FLOWERS FOODS INC filed this DEF 14A on Apr 11, 2023

FLOWERS FOODS INC - DEF 14A - 20230411 - AUDIT_COMMITTEE

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TABLE OF CONTENTS

Proxy
Summary

Annual Meeting
and Voting Information

Directors and Corporate Governance

Share
Ownership

Executive Compensation

Audit Committee Report

Items to be
Voted on

Additional
Information

Appendices

AUDIT COMMITTEE REPORT

The audit committee oversees, among other things, the accounting and financial reporting processes of the company, the audit of the company’s consolidated financial statements, the company’s compliance with legal and regulatory requirements, the effectiveness of the company’s internal control over financial reporting, the qualifications, independence and performance of the company’s independent registered public accounting firm, and the performance of the company’s internal auditors.

The audit committee operates under a written charter adopted by the board of directors. It is available on the company’s website at https://www.flowersfoods.com/investors/corporate-governance/governance-documents. The charter, which was last amended effective August 19, 2022, is reviewed at least annually by the audit committee, and is amended by the board of directors, as appropriate, to reflect the evolving role of the audit committee.

In 2022, the audit committee held eight meetings. Meeting agendas are established by the chair of the audit committee, in consultation with the other committee members, the independent auditors and the appropriate officers of the company. The audit committee’s meetings include, whenever appropriate, executive sessions in which the audit committee meets as a committee and also separately with management, the internal auditors and the independent auditors.

The audit committee is comprised entirely of independent directors who meet the independence, experience, and other qualifications of the NYSE. The audit committee regularly provides resources and directs educational initiatives to help its members to continue developing skills and perspectives to enhance their contributions to the audit committee.

During 2022, the audit committee fulfilled its duties and responsibilities as outlined in the charter. Among other things, the audit committee:

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Met with the senior members of the company’s financial management team at each regularly scheduled meeting;

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Reviewed and discussed with management and the independent auditors the company’s earnings and other financial press releases and annual and quarterly reports on Form 10-K and Form 10-Q prior to filing with the SEC;

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Received periodic updates from management regarding management’s process to assess the adequacy of the company’s internal control over financial reporting and management’s assessment of the effectiveness of the company’s internal control over financial reporting;

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Reviewed and discussed with management, the internal auditors and the independent auditors management’s assessment of the effectiveness of the company’s internal control over financial reporting and the independent auditors’ opinion about the effectiveness of the company’s internal control over financial reporting;

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Reviewed and discussed with management, the internal auditors and the independent auditors, as appropriate, the plans for, and the scope of, the company’s annual audit and other examinations;

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Met in periodic executive sessions with certain members of management, the internal auditors and the independent auditors to discuss the results of their examinations, their assessments of the company’s internal control over financial reporting and the overall integrity of the company’s financial statements;

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Reviewed the compensation of and services performed by the internal auditors;

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Reviewed and discussed with management the company’s enterprise risk management program and the company’s major financial risk exposures, including risks related to information technology, cybersecurity and environmental and sustainability initiatives, and the steps management has taken to monitor and control these exposures;

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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT

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Reviewed and discussed with management, the chief financial officer, the chief compliance officer, the internal auditors and the independent auditors the company’s performance with respect to legal, regulatory and ethical compliance programs, including the overall adequacy and effectiveness of the company’s code of business conduct and ethics and compliance program, including the company’s internal procedures for employees and others to report legal or ethical concerns;

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Reviewed and discussed with management and the independent auditors the company’s legal affairs, including, among other things, ongoing litigation and the U.S. Department of Labor’s compliance review under the Fair Labor Standards Act;

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Reviewed and discussed with management reports and disclosures of insider and related-party transactions and any other potential conflict of interest situations on an ongoing basis in accordance with company policies and procedures;

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Discussed with the board of directors and senior management the importance of maintaining and fostering a culture and tone of compliance generally and in particular with respect to internal controls and financial reporting;

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Reviewed and evaluated the performance of the company’s independent registered public accounting firm based on the audit quality, performance, compensation, and independence of PricewaterhouseCoopers LLP (“PwC”); and

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Received regular updates from management regarding progress on and risks related to certain strategic initiatives, including the ERP+ and digital initiatives.

