Document:

vitl-ex1015_436.htm

 

Exhibit 10.15

 

October 20, 2020

Peter “Pete” Pappas

Via Email

Re:  Offer of Employment

Dear Pete,

It is my great pleasure to extend you an offer of employment with Vital Farms, Inc. (the “Company”) at its Austin, Texas location, beginning on October 26, 2020 (the “Start Date”). Our success has been built on providing the highest quality, ethically produced food, full transparency about our farms and standards, top-shelf service to our customers and care for our crew. We feel your experience, skill set, passion and energy are a fantastic fit. We have a great thing going and want you to help us to the next level and beyond. Subject to your execution of this letter (the “Offer Letter”), this Offer Letter amends, restates and supersedes in its entirety your prior offer letter with the Company dated October 5, 2020 (the “Prior Agreement”). 

Your position will be Chief Sales Officer, reporting into the Chief Executive Officer and performing such duties as are normally associated with that position and such duties as are assigned to you from time to time. You will work remotely from your residence in Dallas until such time as mutually agreed to by you and the Company. This is a full-time position.  As an exempt salaried employee, you will devote substantially all of your business time and attention to the business of the Company and will not be eligible for overtime compensation. 

Your initial base salary will be at the rate of $12,307.69 bi-weekly, which equates to $320,000 on an annualized basis, payable in accordance with the Company’s standard payroll practices and subject to applicable deductions and withholdings.  

If you execute this Offer letter and commence employment in accordance with this Offer Letter, you will be advanced a one-time sign-on bonus of $50,000, subject to applicable deductions and withholdings, which will be earned in full on the twelve (12)-month anniversary of the Start Date (the “Sign-On Bonus”). The Sign-On Bonus will be payable in a lump sum payment on the Company’s first regular payroll date following your Start Date, provided that you remain employed by the Company on such date. If you resign from employment with the Company before the twelve (12)-month anniversary of the Start Date, you will be obligated to, and hereby agree to, repay a prorated portion of the net, after-tax amount of the Sign-On Bonus paid out to you on or before the termination date, based on the number of days you were employed by the Company prior to your resignation.  You agree that if you are obligated to repay all or a portion of the Sign-On Bonus, the Company may deduct, in accordance with applicable law, any such amount from any payments the Company owes you, including but not limited 

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to any regular payroll amount and any expense payments.  You further agree to pay to the Company, within thirty (30) days of your effective termination date, any remaining unpaid balance of the unearned Sign-On Bonus not covered by such deductions.

You will also be eligible to participate in the 401(k) plan maintained by the Company, which currently provides for a bi-weekly employer contribution equal to 3% of your earnings (subject to IRS employer contribution limits), as well as a $40 per month cell-phone reimbursement and $40 per month internet reimbursement (while working from home) in accordance with the Company’s policies on expense reimbursement. As a leader in our company, you are eligible for time off under our management time off policy and will not be subject to the standard PTO limits.  You will be entrusted to manage your work and time off in accordance with such policy and the business and operational needs of the Company.

The Company will also provide you with a recurring monthly payment of $650, less applicable deductions and withholdings, to cover expenses related to your personal automobile which shall be used for work-related local travel (the “Monthly Automobile Payment”).  The Monthly Automobile Payment will be paid on the Company’s first regularly scheduled payroll date of each month; provided, however, that you must be an employee in good standing on the applicable payment date to be eligible to receive the Monthly Automobile Payment for that month.  The Monthly Automobile Payment may be changed, modified or terminated at any time by the Company in its sole discretion.

Additionally, you will be eligible to earn a discretionary annual bonus (the “Annual Bonus”) at an annual target amount of 60% of your base salary. Whether any Annual Bonus is awarded will be based upon the Company's assessment of your performance and the Company’s attainment of goals as set by the Board of Directors in its sole discretion. Following the close of each fiscal year, the Company will determine in its sole discretion whether it will award you an Annual Bonus and the amount of any such Annual Bonus. No amount of the Annual Bonus is guaranteed, and in addition to the other conditions for being awarded such compensation, you must be an employee in good standing on the Annual Bonus payment date to be eligible to earn and receive an Annual Bonus. The Annual Bonus, if any, will be paid on an annual basis, less applicable payroll deductions and withholdings, as soon as practicable after the end of the calendar year for which it was earned, but in no event will it be paid later than March 15 of the year following the fiscal year for which it was earned. Notwithstanding the foregoing, for fiscal year 2020, provided you remain employed in good standing through the end of the year, you will be entitled to an Annual Bonus, in an amount as determined by the Board of Directors based on goals set by the Board of Directors, provided such amount shall be no less than 130% and no more than 130% of 60% of your base salary, for the full calendar year 2020. With the exception of fiscal year 2020, no partial or prorated bonuses will be provided.

