INGLES MARKETS INC
10-Ks and 10-Qs
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Securities Exchange Act of 1934
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to Section 240.14a-12
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INGLES MARKETS, INCORPORATED
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
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4)
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Proposed maximum aggregate value of transaction:
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5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
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1)
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Amount Previously Paid:
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2)
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Form, Schedule or Registration Statement No.:
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Filing Party:
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4)
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Date Filed:
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INGLES MARKETS, INCORPORATED
P.O. BOX 6676
ASHEVILLE, NORTH CAROLINA 28816
NOTICE OF 2020 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, FEBRUARY 11, 2020
To the Stockholders of Ingles Markets, Incorporated:
NOTICE IS HEREBY GIVEN that Ingles Markets, Incorporated will hold its 2020 Annual Meeting of Stockholders at the Grove Park Inn, 290 Macon Avenue, Asheville, North Carolina
28804 on Tuesday, February 11, 2020, at 11:00 a.m. local time, to elect eight directors to serve until the 2021 Annual Meeting of Stockholders.
These items and other matters relating to the Annual Meeting are described in the Proxy Statement that accompanies this Notice.
Only stockholders of record of the Company’s Class A Common Stock, $0.05 par value per share, and Class B Common Stock, $0.05 par value per share, at the close of business on
December 13, 2019, are entitled to notice of and to vote at the Annual Meeting and any adjournment or postponement thereof. We will make available at the Company’s corporate offices a list of stockholders as of the close of business on December 13,
2019, for inspection during normal business hours during the ten-day period immediately preceding the Annual Meeting.
Pursuant to rules adopted by the Securities and Exchange Commission, we have provided access to our proxy materials over the Internet. Accordingly, we are sending a Notice of
Internet Availability of Proxy Materials, or E-proxy notice, on or about December 27, 2019 to our stockholders of record on December 13, 2019. The E-proxy notice contains instructions for your use of this process, including how to access our proxy
statement and annual report and how to authorize your proxy to vote online. In addition, the E-proxy notice contains instructions on how you may receive a paper copy of the proxy statement and annual report or elect to receive your proxy statement and
annual report over the Internet.
It is important that your shares be represented at the Annual Meeting. Whether or not you plan to attend the Annual Meeting, please vote by proxy as soon as possible over the
Internet as instructed in the Notice of Internet Availability of Proxy Materials, or E-proxy notice, or, if you receive paper copies of the proxy materials by mail, you can also vote by mail by following the instructions on the proxy card. If you are
a holder of record of common stock, you may also cast your votes in person at the Annual Meeting. If your shares are held in “street name” (that is, held for your account by a broker or other nominee), you will receive instructions from your broker or
other nominee as to how to vote your shares.
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By Order of the Board of Directors |
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Robert P. Ingle, II
Chairman of the Board
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Asheville, North Carolina
December 27, 2019
YOUR VOTE IS IMPORTANT.
PLEASE VOTE OVER THE INTERNET AS INSTRUCTED IN THESE MATERIALS OR COMPLETE, DATE, SIGN AND RETURN A PROXY CARD AS PROMPTLY AS POSSIBLE.
TABLE OF CONTENTS
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i
INGLES MARKETS, INCORPORATED
P. O. BOX 6676
ASHEVILLE, NORTH CAROLINA 28816
ANNUAL STOCKHOLDERS MEETING
FEBRUARY 11, 2020
Grove Park Inn
290 Macon Avenue
Asheville, North Carolina 28804
The Board of Directors (the “Board”) of Ingles Markets, Incorporated (the “Company”) furnishes you with this Proxy Statement to solicit proxies to be voted at the 2019 Annual
Meeting of Stockholders of the Company. The meeting will be held at the Grove Park Inn, 290 Macon Avenue, Asheville, North Carolina, on Tuesday, February 11, 2020, at 11:00 a.m. local time, for the purposes set forth in the Notice of Annual Meeting of
Stockholders that accompanies this Proxy Statement. The proxies also may be voted at any adjournments or postponements of the meeting.
Pursuant to rules adopted by the Securities and Exchange Commission, we have
provided access to our proxy materials over the Internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials, which is referred to herein as the “E-proxy notice,” on or about December 27, 2019 to each holder of record of
the Company’s Class A Common Stock, $0.05 par value per share (“Class A Common Stock”) and Class B Common Stock, $0.05 par value per share (“Class B Common Stock”), as of December 13, 2019, the record date for the meeting (the “Record Date”). Class A
Common Stock and Class B Common Stock are sometimes referred to collectively in this Proxy Statement as “Common Stock.” The E-proxy notice and this proxy statement summarize the information you need to know to vote by proxy or in person at the annual
meeting. You do not need to attend the annual meeting in person in order to vote.
The Company’s principal executive offices are located at 2913 U.S. Highway 70 West, Asheville (Black Mountain), North Carolina 28711. This Proxy Statement and the accompanying
forms of proxy are first being provided to stockholders on or about December 27, 2019.
Shares of Common Stock properly voted by proxy as instructed in the E-proxy notice will be voted at the Annual Meeting in accordance with the instructions on the proxy. Proxies
that are not properly executed or are not received by the Secretary at or before the Annual Meeting will not be effective.
A stockholder can revoke a proxy at any time prior to the exercise of the authority granted under that proxy. A proxy may be revoked by a stockholder in any of the following
ways:
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by attending the Annual Meeting and voting the shares covered by the original proxy in person at the Annual Meeting;
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by delivering to the Secretary an instrument revoking the proxy; or
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by delivering a later-dated, properly executed proxy with respect to shares covered by the original proxy.
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If any stockholder fails to provide instructions on a proxy properly submitted via the Internet or mail, its proxy will be voted, as recommended by the Board of Directors, at the
Annual Meeting:
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“FOR”
the election of each of the Board nominees named under the heading
“ELECTION OF DIRECTORS –
Identification Of Directors and Executive Officers”.
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1
As of the date of this Proxy Statement, the Company’s management knows of no other matter to be brought before the Annual Meeting. Should any other matter properly come before
the Annual Meeting, all shares of Common Stock represented by effective proxies will be voted, at their discretion, by the persons acting under such proxies.
Only holders of record of shares of Class A Common Stock or Class B Common Stock at the close of business on the Record Date are entitled to vote at the meeting or adjournments
or postponements of the meeting. At the close of business on the Record Date, there were 14,192,985 shares of Class A Common Stock and 6,066,791 shares of Class B Common Stock issued and outstanding.
Quorum Requirements.
The presence in person or by proxy of holders of a majority of the outstanding shares of Class A
Common Stock constitutes a quorum for purposes of the election of directors by the holders of Class A Common Stock. The presence in person or by proxy of holders of a majority of the outstanding shares of Class B Common Stock constitutes a quorum for
purposes of the election of directors by the holders of Class B Common Stock. If holders of shares possessing a majority of the aggregate votes represented by the Class A Common Stock and Class B Common Stock, taking into account the ten votes per
share attributable to the Class B Common Stock, are present at the Annual Meeting in person or by proxy, a quorum will be present for purposes of any other matter that may be presented at the Annual Meeting. Abstentions with respect to a proposal and
broker non-votes are counted for purposes of establishing a quorum. A broker non-vote occurs if a broker does not receive instructions from the beneficial owner of shares held in street name for certain types of proposals and the broker indicates it
does not have authority to vote such shares.
