DEF 14A 1 nc10025859x3_def14a.htm DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE

SECURITIES EXCHANGE ACT OF 1934

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Freshpet, Inc.

(Name of Registrant as Specified In Its Charter)

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August 13, 2021

TO OUR FELLOW STOCKHOLDERS

Thank you for your support of Freshpet, Inc. On behalf of the entire Board of Directors of Freshpet, we invite you to attend Freshpet’s 2021 Annual Meeting of Stockholders to be held virtually on September 23, 2021 at 8:30 a.m., Eastern Time.

This year marked another major milestone on Freshpet’s mission to “change the way people nourish their pets forever.” The Company accelerated its growth for the fourth consecutive year behind its Feed the Growth strategy and announced in early 2020 a long-term plan to achieve $1 billion in net sales and penetrate 8 million households by 2025 – and then increased those goals in early 2021 to $1.25 billion and 11 million households after a strong performance in 2020. The Board, working closely with the management team, also began implementing the long-term governance plan we outlined at last year’s meeting and pursued our first comprehensive ESG program that we summarize later in this report. As our 2020 Annual Meeting approaches, we would like to share our reflections on how we worked together to best represent stockholder interests not just for the present, but over the longer-term.

BOARD OVERSIGHT OF STRATEGY

The Board is dedicated to its role as your fiduciary, and our Directors’ diverse skills and backgrounds reflect the expertise necessary for effective oversight of the business. Freshpet is changing the way people feed their pets, and our strategy to lead the transition to fresh and natural food for our pets is aligned with a fundamental shift in how society views both pets and food. The accelerating growth of the Company over the past four years validates that our Feed the Growth strategy is working and has positioned the Company to realize the benefits of its first-mover position in the market’s shift towards higher quality, fresh pet food. As a Board, we have encouraged and guided the management team to continually make the investments necessary to fully realize Freshpet’s long-term potential, including investments in talent, capacity, systems, and advertising. It is our belief that this focus on long-term growth will deliver significant profitability through increased scale and create a sustainable competitive advantage for the Company.

Consistent with those beliefs, the Board and management decided to raise our long-term growth goals only one year into our 5-year plan when it became apparent that the potency of our strategies and emerging consumer trends were creating an even larger opportunity than we had originally envisioned. To fully realize that opportunity, we chose to accelerate our plans, building more capacity more quickly and created a financing strategy that provided the Company with the resources it needed to be successful. We are now well on our way to building a Freshpet consumer franchise consisting of 11 million households that we believe can generate $1.25 billion in net sales by 2025.

STOCKHOLDER ENGAGEMENT AS DIRECT INPUT TO ENHANCE GOVERNANCE

The Board was particularly gratified by the strong support we received for the “Freshpet Commitment to Good Corporate Governance: 2020 to 2025 Roadmap” that we outlined last year. That plan was the direct result of engagement between our stockholders, management, and representatives from our Board. The plan created a step-by-step process that matched Freshpet’s business development with a series of governance enhancements that would enable us to transition from a small, young, private-equity backed company (with the governance provisions commonly found in such early stage companies) to a $1 billion net sales company with a diverse stockholder base and the governance practices you would expect of a mature company. Many of our stockholders told us that they had not seen another company take such a disciplined, proactive, pragmatic, and transparent approach to its governance transformation.

As you saw last year, our Board took action to adopt a director resignation policy and eliminate supermajority requirements, a decisive first step taken in our governance roadmap. This year, we amended our bylaws to move to a majority vote standard in uncontested elections and we are including a proposal in this year’s Proxy Statement to fully declassify our Board by 2025. These steps are part of our plan to implement a stockholder-responsive governance structure, which you can read more about on page 2 of this Proxy Statement. We believe that this approach is representative of the way we manage every aspect of the Freshpet business, and we appreciate the input we received from stockholders that helped us shape that plan and the support they provided for the plan.

The development of that plan also gave us an opportunity to have meaningful conversations with many of our longest tenured and most sophisticated stockholders about what other actions they would expect us to take as we grow. In total, we spoke to stockholders holding approximately 67% of our outstanding shares. One theme we heard over and over again was that stockholders appreciated the strong environmental and social values that are embedded in Freshpet’s “Pets. People. Planet.” ideology and the actions we take each year to support them, but they also expected us to provide much more detail on the total

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impact of the Company on the environment and the communities we touch and then set long-term goals for improvement. The sustainability report, which we plan to release in August 2021, is in direct response to that stockholder input. While we are still in the early phases of that work, we believe we are off to a good start and have established aggressive goals that will motivate the necessary actions to make Freshpet a truly sustainable company.

Finally, the Board also sought input from our stockholders on the way in which we align management and stockholder interests. In 2020, we were nearing the end of the performance period for multi-year equity grants given to the Company’s four most senior officers and were contemplating how we might replace those grants. Our stockholders clearly appreciated the tremendous growth the 2016 plan had enabled and encouraged us to consider a similar plan with the incentives directly tied to the Company’s publicly stated goals. They also encouraged us to provide stronger disclosures on key elements of the plan, make performance the primary driver of the plan, and use the program to develop a deeper bench of talent. The plan that the Board implemented included additional managers who are essential to our long-term succession plans, vesting targets that are in excess of the Company’s publicly stated long-term goals, and 75% of the vesting is tied to performance.

