Case 2:20-cv-02524-MWF-AFM Document 34 Filed 05/24/21 Page 1 of 62 Page ID #:195
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`Robert C. Moest, Of Counsel, SBN 62166
`THE BROWN LAW FIRM, P.C.
`2530 Wilshire Boulevard, Second Floor
`Santa Monica, California 90403
`Telephone: (310) 915-6628
`Facsimile: (310) 915-9897
`Email: RMoest@aol.com
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`Counsel for Plaintiffs
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`IN THE UNITED STATES DISTRICT COURT
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`CENTRAL DISTRICT OF CALIFORNIA
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`INC.
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`IN RE: BEYOND MEAT,
`DERIVATIVE LITIGATION
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`____________________________
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`This Document Relates to:
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` ALL ACTIONS
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`Case No.: CV-20-2524-MWF (AFMx)
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`DEMAND FOR JURY TRIAL
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`CONSOLIDATED AMENDED SHAREHOLDER DERIVATIVE COMPLAINT
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`Consolidated Amended Shareholder Derivative Complaint
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`Case 2:20-cv-02524-MWF-AFM Document 34 Filed 05/24/21 Page 2 of 62 Page ID #:196
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`INTRODUCTION
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`Plaintiffs Eric Weiner, Kimberly Brink, and Melvyn Klein (“Plaintiffs”), by their
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`undersigned attorneys, derivatively and on behalf of Nominal Defendant Beyond Meat,
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`Inc. (“Beyond Meat” or the “Company”), file this Consolidated Amended Shareholder
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`Derivative Complaint against Individual Defendants Ethan Brown, Mark J. Nelson, Seth
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`Goldman, Gregory Bohlen, Diane Carhart, Raymond J. Lane, Bernhard van Lengerich,
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`Ned Segal, Christopher Isaac “Biz” Stone, Donald Thompson, Kathy N. Waller, Jessica
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`Quetsch, and Anthony Miller (collectively, the “Individual Defendants,” and together
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`with Beyond Meat, the “BM Defendants”) for breaches of their fiduciary duties as
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`employees, directors and/or officers of Beyond Meat, unjust enrichment, waste of
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`corporate assets, abuse of control, gross mismanagement, and against nearly all of the
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`Individual Defendants for violations of Sections 14(a) of the Securities Exchange Act of
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`1934 (the “Exchange Act”), and against ProPortion Foods, LLC and CLW Foods, LLC
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`(and, together with the Individual Defendants and Beyond Meat, the “Defendants”) for
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`aiding and abetting the Individual Defendants’ breaches of their fiduciary duties as
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`employees, directors and/or officers of Beyond Meat. As for Plaintiffs’ complaint against
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`the Defendants, Plaintiffs allege the following based upon personal knowledge as to
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`Plaintiffs and Plaintiffs’ own acts, and information and belief as to all other matters,
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`based upon, inter alia, the investigation conducted by and through Plaintiffs’ attorneys,
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`which included, among other things, a review of the Defendants’ public documents,
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`conference calls, and announcements made by Defendants, United States Securities and
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`Exchange Commission (“SEC”) filings, wire and press releases published by and
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`regarding Beyond Meat, legal filings, news reports, securities analysts’ reports and
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`advisories about the Company, and information readily obtainable on the Internet.
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`Plaintiffs believe that substantial evidentiary support will exist for the allegations set
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`forth herein after a reasonable opportunity for discovery.
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`1
`Consolidated Amended Shareholder Derivative Complaint
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`Case 2:20-cv-02524-MWF-AFM Document 34 Filed 05/24/21 Page 3 of 62 Page ID #:197
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`NATURE OF THE ACTION
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`1.
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`This is a shareholder derivative action that seeks to remedy wrongdoing
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`committed by Beyond Meat’s employees, directors, and officers from at least April 2016
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`through the present (the “Relevant Period”) based on fraudulent misconduct, wrongful
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`termination of the Company’s co-manufacturing agreement, misappropriation of trade
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`secrets, and other misconduct set forth herein including false assurances in SEC filings
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`that Beyond Meat and its employees, directors, and officers were following the
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`Company’s Code of Business Conduct and Ethics (“Code of Conduct”)—including,
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`among other things, with respect to the Company’s compliance with applicable laws,
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`while acting in opposition to those statements.
