CAL-MAINE FOODS, INC.
3320 Woodrow Wilson Drive
Jackson, Mississippi 39207
PROXY STATEMENT FOR ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD OCTOBER 9, 1998
The information set forth in this proxy statement is furnished in
connection with the Annual Meeting of Shareholders of Cal-Maine Foods,
Inc. ("Cal-Maine" or the "Company") to be held on Friday, October 9, 1998,
at 10:00 a.m., Jackson time, at the Company's headquarters, 3320 Woodrow
Wilson Drive, Jackson, Mississippi. A copy of the Company's annual report
to shareholders for the fiscal year ended May 30, 1998, accompanies this
proxy statement. Additional copies of the annual report, notice, proxy
statement, and proxy card may be obtained form the Company's Secretary,
Bobby J. Raines, Post Office Box 2960, Jackson, Mississippi 39207.
The Company's telephone number is 601/948-6813.
The enclosed proxy is solicited by the Board of Directors of the Company.
The proxy may be revoked by a shareholder at any time before it is voted
by filing with the Company's Secretary a written revocation or a duly executed
proxy bearing a later date. The proxy also may be revoked by a shareholder
attending the meeting, withdrawing the proxy, and voting in person.
All expenses incurred in connection with the solicitation of proxies will
be paid by the Company. In addition to the solicitations of proxites by
mail, directors, officers, and regular employees of the Company may solicit
proxies in person or by telephone. The Company will, upon request,
reimburse banks, brokerage houses and other institutions, and fiduciaries
for their expenses in fowarding proxy material to their principals.
This proxy statement and the enclosed form of proxy are first being mailed
to shareholders on or about September 4, 1998. Shareholders of record at the
close of business on August 26, 1998, are eligible to vote at the Annual
Meeting. As of the record date, 11,996,788 shares of the Company's Common
Stock were outstanding, and 1,200,000 shares of the Company's Class A Common
Stock were outstanding. Each share of Common Stock is entitled to one vote
on each matter to be considered at the Annual Meeting. Each share of Class A
Common Stock is entitled to ten votes on each such matter. Both the shares of
Common Stock and the shares of Class A Common Stock have the right of
cumulative voting in the election of directors. Cumulative voting means
that each shareholder will be entitled to cast as many votes as he or she
has the right to cast (before cumulating votes), multiplied by the number
of directors to be elected. All such votes may be cast for a single nominee
or may be distributed among the nominees to be voted for as the shareholder
sees fit. To exercise cumulative voting rights by Proxy, a shareholder must
clearly designate the number of votes to be cast for any given nominee.
Shares represented by a properly executed and returned proxy card will be
voted at the Annual Meeting in accordance with the instructions indicated
thereon. If no instructions are indicated, the proxy will be voted for the
election of nine nominees to serve as directors of the Company and for the
ratification of the appointment of Ernst & Young, LLP as the Company's
independent auditors for the fiscal year ending May 29, 1999.
The election of directors requires a plurality of the votes cast and the
ratification of the appointment of independent auditors requires the
affirmative vote of a majority of the votes cast at the meeting. For
purposes of determining the number of votes cast with respect to a particular
matter, only those case "For" or "Against" are included. Abstentions and
broker non-votes are counted only for purposes of determining whether a
quorum is present at the meeting.
In accordance with the Company's bylaws and Delaware law, the Board will
will appoint two inspectors of election. The inspectors will take charge of,
and will count, the votes and ballots cast at the Annual Meeting and will
make a written report on their determination.
OWNERSHIP OF VOTING SECURITIES BY CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information as to the beneficial ownership
of the Company's Common Stock as of August 10, 1998, by (i) each person
known by the Company to beneficially own more than 5% of the class
outstanding and (ii) each director, each nominee, each executive officer
named in the Summary Compensation Table (see (Compensation of Executive
Officers and Directors) and by all directors and offices as a group. Each
executive officer also is a director of the Company.