Subject to the approval of the Company’s Board of Directors (or authorized committee), you will be provided with an option to purchase 91,972 shares of the Company’s common stock, subject to any stock splits or other capitalization adjustments (the “Option”), with an exercise price per share equal to the closing price per share of the Company’s common stock on the date of grant.  The Option will vest in four equal annual installments, measured from your start date with the Company, and subject to your continued service with the Company. The Option will be subject to the terms and conditions applicable to options granted under the Company’s equity incentive plan then in effect and applicable option agreement.

Your employment is subject to the Company’s personnel policies and procedures as they may be interpreted, adopted, revised or deleted from time to time in the Company’s sole discretion. You will be eligible to participate on the same basis as similarly situated employees in the Company’s benefit plans 

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in effect from time to time during your employment. All matters of eligibility for coverage or benefits under any benefit plan shall be determined in accordance with the provisions of such plan. The Company reserves the right to change, alter, or terminate any benefit plan in its sole discretion. An overview of our current benefit plans will be provided.   

As set forth above, your employment with the Company will at all times be “at will” which means that either you or the Company may terminate your employment at any time for any reason, with or without advance notice.

This offer is contingent on your satisfying the eligibility requirements for employment in the United States and upon your completion of background screening, including reference checks, to the satisfaction of the Company in its sole discretion. As a condition of employment, you will be required to sign and comply with the Proprietary Information and Inventions Agreement (to be provided under separate cover), which prohibits unauthorized use or disclosure of the Company’s proprietary information, among other obligations.

By signing this letter you are representing that you have full authority to accept this position and perform the duties of the position without conflict with any other obligations and that you are not involved in any situation that might create, or appear to create, a conflict of interest with respect to your loyalty to or duties for the Company. You specifically warrant that you are not subject to an employment agreement or restrictive covenant preventing full performance of your duties to the Company. You agree not to bring to the Company or use in the performance of your responsibilities at the Company any materials or documents of a former employer that are not generally available to the public, unless you have obtained express written authorization from the former employer for their possession and use. You also agree to honor all obligations to former employers during your employment with the Company. 

By signing this letter, you acknowledge that the terms described in this letter, together with the Proprietary Information and Inventions Agreement, set forth the entire understanding between us and supersedes any prior representations or agreements, whether written or oral, including but not limited to the Prior Agreement; there are no terms, conditions, representations, warranties or covenants other than those contained herein. No term or provision of this letter may be amended waived, released, discharged or modified except in writing, signed by you and an authorized officer of the Company, except that the Company may, in its sole discretion, adjust rate of pay, salaries, incentive compensation, stock plans, benefits, job titles, locations, duties, responsibilities, and reporting relationships. 

This is an exciting time for our business and for our industry.  We are confident that your talents and abilities will be a fantastic addition to the Vital Farms crew! This offer of employment will expire if not accepted on or before October 16, 2020.  Please indicate your acceptance of this offer by signing below and returning along with the executed Proprietary Information and Inventions Agreement.

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Sincerely,

 

 

	
Vital Farms, Inc.

	
/s/Russell Diez-Canseco

	
Name:
	
 
	
Russell Diez-Canseco

	
Title: 
	
 
	
President and Chief Executive Officer

 

 

	
ACCEPTED AND AGREED TO:

	
/s/Peter Pappas

	
Peter Pappas

	
 

	
Date: 
	
 
	
10/20/2020

 

235402853 v1vitl-ex1026_532.htm

 

