Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangement of Certain
Officers.
On
(1) The Committee approved a 1.25% merit salary increase for each ofLampkin Butts , President andMike Cockrell , Chief Financial Officer, Chief Legal Officer and Treasurer; and a 3.0% merit salary increase for Timothy F. Rigney, Secretary and Controller, effectiveNovember 1, 2020 , as follows:Name Fiscal 2021 Salary
Mr. Butts $ 761,232 Mr. Cockrell $ 652,320 Mr. Rigney $ 349,944
(2) The Committee made the following awards, effective
Name Performance Shares Shares of Restricted Stock Mr. Sanderson 20,500 20,500 Mr. Butts 5,750 5,750 Mr. Cockrell 4,500 4,500 Mr. Rigney 1,325 1,325
The form of restricted stock agreement to be used for the restricted stock
awards noted above will be substantially similar to the form of agreement filed
as Exhibit 10.14 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended
Restricted Stock Agreements
The form of restricted stock agreement provides for the grant of a specified number of shares of restricted stock to the participant as a reward for past service and as an incentive for the performance of future services and for no additional consideration, subject to the following terms and conditions:
• The restricted stock may not be sold or transferred during the restricted period except by will or inheritance. • The restricted period lasts for four years, except that it ends and the shares fully and immediately vest in the event of the participant's death or disability or a change of control of the Registrant. If the participant terminates employment after attaining eligibility for retirement before the end of the restricted period, a pro rata percentage of the shares will immediately vest based on the number of years of the restricted period
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during which the participant was employed with the Registrant (for example, if the participant retires after one year of the restricted period has passed, the participant would receive 25% of the shares and would forfeit the remainder; if the participant retires after two years of the restricted period has passed, the participant would receive 50% of the shares and would forfeit the remainder; and so on). • Rights to the shares are forfeited if the participant's employment terminates for any other reason prior to the end of the restricted period, or if the Board determines that the participant has engaged in specified detrimental conduct or activity while employed with the Registrant or in the two-year period following his or her voluntary termination or termination for cause. If a participant's shares have already vested, he or she must repay the Registrant the fair market value of his or her shares that is specified in his or her restricted stock agreement. • During the restricted period, the participant is entitled to vote the shares and receive dividends.
Performance Share Agreements
The form of performance share agreement provides for the grant of the right to
receive shares of the Registrant's common stock at the end of a restricted
period, subject to the Registrant's achievement of certain performance measures
over the two-year performance period commencing
• A participant can receive a target amount of shares based on the Registrant's average return on equity ("ROE") and a target based on the Registrant's average return on sales ("ROS") over the two-year period commencingNovember 1, 2020 . It also establishes several possible percentages of those target awards that he or she could receive, depending on the Registrant's actual performance measured at the end of the performance period. The performance criteria for the fiscal 2021 performance share awards are: Threshold Target Maximum Measure Weight (50% Payout) (100% Payout) (200% Payout) ROE 50 % 8.0 % 14.7 % 23.5 % ROS 50 % 1.8 % 4.4 % 7.0 % • The Registrant's Board, in its sole discretion, may pay earned performance shares in the form of cash, in shares of common stock, or in a combination of cash or shares which has an aggregate fair market value equal to the value of the earned performance shares at the close of the applicable performance period. • If the participant's employment terminates because of death or disability or after attaining eligibility for retirement, or there has been a change in control of the Registrant before the end of the performance period, the participant will be entitled to receive, at the end of the restricted period, a pro rata portion of the number of performance shares to which he or she otherwise would have been entitled, based on the number of months he or she was employed with the Registrant during the performance period. • Rights to the shares are forfeited if the participant's employment terminates for any other reason prior to the end of the restricted period, or if the Board determines that the participant has engaged in specified detrimental conduct or activity while employed with the Registrant or in the two-year period following his or her voluntary termination or termination for cause. If a participant's shares have already been issued, he or she must repay the Registrant their fair market value as of their issue dates. • During the restricted period, the participant does not have any of the rights of a stockholder of the Registrant with respect to his or her performance shares, including the right to vote the performance shares and the right to receive any dividends or other distributions. • A participant may not sell, exchange, transfer, pledge, hypothecate or otherwise dispose of his or her right to receive performance shares, other than by will or by the applicable laws of descent and distribution.
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Item 7.01 Regulation FD Disclosure.
On
In accordance with General Instruction B.2, the information contained in this
Item 7.01 and the attached Exhibit 99.1 is being "furnished" to the
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits: Exhibit No. Description 99.1 Press release ofSanderson Farms, Inc. datedOctober 22, 2020 . 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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