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`2.
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`Beyond Meat is a provider of plant-based meat products, including beef,
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`pork, and poultry substitutes. Beyond Meat’s most popular offering is the Beyond
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`Burger, a plant-based burger sold in thousands of grocery stores and restaurants
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`internationally.
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`3.
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`Prior to changing its corporate name in September 2018, Beyond Meat, was
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`formerly known as a private company called Savage River, Inc. In 2014, Beyond Meat
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`entered into a written exclusive supply agreement, as amended (the “Supply Agreement”)
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`with Don Lee Farms, a division of Goodman Food Products, Inc. (“Don Lee”), a
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`manufacturer of plant-based, vegan protein products that was founded in 1982 by its
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`current Chief Executive Officer (“CEO”), Donald Goodman (“Goodman”). Under the
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`terms of the Supply Agreement, Beyond Meat would supply Don Lee with the
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`Company’s pea protein-based raw ingredients called “extrudate” which Don Lee would
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`then process and package for distribution and sale. Don Lee would produce and ship to
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`Beyond Meet all of the food products the Company required, including its famous
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`Beyond Burger. To do this, Don Lee established a proprietary process for producing the
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`Company’s products called the “Batch Making Protocols” which detailed the method and
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`2
`Consolidated Amended Shareholder Derivative Complaint
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`Case 2:20-cv-02524-MWF-AFM Document 34 Filed 05/24/21 Page 4 of 62 Page ID #:198
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`process for mass-producing Beyond Meat’s products, particularly the Beyond Burger,
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`including key factors such as ingredient amounts, mixing times, and equipment layouts.
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`4.
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`In early 2016, after Don Lee raised concerns regarding tainted ingredients
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`that it had received from Beyond Meat, the Company’s CEO Ethan Brown (“Brown”)
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`engaged a food safety consultant to conduct an audit of the Company’s Missouri facility
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`to appease Don Lee. Thereafter, the food safety inspector issued a report which reflected
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`the consultant’s findings of contamination. However, Beyond Meat falsely represented
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`the accuracy of the food safety consultant’s report provided to Don Lee, which certain
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`Company employees including Defendants Mark J. Nelson (“Nelson”), Jessica Quetsch
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`(“Quetsch”), and Anthony Miller (“Miller”) coordinated to doctor, alter, and exclude
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`pertinent safety information (the “Fraudulent Misconduct”).
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`5.
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`Soon after the Company launched the Beyond Burger in May 2016, Beyond
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`Meat began its search to replace Don Lee as its co-manufacturer under more favorable,
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`i.e., less costly, terms. Indeed, Beyond Burger had scheduled a test with CLW Foods,
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`LLC (“CLW”) for February 3, 2017, to determine whether it could handle the role of co-
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`manufacturer. When Don Lee inevitably found out, Defendant Brown attempted to
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`mitigate the damage by representing that he had cancelled the test. Instead, however,
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`Beyond Meat continued to negotiate with CLW and by April 12, 2017 had sent design
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`drawings illustrating how CLW should begin to set up the equipment in its facility to
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`produce the Company’s products. That same day, Beyond Meat sent Don Lee a Notice
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`of Breach alleging various food safety violations in Don Lee’s Texas facility. Thereafter,
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`on May 23, 2017, Beyond Meat terminated the Supply Agreement, and began shifting its
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`production to other manufacturers including CLW and ProPortion Foods, LLC
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`(“ProPortion”) in violation of the exclusive Supply Agreement which CLW and
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`ProPortion were aware of (collectively the “Wrongful Termination”). Notably, despite
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`having no prior experience mass-producing plant-based protein products, CLW and
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`ProPortion, the Company’s current co-manufacturers, were up and running within weeks
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`3
`Consolidated Amended Shareholder Derivative Complaint
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`Case 2:20-cv-02524-MWF-AFM Document 34 Filed 05/24/21 Page 5 of 62 Page ID #:199
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`using a nearly identical process as Don Lee’s propriety Batch Making Protocol, a trade
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`secret which the Company, CLW, and ProPortion had misappropriated in violation of
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`applicable laws and the non-disclosure agreement contained in the exclusive Supply
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`Agreement (the “Misappropriation”).