Exhibit 10.26

EXECUTION VERSION

EIGHTH AMENDMENT TO

REVOLVING CREDIT, TERM LOAN, AND SECURITY AGREEMENT

This Eight Amendment to Revolving Credit, Term Loan, and Security Agreement (the “Amendment”) is made this 5th day of October, 2020 by and among VITAL FARMS, INC., a corporation organized under the laws of the State of Delaware (“Vital Farms”), VITAL FARMS OF MISSOURI, LLC, a limited liability company organized under the laws of the State of Missouri (“Vital Farms Missouri”), VITAL FARMS, LLC, a limited liability company organized under the laws of the State of Montana (“Vital Farms Montana”), SAGEBRUSH FOODSERVICE, LLC, a limited liability company organized under the laws of the State of Delaware (“Sagebrush”), BARN DOOR FARMS, LLC, a limited liability company organized under the laws of the State of Delaware (“Barn Door”), BACKYARD EGGS, LLC, a limited liability company organized under the laws of the State of Delaware (“Backyard”, and together with Vital Farms, Vital Farms Missouri, Vital Farms Montana, Sagebrush, Barn Door and each Person joined as a borrower from time to time, collectively, the “Borrowers”, and each a “Borrower”), the financial institutions which are now or which hereafter become a party (collectively, the “Lenders” and each individually, a “Lender”) and PNC BANK, NATIONAL ASSOCIATION (“PNC”), as agent for Lenders (PNC, in such capacity, the “Agent”).

BACKGROUND

A.On October 4, 2017, Borrowers, Lenders, and Agent entered into a certain Revolving Credit, Term Loan, and Security Agreement (as same has been or may be amended, modified, renewed, extended, replaced or substituted from time to time, the “Loan Agreement”) to reflect certain financing arrangements between the parties thereto. The Loan Agreement and all other documents executed in connection therewith are collectively referred to as the “Existing Financing Agreements.” All capitalized terms not otherwise defined herein shall have the meaning ascribed thereto in the Loan Agreement.

B.Borrowers have requested and Agent and Lenders have agreed, subject to the terms and conditions of this Amendment, to modify certain definitions, terms and conditions in the Loan Agreement.

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NOW, THEREFORE, with the foregoing background hereinafter deemed incorporated by reference herein and made part hereof, the parties hereto, intending to be legally bound, promise and agree as follows:

1.Amendments to Loan Agreement. Upon the effectiveness of this Amendment, the Loan Agreement shall be amended as follows:

(a)New Definitions. The following definitions shall be added Section 1.2 of the Loan Agreement in the appropriate alphabetical order:

“Cash Dominion Period” shall mean the period commencing upon the occurrence of a Cash Dominion Triggering Event and ending on the occurrence of a Cash Dominion Satisfaction Event.

“Cash Dominion Satisfaction Event” shall mean the earliest date on which all of the following conditions precedent have been satisfied: (a) if the Cash Dominion Triggering Event shall have occurred as a result of the occurrence of a Cash Dominion Undrawn Availability Triggering Event, Agent shall have consented in writing to the end of such Cash Dominion Period; and

(b)if the Cash Dominion Triggering Event shall have occurred as a result of the occurrence of an Event of Default, such Event of Default shall have been waived in writing by Agent and the Required Lenders.

“Cash Dominion Triggering Event” shall mean any of the following: (a) a Cash Dominion Undrawn Availability Triggering Event has occurred or (b) an Event of Default has occurred and is continuing.

“Cash Dominion Undrawn Availability Triggering Event” shall mean Undrawn Availability is less than $5,000,000 on any Business Day.

(b)Remittances upon Receivables. Section 4.8(d) of the Loan Agreement shall be amended and restated in its entirety as follows:

(d)Borrowers shall instruct their Customers to deliver all remittances upon Receivables (whether paid by check or by wire transfer of funds) to such Blocked Account(s) and/or Depository Accounts (and any associated lockboxes) as Agent shall designate from time to time as contemplated by Section 4.8(h) or as otherwise agreed to from time to time by Agent. Notwithstanding the foregoing, to the extent any Borrower directly receives any remittances upon Receivables, such Borrower shall, at such Borrower’s sole cost and expense, but on Agent’s behalf and for Agent’s account, collect as Agent’s property and in trust for Agent 

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all amounts received on Receivables, and shall not commingle such collections with any Borrower’s funds or use the same except to pay Obligations, and shall as soon as possible and in any event no later than one (1) Business Day after the receipt thereof (i) in the case of remittances paid by check, deposit all such remittances in their original form (after supplying any necessary endorsements) and (ii) in the case of remittances paid by wire transfer of funds, transfer all such remittances, in each case, into such Blocked Accounts(s) and/or Depository Account(s). Each Borrower shall deposit in the Blocked Account and/or Depository Account or, upon request by Agent, deliver to Agent, in original form and on the date of receipt thereof, all checks, drafts, notes, money orders, acceptances, cash and other evidences of Indebtedness. At any time other than during a Cash Dominion Period, payments made by a Borrower’s Customers remitted directly to Agent will be deposited by Agent in the Depository Accounts, and Customer remittances shall only be treated as a repayment of Advances if the Borrowers so elect in a written notice to Agent.