<TABLE>
Common Stock and Class "A" Common Stock
---------------------------------------
<S> <C> <C> <C>
Name of Number of Shares(1) Percent of Class Percent of Total Voting
Beneficial Common Class A Common Class A Power (3)
Owner(2) ------ ------- ------ ------- ---------
- --------
Fred R.
Adams, Jr. 5,173,227 1,196,600 41.9% 99.7% 70.5%
Cal-Maine
Foods, Inc.
Employee Stock
Ownership
Plan 3,090,549 25.0% 12.7%
Richard K.
Looper 312,169(6) 2.5% 1.3%
Adolphus B.
Baker 263,906(7) 3,400 2.1% .3% 1.2%
Bobby J.
Raines 306,238(8) 2.5% 1.3%
Jack B. Self 101,679(9) * *
Joe M. Wyatt 190,074(10) 1.5% *
Charles F.
Collins 114,114(11) * *
W. D. (Jack)
Cox 2,400 * *
R. Faser
Triplett, M.D. 10,400 * *
All directors
and executive
officers as a
group (nine
persons) (12) 6,474,207 77.5% 88.7%
______________________
* Less than 1%.
</TABLE>
(1) The information as to beneficial ownership is based on information
known to the Company or statements furnished to the Company by the
beneficial owners. As used in this table, "beneficial ownership" means
the sole or shared power to vote or to direct the voting of a security,
or the sole or shared investment power with respect to a security (i.e.
the power to dispose of, or to direct the disposition of a security). For
purposes of this table, a person is deemed as of any date to have
"beneficial ownership" of any security that such person has the right
to acquire within 60 days after such date, such as under the Company's
1993 Stock Option Plan.
(2) The address of each person, except W.D. Cox and R. Faser Triplett, M.D.,
is Cal-Maine Foods, Inc., 3320 Woodrow Wilson Drive (Post Office Box 2960),
Jackson, Mississippi 39207. Mr. Cox's address is 1161 Oak River Road,
Memphis, Tennessee 39120 and Dr. Triplett's address is 940 North State
Street, Jackson, Mississippi 39202.
(3) Percent of total voting power is based on the total votes to which the
Common Stock (one vote per share) and Class A Common Stock (ten votes per
share) are entitled.
(4) The number of shares shown in the table include 389,900 shares of
Common Stock owned by Mr. Adams' spouse and 127,200 shares pledged to a
bank to secure a promissory note obligation in relation to which the
Company has a repurchase obligation (See "Certain Relationships and
Related Transactions" under "Election of Directors"). The Class A Common
Stock is convertible on a shares-for-share basis into shares of Common Stock.
(5) Includes 243,367 shares accumulated under the Cal-Maine Foods, Inc.
Employee Stock Ownership Plan ("ESOP").
(6) Includes 102,469 shares accumulated under ESOP, 15,506 shares owned by
Mr. Looper's spouse, and 120,000 shares subject to stock options exercisable
within 60 days.
(7) Includes 48,000 shares subject to stock options exercisable within 60
days and 63,257 shares owned by Mr. Baker's spouse separately and as
custodian for their children as to which Mr. Baker disclaims any beneficial
ownership, and 24,987 shares accumulated under the ESOP.
(8) Includes 2,827 shares accumulated under the ESOP, 5,000 shares owned by
Mr. Raines' spouse, and 85,000 shares subject to stock options exercisable
within 60 days.
(9) Includes 37,679 shares accumulated under the ESOP, and 48,000 shares
subject to stock options exercisable within 60 days.
(10) Includes 108,855 shares accumulated under the ESOP and 48,000 shares
subject to stock options exercisable within 60 days.
(11) Includes 66,114 shares accumulated under the ESOP and 48,000 shares
subject to stock options exercisable within 60 days.
(12) Includes shares as to which Messrs. Adams and Baker disclaim any
beneficial ownership. See Notes (4) and (8) above.
The shares of Common Stock accumulated in the ESOP, as indicated in Notes
(5) through (11) above, also are included in the 3,090,549 shares shown in
the table as owned by the ESOP.