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`6. Moreover, the Company failed to compensate Don Lee for delivered
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`product, furnish Don Lee with equipment, parts, and labor at its sole cost and expense
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`under the Supply Agreement, service and repair such equipment, furnish Don Lee with
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`effective and adequate equipment, and furnish Don Lee with personnel required in
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`connection with various certifying agency requirements as set forth in the Supply
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`Agreement.
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`7.
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`Don Lee filed suit against Beyond Meat in the Superior Court of the State of
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`California for the County of Los Angeles alleging, among other things, breach of
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`contract, misappropriation of trade secrets, unfair competition, and fraud, captioned Don
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`Lee Farms v. Savage River, Inc., Case No. BC662838 (Cal. Super. Ct.) (the “Don Lee
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`Action”). Notably, on January 24, 2020, the court in the Don Lee Action granted Don
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`Lee a right to attach in the amount of $628,689 on the grounds that Don Lee had
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`established a “probable validity” of its claim that Beyond Meat owes Don Lee money for
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`unpaid invoices.
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`8.
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`In breach of their fiduciary duties, the Individual Defendants either engaged
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`in and/or permitted, and/or allowed the Company to engage in the Fraudulent
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`Misconduct, Wrongful Termination, and/or Misappropriation.
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`9.
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`fiduciary duties by personally making and/or causing Beyond Meat to make materially
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`During the Relevant Period, the Individual Defendants further breached their
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`false and misleading statements in the Schedule 14A filed with the SEC on April 10,
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`2020 (the “2020 Proxy Statement”) which failed to disclose, inter alia, that in violation of
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`the Code of Conduct: (1) the Company had engaged in the Fraudulent Misconduct; (2)
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`the Company had engaged in the Wrongful Termination; (3) the Company had engaged
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`4
`Consolidated Amended Shareholder Derivative Complaint
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`Case 2:20-cv-02524-MWF-AFM Document 34 Filed 05/24/21 Page 6 of 62 Page ID #:200
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`in the Misappropriation, which was ongoing; and (4) the Company failed to maintain
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`adequate internal controls.
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`10. During the Relevant Period, the Individual Defendants continued to breach
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`their fiduciary duties by failing to correct and causing Beyond Meat to fail to correct
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`these false and misleading statements and omissions of material fact to the investing
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`public.
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`11. Furthermore, during the Relevant Period, the Individual Defendants
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`breached their fiduciary duties by causing Beyond Meat to fail to maintain adequate
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`internal controls.
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`12.
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`In addition, by including false and misleading statements concerning the
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`Company’s compliance with the Code of Conduct in the 2020 Proxy Statement, nearly all
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`of the Individual Defendants violated Section 14(a) of the Exchange Act.
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`13.
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`In light of the Individual Defendants’ misconduct, which has subjected
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`Beyond Meat and certain of its employees and officers to being named as defendants in
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`the Don Lee Action, the need to undertake internal investigations, the need to implement
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`adequate internal controls, the losses to Beyond Meat from the over-compensation by the
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`Company of the Individual Defendants, Beyond Meat will have to expend millions of
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`dollars.
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`14. The Company has been substantially damaged as a result of the Individual
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`Defendants’ knowing or highly reckless breaches of fiduciary duty and other misconduct,
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`and the aiding and abetting thereof.
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`15.
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`Defendants, most of whom are Beyond Meat’s current directors, their collective
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`In light of the breaches of fiduciary duty engaged in by the Individual
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`engagement in misconduct, the substantial likelihood of the directors’ liability in this
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`derivative action and the CFO’s, former Senior Quality Assurance Manager’s, and former
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`Director of Operation’s liability in the Don Lee Action, their being beholden to each
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`other, their longstanding business and personal relationships with each other, and their
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`5
`Consolidated Amended Shareholder Derivative Complaint
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`Case 2:20-cv-02524-MWF-AFM Document 34 Filed 05/24/21 Page 7 of 62 Page ID #:201
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`not being disinterested and/or independent directors, a majority of Beyond Meat’s Board
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`of Directors (the “Board”) cannot consider a demand to commence litigation against
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`themselves on behalf of Beyond Meat with the requisite level of disinterestedness and
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`independence.
