan. No such special terms, supplements, amendments or restatements, however, will include any provisions that are inconsistent with the terms of this Plan as then in effect unless this Plan could have been amended to eliminate such inconsistency without further approval by the shareholders of the Company.
16. Administration of the Plan.
(a) This Plan will be administered by the Committee; provided, however, that, at the discretion of the Board, this Plan may be administered by the Board, including with respect to the administration of any responsibilities and duties held by the Committee hereunder. The Committee may from time to time delegate all or any part of its authority under this Plan to any subcommittee thereof. To the extent of any such delegation, references in this Plan to the Committee will be deemed to be references to such subcommittee.
(b) The interpretation and construction by the Committee of any provision of this Plan or of any Evidence of Award (or related documents) and any determination by the Committee pursuant to any provision of this Plan or of any such agreement, notification or document will be final and conclusive. No member of the Committee shall be liable for any such action or determination made in good faith. In addition, the Committee is authorized to take any action it determines in its sole discretion to be appropriate subject only to the express limitations contained in this Plan, and no authorization in any Plan section or other provision of this Plan is intended or may be deemed to constitute a limitation on the authority of the Committee.
(c) To the extent permitted by law, the Committee may delegate to one or more of its members or to one or more officers of the Company, or to one or more agents or advisors, such administrative duties or powers as it may deem advisable, and the Committee, the subcommittee, or any person to whom duties or powers have been delegated as aforesaid, may employ one or more persons to render advice with respect to any responsibility the Committee, the subcommittee or such person may have under this Plan. The Committee or the subcommittee may, by resolution, authorize one or more officers of the Company to do one or both of the following on the same basis as the Committee or the subcommittee: (i) designate employees to be recipients of awards under this Plan; and (ii) determine the size of any such awards; provided, however, that (A) the Committee or the subcommittee will not delegate such responsibilities to any such officer for awards granted to an employee who is an officer, Director, or more than 10% “beneficial owner” (as such term is defined in Rule 13d-3 promulgated under the Exchange Act) of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, as determined by the Committee in accordance with Section 16 of the Exchange Act; (B) the resolution providing for such authorization sets forth the total number of Common Stock such officer(s) may grant; and (C) the officer(s) will report periodically to the Committee or the subcommittee, as the case may be, regarding the nature and scope of the awards granted pursuant to the authority delegated.
17. Amendments, Etc.
(a) The Board may at any time and from time to time amend this Plan in whole or in part; provided, however, that if an amendment to this Plan, for purposes of applicable stock exchange rules and except as permitted under Section 11 of this Plan, (i) would materially increase the benefits accruing to Participants under this Plan, (ii) would
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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
materially increase the number of securities which may be issued under this Plan, (iii) would materially modify the requirements for participation in this Plan,or (iv) must otherwise be approved by the shareholders of the Company in order to comply with applicable law or the rules of the New York Stock Exchange or, if the Common Stock is not traded on the New York Stock Exchange, the principal national securities exchange upon which the Common Stock is traded or quoted, all as determined by the Board, then, such amendment will be subject to shareholder approval and will not be effective unless and until such approval has been obtained.
(b) Except in connection with a corporate transaction or event described in Section 11 of this Plan or in connection with a Change in Control, the terms of outstanding awards may not be amended to reduce the Option Price of outstanding Option Rights or the Base Price of outstanding Appreciation Rights, or cancel outstanding “underwater” Option Rights or Appreciation Rights (including following a Participant’s voluntary surrender of “underwater” Option Rights or Appreciation Rights) in exchange for cash, other awards or Option Rights or Appreciation Rights with an Option Price or Base Price, as applicable, that is less than the Option Price of the original Option Rights or Base Price of the original Appreciation Rights, as applicable, without shareholder approval. This Section 17(b) is intended to prohibit the repricing of “underwater” Option Rights and Appreciation Rights and will not be construed to prohibit the adjustments provided for in Section 11 of this Plan. Notwithstanding any provision of this Plan to the contrary, this Section 17(b) may not be amended without approval by the Company’s shareholders.
