The Chefs' Warehouse, Inc. (CHEF) Earnings Call Transcript

Good morning. I'm Christopher Pappas, the Chairman of the Board of Directors and Chief Executive Officer of The Chefs' Warehouse, and it's my pleasure to welcome you to The Chefs' Warehouse 2020 Annual Meeting of Stockholders. To give access to a greater number of our stockholders, we are holding this meeting via Internet webcast for all the stockholders of record as of March 16, 2020, to attend. Stockholders of record may vote online or ask questions during the meeting by submitting your questions in the Ask a Question text box on the Virtual Stockholder Meeting web page and then clicking submit. We ask that you submit only 1 question. We thank you very much for your support and participation. A replay of the virtual meeting will be posted at www.virtualshareholdermeeting.com/chef20 until the sooner of May 15, 2021, or the date of the next Annual Meeting of Stockholders to be held in 2021. I will be serving as Chair of this meeting. The meeting will now come to order. I would like to begin by introducing the other current members of the company's Board of Directors, all of whom are participating in this meeting via Internal webcast: Mr. Dominick Cerbone, Mr. Joseph Cugine, Mr. Steve Goldstone, Mr. Alan Guarino, Mr. Stephen Hanson, Ms. Katherine Oliver and Mr. John Pappas. In addition, I would like to introduce the officers of the company, all of whom are participating in this meeting via Internet webcast: Mr. John Pappas, Vice Chairman; Mr. Alex Aldous, General Counsel; Mr. James Leddy, Chief Financial Officer; Ms. Patricia Lecouras, Chief Human Resource Officer; and Mr. Timothy McCauley, Chief Accounting Officer. Let me also introduce our auditors from BDO USA, who are participating in the meeting via Internet webcast and available to respond to appropriate questions, Mr. Steven Reisberg, Ms. Maria Karalis. We will now conduct the formal part of the meeting. And once all the votes are taken, we will adjourn the meeting and answer any appropriate questions that any stockholder of record may have submitted through the virtual stockholder meeting web page. As indicated in the notice of proxy availability and accompanying documents that were made available beginning on March 27, 2020, all holders of record of common stock as of March 16, 2020, we are here today to consider the following business items: one, to elect Mr. Dominick Cerbone, Joseph Cugine, Steven Goldstone, Alan Guarino, Stephen Hanson, Katherine Oliver, Christopher Pappas, John Pappas as directors to hold office until the next Annual Meeting of Stockholders and until their respective successors are elected and qualified; Two, to ratify the selection of BDO USA as our independent registered public accounting firm for the fiscal year ending December 25, 2020; And three, to approve on a nonbinding advisory basis the compensation of the company's named executive officers as disclosed in the proxy statement that accompany the notice of this meeting. Since no director nominations or other stockholders proposals were properly filed in advance of this meeting in accordance with the requirements of the company bylaws, the business of this meeting is limited to the 3 matters noted above. The polls for the matters upon which stockholders may vote at the meeting are now open and remain open until the business items on the agenda are concluded or until I announce that the polls are closed. If you've already voted by mail, telephone or Internet, you do not need to take any further action. Stockholders of record who have not previously voted or who wish to change their earlier vote may vote now by clicking the Vote Here button on the Virtual Stockholder Meeting web page and following the instructions on the voting window that will open. If you are voting through the Virtual Stockholder Meeting web page, you must be logged in under your 12-digit control number to vote. That number can be found in the notice of proxy availability we sent to you on about March 27, 2020. After the votes have been cast, we will announce the results. If you do vote now, any prior vote cast by you would automatically be revoked and overwritten. We will announce the preliminary results of the voting on the proposals being presented for the stockholders' approval near the end of the meeting immediately following the preliminary tabulations of the voting. I have received an affidavit from the company's proxy mailing agent Broadridge Financial Solutions, certifying that beginning on March 27, 2020, the notice of Annual Meeting of Stockholders was sent and the proxy statement, proxy card and annual report to stockholders were made available to all holders of record of common stock as of March 16, 2020. Affidavit will be incorporated in the minutes of this meeting. Additionally, the alphabetical list of the stockholders of record as of March 16, 2020, who are entitled to vote at the meeting, showing their respective addresses and the number of shares held by each have been available for examination at the company's headquarters in Ridgefield, Connecticut during the period of the last 10 days and is available through the Virtual Stockholder Meeting by clicking the link titled Registered Shareholder List on the right-hand side of the Virtual Stockholder Meeting webpage. Mr. Aldous will be serving as the Inspector of Election for this meeting and has taken the relevant oath of office. As such, I will now ask him to confirm the presence of a quorum at this meeting. Mr. Aldous?

As of this morning, proxies representing more than 93% of the approximately 30.4 million shares of the company's outstanding common stock eligible to vote as of the record date have, in fact, been received. Therefore, I confirm that we have a sufficient number of shares represented at this meeting to constitute a quorum.

So I hereby declare that a quorum exists. As I mentioned earlier, we have 3 items on our agenda today as described in the notice of proxy availability that was mailed to our stockholders of record as of March 16, 2020, beginning on March 27, 2020, and each of these 3 proposals is explained in detail in our proxy statement that was made available to all stockholders of record. Shortly after I present these matters, the polls will be closed. So if you have not already done so, please vote now. The first matter to be voted on by the stockholders is the election of Dominick Cerbone, Joseph Cugine, Steven Goldstone, Alan Guarino, Stephen Hanson, Katherine Oliver, Christopher Pappas and John Pappas as Directors to hold office until the next Annual Meeting of Stockholders and until their respective successors are elected and qualified. The Board recommends a vote for the election of each of the nominees on the ballot. The second matter to be voted on by the stockholders is the ratification of the selection of BDO USA as our independent registered public accounting firm for the fiscal year ending December 25, 2020, and the Board recommends a vote for the ratification of the selection of BDO USA. The third item of business to come before the meeting is a nonbinding advisory vote on the following resolution regarding executive compensation. Resolve that the compensation paid to the company's named executive offices as discussed pursuant to Item 402 of Regulation S-K, including the compensation discussion and analysis, compensation tables and narrative discussion is hereby approved. This proposal is commonly referred to as say-on-pay resolution. The Board recommends a vote for the proposal. I will now ask Mr. Aldous to provide the voting standard for each of the proposals. Mr. Aldous?

Regarding Proposal 1, the election of directors, the affirmative vote of a majority of the votes cast is required to approve the election of each of the nominees for election as a Director. Regarding Proposal 2, the ratification of the selection of BDO, the affirmative vote of a majority of the shares represented at this meeting through the virtual meeting website or by properly executed proxy and entitled to vote on Proposal 2 is necessary to ratify the proposal. Regarding Proposal 3, the nonbinding advisory vote on executive compensation, the affirmative vote of a majority of the shares represented at this meeting through the virtual meeting website or by properly executed proxy and entitled to vote on Proposal 3 is necessary to approve the proposal.

If you have not done so already, please make sure to cast your vote as the polls will be closing shortly. [Voting]