2022 AUDITED FINANCIAL STATEMENTS

The audit committee has reviewed and discussed the company’s audited consolidated financial statements for the fiscal year ended December 31, 2022 with the company’s management and PwC, the company’s independent registered public accounting firm for the fiscal year ended December 31, 2022. Management represented to the audit committee that the company’s audited consolidated financial statements were prepared in accordance with GAAP. The audit committee has reviewed and discussed with management, the internal auditors, and PwC the results of their examinations and their assessments of the company’s internal control over financial reporting and discussed with senior officers of the company the processes undertaken to evaluate the accuracy and fair presentation of the company’s financial statements and the effectiveness of the company’s system of disclosure controls and procedures. The audit committee has also discussed with PwC the matters required to be discussed by the Auditing Standard No. 1301, “Communications with Audit Committees,” issued by the Public Company Accounting Oversight Board (“PCAOB”), including the auditors’ evaluation of the quality of the company’s financial reporting.

Based on the reviews and discussions referred to above and the independence evaluation referred to below, the audit committee recommended to the board of directors that the company’s audited consolidated financial statements be included in the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 for filing with the SEC.

INDEPENDENT AUDITOR SELECTION AND EVALUATION

In 2022, the audit committee continued retention of PwC as our independent registered public accounting firm; evaluated the quality of the annual audit; and the performance of the audit engagement partner. Noting the long tenure of 54 years that PwC has audited the company’s consolidated financial statements, the audit committee:

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Carefully considered PwC’s controls and policies for maintaining independence, including receiving and reviewing the written disclosures and the letter from PwC required by applicable requirements of the PCAOB regarding PwC’s communications with the audit committee concerning independence, and discussing with PwC their independence;

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Evaluated the institutional knowledge that is gained from the continued retention of PwC;

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Monitored and restricted the scope of non-audit services provided by PwC to the company, including having a pre-approval process for engagement and fees for all non-audit work;

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Evaluated compliance with the company’s hiring policies to not hire resources from PwC;

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Provided oversight to PwC by meeting eight times throughout the year, including executive sessions;

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TABLE OF CONTENTS

Proxy
Summary

Annual Meeting
and Voting Information

Directors and Corporate Governance

Share
Ownership

Executive Compensation

Audit Committee Report

Items to be
Voted on

Additional
Information

Appendices

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Received a report from PwC regarding its internal evaluation of audit quality;

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Reviewed and discussed the quality of the audit with management and the internal auditors;

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Monitored PCAOB reports and peer reviews; and

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Evaluated the performance of the audit engagement partner, considering the overall quality of the planning, execution and communication of results of the audit, timeliness of the audit and service commitments and the fee structure for the services provided. The independent auditor rotates the audit engagement partner every five years. In 2021, the audit committee selected a new audit engagement partner to serve in that capacity beginning in 2022 when the former audit engagement partner rotated off the engagement. To make its selection, the audit committee interviewed potential engagement partners including evaluating their experience and fit with values and relationships with both management and the audit committee. The audit committee had previously rotated the audit engagement partner for PwC in 2017.

Based on the reviews and discussions referred to above, the audit committee recommended to the board of directors the continued retention of PwC as the company’s independent registered public accounting firm.

The Audit Committee of the Board of Directors:

James T. Spear, Chair

Rhonda Gass

W. Jameson McFadden

Terry S. Thomas

C. Martin Wood III

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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT

ITEMS TO BE VOTED ON

OVERVIEW OF PROPOSALS

This proxy statement contains five proposals requiring shareholder action. Proposal I requests the election of 11 director-nominees to the board of directors. Proposal II requests an advisory vote on the compensation of the Named Executives. Proposal III requests an advisory vote on the frequency of future advisory votes to approve the compensation on the Named Executives. Proposal IV requests the approval of the amendment and restatement of the Flowers Foods, Inc. 2014 Omnibus Equity and Incentive Compensation Plan. Proposal V requests the ratification of the appointment of PricewaterhouseCoopers LLP as the company’s independent registered public accounting firm for the fiscal year ending December 30, 2023. Each of the proposals is discussed in more detail below.