ELECTION OF DIRECTORS
The Company's bylaws provide that the number of directors shall be fixed
by resolution of the Board of Directors and that the number may not be less
than three nor more than 15. Pursuant to the bylaws, the Board of Directors
has fixed the number of directors at nine. Unless otherwise specified,
proxies will be voted FOR the election of the nine nominees named below
to serve until the next annual meeting of shareholders and until their
successors are elected and qualified. If, at the time of the meeting, any
of the nominees named below is unable or declines to serve as director
(which is not anticipated), the proxies will be voted for the election of
such other person or persons as the Board of Directors may designate in
their discretion. The directors recommend a vote FOR the nine nominees
listed below. All nominees presently serve as directors of the Company.
Nominees for Director
The table below sets forth certain information regarding the nominees
for election to the Board of Directors:
<TABLE>
<S> <C> <C>
Name Age Tenure and Business Experience
- ---- --- ------------------------------
Fred R. Adams, Jr.(1)(3) 66 Fred R. Adams, Jr. has served as the
Chairman of the Board Chief Executive Officer and director
of Directors and Chief of the Company since its formation in
Executive Officer 1969 and as the Chairman of its
Board of Directors since 1982. He
is a director and past chairman of
National Egg Company, United Egg
Producers, Mississippi Poultry
Association, U.S. Egg Marketers, Inc.
and Egg Clearinghouse, Inc. Mr. Adams
is the father-in-law of Mr. Baker.
Richard K. Looper (1) 71 Richard K. Looper served as
President and Chief Operating
Officer of the Company from
1983 to January 1997. Previously,
he had served as Executive Vice
President of the Company since
1982 and was originally employed
by the Company in 1974. Mr. Looper
is a past chairman of the American
Egg Board and U.S. Egg Marketers,
Inc. He has served as a director
of the Company since 1982.
Adolphus B. Baker (1) 41 Adolphus B. Baker was elected
President and President and Chief Operating
Chief Operating Officer in January 1997. He was
Officer serving as Vice President and
Director of Marketing of the
Company when elected President.
Previously, he had served
as Assistant to the President
since 1987 and has been employed
by the Company since 1986. Mr. Baker
is a member of the American
Egg Board, chairman of Mississippi
Poultry Association, and is a
past chairman of Egg Clearinghouse,
Inc. He has been a director of the
Company since 1991. Mr. Baker is
Mr. Adams' son-in-law.
Bobby J. Raines (1)(2) 65 Bobby J. Raines has served as Vice
Vice President, Chief President, Chief Financial Officer,
Financial Officer, Treasurer and Secretary of the
Treasurer, Secretary and Company since 1972. Previously, he
Director had handled various operational
responsibilities and has been
employed by the Company since its
formation in 1969. He has served as
a director of the Copany since 1982.
Jack B. Self 68 Jack B. Self has been Vice President
Vice President/Operations /Operations and Production of the
and Production and Director Company since 1977. He has served
as a director of the Company since
1983.
Joe M. Wyatt 59 Joe M. Wyatt has been Vice President
Vice President/Feed Mill /Feed Mill Divisioin since 1977 and
Division and Director has been employed by the Company
since its formation in 1969. He has
served as a director of the Company
since 1983.
Charles F. Collins 54 Charles F. Collins has served as
Vice President, Controller Vice President and Controller of the
and Director Company since 1978. He has served as
a director of the Company since 1983.
He has been employed by the Company
since 1969.
W. D. (Jack) Cox (2)(3) 72 W.D.(Jack) Cox has served as a
Director Director of the Company since
September 1996. Mr. Cox has been a
consultant to various food companies
and a major farm implement company
since October 1990. Prior thereto,
he served as Vice President for
vegetable oil procurement at Kraft,
Inc. ("Kraft"), and was a consultant
to offshore and Canadian locations of
Kraft's facilities. In the early
1980s, Mr. Cox was Vice President for
commodities and ingredients of Nabisco
Brands, inc. From 1970 to 1972 Mr.
Cox was employed by the Company as
Vice President for egg products.