(c)Proceeds of Collateral. Section 4.8(h) of the Loan Agreement shall be amended and restated in its entirety as follows:

(h)All proceeds of Collateral shall be deposited by Borrowers into either (i) a lockbox account, dominion account or such other “blocked account” (“Blocked Accounts”) established at a bank or banks (each such bank, a “Blocked Account Bank”) pursuant to an arrangement with such Blocked Account Bank as may be acceptable to Agent or (ii) depository accounts (“Depository Accounts”) established at Agent for the deposit of such proceeds. Each applicable Borrower, Agent and each Blocked Account Bank shall enter into a deposit account control agreement in form and substance satisfactory to Agent that is sufficient to give Agent “control” (for purposes of Articles 8 and 9 of the Uniform Commercial Code) over such accounts and which directs such Blocked Account Bank to transfer such funds so deposited on a daily basis or at other times acceptable to Agent to Agent, either to any account maintained by Agent at said Blocked Account Bank or by wire transfer to appropriate account(s) at Agent. All funds deposited in such Blocked Accounts or Depository Accounts shall immediately become subject to the security interest of Agent for its own benefit and the ratable benefit of Issuer, Lenders and all other holders of the Obligations, and Borrowing Agent shall obtain the agreement by such Blocked Account Bank to waive any offset rights against the funds so deposited. Neither Agent nor any Lender assumes any responsibility for such blocked account arrangement, including any claim of accord and satisfaction or release with respect to deposits 

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accepted by any Blocked Account Bank thereunder. At any time during a Cash Dominion Period, Agent shall apply all funds received by it from the Blocked Accounts and/or Depository Accounts to the satisfaction of the Obligations (including the cash collateralization of the Letters of Credit) in such order as Agent shall determine in its reasonable discretion, provided that, in the absence of any Event of Default, Agent shall apply all such funds representing collection of Receivables first to the prepayment of the principal amount of the Swing Loans, if any, and then to the Revolving Advances. Notwithstanding the foregoing, Borrowers may maintain account numbers 586013031674 and 488031113038 at Bank of America; provided, however, the balance in each account shall not exceed $100,000 at any time.

2.Representations and Warranties. Each Borrower hereby:

(a)reaffirms all representations and warranties made to Agent and Lenders under the Loan Agreement and all of the other Existing Financing Agreements and confirms that all are true and correct in all respects as of the date hereof as if made on and as of the date hereof, except for representations and warranties which related exclusively to an earlier date, which shall be true and correct in all respects as of such earlier date;

(b)reaffirms all of the covenants contained in the Loan Agreement, covenants to abide thereby until all Advances, Obligations and other liabilities of Borrowers to Agent and Lenders under the Loan Agreement of whatever nature and whenever incurred, are satisfied and/or released by Agent and Lenders;

(c)represents and warrants that after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing under any of the Existing Financing Agreements;

(d)represents and warrants that it has the authority and legal right to execute, deliver and carry out the terms of this Amendment, that such actions were duly authorized by all necessary corporate action and that the officers executing this Amendment on its behalf were similarly authorized and empowered, and that this Amendment does not contravene any provisions of its articles of incorporation, bylaws or other formation documents, or of any contract or agreement to which it is a party or by which any of its properties are bound; and

(e)represents and warrants that this Amendment and all assignments, instruments, documents, and agreements executed and delivered in connection herewith are valid, binding and enforceable in accordance with their respective terms except as such enforceability may be limited by equitable principles or any applicable bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally.

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3.Conditions Precedent/Effectiveness Conditions. This Amendment shall be effective upon satisfaction of the following conditions precedent (all documents to be in form and substance satisfactory to Agent and Agent’s counsel):

(a)Agent shall have received this Amendment fully executed by Borrowers; and

(b)Execution and/or delivery of all other agreements, instruments and documents requested by Agent to effectuate and implement the terms hereof.

4.Further Assurances. Borrowers hereby agree to take all such actions and to execute and/or deliver to Agent and Lenders all such documents, assignments, financing statements and other documents, as Agent and Lenders may reasonably require from time to time, to effectuate and implement the purposes of this Amendment.

5.Payment of Expenses. Borrowers shall pay or reimburse Agent and Lenders for their reasonable attorneys’ fees and expenses in connection with the preparation, negotiation and execution of this Amendment and the documents provided for herein or related hereto.