Election of Directors.
If a quorum of each class is present at the Annual Meeting, the holders of Class A Common
Stock, voting as a class, will elect two directors, and the holders of Class B Common Stock, voting as a class, will elect six directors. For purposes of the election of directors, each stockholder will have one vote for each share of Common Stock
held by the stockholder as of the Record Date. Pursuant to the North Carolina Business Corporation Act, directors will be elected by a plurality of the votes cast by the holders of shares entitled to vote in the election. Thus, abstentions and broker
non-votes will not be included in vote totals and will not affect the outcome of the vote.
In accordance with New York Stock Exchange rules, a broker that is a member firm of that exchange does not have authority to vote shares held by it in “street name” in the
election of directors unless it is instructed by the beneficial owner of such shares as to how such shares are to be voted in such election. Accordingly, if you hold your shares through a broker, you are urged to provide it voting instructions in
accordance with your broker’s directions.
Cumulative voting is not applicable to the election of directors at the Annual Meeting.
Other Matters.
Unless otherwise provided in the Company’s Articles of Incorporation or the North Carolina Business
Corporation Act, holders of Class A Common Stock and Class B Common Stock will vote as a single class with respect to any matter. In any such vote, stockholders will be entitled to one vote for each share of Class A Common Stock held as of the Record
Date and ten votes for each share of Class B Common Stock held as of the Record Date. For purposes of any such vote, if a quorum is present, a proposal will pass if the votes cast “for” the action exceed the votes cast “against” the action, unless
otherwise provided in the Company’s Articles of Incorporation or the North Carolina Business Corporation Act. Shares not voted with respect to any such matters (whether by abstention or broker non-vote) would not be included in vote totals and would
not impact the vote. As of the date of this Proxy Statement, the Company knows of no matters other than those listed on the Notice of Annual Meeting of Stockholders to be presented for action at the Annual Meeting.
2
Each member of the Board is elected for a term of one year and until his/her successor is elected and qualified or until his/her earlier death, resignation or removal from
office. The Company’s Articles of Incorporation and Bylaws provide that the Board may from time to time fix by resolution the number of directors that constitutes the Board, which shall be not less than five nor more than eleven. The Board has
determined by resolution that the number of directors will be fixed at eight for purposes of this election. In accordance with the Company’s Articles of Incorporation and Bylaws, two of the eight directors will be elected by a vote of the holders of
the Class A Common Stock, voting as a separate class, and the remaining six directors will be elected by a vote of the holders of the Class B Common Stock, voting as a separate class.
The Board has nominated, and recommends a vote FOR, Ernest E. Ferguson and John R. Lowden as directors to be elected by the holders of the Class A Common Stock
and Fred D. Ayers, Ronald B. Freeman, Robert P. Ingle, II, James W. Lanning, Laura Ingle Sharp, and Brenda S. Tudor as directors to be elected by the holders of the Class B Common Stock.
Proxies received by the Board will be voted “
For
” the election of all of the nominees unless stockholders specify a contrary choice in
their proxy. We expect each director nominee to be able to serve if elected. If any director nominee is not able to serve, proxies will be voted “for” the remainder of those nominated and may be voted for substitute nominees.
The biographical information set forth below was furnished by each named director and executive officer of the Company. Except as otherwise indicated, each such person has been
engaged in his or her most recent occupation or employment for more than five years.
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DIRECTORS AND EXECUTIVE OFFICERS
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Robert P. Ingle, II
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Robert P. Ingle, II has been a member of the Board of Directors since February 1997, has served as Chairman of the Board since May 2004, and served as Chief Executive Officer from March
2011 until March 2016. He has been employed by the Company in a variety of positions since 1985. Mr. Ingle is 51.
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James W. Lanning
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Mr. Lanning has served as a director of the Company since May
2003 and was appointed Chief Executive Officer in March 2016. He has served as
President since March 2003. He has been employed by the Company in a variety of positions since 1975. Mr. Lanning is 60.
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Ronald B. Freeman
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Mr. Freeman has served as a director of the Company since May 2005 and has served as Chief Financial Officer of the Company since 2005. Mr. Freeman is 62.
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Fred D. Ayers
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Mr. Ayers has served as a director of the Company since February 2006. Mr. Ayers retired in 2002 as a senior officer of Wachovia Bank. He has served on numerous boards and remains active
in the Asheville community. Mr. Ayers is 77.
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Ernest E. Ferguson
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Mr. Ferguson has served as a director of the Company since December 2014. Mr. Ferguson retired in 2007 as a senior vice president and commercial sales director of Wachovia Bank (now Wells
Fargo). He has continued to serve on numerous boards and remains active in the Asheville community. Mr. Ferguson is 72.
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John R. Lowden
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Mr. Lowden has served as a director of the Company since April 2018. Mr. Lowden is President and Chief Investment Officer of NewCastle Partners, LLC, a private investment firm founded in
2001. Mr. Lowden is 62.
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Laura Ingle Sharp
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Ms. Sharp has been a director of the Company since February 1997. She has in the past served the Company in several capacities on a full-time and part-time basis. The Company’s “Laura
Lynn” private label products are named after Ms. Sharp. Ms. Sharp is 62.
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Brenda S. Tudor
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Ms. Tudor has served as a director of the Company since December 2014. Ms. Tudor is a certified public accountant. She retired May 31, 2019 as President and Chief Financial Officer of
Morgan-Keefe Builders, Inc. Ms. Tudor is 62.
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Messrs. Ingle, Lanning, Freeman, and Ms. Sharp have been employees and/or directors of the Company, or its subsidiaries, for many years and, as such, are uniquely qualified to
serve on the Company’s Board of Directors. Messrs. Ayers, Lowden, and Ferguson, and Ms. Tudor provide unique and diverse qualities to our Board of Directors as a result of their backgrounds as senior banking officers, chief investment officer, and
corporate executive officer, respectively.
The Company does not have a policy with regard to the consideration of diversity in identifying director nominees.
Robert P. Ingle, II and Laura Ingle Sharp are brother and sister. There are no other family relationships among any of the directors or executive officers of the Company. Based
upon the voting power of Mr. Robert P. Ingle, II in the election of directors, the Company meets the definition of a “Controlled Company” for purposes of the Nasdaq corporate governance rules and thus is exempt from certain of its corporate governance
requirements, including the requirement that a majority of the board members be “Independent Directors.”
4
The Board had two standing committees during fiscal 2019: an Executive Committee, and an Audit/Compensation Committee. The Company did not have a separate nominating committee
during fiscal 2019. As a Controlled Company under the Nasdaq corporate governance rules, the continued listing requirements of Nasdaq do not require that the Company have a nominating committee.