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`JURISDICTION AND VENUE
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`16. This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331
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`because Plaintiffs’ claims raise a federal question under Section 14(a) of the Exchange
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`Act, 15 U.S.C. § 78n(a)(1) and Rule 14a-9 of the Exchange Act, 17 C.F.R. § 240.14a-9.
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`17. This Court has supplemental jurisdiction over Plaintiffs’ state law claims
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`pursuant to 28 U.S.C. § 1367(a).
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`18. This derivative action is not a collusive action to confer jurisdiction on a
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`court of the United States that it would not otherwise have.
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`19. The Court has personal jurisdiction over each of the Defendants because
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`each Defendant is either a corporation or limited liability company doing business in
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`California, or he or she is an individual who has minimum contacts with California to
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`justify the exercise of jurisdiction over them.
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`20. Venue is proper in this District pursuant to 28 U.S.C. §§ 1391 and 1401
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`because a substantial portion of the transactions and wrongs complained of herein
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`occurred in this District, and the Defendants have received substantial compensation in
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`this District by engaging in numerous activities that had an effect in this District.
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`21. Venue is proper in this District because Beyond Meat and the Individual
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`Defendants have conducted business in this District, and Defendants’ actions have had an
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`effect in this District.
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`Plaintiffs
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`PARTIES
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`22. Plaintiff Weiner is a current shareholder of Beyond Meat common stock and
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`has continuously held Beyond Meat common stock at all relevant times.
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`6
`Consolidated Amended Shareholder Derivative Complaint
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`Case 2:20-cv-02524-MWF-AFM Document 34 Filed 05/24/21 Page 8 of 62 Page ID #:202
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`23. Plaintiff Brink is a current shareholder of Beyond Meat common stock and
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`has continuously held Beyond Meat common stock at all relevant times.
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`24. Plaintiff Klein is a current shareholder of Beyond Meat common stock and
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`has continuously held Beyond Meat common stock at all relevant times.
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`Nominal Defendant Beyond Meat
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`25. Beyond Meat is a Delaware corporation with its principal executive offices
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`located at 119 Standard Street, El Segundo, California 90245. Beyond Meat’s shares
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`trade on NASDAQ under the ticker symbol “BYND.”
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`Defendant Brown
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`26. Defendant Brown is the founder of the Company and has served as the
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`Company’s President and CEO since 2009. According to the 2020 Proxy Statement, as of
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`March 23, 2020, Defendant Brown beneficially owned 3,381,883 shares of Beyond
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`Meat’s common stock, which represented 5.3% of Beyond Meat’s outstanding shares of
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`common stock on that date. Given that the price per share of Beyond Meat’s common
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`stock at the close of trading on March 23, 2020 was $57.55, Defendant Brown owned
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`approximately $194.6 million worth of Beyond Meat stock.
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`27. For the fiscal year ended December 31, 2019, Defendant Brown received
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`$8,010,451 in compensation from Beyond Meat. This included $500,000 in salary,
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`$7,257,451 in option awards, $250,000 in non-equity incentive plan compensation, and
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`$3,000 in all other compensation. For the fiscal year ended December 31, 2018,
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`Defendant Brown received $967,994 in compensation from Beyond Meat. This included
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`$298,750 in salary, $524,244 in option awards, and $145,000 in non-equity incentive
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`plan compensation. For the fiscal year ended December 31, 2017, Defendant Brown
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`received $413,489 in compensation from Beyond Meat. This included $288,789 in salary
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`and $124,700 in non-equity incentive plan compensation.
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`7
`Consolidated Amended Shareholder Derivative Complaint
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`Case 2:20-cv-02524-MWF-AFM Document 34 Filed 05/24/21 Page 9 of 62 Page ID #:203
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`Defendant Nelson
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`28. Defendant Nelson served as Beyond Meat’s CFO since May 2017, and as
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`Treasurer since September 2018. Previously, he served as Beyond Meat’s Chief
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`Operating Officer from May 2017 through September 2018, and as Secretary from
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`September 2018 through May 2019. On February 26, 2021, Defendant Nelson informed
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`the Company of his intention to retire, and did retire, from employment with the
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`Company effective May 5, 2021. In consideration for his retirement, Defendant Nelson
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`received a $1,000 lump sum payment and the Company will pay the costs of monthly
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`COBRA premiums for him and his dependents for up to 18 months. However, Defendant
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`Nelson will serve as a consultant to the Company starting on May 6, 2021 until May 5,
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`2023.