(c) If permitted by Section 409A of the Code, but subject to Section 17(d), including in the case of termination of employment or service, or in the case of unforeseeable emergency or other circumstances, or in the event of a Change in Control, to the extent a Participant holds an Option Right or Appreciation Right not immediately exercisable in full, or any shares of Restricted Stock as to which the substantial risk of forfeiture or the prohibition or restriction on transfer has not lapsed, or any Restricted Stock Units as to which the Restriction Period has not been completed, or any Cash Incentive Awards, Performance Shares or Performance Units which have not been fully earned, or any dividend equivalents or any other awards made pursuant to Section 9 subject to any vesting schedule or transfer restriction, or holds Common Stock subject to any transfer restriction imposed pursuant to Section 10(b) of this Plan, the Committee may, in its sole discretion, provide for continued vesting or accelerate the time at which such Option Right, Appreciation Right or other award may be exercised or the time at which such substantial risk of forfeiture or prohibition or restriction on transfer will lapse or the time when such Restriction Period will end or the time at which such Cash Incentive Awards, Performance Shares or Performance Units will be deemed to have been earned or the time when such transfer restriction will terminate or may waive any other limitation or requirement under any such award.
(d) Subject to Section 17(b) hereof, the Committee may amend the terms of any award theretofore granted under this Plan prospectively or retroactively. Except for adjustments made pursuant to Section 11 above, no such amendment will materially impair the rights of any Participant without his or her consent. The Board may, in its discretion, terminate this Plan at any time. Termination of this Plan will not affect the rights of Participants or their successors under any awards outstanding hereunder and not exercised in full on the date of termination.
18. Compliance with Section 409A of the Code.
(a) To the extent applicable, it is intended that this Plan and any grants made hereunder comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to the Participants. This Plan and any grants made hereunder will be administered in a manner consistent with this intent. Any reference in this Plan to Section 409A of the Code will also include any regulations or any other formal guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.
(b) Neither a Participant nor any of a Participant’s creditors or beneficiaries will have the right to subject any deferred compensation (within the meaning of Section 409A of the Code) payable under this Plan and grants hereunder to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment. Except as permitted under Section 409A of the Code, any deferred compensation (within the meaning of Section 409A of the Code) payable to a Participant or for a Participant’s benefit under this Plan and grants hereunder may not be reduced by, or offset against, any amount owed by a Participant to the Company or any of its affiliates.
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(c) If, at the time of a Participant’s separation from service (within the meaning of Section 409A of the Code), (i) the Participant will be a specified employee (within the meaning of Section 409A of the Code and using the identification methodology selected by the Company from time to time) and (ii) the Company makes a good faith determination that an amount payable hereunder constitutes deferred compensation (within the meaning of Section 409A of the Code) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the Code in order to avoid taxes or penalties under Section 409A of the Code, then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it, without interest, on the tenth business day of the seventh month after such separation from service.
(d) Solely with respect to any award that constitutes nonqualified deferred compensation subject to Section 409A of the Code and that is payable on account of a Change in Control (including any installments or stream of payments that are accelerated on account of a Change in Control), a Change of Control shall occur only if such event also constitutes a “change in the ownership,” “change in effective control,” and/or a “change in the ownership of a substantial portion of assets” of the Company as those terms are defined under Treasury Regulation §1.409A-3(i)(5), but only to the extent necessary to establish a time and form of payment that complies with Section 409A of the Code, without altering the definition of Change in Control for any purpose in respect of such award.
(e) Notwithstanding any provision of this Plan and grants hereunder to the contrary, in light of the uncertainty with respect to the proper application of Section 409A of the Code, the Company reserves the right to make amendments to this Plan and grants hereunder as the Company deems necessary or desirable to avoid the imposition of taxes or penalties under Section 409A of the Code. In any case, a Participant will be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on a Participant or for a Participant’s account in connection with this Plan and grants hereunder (including any taxes and penalties under Section 409A of the Code), and neither the Company nor any of its affiliates will have any obligation to indemnify or otherwise hold a Participant harmless from any or all of such taxes or penalties.
19. Miscellaneous Provisions.
(a) The Company will not be required to issue any fractional shares of Common Stock pursuant to this Plan. The Committee may provide for the elimination of fractions or for the settlement of fractions in cash.
(b) This Plan will not confer upon any Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor will it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate such Participant’s employment or other service at any time.
(c) Except with respect to Section 19(e), to the extent that any provision of this Plan would prevent any Option Right that was intended to qualify as an Incentive Stock Option from qualifying as such, that provision will be null and void with respect to such Option Right. Such provision, however, will remain in effect for other Option Rights and there will be no further effect on any provision of this Plan.
(d) No award under this Plan may be exercised by the holder thereof if such exercise, and the receipt of cash or stock thereunder, would be, in the opinion of counsel selected by the Company, contrary to law or the regulations of any duly constituted authority having jurisdiction over this Plan.