The Executive Committee.
The Executive Committee can exercise the powers of the full Board between meetings of the
Board, except for powers that may not be delegated to a committee of the Board under the North Carolina Business Corporation Act. During fiscal 2019, the Executive Committee consisted of Messrs. Robert P. Ingle, II, Ronald B. Freeman and James W.
Lanning.
The Audit/Compensation Committee.
The Board has established, through the Company’s Bylaws, an Audit/Compensation
Committee. When acting in its capacity as Audit Committee, this committee acts under the authority of and has the responsibilities described in the Company’s Audit Committee Charter. The Audit Committee Charter is available on the Company’s website
at
www.ingles-markets.com
. In this capacity, the committee is responsible for, among other things, recommending the engagement of the Company’s independent registered public accounting firm, approving the fees and services to be provided by
the independent registered public accounting firm, overseeing the independent registered public accounting firm, reviewing and evaluating significant matters relating to the audit and internal controls of the Company, reviewing the scope and results of
audits by, and recommendations of, the Company’s independent registered public accounting firm and establishing and administering the Company’s Related Party Transaction policy. In addition, the committee reviews the audited consolidated financial
statements of the Company.
The Committee does not have a separate Compensation Committee charter. When the committee is acting in its capacity as the Compensation Committee, the Board has empowered the
committee to:
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approve compensation levels and increases in compensation of each executive officer and of other employees of the Company whose annual base salary is in excess of $150,000; and
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approve all incentive payments to executive officers and any incentive payments in excess of $25,000, paid in cash or property, in any calendar year to any other employee that does not
work in one of the Company’s supermarkets.
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Furthermore, the Committee, when acting as the Compensation Committee, administers the Company’s employee benefit plans and other compensation matters where independent,
disinterested administration is required by applicable tax or securities laws and regulations. Where such laws or regulations require that grants or awards under a stock-based employee benefit plan be made by the full Board or by a committee of
non-employee or outside directors, the Committee or the Board, as appropriate, makes such decisions.
During fiscal 2019, the Audit/Compensation Committee consisted of Messrs. Ayers and Ferguson and Ms. Tudor. The Board has determined that each member of the committee is
independent for purposes of the provisions of the Sarbanes-Oxley Act of 2002 and the Nasdaq corporate governance rules regarding audit committees. The Board has also determined that Mr. Ayers, an “audit committee financial expert” as defined under the
rules of the Securities and Exchange Commission, is independent of management of the Company.
All compensation decisions made during fiscal 2019 that were not made exclusively by the Board or the Audit/Compensation Committee were made by the Chairman of the Board, in
certain instances in consultation with the Chief Executive Officer. Messrs. Ayers and Ferguson and Ms. Tudor, who were the members of the Audit/Compensation Committee during fiscal 2019, were not officers or employees of the Company or its
subsidiaries during fiscal 2019 or any of the five prior fiscal years. Messrs. Ayers and Ferguson and Ms. Tudor did not have any relationships with the Company that would require disclosure under “Transactions With Related Persons.”
5
The Board held four formal meetings during fiscal 2019. The Executive Committee held no formal meetings during fiscal 2019, but met periodically on an informal basis. The
Audit/Compensation Committee held nine formal meetings during fiscal 2019, and met periodically on an informal basis during Board meetings and as required for other purposes. Each director attended at least 75% of all meetings of the Board and of the
committees of the Board on which he or she served during fiscal 2019.
See “Committees of the Board of Directors.”
Directors who are not officers of the Company or any of its subsidiaries are paid an annual retainer of $15,000 plus $1,250 for each Board or Committee meeting they attend in
person. Audit/Compensation Committee members other than the Chairman are also paid an additional annual retainer of $10,000 for service on such Committee, and the Chairman of the Audit/Compensation Committee is paid an additional annual retainer of
$15,000.
The following director compensation table sets forth, for the fiscal year ended September 28, 2019, the cash compensation paid by the Company to its outside directors. There
were no other items of compensation paid to outside directors for the fiscal year ended September 28, 2019. Mr. Lowden was elected to the Board in April 2018.
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Name
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Fees
Earned or Paid
in Cash
($)
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Total
($)
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Fred D. Ayers
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35,000
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35,000
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Ernest E. Ferguson
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30,008
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30,008
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John R. Lowden
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18,750
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18,750
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Laura Ingle Sharp
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20,000
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20,000
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Brenda S. Tudor
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30,008
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30,008
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As noted above, the Company did not have a standing nominating committee in fiscal 2019. Historically, the Board of Directors has not considered a nominating committee necessary
in that there have been few vacancies on the Company’s Board, and vacancies have been filled through discussions between the Chairman of the Board and the Chief Financial Officer of the Company with input from other Board members as needed. Under the
Company’s Articles of Incorporation, 25% of the directors of the Company are elected by the holders of Class A Common Stock, voting as a separate class, and the remaining directors are elected by holders of the Class B Common Stock, voting as a
separate class. Mr. Ingle II, the Chairman of the Company, is also the majority holder of the outstanding shares of Class B Common Stock as a result of being appointed the trustee with sole voting and dispositive power of trusts established by his
father, Robert P. Ingle, in connection with his estate plan.
The Board has not adopted a policy with respect to minimum qualifications for Board members. Conversely, with respect to each individual vacancy, the Board has determined the
specific qualifications and skills required to fill that vacancy and to complement the existing qualifications and skills of the other Board members. Historically, the Company has not engaged third parties to assist in identifying and evaluating
potential nominees, but would do so in those situations where particular qualifications are required to fill a vacancy and the Board’s and management’s contacts are not sufficient to identify an appropriate candidate.
6
The Company maintains contact information, both telephone and email, on its website under the heading “Talk to Us.” By following the “Talk to Us” link, a stockholder will be
given access to the Company’s telephone number and mailing address as well as a link for providing email correspondence to Investor Relations. Communications sent to Investor Relations and specifically marked as a communication for the Board will be
forwarded to the Board or specific members of the Board as directed in the stockholder communication. In addition, communications received via telephone for the Board are forwarded to the Board by an officer of the Company.
The Company generally requires that all directors attend the annual meeting of stockholders, absent extraordinary circumstances. All directors attended the annual meeting of
stockholders held in 2019.
The Company has adopted a Code of Ethics that applies to its senior financial officers, including without limitation, its Chairman, Chief Executive Officer, Chief Financial
Officer and Controller. The full text of the Code of Ethics is published on the Company’s website at
www.ingles-markets.com
under the caption “Corporate.” In the event that the Company makes any amendments to, or grants any waivers of, any
provision of the Code of Ethics applicable to its principal executive officer, principal financial officer or principal accounting officer, the Company intends to promptly disclose such amendment or waiver on its website.
7
The following report of the Audit/Compensation Committee does not constitute soliciting material and should not be deemed filed with the Securities and Exchange Commission nor
shall this report be incorporated by reference into any of our filings under the Securities Act of 1933 or the Securities Exchange Act of 1934.