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`29. For the fiscal year ended December 31, 2018, Defendant Nelson received
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`$610,758 in compensation from Beyond Meat. This included $326,666 in salary,
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`$121,591 in option awards, and $162,501 in non-equity incentive plan compensation.
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`For the fiscal year ended December 31, 2017, Defendant Nelson received $404,378 in
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`compensation from Beyond Meat. This included $287,336 in salary and $117,042 in non-
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`equity incentive plan compensation.
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`Defendant Goldman
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`30. Defendant Seth Goldman (“Goldman”) has served as a Company director
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`since February 2013 and is Chairman of the Board. He also served as Executive Chair of
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`the Company from February 2013 until February 2020. According to the 2020 Proxy
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`Statement, as of March 23, 2020, Defendant Goldman beneficially owned 1,080,722
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`shares of Beyond Meat’s common stock, which represented 1.7% of Beyond Meat’s
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`outstanding shares of common stock on that date. Given that the price per share of
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`Beyond Meat’s common stock at the close of trading on March 23, 2020 was $57.55,
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`Defendant Goldman owned approximately $62.2 million worth of Beyond Meat stock.
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`8
`Consolidated Amended Shareholder Derivative Complaint
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`Case 2:20-cv-02524-MWF-AFM Document 34 Filed 05/24/21 Page 10 of 62 Page ID #:204
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`31. For the fiscal year ended December 31, 2019, Defendant Goldman received
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`$1,773,445 in compensation from Beyond Meat. This included $1,409,661 in option
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`awards, $121,260 in non-equity incentive plan compensation, and $242,524 in all other
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`compensation. For the fiscal year ended December 31, 2018, Defendant Goldman
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`received $175,000 in compensation from Beyond Meat, which consisted entirely of fees
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`paid for consulting services.
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`Defendant Bohlen
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`32. Defendant Gregory Bohlen served as a Beyond Meat director from February
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`2013 until he resigned on October 23, 2019.
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`Defendant Carhart
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`33. Defendant Diane Carhart (“Carhart”) has served as a Company director
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`since January 2016, and also serves and has served as a member of the Audit Committee
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`since at least 2019. According to the 2020 Proxy Statement, as of March 23, 2020,
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`Defendant Carhart beneficially owned 28,436 shares of Beyond Meat’s common stock.
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`Given that the price per share of Beyond Meat’s common stock at the close of trading on
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`March 23, 2020 was $57.55, Defendant Carhart owned approximately $1.6 million worth
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`of Beyond Meat stock.
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`34. For the fiscal year ended December 31, 2019, Defendant Carhart received
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`$31,688 in compensation from the Company, which consisted entirely of fees earned or
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`paid in cash.
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`Defendant Lane
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`35. Defendant Raymond J. Lane (“Lane”) has served as a Beyond Meat director
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`since February 2015 and also serves, and has served, as a member of the Human Capital
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`Management and Compensation Committee since at least 2019. According to the 2020
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`Proxy Statement, as of March 23, 2020, Defendant Lane beneficially owned 259,962
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`shares of Beyond Meat’s common stock. Given that the price per share of Beyond Meat’s
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`9
`Consolidated Amended Shareholder Derivative Complaint
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`Case 2:20-cv-02524-MWF-AFM Document 34 Filed 05/24/21 Page 11 of 62 Page ID #:205
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`common stock at the close of trading on March 23, 2020 was $57.55, Defendant Lane
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`owned approximately $15 million worth of Beyond Meat stock.
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`36. For the fiscal year ended December 31, 2019, Lane received $35,358 in
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`compensation from the Company, which consisted entirely of fees earned or paid in cash.
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`Defendant van Lengerich
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`37. Defendant Bernhard van Lengerich (“van Lengerich”) has served as a
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`Company director since November 2016. According to the 2020 Proxy Statement, as of
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`March 23, 2020, Defendant van Lengerich beneficially owned 10,133 shares of Beyond
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`Meat’s common stock. Given that the price per share of Beyond Meat’s common stock at
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`the close of trading on March 23, 2020 was $57.55, Defendant van Lengerich owned
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`approximately $583,154 million worth of Beyond Meat stock.