(e) Absence on leave approved by a duly constituted officer of the Company or any of its Subsidiaries will not be considered interruption or termination of service of any employee for any purposes of this Plan or awards granted hereunder.
(f) No Participant will have any rights as a shareholder with respect to any shares subject to awards granted to him or her under this Plan prior to the date as of which he or she is actually recorded as the holder of such shares upon the stock records of the Company.
(g) The Committee may condition the grant of any award or combination of awards authorized under this Plan on the surrender or deferral by the Participant of his or her right to receive a cash bonus or other compensation otherwise payable by the Company or a Subsidiary to the Participant.
B-15
FLOWERS FOODS, INC. | 2023 PROXY STATEMENT
(h) Except with respect to Option Rights and Appreciation Rights, the Committee may permit Participants to elect to defer the issuance of Common Stock under this Plan pursuant to such rules, procedures or programs as it may establish for purposes of this Plan and which are intended to comply with the requirements of Section 409A of the Code. The Committee also may provide that deferred issuances and settlements include the crediting of dividend equivalents or interest on the deferral amounts.
(i) If any provision of this Plan is or becomes invalid, illegal or unenforceable in any jurisdiction, or would disqualify this Plan or any award under any law deemed applicable by the Committee, such provision will be construed or deemed amended or limited in scope to conform to applicable laws or, in the discretion of the Committee, it will be stricken and the remainder of this Plan will remain in full force and effect. Notwithstanding anything in this Plan or an Evidence of Award to the contrary, nothing in this Plan or in an Evidence of Award prevents a Participant from providing, without prior notice to the Company, information to governmental authorities regarding possible legal violations or otherwise testifying or participating in any investigation or proceeding by any governmental authorities regarding possible legal violations, and for purpose of clarity a Participant is not prohibited from providing information voluntarily to the Securities and Exchange Commission pursuant to Section 21F of the Exchange Act.
20. Effective Date/Termination. The Flowers Foods, Inc. 2014 Omnibus Equity and Incentive Compensation Plan was effective as of the Effective Date. This 2023 amendment and restatement of the Flowers Foods, Inc. 2014 Omnibus Equity and Incentive Compensation Plan will be effective as of the date on which such amendment and restatement is approved by the Company’s shareholders (the “Amendment and Restatement Date”). No grants will be made on or after the Effective Date under the Predecessor Plan, provided that outstanding awards granted under the Predecessor Plan will continue following the Effective Date. No grant will be made under this Plan on or after the tenth anniversary of the Amendment and Restatement Date, but all grants made prior to such date will continue in effect thereafter subject to the terms thereof and of this Plan. For clarification purposes, the terms and conditions of this Plan shall not apply to or otherwise impact previously granted and outstanding awards under the Predecessor Plan, as applicable (except for purposes of providing for shares of Common Stock under such awards to be added to the aggregate numbers of shares of Common Stock available under Section 3(a) of this Plan pursuant to the share counting rules of this Plan).
21. Governing Law. This Plan and all grants and awards and actions taken hereunder will be governed by and construed in accordance with the internal substantive laws of the State of Georgia.
22. Stock-Based Awards in Substitution for Option Rights or Awards Granted by Another Company. Notwithstanding anything in this Plan to the contrary:
(a) Awards may be granted under this Plan in substitution for or in conversion of, or in connection with an assumption of, stock options, stock appreciation rights, restricted stock, restricted stock units or other stock or stock-based awards held by awardees of an entity engaging in a corporate acquisition or merger transaction with the Company or any Subsidiary. Any conversion, substitution or assumption will be effective as of the close of the merger or acquisition, and, to the extent applicable, will be conducted in a manner that complies with Section 409A of the Code. The awards so granted may reflect the original terms of the awards being assumed or substituted or converted for and need not comply with other specific terms of this Plan, and may account for shares of Common Stock substituted for the securities covered by the original awards and the number of shares subject to the original awards, as well as any exercise or purchase prices applicable to the original awards, adjusted to account for differences in stock prices in connection with the transaction.
(b) In the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary merges has shares available under a pre-existing plan previously approved by shareholders and not adopted in contemplation of such acquisition or merger, the shares available for grant pursuant to the terms of such plan (as adjusted, to the extent appropriate, to reflect such acquisition or merger) may be used for awards made after such acquisition or merger under this Plan; provided, however, that awards using such available shares may not be made after the date awards or grants could have been made under the terms of the pre-existing plan absent the acquisition or merger, and may only be made to individuals who were not employees or directors of the Company or any Subsidiary prior to such acquisition or merger.