The Audit/Compensation Committee oversees the Company’s financial reporting process on behalf of the Board. Management has the primary responsibility for the Company’s financial
statements and the financial reporting process including the systems of internal controls. The Company’s
independent registered public accounting firm is responsible for performing an independent audit of the
Company’s consolidated financial statements and issuing an opinion on the conformity of those audited financial statements with generally accepted accounting principles.
In connection with the preparation and filing of the Company’s Annual Report on Form 10-K for its fiscal year ended September 28, 2019:
(1)
The Audit/Compensation Committee reviewed and discussed the audited consolidated
financial statements with management;
(2)
The Audit/Compensation Committee discussed with Deloitte & Touche LLP, the
Company’s independent registered public accounting firm those matters required to be discussed by Auditing Standard No. 1301, “Communications with Audit Committees,” as adopted by the Public Company Accounting Oversight Board (the “PCAOB”), and the
matters required to be reported to the Audit Committee by the independent registered public accounting firm pursuant to SEC Regulation S-X, Rule 2.07; and
(3)
The Audit/Compensation Committee received the written disclosures and the letter
from Deloitte & Touche LLP required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit/Compensation Committee concerning independence and has
discussed with Deloitte & Touche LLP its independence.
The Audit/Compensation Committee discussed with the Company’s independent registered public accounting firm the overall scope and plans for their audit of the Company’s financial
statements. The Audit/Compensation Committee meets periodically with the Company’s independent registered public accounting firm to discuss the results of their examinations, their evaluations of the Company’s internal controls and the overall quality
of the Company’s financial reporting. The Audit/Compensation Committee held nine meetings during fiscal 2019.
Based on the review and discussions referred to above, the Audit/Compensation Committee recommended to the Company’s Board of Directors (and the Board approved) that the
Company’s audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 28, 2019, for filing with the Securities and Exchange Commission.
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SUBMITTED BY:
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THE AUDIT/COMPENSATION COMMITTEE
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Fred D. Ayers Ernest E. Ferguson Brenda S. Tudor
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8
The following discussion and analysis is intended to provide an understanding of the actual compensation earned by each of the Company’s named executive officers (“Executive
Officers”), and describes the Company’s compensation objectives and policies as applied to these Executive Officers.
Compensation Philosophy.
The objectives of the Company’s compensation program are to (1) attract,
motivate, develop and retain top quality executives who will drive long-term stockholder value and (2) deliver competitive total compensation packages based upon both Company and individual performance. The Company wants its executives to balance
the risks and related opportunities inherent in its industry and in the performance of their duties and share the upside opportunity and the downside risks once actual performance is measured.
The Audit/Compensation Committee is responsible for administering executive compensation. The duties of this committee are set forth under the heading “
ELECTION OF DIRECTORS – Committees of the Board of Directors
–
Audit/Compensation Committee
.” To achieve the objectives of the Company’s compensation
program, the Company’s Chief Executive Officer and the Audit/Compensation Committee have set forth a compensation program for its Executive Officers that is reviewed annually. It includes the following elements:
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Base annual cash salary;
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Annual cash incentive bonuses; and
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Retirement, health and other benefits.
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The Company does not have any Employment, Change in Control or Severance Agreements with any of its Executive Officers. The Company believes in trust, loyalty and commitment
from both the Company and the Executive Officers, and believes that such agreements are not necessary to achieve its goals and the needs of the Executive Officers.
Factors Considered in Determining Compensation.
The Company’s Chairman of the Board and Chief Executive Officer
periodically review the compensation paid by the Company to its Executive Officers and other employees. Based on the Company’s general performance and that of the individual Executive Officer, they make final subjective determinations with respect to
any changes to be made to that compensation. Bonuses paid to officers of the Company’s subsidiary, Milkco, Inc., are based on a percentage of Milkco’s earnings before taxes and payment of bonuses.
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Neither the full Board nor the Audit/Compensation Committee generally reviews or ratifies the decisions of the Chairman of the Board and Chief Executive Officer relating to executive
compensation unless otherwise required by the Company’s Bylaws, by resolutions adopted by the Board, or by the North Carolina Business Corporation Act. Decisions are made by the Board or the Audit/Compensation Committee if such decisions
require the adoption of documents relating to employee benefit plans or programs. In addition, the Audit/Compensation Committee is required by resolution of the Board of Directors to approve any increases in compensation that the Company
will pay to an employee whose base salary is in excess of $150,000, all incentive compensation that the Company will pay to Executive Officers and any incentive payments in excess of $25,000 that the Company will pay to any other employee
who does not work in one of the Company’s supermarkets. Certain managers that work in the Company’s supermarkets are paid incentive compensation based on each individual store’s operating profit. These incentive payments may exceed
$25,000 and are not approved by the Audit/Compensation Committee.
|
9
The Internal Revenue Code generally provides that corporate deductions will be disallowed for annual compensation in excess of $1 million paid to certain executive officers of
publicly held corporations. “Performance-based” compensation is excluded from the cap. The $1 million compensation deduction cap would be applicable to the Executive Officers named in the “
SUMMARY COMPENSATION TABLE
”.
The Chairman, Chief Executive Officer and the Audit/Compensation Committee, as appropriate, intend to consider the Internal Revenue Code’s compensation deductibility cap when they determine compensation levels and to evaluate appropriate alternatives
to mitigate any adverse impact this limitation may have on the deductibility of executive compensation paid by the Company and its subsidiaries.
Base Salary.
Base salary is used to attract and retain Executive Officers and is determined using publically
available comparisons with industry competitors and other relevant factors, including the seniority of the individual, the functional role of the position, the level of the individual’s responsibility, ability to replace the individual, etc. The
information is used subjectively without benchmarking in the determination of base salaries. The base salaries paid to the Executive Officers during fiscal 2019 are shown in the Summary Compensation Table presented in this proxy statement.
Cash Incentive Bonus Awards.
Annual cash bonuses are a significant component of each Executive Officer’s
compensation, reflecting the Company’s belief that management’s contribution to long-term stockholder returns comes from maximizing earnings and the potential of the Company.
Executive Officers of the Company received a bonus, the amounts of which were subjectively determined taking into consideration Company profitability and the Executive Officer’s
performance for the fiscal year to which the bonus relates. This subjective determination is made by Mr. Ingle II and Mr. Lanning, and approved by the Audit/Compensation Committee. The bonus paid to Mr. Collins, President of the Company’s subsidiary,
Milkco, Inc., is based on a percentage of Milkco’s earnings before taxes and payment of bonuses. Mr. Collins receives a bonus equal to a percentage of Milkco’s earnings before taxes and payment of bonuses, up to a maximum of $49,950 per year. Based
on Milkco’s expected financial performance, the Company anticipates Mr. Collins will continue to receive at or near the maximum bonus.
Retirement, Health and Other Benefits.
Investment/Profit Sharing Plan.