R. Faser Triplett, M.D.(2)(3) 64 R. Faser Triplett, M.D. has served as
Director a director of the Company since
September 1996. Dr. Triplett is a
practicing physician and a Clinical
Assistant Professor at the University
of Mississippi School of Medicine.
He is the majority owner of Avanti
Travel, Inc. and a director of Mobile
Telecommunications Technologies Corp.
________________
(1) Member of the Executive Committee
(2) Member of the Audit Committee
(3) Member of the Compensation Committee
</TABLE>
The Company's executive officers, each of whom is also a director of Cal-
Maine, serve as executive officers at the pleasure of the Board.
Board and Committee Meetings
The Board of Directors of the Company held four (4) meetings in fiscal year
1998, and all directors attended the meetings held. The Executive Committee
of the Board consists of Messrs. Adams, Looper, Baker and Raines. The Board
also has a Compensation Committee consisting of Messrs. Adams, Cox and
Triplett, and an Audit Committee consisting of Messrs. Raines, Cox and
Triplett. The Compensation and Audit Committees were established in October
1997, after Messrs. Cox and Triplett became members of the Board of Directors
in anticipatioin of Cal-Maine becoming a public company. The Board does not
have a nominating committee or committee performing similar functions.
The Executive Committee may exercise all of the powers of the full Board of
Directors, except for certain major actions, such as the adoption of any
agreement of merger or consolidation, the recommendation to stockholders
of any disposition of substantially all of the Company's assets or a
dissolution of the Company, and the declaration of a dividend or
authorization of an issuance of stock. The Executive Committee acts on
matters, within the scope of its authority, between meetings of the full
Board. During the last fiscal year, no formal meetings of the Executive
Committee were held, but the Committee, pursuant to Delaware law, took
action by unanimous written consent on fourteen (14) occasions.
The Compensation Committee reviews and recommends to the Board of Directors
the compensation and benefits of all officers of the Company, reviews general
policy matters relating to compensation and benefits of employees of the
Company, including the issuance of stock options to the Company's officers,
employees and directors. The Compensation Committee met one (1) time
during fiscal 1998.
The Audit Committee meets with management and the Company's independent
auditors to determine the adequacy of internal controls and other financial
reporting matters. The Audit Committee met one (1) time during fiscal 1998.
Certain Relationships and Related Transactions
Under a Redemption Agreement with Mr. Adams executed March 7, 1994 (the
"Agreement"), the Company agreed to purchase certain shares of the Company's
capital stock owned by Mr. Adams (the "Collateralized Shares"), which secured
Mr. Adams' obligation under a promissory note (the "Note") payable to a
bank. The Company agreed to repurchase the Collateralized Shares from the
bank, at a purchase price related to the market value thereof, in the event
of a default under the Note, based on the determination of the Board of
Directors that it would be in the best interest of the Company for the
Collateralized Shares to be acquired, if necessary, by the Company rather
than by an unrelated party. There has been no default under the Note. At
May 30, 1998, Mr. Adams had reduced the principal amount of the Note to
$221,783 and the number of Collateralized Shares securing his obligation
amounted to 127,200 shares of Common Stock.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10% of a
registered class of the Company's equity securities, such as the Common
Stock, to file with the Securities and Exchange Commission initial reports
of ownership and reports of changes in ownership of Common Stock and other
equity securities of the Company. Such persons are also required to furnish
the Company with copies of all forms they file under this regulation. To
the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and representations that no other reports
were required, for the fiscal year ended May 30, 1998, all Section 16(a)
reports applicable to its directors and executive officers were timely filed.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
The following Summary Compensation Table sets forth all compensation awarded
to, earned by or paid for services rendered to the Company in all capacities
during the fiscal year ended May 30, 1998 by (i) the Company's chief
executive officer and (ii) the Company's four other most highly compensated
executive officers who were serving as executive officers at the end of that
year.