PROPOSAL I ELECTION OF DIRECTORS

Background information concerning each of our director-nominees is provided above under the section entitled “Directors and Corporate Governance.”

The following nominees are proposed for election as directors to serve until the 2024 annual shareholder meeting:

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George E. Deese

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Edward J. Casey, Jr.

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Thomas C. Chubb, III

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Rhonda Gass

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Margaret G. Lewis

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W. Jameson McFadden

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A. Ryals McMullian

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James T. Spear

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Melvin T. Stith, Ph.D.

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Terry S. Thomas

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C. Martin Wood III

Unless instructed otherwise, the proxies will be voted for the election of the director-nominees named above to serve for the terms indicated or until their successors are elected and have been duly qualified. If any nominee is unable to serve, proxies may be voted for a substitute nominee selected by the board of directors. However, the board of directors has no reason to believe that any nominee will not be able to serve if elected.

Vote Required

Each of the 11 nominees for director who receive a majority of the votes cast at the meeting in person or by proxy will be elected (meaning the number of shares voted “for” a director-nominee must exceed the number of shares voted “against” that director-nominee), subject to the board of directors’ existing policy regarding resignations by directors who do not receive a majority of “for” votes, which is described in our corporate governance guidelines.

Recommendation of the Board

Your board of directors unanimously recommends that you vote “FOR” each of the above-named director-nominees.

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TABLE OF CONTENTS

Proxy
Summary

Annual Meeting
and Voting Information

Directors and Corporate Governance

Share
Ownership

Executive Compensation

Audit Committee Report

Items to be
Voted on

Additional
Information

Appendices

PROPOSAL 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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pay opportunities that are:

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appropriate to the size of the company when compared to peer companies; and

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heavily performance-based using multiple internal and stock-based performance measures;

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disclosure of the financial performance drivers used in our incentives, in numeric terms;

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a long-term incentives program:

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that is entirely performance-based and aligned with shareholder interests through links to stock performance and measurement of our ROIC performance versus our cost of capital; and

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whose payout potentials are capped at conservative levels;

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an enhanced clawback policy that allows for recoupment of incentives in certain situations;

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double-trigger equity vesting upon a change of control;

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no backdating or repricing of stock options;

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stock ownership guidelines for executives and directors;

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no perquisites; and

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no employment contracts.

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 II 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 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 to be included in our proxy statement every one, two or three years.

The board of directors recommends that a say-on-pay shareholder advisory vote, similar to Proposal II, be included in the company’s proxy statement every year. The board of directors believes that a say-on-pay vote every year by shareholders provides the highest level of accountability and direct communication by enabling the say-on-pay vote to correspond to the majority of the information presented in the accompanying proxy statement for the applicable meeting of shareholders.

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.

“RESOLVED, that the option of once every year, two years or three years that receives the highest number of votes cast for this resolution will be determined to be the preferred frequency with which the company is to hold a shareholder advisory vote to 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 company or the board of directors and, notwithstanding the results of such vote, the board of directors may decide that it is in the best interests of shareholders and the company to hold an advisory vote on executive compensation more or less frequently than the option approved by shareholders. If none of the options achieves the required vote, the board of directors intends to use its discretion to conduct future advisory votes to approve executive compensation each year.

Vote Required

The proxy card provides shareholders with the opportunity to choose among four frequency options (“1 YEAR,” “2 YEARS,” “3 YEARS,” or “ABSTAIN”), and, therefore, shareholders will not be voting to approve or disapprove the action. The frequency option that receives the highest number of votes cast by shareholders will be deemed to be the frequency for future say-on-pay shareholder advisory votes that has been recommended by shareholders.