The Company maintains the Ingles Markets, Incorporated Investment/Profit Sharing Plan (the “Profit
Sharing Plan”) to provide retirement benefits to eligible employees, including Executive Officers. The Profit Sharing Plan includes 401(k) employee elective contributions, discretionary employer matching contributions and discretionary profit sharing
contribution features. The assets of the Profit Sharing Plan are held in trust for participants and are distributed upon the retirement, disability, death, in-service following age 59 ½ (upon request) or other termination of employment of the
participant. Quarterly, the Company, in its discretion, determines the amount of any Company profit sharing contributions and the amount of any matching contributions to be made based on participants’ 401(k) contributions for the quarter. During
fiscal 2019, the Company matched employee contributions at a rate of $0.50 for each dollar of employee contributions up to 5% of the employee’s salary.
Employees who participate in the Profit Sharing Plan may contribute to their 401(k) account between 1% and 50% (in increments of 1%) of their compensation by way of salary
reductions that cannot exceed a maximum amount that varies annually in accordance with the Internal Revenue Code. Highly compensated participants are limited to 3%. The Company also makes available to Profit Sharing Plan participants the ability to
direct the investment of their 401(k) accounts (including the Company’s matching contributions) in various investment funds, including a fund holding Class A Common Stock of the Company.
The Company did not make a discretionary profit sharing contribution to the Profit Sharing Plan for fiscal 2019.
10
Company discretionary employer matching cash contributions to the Profit Sharing Plan totaled $2.9 million for fiscal 2019. These contributions were allocated to the matching
contribution accounts in each participant’s 401(k) account. The Company’s contributions to each of the Executive Officers are reflected in the Summary Compensation Table. As of September 28, 2019, all of the Executive Officers who are named in the
Summary Compensation Table were 100% vested in their accounts.
Participants’ interests in employer contributions allocated to their accounts vest over six years.
Nonqualified Investment Plan.
The Company maintains an Executive Nonqualified Excess Plan to provide benefits similar to the
Investment/Profit Sharing Plan to certain of the Company’s management employees and pharmacists (in the Company’s stores) who are otherwise limited in their employee elective contributions under the 401(k) feature of the Profit Sharing Plan. Employees
who participate in the Executive Nonqualified Excess Plan may contribute between one percent and seventy-five percent of base pay and up to one hundred percent of bonus pay (in increments of one percent) of their compensation by way of salary
reductions. In addition, the Company may make discretionary matching contributions. The Company’s contributions to each of the Executive Officers are reflected in the Summary Compensation Table. During fiscal 2019, the Company matched employee
contributions at a rate of $0.50 for each dollar of employee contributions up to 2% of the employee’s earnings. As of September 28, 2019, all of the Executive Officers who are named in the Summary Compensation Table were 100% vested in their accounts.
Participants’ interests in contributions allocated to their accounts vest over six years. Company contributions to the Plan were approximately $224,000 in fiscal 2019.
Insurance.
The Company currently makes available to its Executive Officers and all employees a comprehensive health, dental, vision,
life and disability insurance program. The health care insurance offers a variety of coverage options, at the employee’s discretion. The Company maintains, at its expense, for the benefit of each of its full-time employees life insurance policies in
amounts up to $150,000 based on the compensation of the employee. The premiums paid by the Company for the benefit of Executive Officers are included in the Summary Compensation Table.
The Company’s Board of Directors has considered and determined that risks arising from the Company’s compensation policies and practices for its employees are not reasonably
likely to have a material adverse effect on the Company.
11
The Audit/Compensation Committee has reviewed and discussed with management the “Compensation Discussion and Analysis” set forth above in this Proxy Statement. Based on such
review, the related discussions and such other matters deemed relevant and appropriate by the Audit/Compensation Committee, the Audit/Compensation Committee has recommended to the Board of Directors that the “Compensation Discussion and Analysis” be
included in this Proxy Statement and in the Company’s Annual Report on Form 10-K for the year ended September 28, 2019.
|
SUBMITTED BY:
|
||
|
THE AUDIT/COMPENSATION COMMITTEE
|
||
|
Fred D. Ayers Ernest E. Ferguson Brenda S. Tudor
|
||
12
The following tables set forth information concerning the compensation of the Company’s Chief Executive Officer, Chief Financial Officer and each of its other Named Executive
Officers at the end of fiscal 2019.
SUMMARY COMPENSATION TABLE
|
Name and Principal
Position during 2019
|
Fiscal
Year
|
Salary
($)
|
Bonus
($)
|
Non-Equity
Incentive Plan
Compensation ($)
|
All Other
Compensation
($) (1)
|
Total
($)
|
||||||||||||||||
|
James W. Lanning
|
2019
|
742,293
|
470,000
|
—
|
27,246
|
1,239,539
|
||||||||||||||||
|
Chief Executive Officer and
|
2018
|
722,692
|
450,000
|
—
|
26,987
|
1,199,679
|
||||||||||||||||
|
President
|
2017
|
716,250
|
450,000
|
—
|
19,610
|
1,185,860
|
||||||||||||||||
|
Robert P. Ingle
|
2019
|
682,692
|
400,000
|
—
|
32,967
|
1,115,660
|
||||||||||||||||
|
Chairman of the Board
|
2018
|
672,692
|
400,000
|
—
|
37,440
|
1,110,132
|
||||||||||||||||
|
|
2017
|
677,788
|
400,000
|
— |
39,036
|
1,116,825
|
||||||||||||||||
|
Ronald B. Freeman
|
2019
|
363,117
|
112,000
|
—
|
9,415
|
484,532
|
||||||||||||||||
|
Vice President Finance,
|
2018
|
354,654
|
105,000
|
—
|
9,425
|
469,079
|
||||||||||||||||
|
Chief Financial Officer
|
2017
|
353,202
|
105,000
|
—
|
8,606
|
466,808
|
||||||||||||||||
|
L. Keith Collins (2)
|
2019
|
248,761
|
—
|
45,981
|
11,830
|
306,572
|
||||||||||||||||
|
President, Milkco, Inc.
|
2018
|
234,308
|
—
|
49,950
|
11,758
|
296,016
|
||||||||||||||||
|
|
2017
|
230,539
|
— |
49,950
|
9,061 |
289,549
|
||||||||||||||||
(1) All other fiscal 2019 compensation for each of the Executive Officers consists of the following:
|
Fiscal 2019
|
||||||||||||||||
|
James W.
Lanning
|
Robert P.
Ingle, II
|
Ronald B.