<TABLE>
SUMMARY COMPENSATION TABLE
<S> <C> <C> <C> <C>
Annual Compensation Long-Term
------------------- Compensation
------------
Name and Principal LTIP All Other
Positions Salary Bonus (1) Payouts Compensation(2)
Fred R. Adams, Jr.-
Chairman of the Board
and Chief Executive
Officer $254,978 $250,000 None $60,997
Richard K. Looper -
Vice Chairman of the
Board of Directors $147,830 $100,000 $50,000(3) $ 1,246
Adolphus B. Baker -
President, Chief
Operating Officer
and Director $118,478 $80,000 $ 710
Bobby J. Raines -
Vice President,
Chief Financial
Officer, Treasurer
and Secretary $135,678 $88,000 (4) $43,795
Joe M. Waytt -
Vice President/
Operations and
Feed Mills $ 94,373 $64,188 $ 730
_____________________
</TABLE>
(1) Bonuses are determined annually by the Compensation Committee of the
Board of Directors on a discretionary basis based on the results of the
Company's operations and the Committee's evaluation of the executive
officer's contribution to such performance.
(2) The amounts shown represent premiums paid under separate life insurance
policies purchased by the Company for each person named in the table. The
policy on Mr. Adams' life is owned by an Adams family intervivos trust, and
the beneficiaries are Mr. Adams' four daughters and their descendants.
Messrs. Looper and Raines are the owners of their respective policies, and
members of their families are the beneficiaries. The Company is not a
beneficiary under any of such policies and will not receive any portion
paid thereunder upon the death of any of the insureds. In addition, the
Company made contributions to the account of each named executive maintained
under the Company's Employee Stock Ownership Plan. See "Employee Stock
Ownership Plan" below. The number for Mr. Raines includes value attributable
to exercised options.
(3) Paid pursuant to Mr. Looper's incentive compensation agreement with the
Company. See "Long Term Incentive Plans," below.
(4) Mr. Raines earns compensation payable in the future pursuant to long
term incentive plans. See "Long Term Incentive Plans" below.
No options were granted to the above-named executive officers in fiscal 1998.
Fiscal Year End Option Value Table
The following table sets forth information as of May 30, 1998, concerning
the exercised and unexercised options held by executive officers named in
the Summary Compensation Table, Mr. Raines exercised options to purchase
11,000 shares on June 23, 1997 during fiscal year 1998. Options are "in-
the-money" when the fair market of underlying Common Stock exceeds the
exercise price of the option. The closing price of Common Stockon May 30,
1998, was $5.34 per share.
<TABLE>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at May 30, 1998 May 30, 1998(1)
----------------------- -----------------------
<S> <C> <C> <C> <C>
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
Richard K. Looper 120,000 -0- 230,400 -0-
Adolphus B. Baker 48,000 -0- 92,160 -0-
Bobby J. Raines 85,000 -0- 163,200 -0-
Joe M. Wyatt 48,000 -0- 92,160 -0-
- ---------------
</TABLE>
(1) Market value of underlying securities on May 30, 1998, minus the
exercise price.
Employee Stock Ownership Plan
The Company maintains a payroll-based Employee Stock Ownership Plan (the
"ESOP"). Pursuant to the ESOP, originally established in 1976, substantially
all persons employed at January 1, 1994, as well as substantially all new
full-time employees over age 21 with one or more years of service,
participate. Its assets, which are managed by a trustee designated by the
Board, consist primarily of Common Stock of the Company. Contributions by
the Company may be made in cash or shares of Common Stock, as determined
by the Board of Directors. Employee contributions are not permitted.
Company contributions generally may not exceed 15% of the aggregate annual
compensation of participating employees. Contributions are allocated to
the accounts of participating employees in the proportion which each
employee's compensation for the year bears to the total compensation
(up to $150,000 per employee) of all participating employees. Company
contributions vest 20% annually beginning with the participating employee's
third year year of service.