OUR COMMITMENT TO SERVE OUR PETS, PEOPLE AND PLANET

Ever since the inception of our Company, we have focused on ensuring that every decision we make is good for “Pets. People. Planet.” That ethos is embedded in everything we do. We consider ourselves fortunate to have stakeholders who share those values and support our efforts to create a world where all three can thrive simultaneously. As our success grows, our impact on all our stakeholders will grow, so we need to ensure that everything we do contributes to the world in a positive way. That will take significant commitment and effort. You have our word that we will be relentless in our efforts to make Freshpet into the kind of company whose success is only exceeded by the esteem in which it is held for the way in which we achieve those results.

Thank you for your support and continued interest in Freshpet.

Sincerely,

William B. Cyr

Chief Executive Officer & Executive Director

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FRESHPET, INC.

400 PLAZA DRIVE, 1^STFLOOR

SECAUCUS, NJ 07094

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

SEPTEMBER 23, 2021

TO THE STOCKHOLDERS OF FRESHPET, INC.:

The 2021 Annual Meeting of Stockholders of Freshpet, Inc. (the “Company”) will be held virtually due to the coronavirus (COVID-19) outbreak and in the interest of the health and well-being of our employees, stockholders and other meeting participants. The decision to have a virtual Annual Meeting this year does not represent a change in our stockholder engagement philosophy, and we currently expect to return to an in-person meeting as soon as feasibly and safely possible.

The Annual Meeting can be accessed by visiting www.virtualshareholdermeeting.com/FRPT2021, where you will be able to listen to the meeting live, submit questions and vote online. It is important that your shares be represented. Whether or not you plan to attend the virtual Annual Meeting, please vote using the procedures described on the notice of internet availability of proxy materials or on the proxy card. Your vote will mean that you are represented at the Annual Meeting regardless of whether or not you attend the Annual Meeting. Returning the proxy does not deprive you of your right to attend the meeting and to vote your shares virtually at the Annual Meeting.

The meeting will be held on September 23, 2021 at 8:30 a.m., Eastern Time, for the following purposes:

ITEMS OF BUSINESS

1.	To elect two members of the Board of Directors. The Board intends to present for re-election the following two nominees: Daryl G. Brewster and Jacki S. Kelley;

2.	To ratify the appointment of KPMG LLP as the independent registered public accounting firm for 2021;

3.	To approve, by advisory vote, the compensation of the Company’s named executive officers (the “Say-on-Pay Proposal”);

4.	To approve an amendment to our Fourth Amended and Restated Certificate of Incorporation (as amended prior to the date hereof, the “Certificate of Incorporation”) to declassify the Board of Directors as set forth herein (the “Declassification Proposal”); and

5.	To transact other business, if any, that is properly brought before the meeting or any adjournment or postponement thereof.

RECORD DATE

Close of business on July 26, 2021.

Sincerely,

Charles A. Norris

Chairman of the Board

Secaucus, New Jersey

August 13, 2021

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON SEPTEMBER 23, 2021: The Company’s Notice of Annual Meeting, Proxy Statement and 2020 Annual Report to stockholders are available on the internet at www.proxyvote.com.

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	TABLE OF CONTENTS
The Meeting		2
General Information		2
Stockholder Engagement		7
Commitment to Good Corporate Governance		10
Directors, Executive Officers, and Corporate Governance		25
Executive Compensation		37
Compensation Committee Report		54
Executive Compensation Tables		55
Delinquent Section 16(a) Reports		64
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		67
Certain Relationships and Related Party Transactions		71
Audit Committee Report		73
Proposals		74
Other Matters		81

In this Proxy Statement, we may make forward-looking statements regarding future events or the future financial performance of the Company. We use words such as “anticipate,” “believe,” “expect,” “intend,” “estimate,” “plan,” “predict,” “seek,” “goal,” “will,” “may,” “likely,” “should,” “could” (and the negative of any of these terms) and similar expressions to identify forward-looking statements. In addition, any statements that refer to projections of our future financial performance, trends in our business or industry, uncertain events and assumptions, such as our ability to implement our future corporate governance plans described herein and our ability to meet our sustainability targets, goals, and commitments, including due to the impact of climate change, and other characterizations of future events or circumstances are forward-looking statements. These forward-looking statements are not guarantees of future performance and reflect management’s current expectations. Our actual results could differ materially from those discussed in such forward-looking statements. Please refer to our annual and quarterly reports on Form 10-K and Form 10-Q, respectively, for a discussion of important factors that could cause actual events or actual results to differ materially from those discussed in this Proxy Statement. These forward-looking statements speak only as of the date of this Proxy Statement, and we assume no obligation to revise or update any forward-looking statement for any reason, except as required by law.

SEC Form DEF 14A filed by Freshpet, Inc.