Recommendation of the Board

Your board of directors unanimously recommends that you vote “1 YEAR” Proposal III.

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TABLE OF CONTENTS

Proxy
Summary

Annual Meeting
and Voting Information

Directors and Corporate Governance

Share
Ownership

Executive Compensation

Audit Committee Report

Items to be
Voted on

Additional
Information

Appendices

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 2023 annual meeting of shareholders, the amendment and restatement of the Flowers Foods, Inc. 2014 Omnibus Equity and Incentive Compensation Plan. In this proposal, we refer to the original Flowers Foods, Inc. 2014 Omnibus Equity and Incentive Compensation Plan as the “2014 Plan,” and we refer to the amended and restated Flowers Foods, Inc. 2014 Omnibus Equity and Incentive Compensation Plan as the “Amended 2014 Plan.”

The company’s shareholders approved the 2014 Plan at the company’s 2014 annual meeting 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 the 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 by 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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TABLE OF CONTENTS

Proxy
Summary

Annual Meeting
and Voting Information

Directors and Corporate Governance

Share
Ownership

Executive Compensation

Audit Committee Report

Items to be
Voted on

Additional
Information

Appendices

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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Shares of Common Stock withheld by us, tendered or otherwise used in payment of the exercise price of a stock option;

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Shares of Common Stock withheld by us, tendered or otherwise used to satisfy tax withholding with respect to awards;

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Shares of Common Stock subject to a stock-settled stock appreciation right that are not actually issued in connection with the settlement of such stock appreciation right on exercise; and

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Shares of Common Stock reacquired by the company on the open market or otherwise using cash proceeds from the exercise of stock options.

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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Directors and Corporate Governance

Share
Ownership

Executive Compensation

Audit Committee Report

Items to be
Voted on

Additional
Information

Appendices

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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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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Audit Committee Report

Items to be
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Additional
Information

Appendices

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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Additional
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Appendices

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)


NAME AND POSITION/GROUP	DOLLAR VALUE ($)		NUMBER OF UNITS (#)
A. Ryals McMullian		—		—
R. Steve Kinsey		—		—
Bradley K. Alexander		—		—
D. Keith Wheeler		—		—
Stephanie B. Tillman		—		—
Executive Group		—		—
Non-Executive Director Group		1,595,913		^
Non-Executive Officer Employee Group		—		—

Shares are computed by dividing the dollar value by the stock price on the grant date rounded up to the nearest ten shares. Based on the closing price of the Common Stock on March 15, 2023 ($27.22), we estimate that these restricted stock unit awards will cover an aggregate of approximately 58,630 shares.

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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		—

(1)	The grants to these individuals are included in the total set forth in the prior row.

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:

–

no income will be recognized by a grantee at the time a non-qualified stock option or SAR is granted; and

–

at the time of exercise of a non-qualified stock option or SAR, ordinary income will be recognized by the grantee in an amount equal to, in the case of a non-qualified stock option, the difference between the option price paid for the shares and the fair market value of the unrestricted shares of Common Stock on the date of exercise and, in the case of a SAR, the amount of cash received and the fair market value of any unrestricted shares of Common Stock received.

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.

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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 approved by security holders		4,001,968	$	—		897,922
Equity compensation plans not approved by security holders		—		—		—

Total		4,001,968	$	—		897,922

(1)

Includes 3,919,189 shares subject to outstanding awards under the 2014 Plan, including 2,288,923 shares subject to performance-based awards. The number of shares subject to performance-based awards assumes such awards will vest at the maximum potential number of shares issuable and may overstate potential dilution. In addition, the amount in this column includes 82,779 deferred shares outstanding under the EPIP that will be issued at the end of the deferral period.

(2)	Time-based restricted stock units and performance-based awards are not considered in the weighted average exercise price as these awards have no exercise price.

(3)	Assumes all unvested awards are issuable at the maximum potential number of shares issuable and may overstate potential dilution.

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 for the fiscal year ended December 31, 2022 for additional information on equity compensation plans.