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`38. For the fiscal year ended December 31, 2019, Defendant van Lengerich
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`received $146,685 in compensation from Beyond Meat. This included $26,685 in fees
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`earned or paid in cash, $120,000 in all other compensation. For the fiscal year ended
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`December 31, 2018, Defendant van Lengerich received $120,000 in compensation from
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`Beyond Meat, which consisted entirely of fees paid for consulting services.
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`Defendant Segal
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`39. Defendant Ned Segal (“Segal”) has served as a Company director since
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`November 2018, and also serves, and has served, as a member of the Audit Committee
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`since at least 2019. According to the 2020 Proxy Statement, as of March 23, 2020,
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`Defendant Segal beneficially owned 21,734 shares of Beyond Meat’s common stock.
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`Given that the price per share of Beyond Meat’s common stock at the close of trading on
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`March 23, 2020 was $57.55, Defendant Segal owned approximately $1.3 million worth
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`of Beyond Meat stock.
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`40. For the fiscal year ended December 31, 2019, Defendant Segal received
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`$31,688 in compensation from the Company, which consisted entirely of fees earned or
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`paid in cash. For the fiscal year ended December 31, 2018, Defendant Segal received
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`10
`Consolidated Amended Shareholder Derivative Complaint
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`

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`Case 2:20-cv-02524-MWF-AFM Document 34 Filed 05/24/21 Page 12 of 62 Page ID #:206
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`$149,522 in compensation from Beyond Meat, which consisted entirely of option awards.
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`Defendant Stone
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`41. Defendant Christopher Isaac “Biz” Stone (“Stone”) has served as a
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`Company director since January 2012, and also serves, and has served, as the Chair of the
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`Nominating and Corporate Governance Committee since at least 2019. According to the
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`2020 Proxy Statement, as of March 23, 2020, Defendant Stone beneficially owned
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`226,390 shares of the Company’s common stock. Given that the price per share of the
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`Company’s common stock at the close of trading on March 23, 2020 was $57.55,
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`Defendant Stone owned approximately $13 million worth of Beyond Meat stock.
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`42. For the fiscal year ended December 31, 2019, Defendant Stone received
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`$32,022 in compensation from the Company, which consisted entirely of fees earned or
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`paid in cash.
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`Defendant Thompson
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`43. Defendant Donald Thompson (“Thompson”) has served as a Company
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`director since October 2015, and also serves, and has served, as the Chair of the Human
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`Capital Management and Compensation Committee since at least 2019. According to the
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`2020 Proxy Statement, as of March 23, 2020, Defendant Thompson beneficially owned
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`816,132 shares of the Company’s common stock. Given that the price per share of the
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`Company’s common stock at the close of trading on March 23, 2020 was $57.55,
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`Defendant Thompson owned approximately $47 million worth of Beyond Meat stock.
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`44. For the fiscal year ended December 31, 2019, Defendant Thompson received
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`$33,356 in compensation from the Company, which consisted entirely of fees earned or
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`paid in cash.
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`Defendant Waller
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`45. Defendant Kathy N. Waller (“Waller”) has served as a Company director
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`since November 2018, and also serves, and has served, as the Chair of Audit Committee
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`and as a member of the Nominating and Corporate Governance Committee since at least
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`11
`Consolidated Amended Shareholder Derivative Complaint
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`Case 2:20-cv-02524-MWF-AFM Document 34 Filed 05/24/21 Page 13 of 62 Page ID #:207
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`2019. According to the 2020 Proxy Statement, as of March 23, 2020, Defendant Waller
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`beneficially owned 17,234 shares of the Company’s common stock. Given that the price
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`per share of the Company’s common stock at the close of trading on March 23, 2020 was
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`$57.55, Defendant Waller owned approximately $1 million worth of Beyond Meat stock.
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`46. For the fiscal year ended December 31, 2019, Defendant Waller received
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`$38,922 in compensation from the Company, which consisted entirely of fees earned or
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`paid in cash. For the fiscal year ended December 31, 2018, Defendant Waller received
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`$149,522 in compensation from the Company, which consisted entirely of option awards.