Freeman
|
L. Keith
Collins
|
|||||||||||||
|
Employer Match for 401(k) Plan
|
$
|
4,200
|
$
|
4,200
|
$
|
4,465
|
$
|
4,260
|
||||||||
|
Employer Match for Non-Qualified Plan
|
12,123
|
10,827
|
3,627
|
2,947
|
||||||||||||
|
Life Insurance
|
234
|
234
|
234
|
234
|
||||||||||||
|
Accidental Death & Dismemberment and
|
||||||||||||||||
|
Long-Term Disability Insurance
|
1,089
|
1,089
|
1,089
|
1,089
|
||||||||||||
|
Travel Expenses
|
9,600
|
16,617
|
—
|
3,300
|
||||||||||||
|
(2) Mr. Collins receives a bonus equal to a percentage of Milkco’s earnings before taxes and payment of bonuses, up to a maximum of $49,950 per year.
|
|
|
SEC rules require the Company to disclose the total annual compensation of James W. Lanning, our Chief Executive Officer (“CEO”), the median of the total annual compensation of
all employees other than Mr. Lanning (“Median Annual Compensation”), as well as their ratio to each other (referred to as the “CEO pay ratio”) based on data as of September 28, 2019 (the “Determination Date”). Our employee population consists of a
number of part-time employees, most of them compensated on an hourly basis. As noted in our Form 10-K for the fiscal year ended September 28, 2019, approximately 62% of the Company’s employees work on a part-time basis. The Company’s median employee
for fiscal 2018 was a part-time, hourly employee that was paid for less than forty hours during the week containing the Determination Date. In accordance with SEC guidelines, the Company is using the same median employee and Determination Date for
fiscal 2019 as the Company does not believe there has been a significant change in its employee population or employee compensation arrangements.
13
For fiscal 2019:
|
|
• |
Mr. Lanning’s total compensation:
$1,239,539
|
|
|
|
• |
Median Annual Compensation: $17,119
|
|
|
• |
Ratio of CEO total compensation to Median Annual Compensation:
72:1
|
|
This CEO pay ratio is a reasonable estimate calculated in good faith, in a manner consistent with Item 402(u) of Regulation S-K. To identify the Median Annual Compensation we
took the following steps:
|
|
• |
For the week ending with the Determination Date 22,485 active employees received cash compensation. This population consisted of full-time, part-time and temporary employees for the
Company and all of its subsidiaries.
|
|
|
• |
The Company used gross wages including salary, wages, overtime and any other cash compensation for the week ending the determination date to identify the median employee.
|
|
|
• |
For this employee, we multiplied the weekly wages by 52 weeks to determine Median Annual Compensation of $17,119.
|
|
|
• |
We calculated the CEO pay ratio taking into account that CEO compensation includes amounts other than weekly salary.
|
SEC rules for the CEO pay ratio allow companies to adopt a variety of methodologies and to make reasonable estimates and assumptions that reflect their compensation practices.
As such, the CEO pay ratio reported by other companies may not be comparable to what the Company reports.
14
Except where indicated in the footnotes below, the following table sets forth the number of shares of Class A Common Stock and Class B Common Stock owned beneficially as of
September 28, 2019, by each director and nominee for director, each of the executive officers of the Company named in the Summary Compensation Table, all directors and executive officers as a group and each person known by the Company to be a
beneficial owner of more than five percent (5%) of either class of the outstanding Common Stock. The table also sets forth the percentage of each class of Common Stock held by such stockholders. As of September 28, 2019, there were 14,180,485
shares of Class A Common Stock and 6,079,291 shares of Class B Common Stock outstanding. Except as otherwise indicated, each beneficial owner has sole voting and investment power with respect to the
Common Stock listed.
|
Number of Shares
Owned Beneficially
|
Percentage of
Common Stock
|
Percentage
of Total
Voting
Power
|
||||||||||||||||||
|
Name
|
Class A
(2)
|
Class B
|
Class A
(2)
|
Class B
|
||||||||||||||||
|
Robert P. Ingle, II
(1)
|
5,701,299
|
(3)(4)
|
5,701,299
|
(3)(4)
|
28.7
|
%
|
(3)(4)
|
93.8
|
%
|
(3)(4)
|
76.0
|
%
|
(3)(4)
|
|||||||
|
James W. Lanning
(1)
|
242,649
|
(3)
|
232,649
|
(3)
|
1.7
|
%
|
(3)
|
3.9
|
%
|
(3)
|
3.2
|
%
|
(3)
|
|||||||
|
Laura Ingle Sharp
(1)
|
115,411
|
(5)
|
79,725
|
(5)
|
*
|
(5)
|
1.3
|
%
|
(5)
|
1.1
|
%
|
(5)
|
||||||||
|
Ronald B. Freeman
(1)
|
235,514
|
(3)
|
232,649
|
(3)
|
1.6
|
%
|
(3)
|
3.8
|
%
|
(3)
|
3.1
|
%
|
(3)
|
|||||||
|
Fred D. Ayers
(1)
|
463
|
0
|
*
|
*
|
*
|
|||||||||||||||
|
Brenda S. Tudor
(1)
|
300
|
0
|
*
|
*
|
*
|
|||||||||||||||
|
Ernest E. Ferguson
(1)
|
250
|
0
|
*
|
*
|
*
|
|||||||||||||||
|
John R. Lowden
(1)
|
0
|
0
|
*
|
*
|
*
|
|||||||||||||||
|
Mario J. Gabelli et al
(6)
|
2,122,952
|
(7)
|
0
|
15.0
|
%
|
(7)
|
*
|
2.8
|
%
|
(7)
|
||||||||||
|
Dimensional Fund Advisors, LP
(8)
|
1,186,426
|
(9)
|
0
|
8.4
|
%
|
(9)
|
*
|
1.6
|
%
|
(9)
|
||||||||||
|
The Vanguard Group
(10)
|
973,190
|
(11)
|
0
|
6.9
|
%
|
(11)
|
*
|
1.3
|
%
|
(11)
|
||||||||||
|
Black Rock, Inc.
(12)
|
1,103,946
|
(13)
|
0
|
7.8
|
%
|
(13)
|
*
|
1.5
|
%
|
(13)
|
||||||||||
|
River Road Asset Management, LLC
(14)
|
863,425
|
0
|
6.1
|
%
|
*
|
1.2
|
%
|
|||||||||||||
|
LSV Asset Management
(15)
|
889,156
|
6.3
|
%
|
*
|
1.2
|
%
|
||||||||||||||
|
Ingles Investment/Profit Sharing Plan
(1)
|
232,649
|
232,649
|
1.6
|
%
|
3.8
|
%
|
3.1
|
%
|
||||||||||||
|
All Directors and Executive Officers as a group (8 persons)
|
5,830,588
|
(3)
|
5,781,024
|
(3)
|
29.2
|
%
|
(3)
|
95.1
|
%
|
(3)
|
77.2
|
%
|
(3)
|
|||||||
|
*
|
Less than 1%. |
| (1) | The address of this beneficial owner is P.O. Box 6676, Asheville, North Carolina 28816. |
|
(2)
|
Each share of Class B Common Stock is convertible, at any time at the option of the holder, into one share of Class A Common Stock. If the holder of any shares of Class B Common
Stock transfers the shares to anyone other than a “qualified transferee” as defined in the Company’s Articles of Incorporation, then each share of Class B Common Stock will automatically convert into a share of Class A Common Stock.