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PROPOSAL V RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Our audit committee and board of directors have appointed PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 30, 2023. The board of directors recommends that this appointment be ratified.

Representatives of PricewaterhouseCoopers LLP will be present at the 2023 annual meeting of shareholders and will have the opportunity to make a statement, if they desire to do so, and to respond to appropriate questions.

We have been advised by PricewaterhouseCoopers LLP that neither the firm, nor any member of the firm, has any financial interest, direct or indirect, in any capacity in the company or its subsidiaries.

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 reviews 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 with 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 reviewed 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 non-audit services provided by PricewaterhouseCoopers LLP are pre-approved by the audit committee on a case-by-case basis.

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.

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FLOWERS FOODS, INC. | 2023 PROXY STATEMENT

ADDITIONAL INFORMATION

2024 SHAREHOLDER PROPOSALS

In order to properly submit a proposal for inclusion in the proxy statement for the 2024 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.

If you wish to present a proposal before the 2024 annual meeting of shareholders, but do not wish to have the proposal considered for inclusion in the proxy statement and proxy card, you must follow the procedures outlined in our bylaws. We must receive your shareholder proposal at the address noted below no earlier than January 26, 2024 and no later than February 25, 2024. If your proposal is not properly brought before the 2024 annual meeting of shareholders in accordance with our bylaws, the chairman of the board of directors may declare such proposal not properly brought before the 2024 annual meeting of shareholders, and it will not be acted upon.

Compliance with Universal Proxy Rules for Director Nominations

In addition to satisfying the requirements under our bylaws, if you intend to comply with the SEC’s universal proxy rules and to solicit proxies in support of director-nominees other than the company’s nominees, you must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act, which notice must be postmarked or transmitted electronically to us at our principal executive offices no later than 60 calendar days prior to the one-year anniversary date of the annual meeting (for the 2024 annual meeting of shareholders, no later than March 26, 2024). If the date of the 2024 annual meeting of shareholders is changed by more than 30 calendar days from such anniversary date, however, then you must provide notice by the later of 60 calendar days prior to the date of the 2024 annual meeting of shareholders and the 10th calendar day following the date on which public announcement of the date of the 2024 annual meeting of shareholders is first made.

Any proposals or notices should be sent to:

Stephanie B. Tillman

Chief Legal Counsel

Flowers Foods, Inc.

1919 Flowers Circle

Thomasville, Georgia 31757

DELIVERY OF PROXY MATERIALS TO HOUSEHOLDS

Under the rules of the SEC, the company is permitted to use a method of delivery, often referred to as “householding.” Householding permits the company to mail a single set of proxy materials to any household in which two or more different shareholders reside and are members of the same household or in which one shareholder has multiple accounts. The company did not household materials for the 2023 annual meeting of shareholders. If the company households materials for future meetings, then only one copy of the company’s annual report and proxy statement will be sent to multiple shareholders of the company who share the same address and last name, unless the company has received contrary instructions from one or more of those shareholders. In addition, the company has been notified that certain intermediaries (i.e., banks, brokers or other nominees) will household proxy materials for the 2023 annual meeting of shareholders. For voting purposes, a separate proxy card will be included for each account at the shared address. The company will deliver promptly, upon oral or written request, a separate copy of the annual report and proxy statement to any shareholder at the same address. If you wish to receive a separate copy of the annual report and proxy statement, you may contact the company’s Investor Relations Department (a) by mail at 1919 Flowers Circle, Thomasville, GA 31757, (b) by telephone at (229) 226-9110, or (c) by submission at https://www.flowersfoods.com/contact/investor-relations. You may also contact your bank, broker or other nominee to make a similar request. Shareholders sharing an address who now receive multiple copies of the company’s annual report and proxy statement may request delivery of a single copy by contacting the company as indicated above, or by contacting their bank, broker or other nominee, provided the broker, bank or other nominee has elected to household proxy materials.

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FLOWERS FOODS INC filed this DEF 14A on Apr 11, 2023

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