Shares of Common Stock held in an employee's account are voted by the ESOP
trustee in accordance with the employee's instructions. An employee or
his or her beneficiary is entitled to distribution of the balance of his or
her account upon termination of employment. The Company's contributions
to the ESOP amounted to approximately $1,008,370 in fiscal year 1998. For
fiscal year 1998, the Company's contributions to the ESOP on behalf of each
of the executive officers named in the Summary Compensation Table were:
Fred R. Adams, Jr. - $6,297, Richard K. Looper - $6,297, Adolphus B. Baker-
$6,297, Bobby J. Raines - $6, 297, and Joe M. Wyatt - $6,297.
1993 Stock Option Plan
Pursuant to the Company's 1993 Stock Option Plan, which was adopted on May
25, 1993 and amended on September 23, 1996, with stockholder approval, (the
"1993 Plan") a total of 800,000 shares of Common Stock are reserved for
issuance upon the exercise of options that may be granted to directors,
officers and key employees of the Company. Options are awareded by the
Board of Directors of the Company and may be either incentive stock options
("ISOs") that satisfy the requirements of Se ction 422 of the Code or
nonstatutory options ("NSOs") which are not intended to satisfy such
requirements.
The exercise price per share under any option granted under the 1993 Plan may
not be less than 100% of the fair market value of the Common STock on the
date of grant, or int he case or ISOs, lessthan 110% of such fair marekt
value if the option is granted to a person who holds 10% or more of the
voting power of the capital stock of the Company. The number and kind of
shares subject to an option, and the option exericse price, may be adjusted
in certain circumstances to prevent dilution. The method of payment of an
option exercise price will be as determined by the Board of Directors and
set forth in the individual stock option agreement.
No options may be granted under the 1993 Plan more than ten years after the
date of its adoption, and no option may be exercised mroe than 10 eyars after
the date of its grant, or in the case of an ISO, more than five years after
the date of grant if granted to a person holding more than 10% of the voting
power of the Common Stock. The term or times at which an option may be
exercised and any conditions or restrictions relating thereto will be as
determined by the Board of Directors and set forth in the individual stock
option agreement. Options are not transferable or assignable otherwise than
by will or the laws of descent and distribution, and during his or her
lifetime may only be exercised by the optionee.
The presently outstanding options granted under the 1993 Plan are
exercisable on a cumulative basis over a period of six years from the
date of grant at the rate of 20% per year beginning twelve months after
the date of grant. The shares subject to the 1993 Plan have been registered
under the Securities Act of 1933.
Savings and Retirement Plan
Since 1985, the Company has maintained a defined contribution savings and
retirement plan (the "Retirement Plan"), which is designed to qualify under
Sections 401 (a) and 401 (k) of the Code. An employee is eligible to
participate in the Retirement Plan on or after having attained age 21 and
after one year of service. The Retirement Plan is administered by the Company
and permits covered employees to contribute up to the maximum allowed by the
IRS regulations. Highly compensated employees may be subject to further
limitations on the amount of their maximum contribution. The Company may
make discretionary contributions matching each employee's pre-tax
contributions. At the present time, the Company does not make discretionary
contributions. The Retirement Plan is intended to comply with the Employee
Retirement Income Security Act of 1974, as amended.
Participating employees are at all times 100% vested in their account
balances under the Retirement Plan. Benefits are paid at the time of a
participant's death, retirement, disability, termination of employment,
and, under limited circumstances, may be withdrawn prior to the employee's
termination of service. Contributions are not taxable to employees until
such funds are distributed to them.
Long Term Incentive Plans
The Company has entered into certain incentive compensation continuation
agreements (the "Agreements") with Richard K. Looper, and Bobby J. Raines.
Pursuant to the Agreements, each such executive officer may earn up to ten
years of compensation payments if he remains with the Company until age 65.
If the officer's employment ends before his 65th birthday, he would be
entitled to fewer years of incentive compensation payments, depending on
the length of time served as an officer. The incentive compensation payments
are made monthly, beginning immediately after the officer's 65th birthday,
at the annual rate of $50,000 per year for Messrs. Looper and Raines. The
Agreements provide that once payments begin or have been earned, any
remaining payments will continue to be made to the officer's estate after
his death.