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(c) Any shares of Common Stock that are issued or transferred by, or that are subject to any awards that are granted by, or become obligations of, the Company under Sections 22(a) or 22(b) of this Plan will not reduce the shares of Common Stock available for issuance or transfer under this Plan or otherwise count against the limits contained in Section 3 of this Plan. In addition, no shares of Stock subject to an award that is granted by, or becomes an obligation of, the Company under Sections 22(a) or 22(b) of this Plan, will be added to the aggregate limits contained in Section 3(a) of this Plan.
B-17
FLOWERS FOODS, INC.
SHAREHOLDER RELATIONS DEPT.
1919 FLOWERS CIRCLE
THOMASVILLE, GA 31757
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FLOWERS FOODS, INC.
Dear Shareholder,
Please take note of the important information enclosed with this Proxy. Your vote is important, and we encourage you to exercise your right to vote these shares. Please mark the boxes on the reverse side of this proxy card to indicate your vote. Then sign the card and return it in the enclosed postage-paid envelope, or follow the instructions on the reverse side of this proxy card for Internet or telephone voting. Your vote must be received prior to the Annual Meeting of Shareholders on May 25, 2023.
23, 2024. If you are a participant in the Flowers Foods, Inc. 401(k) Retirement Savings Plan, you have the right to direct Great-WestEmpower Trust Company, LLC, the Trustee of the 401(k) plan, how to vote the Flowers Foods, Inc. common shares allocated to the account. Any unvoted or unallocated shares will be voted by the Trustee in the same proportion on each proposal as the Trustee votes the shares of stock credited to the 401(k) plan participants’ accounts for which the Trustee receives voting directions from the 401(k) plan participants. The number of shares that are eligible to vote is based on the balance in the 401(k) plan on March 21, 2023,19, 2024, the record date for the Annual Meeting. Because all of the shares in the 401(k) plan are registered in the name of Great-WestEmpower Trust Company, LLC, as Trustee, you will not be able to vote these shares in the 401(k) plan in person at the Annual Meeting on May 25, 2023.
23, 2024. If stock is owned directly in your own name as well as in the 401(k) plan, separate share totals are indicated on the reverse side of this voting instruction form. If you own stock indirectly through a bank or broker, as well as in the 401(k) plan, you will receive a separate voting instruction form from the bank or broker.
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Thank you. Flowers Foods, Inc. The 20232024 Annual Meeting of Shareholders will be held virtually via the Internet at
www.virtualshareholdermeeting.com/FLO2023FLO2024 on May 25, 202323, 2024 at 11:00 a.m., Eastern Time.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
V07166-P87400
V39516-P06127 FLOWERS FOODS, INC. 1919 Flowers Circle Thomasville, Georgia 31757 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 23, 2024 The undersigned hereby appoints A. Ryals McMullian, R. Steve Kinsey and Stephanie B. Tillman as proxies, with power to act without the other, and with full power of substitution, and hereby authorizes them to represent and vote, as designated on the reverse side, all the shares of common stock of Flowers Foods, Inc. held of record on March 19, 2024, by the undersigned at the Annual Meeting of Shareholders to be held virtually via the Internet at www.virtualshareholdermeeting.com/FLO2024 on May 23, 2024 at 11:00 a.m., Eastern Time, and at any adjournment or postponement thereof. The above-named proxies of the undersigned are authorized to vote, in their discretion, upon such other matters as may properly come before the Annual Meeting or any adjournment or postponement thereof. If you are a participant in the Flowers Foods, Inc. 401(k) Retirement Savings Plan, you have the right to direct Empower Trust Company, LLC, the Trustee of the 401(k) plan, how to vote the Flowers Foods, Inc. common shares allocated to the account. This proxy card also acts as a voting instruction form to provide voting directions to the Trustee. The proxies will vote on the proposals set forth in the Notice of Annual Meeting and Proxy Statement as specified on the reverse side and are authorized to vote, in their discretion, on any other matters that may properly come before the Annual Meeting or any adjournment or postponement thereof. WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS INDICATED ON THE REVERSE SIDE. IF NO INDICATION IS MADE, ANY EXECUTED PROXY WILL BE VOTED "FOR" THE ELECTION OF ALL OF THE DIRECTOR-NOMINEES LISTED ON THE REVERSE SIDE,"FOR" PROPOSALS 2 AND 3, AND IN THE DISCRETION OF THE PROXIES AS TO ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF. PLEASE VOTE, DATE AND SIGN ON THE REVERSE SIDE AND RETURN THE PROXY
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