January 25, 1995
Dear Stockholder:
The 1995 Annual Meeting of Stockholders of the Company will be held in
the Petroleum Room of the Ramada Inn in Laurel, Mississippi, at 10:00 A.M. on
Thursday, February 23, 1995. The purposes of the Annual Meeting are set forth
in the accompanying Notice and Proxy Statement.
The 1994 Annual Report, which is enclosed, contains financial and other
information concerning the Company and its business for the fiscal year ended
October 31, 1994. The Annual Report is not to be considered part of the
proxy solicitation materials.
We cordially invite you to attend the Annual Meeting. If you cannot
attend, please complete and return the enclosed Proxy so that your vote can
be recorded.
Cordially,
/s/ Joe Frank Sanderson
Joe Frank Sanderson
Chairman of the Board
PAGE
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held February 23, 1995
To the Stockholders:
The Annual Meeting of Stockholders of Sanderson Farms, Inc. (the
"Company") will be held in the Petroleum Room of the Ramada Inn, Laurel,
Mississippi at 10:00 A.M. (local time) on Thursday, February 23, 1995, for
the following purposes:
(1) To elect three Class C Directors to serve until the 1998 annual
meeting;
(2) To consider and act upon a proposal to ratify and approve the
selection of Ernst & Young LLP as the Company's independent auditors for
the fiscal year ending October 31, 1995; and
(3) To transact such other business as may properly come before the
meeting or any adjournments thereof.
The business to be transacted at the Annual Meeting is more fully
described in the accompanying Proxy Statement, to which reference is hereby
made.
The Board of Directors has fixed the close of business on January 6,
1995, as the record date for determining stockholders entitled to notice
of and to vote at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS:
/s/James A. Grimes
James A. Grimes, Secretary
Dated: January 25, 1995
<PAGE>
PROXY STATEMENT
General
The accompanying Proxy is solicited by and on behalf of the Board of
Directors of Sanderson Farms, Inc. (the "Company"), P.O. Box 988, Laurel,
Mississippi 39441, in connection with the 1995 Annual Meeting of
Stockholders to be held February 23, 1995, and any adjournments of that
meeting. Execution of the Proxy will not in any way affect a stockholder's
right to attend the meeting and, upon revocation of the Proxy, to vote in
person. Proxies may be revoked at any time before they are voted by filing
with the Secretary a written notice of revocation or a duly executed Proxy
bearing a later date. Unless they are revoked, Proxies in the form
enclosed, properly executed and received by the Secretary of the Company
prior to the Annual Meeting, will be voted at the meeting as specified by
the stockholder in the Proxy or, except with respect to broker
non-votes, if no specification is made in the Proxy, then FOR each of the
proposals set forth in the accompanying Notice of Annual Meeting of
Stockholders, and according to their discretion upon all other matters
which may properly come before the meeting. Broker non-votes will
be treated as not present for purposes of calculating the vote on a matter
for which no specification is made in the proxy, and will not be counted
either as a vote FOR or AGAINST a proposal or as an ABSTENTION with respect
thereto. Abstentions will not be counted either as a vote FOR or as a vote
AGAINST a proposal. The cost of soliciting Proxies is being paid by
the Company.
The Company's 1994 Annual Report accompanies this Proxy Statement, but
is not to be considered a part of the proxy solicitation materials. The
record date for the Annual Meeting is January 6, 1995. These materials
are being mailed to stockholders on or about January 25, 1995.
Capital Stock
The authorized capital stock of the Company consists of 5,000,000 shares of
non-voting preferred stock, of which 500,000 shares have been designated
Series A Junior Participating Preferred Stock, par value $100.00 per share,
none of which shares have been issued, and 100,000,000 shares of Common
Stock, par value $1.00 per share, of which 9,075,427 shares had been issued
and were outstanding as of January 6, 1995, the record date for the Annual
Meeting. Only stockholders of record at the close of business on such
date are entitled to notice of and to vote at the Annual Meeting. Each
such stockholder is entitled to one vote for each share of common stock held
at that date.