6.Reaffirmation of Loan Agreement. Except as modified by the terms hereof, all of the terms and conditions of the Loan Agreement, as amended, and all other of the Existing Financing Agreements are hereby reaffirmed and shall continue in full force and effect as therein written.

7.Confirmation of Indebtedness. Borrowers confirm and acknowledge that as of the close of business on October 2, 2020, Borrowers were indebted to Agent and Lenders for the Advances under the Loan Agreement without any deduction, defense, setoff, claim or counterclaim, of any nature, in the aggregate principal amount of $0 due on account of Revolving Advances, $7,532,879.84 due on account of the Term Loan and $0 due on account of the Equipment Loans, plus all fees, costs and expenses incurred to date in connection with the Loan Agreement and the Other Documents.

8.Release. In consideration of Agent’s and Lenders’ agreements contained in this Amendment, Borrowers hereby irrevocably release and forever discharge Agent, Lenders and their respective affiliates, subsidiaries, successors, assigns, partners, members, shareholders, directors, officers, employees, agents, consultants, attorneys and other professional advisors (each, a “Released Person”) of and from any and all claims, suits, actions, investigations, proceedings or demands, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law of any kind or character, known or unknown, which Borrowers ever had or now have against any Released Person which relates, directly or indirectly, to any acts or omissions of any Released Person relating to the Loan Agreement or any Other Document on or prior to the date hereof.

9.Miscellaneous.

(a)Third Party Rights. No rights are intended to be created hereunder for the benefit of any third party donee, creditor, or incidental beneficiary.

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(b)Headings. The headings of any paragraph of this Amendment are for convenience only and shall not be used to interpret any provision hereof.

(c)Modifications. No modification hereof or any agreement referred to herein shall be binding or enforceable unless in writing and signed on behalf of the party against whom enforcement is sought.

(d)Governing Law. This Amendment shall, in accordance with Section 5- 1401 of the General Obligations Law of the State of New York, be governed by and construed in accordance with the laws of the State of New York applied to contracts to be performed wholly within the State of New York.

(e)Counterparts. This Amendment may be executed in any number of counterparts and by facsimile or electronic transmission, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

 

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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered by their duly authorized officers as of the date first above written.

 

	
BORROWERS:

	
VITAL FARMS, INC.

	
By:
	
 
	
/s/ Jason Dale

	
Name:
	
 
	
Jason Dale

	
Title:
	
 
	
Chief Operating Officer

	
VITAL FARMS OF MISSOURI, LLC

	
By its Member: Vital Farms, Inc.

	
By:
	
 
	
/s/ Jason Dale

	
Name:
	
 
	
Jason Dale

	
Title:
	
 
	
Chief Operating Officer

	
VITAL FARMS, LLC

	
By its Manager: Vital Farms, Inc.

	
By:
	
 
	
/s/ Jason Dale

	
Name:
	
 
	
Jason Dale

	
Title:
	
 
	
Chief Operating Officer

	
SAGEBRUSH FOODSERVICE, LLC

	
By its Manager: Vital Farms, Inc.

	
By:
	
 
	
/s/ Jason Dale

	
Name:
	
 
	
Jason Dale

	
Title:
	
 
	
Chief Operating Officer

	
BARN DOOR FARMS, LLC

	
By its Manager: Vital Farms, Inc.

	
By:
	
 
	
/s/ Jason Dale

	
Name:
	
 
	
Jason Dale

	
Title:
	
 
	
Chief Operating Officer

	
BACKYARD EGGS, LLC

	
By its Manager: Vital Farms, Inc.

	
By:
	
 
	
/s/ Jason Dale

	
Name:
	
 
	
Jason Dale

	
Title:
	
 
	
Chief Operating Officer

 

[SIGNATURE PAGE TO EIGHTH AMENDMENT TO REVOLVING CREDIT, TERM 
LOAN, AND SECURITY AGREEMENT]

 

	
AGENT AND LENDER:
	
PNC BANK, NATIONAL ASSOCIATION, as

	
 
	
Agent and Lender

	
 
	
By:
	
 
	
/s/ Lauren Tayag

	
 
	
Name:
	
 
	
Lauren Tayag

	
 
	
Title:
	
 
	
Vice President

 

[SIGNATURE PAGE TO EIGHTH AMENDMENT TO REVOLVING CREDIT, TERM 
LOAN, AND SECURITY AGREEMENT]

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