Danone, Lifeway deal paves way for independent board reform

USA – Lifeway Foods, a supplier of kefir and fermented probiotic products, has announced a Cooperation Agreement with Danone North America, aimed at resolving ongoing litigation and refreshing Lifeway’s board of directors in an orderly manner.

Subject to the terms and conditions of the Cooperation Agreement, Lifeway agreed to carry out an orderly refreshment of its board of directors, and the pending litigation pertaining to Danone’s Stockholders’ Agreement with Lifeway will be stayed.

Additionally, Danone has agreed not to act by written consent in favor of proposals contained in the ongoing consent solicitation filed by Edward and Ludmila Smolyansky, among others, and to support the Board’s recommended director candidates at the 2025 and 2026 annual meetings.

As part of the Cooperation Agreement: Lifeway agreed that by October 30, 2025, its Board will appoint three directors who meet Nasdaq’s independence criteria.

By November 14, 2025, the Board will appoint one additional independent director. These appointments will be made by the Board’s Strategic Review Committee, which consists solely of Lifeway independent directors.

 These directors must be unaffiliated with Danone, Ed and Lucy Smolyansky, Lifeway, or any current Lifeway officer or director. All appointments are subject to Danone’s good faith review and approval, which will not be unreasonably withheld, conditioned, or delayed.

To promote strong governance while maintaining the benefits of continuity, Lifeway has planned an orderly board refreshment process.

As part of this plan, Pol Sikar will step down from the Board on or before the Company’s 2025 annual meeting of shareholders.

Additionally, Jay Scher and another current Board member will step down on or before the 2026 annual meeting.

Pol Sikar and Jay Scher, the longest serving Board members, are being recognized for their dedicated service and valuable contributions to Lifeway.

The Company expresses its gratitude and appreciation for their commitment during their tenure. This approach balances renewal with respect for the experience and knowledge these directors bring.

Second, Lifeway has agreed that, by the earlier of October 30, 2025 and the date on which the third new independent director is appointed to the Board, the Board will separate the Chair and CEO roles.

Consistent with good corporate governance practices, the Company will appoint an independent director to serve as Chair of the Board. Julie Smolyansky will continue in her role as CEO of the Company.

Third, Lifeway agreed to comply with the Stockholders’ Agreement without contesting or admitting its validity, and Danone has agreed to waive certain rights under the Stockholders’ Agreement, including its right to appoint a member of the Board.

In addition, Danone has agreed to waive and not to enforce any of its rights under the Stockholders’ Agreement (except for books and records rights), if Danone and its affiliates no longer own at least 5% of the number of shares of Lifeway common stock currently outstanding.

Fourth, suppose at any time before June 30, 2026, Edward or Ludmila Smolyansky call a special meeting of shareholders or commence a consent solicitation.

In that case, Danone will vote or deliver a consent in accordance with the Board’s recommendations with respect to all matters relating to Board composition and, with certain exceptions, Lifeway’s organizational documents.

Additionally, Lifeway has agreed to file a shelf registration statement by October 30, 2025, which would facilitate the public registration of Danone’s shares for sale, if Danone decides to sell shares of Lifeway common stock. Danone has agreed that, if it determines to sell its stake in Lifeway, it will consider in good faith a potential marketed offering of all or a portion of its shares of Lifeway’s Common Stock.

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