<PAGE>
Stock Dividend
On January 26, 1995, the Board of Directors of the company will
consider the declaration of a stock dividend of one-half share of common
stock for each share of common stock outstanding on February 7, 1995, which
is the proposed record date for the stock dividend. The stock dividend, if
declared, will be payable February 22, 1995.
Numbers of shares of common stock and prices per share reflected
throughout this Proxy Statement are pre-dividend numbers and prices and,
accordingly, do not reflect the increase in the number of shares, or the
decrease in the per share price, that will occur by virtue of the 50% stock
dividend if the Board takes such action.
Beneficial Ownership
The following table sets forth information, as of January 6, 1995
concerning (a) the only stockholders known by the Company to own
beneficially more than 5% of the common stock of the Company, which is the
only class of voting securities outstanding, (b) the beneficial ownership
of common stock of the executive officers named in the "Summary
Compensation Table" below, and (c) the beneficial ownership of common
stock by all Directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
Amount
Beneficial Owner(s) Beneficially Percent
and Address Owned(1)(2) of Class
<S> <C> <C> <C>
Joe Frank Sanderson (3) 2,152,838 shares 23.72%
Dewey R. Sanderson, Jr. (4) 2,178,988 shares 24.01%
D. Michael Cockrell (5) 660,376 shares 7.28%
Joe F. Sanderson, Jr. (6) 740,010 shares 8.15%
Trustmark National Bank (7) 660,076 shares 7.27%
All Directors and executive
officers as a
group (12 persons) (8) 5,240,606 shares 57.75%
</TABLE>
(1) The shares are owned of record by the beneficial owners shown with
sole voting and investment power, except as set forth in the following notes.
(2) Joe F. Sanderson, Jr., D. Michael Cockrell and Trustmark National
Bank are the trustees of the Employee Stock Ownership Plan and Trust of
Sanderson Farms, Inc. and Affiliates (the "ESOP"), which is the record
owner of 660,076 shares of common stock of the Company. Trustmark National
Bank and Messrs. Sanderson and Cockrell, in their respective capacities as
trustees of the ESOP, share with each other investment power with
respect to those shares of common stock and therefore are each deemed to
beneficially own, under applicable regulations of the Securities and
Exchange Commission, the 660,076 shares of common stock owned of record by
the ESOP. With respect to the voting power of the 660,076 shares of common
stock, the members of the Administrative Committee of the ESOP
share with each other voting power as to 5,500 shares, which are the
shares of common stock not allocated to participant accounts under the ESOP,
and the participants in the ESOP exercise sole voting power as to the
654,576 shares allocated to their respective accounts under the ESOP.
(3) Address: P. O. Box 988, Laurel, Mississippi 39441. The amount in
the table includes 2,099,897 shares owned of record by Mr. Sanderson
and 52,941 shares allocated to Mr. Sanderson's account under the ESOP, with
respect to each of which amount Mr. Sanderson has sole voting power. Mr.
Sanderson has sole investment power with respect to the 2,099,897 shares
owned of record by him. The trustees of the ESOP share investment power
over the 52,941 shares allocated to Mr. Sanderson's account under the ESOP.
(4) Address: P. O. Box 988, Laurel, Mississippi 39441. Includes 148,838
shares owned of record by Mr. Sanderson's wife, as to which she exercises
sole voting and investment power, and as to which Mr. Sanderson, pursuant
to Rule 13d-4, disclaims beneficial ownership.
(5) Address: P. O. Box 988, Laurel, Mississippi 39441. The amount in
the table includes 300 shares owned of record by Mr. Cockrell. See note (2)
above for a description of the nature of Mr. Cockrell's beneficial ownership
of the 660,076 shares of common stock owned of record by the ESOP. Mr.
Cockrell, pursuant to Rule 13d-4, disclaims beneficial ownership of all
shares of common stock owned of record by the ESOP.
(6) Address: P. O. Box 988, Laurel, Mississippi 39441. See note (2)
above for a description of the nature of Mr. Sanderson's beneficial
ownership of the 660,076 shares of common stock owned of record by the ESOP.