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`Defendant Quetsch
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`47. Defendant Jessica Quetsch (“Quetsch”) has served as the Company’s
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`Customer Compliance Document, Senior Manager since April 2020. Previously, she
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`served as the Company’s Customer Compliance, Document Manager from January 2019
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`until April 2020, as the Co-Manufacturing Quality Assurance Manager from July 2018
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`until December 2018, as the Quality Manager, Manufacturing from December 2017 until
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`July 2018, as a Senior Food Scientist from July 2017 until December 2017, as the Senior
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`Quality Assurance Manager from April 2016 until July 2017, and as a Quality Assurance
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`Manager, SQF Practitioner from January 2014 until July 2017.
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`Defendant Miller
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`48. Defendant Anthony Miller (“Miller”) served as the Company’s Director of
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`Operations from July 2015 until September 2016.
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`Defendant ProPortion
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`49. ProPortion Foods, LLC (“ProPortion”) is a limited liability company,
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`headquartered in Round Rock, Texas and was acquired by Cargill in December 2020.
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`ProPortion served as one of Beyond Meat’s co-manufacturers after the Wrongful
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`Termination.
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`Defendant CLW
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`12
`Consolidated Amended Shareholder Derivative Complaint
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`

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`Case 2:20-cv-02524-MWF-AFM Document 34 Filed 05/24/21 Page 14 of 62 Page ID #:208
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`50. CLW Foods, LLC (“CLW”)1 is a limited liability company, headquartered in
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`Hanford, California. CLW served as one of Beyond Meat’s co-manufacturers after the
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`Wrongful Termination.
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`FIDUCIARY DUTIES OF THE INDIVIDUAL DEFENDANTS
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`51. By reason of their positions as officers, directors, and/or fiduciaries of
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`Beyond Meat and because of their ability to control the business and corporate affairs of
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`Beyond Meat, the Individual Defendants owed Beyond Meat and its shareholders
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`fiduciary obligations of trust, loyalty, good faith, and due care, and were and are required
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`to use their utmost ability to control and manage Beyond Meat in a fair, just, honest, and
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`equitable manner. The Individual Defendants were and are required to act in furtherance
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`of the best interests of Beyond Meat and its shareholders so as to benefit all shareholders
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`equally.
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`52. Each director and officer of the Company owes to Beyond Meat and its
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`shareholders the fiduciary duty to exercise good faith and diligence in the administration
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`of the Company and in the use and preservation of its property and assets and the highest
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`obligations of fair dealing.
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`53. The Individual Defendants, because of their positions of control and
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`authority as directors and/or officers of Beyond Meat, were able to and did, directly
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`and/or indirectly, exercise control over the wrongful acts complained of herein.
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`54. To discharge their duties, the officers and directors of Beyond Meat were
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`required to exercise reasonable and prudent supervision over the management, policies,
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`controls, and operations of the Company.
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`1 Although ProPortion and CLW are incorporated as distinct entities, Don Ephgrave
`(“Ephgrave”), the Company’s former Vice President of Operations and Supply Chain
`from 2016 to 2017, testified in the federal securities class action filed in the Central
`District of California captioned Tran v. Beyond Meat, Inc., et al., Case No.: 2:20-cv-
`00963 that ProPortion and CLW are essentially alter egos of each other and that the two
`entities had the same owner.
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`13
`Consolidated Amended Shareholder Derivative Complaint
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`

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`Case 2:20-cv-02524-MWF-AFM Document 34 Filed 05/24/21 Page 15 of 62 Page ID #:209
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`55. Each Individual Defendant, by virtue of his or her position as a director
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`and/or officer, owed to the Company and to its shareholders the highest fiduciary duties
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`of loyalty, good faith, and the exercise of due care and diligence in the management and
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`administration of the affairs of the Company, as well as in the use and preservation of its
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`property and assets. The conduct of the Individual Defendants complained of herein
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`involves a knowing and culpable violation of their obligations as directors and officers of
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`Beyond Meat, the absence of good faith on their part, or a reckless disregard for their
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`duties to the Company and its shareholders that the Individual Defendants were aware or
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`should have been aware posed a risk of serious injury to the Company. The conduct of
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`the Individual Defendants who were also officers and directors of the Company has been
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`ratified by the remaining Individual Defendants who collectively comprised Beyond
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`Meat’s Board at all relevant times.
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`56. As senior executive officers and direc