SANDERSON FARMS INC false 0000812128 0000812128 2020-02-12 2020-02-12

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 12, 2020

 

SANDERSON FARMS, INC.

(Exact name of registrant as specified in its charter)

 

Mississippi

 

1-14977

 

64-0615843

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

127 Flynt Road

Laurel, Mississippi

 

39443

(Address of principal executive offices)

 

(Zip Code)

(601) 649-4030

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

 

Check the appropriate box if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

  ☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

  ☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

  ☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

  ☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading

symbol(s)

 

Name of each exchange

on which registered

Common stock, $1 par value per share

 

SAFM

 

NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

Section 5 — Corporate Governance and Management

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

1.    On February 12, 2020, the Compensation Committee of the Registrant’s board of directors adopted a Bonus Award Program for the Registrant’s salaried employees and management trainees effective November 1, 2019. If the Registrant meets net income per share and minimum return on average stockholders’ equity goals for the fiscal year ended October 31, 2020, the program provides for the award of bonuses to eligible participants equal to a percentage of their base salary. For the Named Executive Officers and certain other key members of management, the total potential award has two components: a percentage based on the Registrant’s earnings per share, and a percentage based on the Registrant’s operational performance as measured by Agristats, a private industry benchmarking service that analyzes performance data submitted by a significant majority of the poultry industry. If the Registrant earns the maximum earnings per share goal under the program, and if it performs at the top tier of operational performance specified in the program (as reported by Agristats), the Named Executive Officers would earn the maximum possible bonus under the program as follows: $3,036,600 for the Chairman and Chief Executive Officer (200% of base salary), $1,202,938 for the President (160% of base salary), $901,975 for the Treasurer, and Chief Financial and Legal Officer (140% of base salary), and $271,805 for the Secretary and Controller (principal accounting officer) (80% of base salary).

The foregoing description of the Bonus Award Program does not purport to be complete and is qualified in its entirety by reference to the full text of the Bonus Award Program, which is filed herewith as Exhibit 10.1 and is incorporated herein by reference.

Also on February 12, 2020, the Compensation Committee ratified the payment of certain miscellaneous items of compensation during fiscal 2019 to the Registrant’s Named Executive Officers, as follows:

Type

 

Joe F. Sanderson, Jr.,
Chairman & CEO

   

Lampkin Butts,
President & COO

   

D. Michael Cockrell,
Treasurer & CFO

   

Tim Rigney,
Secretary

 

Personal Use of Company and Charter Aircraft

  $

84,099

    $

9,859

    $

29,930

    $

—  

 

Other Travel Related Expenses

   

2,955

     

1,816

     

225

     

—  

 

401(k) Matching Contribution

   

11,000

     

11,000

     

11,000

     

11,000

 

ESOP Contribution

   

1,953

     

1,953

     

1,953

     

1,953

 

Term Life Insurance Premium

   

148

     

183

     

272

     

272

 

Matching Charitable Contributions

   

5,000

     

6,000

     

2,500

     

—  

 

Dividends Paid on Restricted Stock

   

123,200

     

32,000

     

25,920

     

5,110

 

Accidental Death Premium

   

9

     

12

     

18

     

18

 

Health Plan Benefit

   

9,323

     

9,323

     

9,323

     

9,323

 
                                 

Total

  $

237,687

    $

72,146

    $

81,141

    $

27,676

 

2.    On February 13, 2020, Edward Chisholm, the Registrant’s Director of Operations, became the Registrant’s “principal operating officer.” Lampkin Butts, who had been the Registrant’s Chief Operating Officer until February 13, 2020, will continue in his role as the Registrant’s President. Mr. Chisholm, who is 52, was appointed the Registrant’s Director of Operations effective February 1, 2020. Before that, he had served as the Registrant’s Director of Production since November 2017 and as a Corporate Production Manager for the Registrant from July 2011 to November 2017. The role of Director of Operations is not a corporate office under the Registrant’s By-Laws, but Mr. Chisholm, as Director of Operations, will perform the functions of a “principal operating officer” as that term is used in the rules promulgated under the Securities Exchange Act of 1934, as amended.

Item 5.07 Submission of Matters to a Vote of Security Holders.