Accordingly, for each holder of Class B Common Stock the number of shares and percentage of Class A Common Stock set forth in this table also reflect the Class A Common Stock into which such stockholder’s shares of Class B Common Stock are
convertible. However, these converted shares are not used to calculate such percentages for any other stockholder in this table. The number of shares and percentage of Class A Common Stock held by all directors and executive officers as a
group also reflects the conversion into Class A Common Stock of each share of Class B Common Stock held by each director and executive officer. Because the Class B Common Stock converts into Class A Common Stock on a one to one basis, the
number of shares of Class B Common Stock noted in the table above also represents the number of shares of Class A Common Stock each holder would beneficially own upon conversion of the Class B Common Stock beneficially owned by them.
|
15
|
(3)
|
Includes the 232,649 shares of Class B Common Stock and 0 shares of Class A Common Stock held by the Company’s Investment/Profit Sharing Plan and Trust, of which Messrs. Ingle II, Freeman
and Lanning are trustees. The trustees, by a majority vote, have sole voting power and dispositive power with respect to such shares. However, Messrs. Ingle II, Freeman and Lanning disclaim beneficial ownership of such shares.
|
|
(4)
|
Includes a total of 5,468,650 shares of Class B Common Stock held by trusts of which Mr. Ingle II is sole trustee with sole voting power and dispositive power with respect to such shares.
|
|
(5)
|
Includes 686 shares of Class A Common Stock and 2,025 shares of Class B Common Stock held by Ms. Sharp’s minor children.
|
|
(6)
|
The address of this beneficial owner is GAMCO Investors, Inc., One Corporate Center, Rye, New York 10580-1435.
|
|
(7)
|
The information as to Mario J. Gabelli (includes entities controlled directly or indirectly by Mario Gabelli, collectively, the “Gabelli Entities”) with respect to the number of shares
beneficially owned by the Gabelli Entities is derived from its Schedule 13D/A filed with the Securities and Exchange Commission on May 17, 2019. All other information regarding the Gabelli Entities is derived from such Schedule. Such Schedule
discloses that (i) Mario Gabelli is the chief investment officer for most of the Gabelli Entities signing such statements and is deemed to have beneficial ownership of the shares owned by all Gabelli Entities, (ii) Mario Gabelli and the Gabelli
Entities do not admit that they constitute a group within the meaning of Section 13(d) of the Exchange Act and the rules and regulations thereunder and (iii) Mario Gabelli and the Gabelli Entities have the sole power to vote or direct the vote
and dispose or to direct the disposition of all the shares of which they are beneficial owners. The Gabelli Entities that beneficially own shares of the Company’s Class A Common Stock are registered investment advisors and beneficially own
such shares in an agent capacity.
|
|
(8)
|
The address for this beneficial owner is Palisades West, Building One, 6300 Bee Cave Road, Austin, TX 78746.
|
|
(9)
|
The information as to the number of shares beneficially owned by Dimensional Fund Advisors, LP is derived from its Schedule 13G/A filed with the Securities and Exchange Commission on
February 8, 2019. All other information as to Dimensional Fund Advisors, LP is also derived from such Schedule. Dimensional Fund Advisors LP, an investment adviser registered under Section 203 of the Investment Advisors Act of 1940, furnishes
investment advice to four investment companies registered under the Investment Company Act of 1940, and serves as investment manager to certain other commingled group trusts and separate accounts (such investment companies, trusts and accounts,
collectively referred to as the “Funds”). In certain cases, subsidiaries of Dimensional Fund Advisors LP may act as an adviser or sub-adviser to certain Funds. In its role as investment advisor, sub-adviser and/or manager, Dimensional Fund
Advisors LP or its subsidiaries (collectively, “Dimensional”) possess voting and/or investment power over the securities of the Issuer that are owned by the Funds, and may be deemed to be the beneficial owner of the shares of the Issuer held by
the Funds. However, all securities reported in this schedule are owned by the Funds.
|
|
(10)
|
The address for this beneficial owner is 100 Vanguard Blvd., Malvern, PA 19355.
|
|
(11)
|
The shares are beneficially owned by The Vanguard Group (“Vanguard”) and subsidiaries of Vanguard.
|
|
(12)
|
The address for this beneficial owner is 55 West 52
nd
Street, New York, NY 10055.
|
(13)
The shares are beneficially owned by subsidiaries of Black Rock, Inc.
(14)
The address for this beneficial owner is 462 S. 4
th
Street, Suite 2000, Louisville, KY 40202.
(15)
The address for this beneficial owner is155 N. Wacker Drive, Suite 4600, Chicago, IL 60606.
16
The Company monitors certain relationships and related party transactions by requiring each director and executive officer to notify the Company’s Chief Financial Officer and
Executive Committee in advance of any upcoming transactions that may be considered a transaction with a related person. The Company has adopted a formal Related Party Transactions policy to ensure compliance with the above guidelines, Nasdaq rules,
and SEC regulations. In addition, each director and executive officer completes an annual questionnaire to disclose any transactions with related persons.
The Company will from time to time make short-term, non-interest bearing loans to the Company’s Investment/Profit Sharing Plan to allow the Plan to meet distribution obligations
during a time when the Plan was prohibited from selling shares of the Company’s Class A Common Stock. During fiscal 2019, there were no loans or repayments. As of the date of this filing, there were no loans outstanding.
The Company will from time to time purchase from the Plan shares of the Company’s Class B Common Stock to meet distribution obligations of the Plan. There were no such
transactions during fiscal 2019. The per share purchase price for these transactions is equal to the closing sales price of the Company’s Class A Common Stock on the Nasdaq Global Select Market for the day prior to the purchase.
In November 2019, the Company sold two land parcels to a limited liability corporation having Robert P. Ingle II, the Company’s Chairman of the Board, as one of its principals
with a financial interest in the transaction. In accordance with the Company’s Related Party Transaction policy, fair market value appraisals were obtained, and the Company’s Audit Committee approved the transaction. Total consideration was $4.3
million.
The Company believes that the transactions described above have been and will continue to be on terms no less favorable to the Company than those available from unaffiliated
third parties in transactions negotiated at arms-length. The Company does not intend to enter into any transactions in the future with or involving any of its executive officers or directors or any members of their immediate family on terms that would
be less favorable to the Company than those that would be available from unaffiliated third parties in arms-length transactions.
Deloitte & Touche LLP has served as the independent registered public accounting firm for the Company and its subsidiaries since February 27, 2012. The Company had no
disagreements with Deloitte & Touche LLP on accounting and financial disclosures. Deloitte & Touche LLP’s work on the Company’s audit for fiscal year 2019 was performed by full-time, permanent employees and partners of the firm.
Representatives of Deloitte & Touche LLP are expected to be present at the 2020 Annual Meeting. These representatives will have the opportunity to make a statement if they desire to do so and will respond to appropriate stockholder questions.
The Company has appointed Deloitte & Touche LLP as the independent registered public accounting firm to audit the Company’s fiscal 2020 financial statements.
17
As reflected in the tables below, the Company incurred fees in fiscal years 2019 and 2018 for services performed by Deloitte & Touche LLP related to such periods.