Mr. Looper has earned ten (10) years of incentive compensation payments
under his Agreement. Mr. Looper began receiving his payments on December
1, 1991. Mr. Raines will have earned eleven (11) years in October 1998 and
will earn an additional year for each year worked thereafter until his
retirement.
Director Compensation
The Company's non-employee directors are each entitled to receive $10,000
annually as compensation for their services as a director and may be granted
options to purchase Common Stock under the 1993 Plan. Options to purchase
12,000 shares of Common Stock at a price of $4.33 per share were granted on
October 15, 1996 to each of W. D. (Jack) Cox and R. Faser Triplett, the non-
employee directors of the Company. On April 3, 1998, Mr. Cox exercised
options to acquire 2,400 shares of Common Stock at which time the market
price was $6.44. All options expire ten years after grant. Directors also
may be compensated for any services performed in addition to their normal
duties as a director of the Company. Employee-directors receive no
additional compensation for their services as directors of the Company.
Compensation Committee Interlocks and Insider Participation
In October 1996, the Board of Directors established a Compensation Committee.
As indicated above, the members of the Committee are Fred R. Adams, Jr.,
Chairman of the Board of Directors and Chief Executive Officer, and W.D.
(Jack) Cox and R. Faser Triplett, independent directors of the Company.
Only Mr. Adams is an employee of the Company.
Mr. Adams, as previously discussed, has been, and is, a party to certain
transactions to which Cal-Maine also has been, or is, a party. See "Certain
Relationships and Related Transactions" under "Election of Directors." From
1970 to 1972, Mr. Cox was employed by the Company as Vice President for egg
products.
Compensation Committee Report on Executive Compensation and Stock Performance
Graph
Total compensation for the executive officers named in the table on Page 6
went down slightly compared to the preceding year. While the Compensation
Committee felt the performance of the named executives was outstanding and
was not in any manner the cause of a reduction in company profits which were
attributable to industry wide conditions, the Committee elected to reduce
overall compensation slightly.
COMPARISON OF 17 MONTH CUMULATIVE TOTAL RETURN
AMONG CAL-MAINE FOODS, INC.
THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE NASDAQ NON-FINANCIAL INDEX
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
12/12/96 2/97 5/97 8/97 11/97 2/98 5/98
CAL-MAINE
FOODS, INC. 100.00 112.50 96.43 96.43 87.50 91.21 76.57
NASDAQ STOCK
MARKET (U.S.) 100.00 101.09 108.49 123.42 124.58 138.30 137.84
NASDAQ NON-
FINANCIAL 100.00 99.80 107.64 122.09 121.01 134.65 134.16
</TABLE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors, upon recommendation of the Audit Committee, has
appointed Ernst & Young LLP, independent public accountants, to act as
auditors for the fiscal year ending May 29, 1999. Ernst & Young LLP has
audited the accounts of the Company since 1989. Representatives of Ernst &
Young LLP are expected to be present at the annual meeting and will have an
opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Shareholder proposals must be received in writing by the Company no later
than May 4, 1999, to be considered for inclusion in the Company's proxy
materials for the 1999 Annual Meeting. Shareholder proposals should be
addressed to Cal-Maine Foods, Inc., Post Office Box 2960, Jackson,
Mississippi 39207, Attention: Secretary. No shareholder proposals were
received for inclusion in the proxy materials for the 1998 meeting.
OTHER MATTERS
The Board of Directors is not aware of any other matters which may come
before the meeting. However, if any other matters are properly brought
before the meeting, the proxies in the enclosed proxy will vote in
accordance with their best judgment on such matters.
Holders of Common Stock are urged to complete, sign and date the accompanying
proxy card and return it in the enclosed envelope. No postage is necessary
if the proxy card is mailed in the United States.
By order of the Board of Directors,
<TABLE>
<S> <C>
s/ Bobby J. Raines
______________________________________
Bobby J. Raines
Secretary
Jackson, Mississippi
September 4, 1998
</TABLE>