The Registrant held its annual meeting of stockholders on February 13, 2020. At the meeting, the stockholders were requested to: (1) elect David Barksdale, Lampkin Butts, Beverly W. Hogan, Phil K. Livingston, and Joe F. Sanderson, Jr. as a Class A Directors to serve until the 2023 annual meeting, and elect Sonia Pérez as a Class C Director to serve until the 2022 annual meeting; (2) approve the Sanderson Farms, Inc. and Affiliates Amended and Restated Stock Incentive Plan; (3) approve, in a non-binding advisory vote, the compensation of the Registrant’s Named Executive Officers; (4) determine, in a non-binding advisory vote, the frequency with which the Registrant should hold future non-binding, advisory votes on executive compensation, (5) consider and act upon a proposal to ratify and approve the selection of Ernst & Young LLP as the Registrant’s independent auditors for the fiscal year ending October 31, 2020; (6) consider and act upon a stockholder proposal to request that the Registrant’s board of directors provide a report on water resource risks and related metrics; and (7) consider and act upon a stockholder proposal to request that the Registrant’s board of directors provide a report on the Registrant’s human rights due diligence process.

The following are the final voting results on proposals considered and voted upon at the meeting, which are more fully described in the Registrant’s proxy statement filed on January 10, 2020:

  1. The stockholders voted to re-elect the following directors by the votes set forth below:

Name

 

For

   

Against

   

Abstain

   

Broker

Non-Votes

 

David Barksdale

   

19,322,962

     

117,851

     

9,274

     

1,390,366

 

Lampkin Butts

   

19,019,296

     

422,687

     

8,103

     

1,390,366

 

Beverly W. Hogan

   

19,012,199

     

429,081

     

8,807

     

1,390,366

 

Phil K. Livingston

   

17,934,615

     

1,507,123

     

8,349

     

1,390,366

 

Joe F. Sanderson, Jr.

   

19,084,197

     

308,803

     

57,086

     

1,390,366

 

Sonia Pérez

   

19,388,663

     

48,396

     

13,028

     

1,390,366

 

  2. The stockholders voted to approve the Sanderson Farms, Inc. and Affiliates Amended and Restated Stock Incentive Plan by the votes set forth below:

For

 

Against

 

Abstain

 

Broker Non-Votes

18,724,648

 

713,812

 

11,627

 

1,390,366

  3. The stockholders voted to approve, in a non-binding advisory vote pursuant to Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the compensation of the Registrant’s Named Executive Officers, as disclosed pursuant to Item 402 of Securities and Exchange Commission Regulation S-K, including the Compensation Discussion and Analysis, the compensation tables and narrative disclosures, in the Registrant’s definitive proxy statement filed on January 10, 2020, by the votes set forth below (representing approval by 96.2% of the votes cast):

For

 

Against

 

Abstain

 

Broker Non-Votes

18,692,771

 

745,315

 

12,001

 

1,390,366

  4. The stockholders voted to hold future non-binding, advisory votes on executive compensation every year by the votes set forth below:

Every Year

 

Every 2 Years

 

Every 3 Years

 

Abstain

 

Broker Non-Votes

18,427,262

 

23,795

 

988,827

 

10,202

 

1,390,366

Following the annual meeting, on the recommendation of its Nominating and Governance Committee, the Registrant’s board of directors voted to hold future advisory votes on executive compensation every year, in accordance with the selection receiving the highest number of votes at the annual meeting.

  5. The stockholders voted to ratify and approve the selection of Ernst & Young LLP as the Registrant’s independent auditors for the fiscal year ending October 31, 2020, by the votes set forth below:

For

 

Against

 

Abstain

 

Broker Non-Votes

20,452,729

 

366,820

 

20,904

 

—

  6. The stockholders voted to reject the stockholder proposal to request that the Registrant’s board of directors provide a report on water resource risks and related metrics by the votes set forth below:

For

 

Against

 

Abstain

 

Broker Non-Votes

2,086,239

 

16,211,843

 

1,152,004

 

1,390,366

  7. The stockholders voted to reject the stockholder proposal to request that the Registrant’s board of directors provide a report on the Registrant’s human rights due diligence process:

For

 

Against

 

Abstain

 

Broker Non-Votes

7,184,082

 

12,138,392

 

127,613

 

1,390,366

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits: 

Exhibit
No.

   

Description

         
 

10.1

   

Sanderson Farms, Inc., Bonus Award Program Effective November 1, 2019.

         
 

104

   

Cover Page Interactive Data File (embedded within the Inline XBRL document).

EXHIBIT INDEX

Exhibit
No.

   

Description

         
 

10.1

   

Sanderson Farms, Inc., Bonus Award Program Effective November 1, 2019.

         
 

104

   

Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

SANDERSON FARMS, INC.

(Registrant)

Date: February 18, 2020

 

 

By:

 

/s/ D. Michael Cockrell

 

 

 

D. Michael Cockrell

Treasurer and Chief Financial Officer

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