Deloitte & Touche LLP
|
Year Ended
September 28, 2019
|
Year Ended
September 29, 2018
|
|||||||
|
Audit Fees
|
$
|
967,000
|
$
|
967,000
|
||||
|
Audit-related Fees
|
—
|
—
|
||||||
|
Tax Fees
|
—
|
—
|
||||||
|
All Other Fees
|
—
|
—
|
||||||
|
Total Fees
|
$
|
967,000
|
$
|
967,000
|
||||
In the above tables:
“Audit fees” are fees billed by the independent registered public accounting firms for professional services for the audit of the consolidated financial statements included in
the Company’s Annual Report on Form 10-K, the audit of internal controls over financial reporting, review of consolidated financial statements included in the Company’s Quarterly Reports on Form 10-Q, and for services that are normally provided by the
auditors in connection with statutory and regulatory filings or engagements;
“Audit-related fees” are fees for services performed during the respective years by the independent registered accounting firm for assurance and related services not reported
under the caption “Audit Fees” in the tables above.
“Tax fees” are fees for services performed during the respective years by the independent registered public accounting firm for professional services related to certain tax
compliance, tax advice, and tax planning; and
“All other fees” are fees for any other services performed during the respective years.
The Company’s Audit/Compensation Committee pre-approved all services described above for fiscal 2019, including non-audit services, and has determined that these fees and
services are compatible with maintaining the independence of Deloitte & Touche LLP. The Company’s Audit/Compensation Committee requires that each service provided by Deloitte & Touche LLP be pre-approved by the committee. However, the Committee
has empowered the chair of the committee to grant such approval on its behalf as to matters that arise between Audit/Compensation Committee meetings.
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The Company will solicit proxies for the Annual Meeting and will bear the cost of internet availability of documents, voting over the internet and for all other costs associated
with assembling, printing, mailing and soliciting proxy solicitation materials. The Company’s officers and regular employees may also solicit proxies in person or by telephone, but they will not be specially compensated for such services. The
Company’s regularly retained investor relations firm, Corporate Communications, Inc., may also solicit proxies by internet, telephone and mail. The Company will not pay Corporate Communications, Inc. a separate fee for any such proxy solicitations.
The Company will reimburse brokerage firms and other nominees, custodians and fiduciaries for the reasonable out-of-pocket expenses they incur in forwarding proxy solicitation materials to the beneficial owners of Common Stock held of record by them.
The Company plans to hold its 2021 Annual Meeting of Stockholders in February of 2021. Any proposal that a stockholder wants to be presented at the 2020 Annual Meeting of
Stockholders must be received by the Secretary no later than September 3, 2020 or the proposal will automatically be excluded from proxy materials for that meeting. Such proposals must be received by the Secretary at the Company’s principal office,
the address of which is set forth in this Proxy Statement, and must meet the requirements of the regulations of the Securities and Exchange Commission to be eligible to be included in the proxy materials for the Company’s 2021 Annual Meeting.
Further, any stockholder proposal for which the Company does not receive notice on or before November 15, 2020 shall be subject to the discretionary vote of the proxy holders at
the 2021 Annual Meeting of Stockholders.
If notice of a stockholder proposal that has not been submitted to be included in this Proxy Statement was not received by the Company on or before November 15, 2019, the persons
named in the enclosed form of proxy will have discretionary authority to vote all proxies with respect thereto in accordance with their best judgment.
At this time, the Company does not know of any matters to be presented for action at the 2020 Annual Meeting other than those listed in the Notice of Annual Meeting of
Stockholders and contained in this Proxy Statement. If any other matter comes before the Annual Meeting, it is intended that the persons who are named in the proxies will vote the shares represented by effective proxies in their discretion.
Pursuant to Section 16(a) of the Exchange Act, the Company is required to identify any Reporting Person (as defined below) that failed to file on a timely basis with the
Securities and Exchange Commission any report that was required to be filed during fiscal 2019 with the SEC pursuant to Section 16(a) of the Exchange Act. Such required filings include a Form 3 (an initial report of beneficial ownership of Common
Stock) and a Form 4 and Form 5 (which reflect changes in beneficial ownership of Common Stock). For purposes of this Proxy Statement, a “Reporting Person” is a person who at any time during fiscal year 2019 was (a) a director of the Company, (b) an
executive officer of the Company or its subsidiaries, or (c) a holder of more than 10% of the Company’s outstanding Class A Common Stock or Class B Common Stock.
The Company believes that during fiscal year 2019, its Reporting Persons complied with all Section 16(a) filing requirements, except that Ms. Laura Ingle Sharp inadvertently
failed to report a stock conversion. The reportable transaction took place on March 11, 2019 and was reported on December 12, 2019. In making this statement, the Company has relied solely upon an examination of the copies of Forms 3, 4 and 5, and
amendments thereto, provided to the Company and the written representations of its Reporting Persons.
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Upon written request, the Company will provide, without charge, to stockholders that are entitled to receive this Proxy Statement a copy of the Company’s
Annual Report on Form 10-K for the fiscal year ended September 28, 2019, as filed with the Securities and Exchange Commission (including the financial statements and related schedules, but not including the exhibits thereto, which will be provided upon
written request at the stockholder’s expense). Such Annual Report is also available at
www.ingles-markets.com
, at Corporate Information, SEC Filings. Requests for copies should be directed to Investor Relations at Ingles Markets,
Incorporated, P.O. Box 6676, Asheville, North Carolina 28816, or by telephone at (828) 669-2941, ext. 223.
YOUR VOTE IS IMPORTANT.
PLEASE VOTE OVER THE INTERNET AS INSTRUCTED IN THESE MATERIALS OR COMPLETE, DATE, SIGN AND RETURN A PROXY CARD AS PROMPTLY AS POSSIBLE.
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By Order of the Board of Directors |
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Robert P. Ingle, II
Chairman of the Board
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TABLE OF CONTENTS
PROXY STATEMENTExecution and Revocation of ProxiesActions to Be Taken by ProxyVoting RightsELECTION OF DIRECTORSIdentification of Directors and Executive OfficersCommittees of the Board of DirectorsCompensation Committee Interlocks and Insider Participation in Compensation DecisionsMeetings of the Board of Directors and CommitteesDirector NominationsStockholder Communication with Board MembersBoard Member Attendance at Annual MeetingsCode of EthicsAUDIT/COMPENSATION COMMITTEE REPORTEXECUTIVE COMPENSATION AND OTHER INFORMATIONCompensation Discussion and AnalysisElements of Executive CompensationManagement of Compensation Related RiskAudit/Compensation Committee Report on Executive CompensationExecutive Compensation SummaryCEO Pay RatioSECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERSTRANSACTIONS WITH RELATED PERSONSRELATIONSHIP WITH INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMPrincipal Accountant Fees and ServicesOTHER MATTERSSolicitation of ProxiesStockholders Proposals for the 2021 Annual MeetingAction on Other Matters at the 2020 Annual MeetingSection 16(a) Beneficial Ownership Reporting ComplianceDelinquent Section 16(a) ReportsAvailability of Form 10-K