Lifeway Foods (LWAY) Proxy Filing summary

Executive summary

• A group of shareholders led by Ludmila and Edward Smolyansky, holding 23.2% of shares, is soliciting written consents to replace the entire board, elect new directors, restore prior bylaws, and prohibit nepotism at the executive level.

• The solicitation follows the board's rejection of two acquisition offers from Danone at significant premiums and the adoption of a poison pill, as well as controversial compensation and governance decisions.

• The group criticizes the board for poor financial performance, lack of independent oversight, and self-enrichment, and seeks to reconstitute the board with independent directors to review strategic alternatives.

Voting matters and shareholder proposals

• Four proposals are presented: (1) repeal bylaw amendments made after March 24, 2023; (2) remove all current directors; (3) elect seven new nominees; (4) amend bylaws to prohibit employment of immediate family of the CEO/president.

• Each proposal requires majority consent of outstanding shares as of July 2, 2025; the board removal and director election proposals are mutually conditioned.

• Abstentions or failure to return the consent card count as votes against the proposals.

Board of directors and corporate governance

• The current board is accused of repeated governance failures, including mishandling acquisition offers, lack of independent oversight, and enabling nepotism.

• The proposed nominees include experienced executives in finance, operations, and industry, with most being independent except Ludmila and Edward Smolyansky.

• The anti-nepotism proposal specifically targets the employment of the CEO's spouse, who is alleged to have significant influence without proper qualifications.