With respect to the 19,203 shares allocated to his account under the ESOP,
Mr. Sanderson has sole voting power and the trustees of the ESOP share with
each other investment power. Mr. Sanderson, pursuant to Rule 13d-4,
disclaims beneficial ownership of all shares of common stock owned of
record by the ESOP, except the 19,203 shares allocated to his individual
account. In addition, the amount shown in the table includes 45,841 shares
owned of record by Mr. Sanderson over which he exercises sole voting and
investment power. The amount shown in the table also includes
4,360 shares owned of record by Mr. Sanderson's wife, over which she
exercises sole voting and investment power and as to which Mr. Sanderson,
pursuant to Rule 13d-4, disclaims beneficial ownership. The amount in the
table also includes 29,733 shares owned of record by a charitable private
foundation established by Joe Frank Sanderson, for which Mr. Sanderson
serves as a director and as such, shares voting and investment power with the
other directors of the foundation with respect to such shares.
(7) Address: 415 North Magnolia, Laurel, Mississippi 39940. See note
(2) above for a description of the nature of Trustmark National Bank's
beneficial ownership of the 660,076 shares of common stock owned of record
by the ESOP. Trustmark National Bank, pursuant to Rule 13d-4, disclaims
beneficial ownership of all shares of common stock owned of record
by the ESOP, which constitute all shares reported as being beneficially
owned by it.
(8) Includes an aggregate of 74,621 shares allocated to the accounts
of all Directors and executive officers as a group (12 persons, 4
participating) under the ESOP. See note (2) above.
<PAGE>
ELECTION OF DIRECTORS
The amended Articles of Incorporation of the Company provide that
the Board of Directors shall be divided into three classes (Class A, Class
B and Class C), with each class containing one-third, or as close to
one-third as possible, of the total, and that the number of directors
shall be fixed by the Board of Directors in the By-laws. At the
current time, the Board of Directors has fixed the number of directors
at nine, resulting in there being three directors in each class. At each
annual meeting of stockholders, directors constituting one class are
elected for a three-year term. At the 1995 Annual Meeting, stockholders
will elect three Class C directors, whose term will expire at the 1998
annual meeting.
Nominees for Class C Directors
The Board of Directors proposes the election as Class C Directors of
the three nominees listed below, each to serve as a Class C Director
until the 1998 annual meeting and until his successor is elected and has
qualified. Any vacancy on the Board of Directors may be filled either by
the Board of Directors or by the stockholders, and any person elected to
fill a vacancy will serve the remainder of the term of the director
whose position has become vacant.
Proxies in the enclosed form may also be voted for the election as
Class C Directors of substitute nominees who may be named by the Board of
Directors to replace any of the three nominees who become unavailable to
serve for any reason. (No such unavailability is presently known to the
Board of Directors.) In no event, however, will the Proxies be
voted for more than three persons. There are no arrangements or
understandings relating to any person's service or prospective service
as a Class C Director of the Company. No nominee listed below will be
elected as a Class C Director unless such nominee receives the affirmative
vote of the holders of a majority of the shares entitled to vote and
represented (whether in person or by proxy) at the Annual Meeting at which
a quorum is present. If more nominees than the number of Directors to be
elected receive a majority vote, then those nominees, up to three persons,
receiving the highest number of votes will be elected. Abstentions will
not be counted either as a vote FOR or as a vote AGAINST the nominees for
Class C Directors. Broker non-votes will be treated as not present for
purposes of calculating the vote with respect to the election of the Class C
Directors, and will not be counted either as a vote FOR or AGAINST or as an
ABSTENTION with respect thereto.
The following table lists the nominees for Class C Director and shows,
as of January 6, 1995, their respective beneficial ownership of common stock
of the Company. Joe Frank Sanderson is the father of Joe F. Sanderson, Jr.
(Class A Director), the brother of Dewey R. Sanderson, Jr. (Class B
Director) and the uncle of Robert Buck Sanderson (Class C Director). Robert
Buck Sanderson is the son of Dewey R. Sanderson, Jr. (Class B Director),
the cousin of Joe F. Sanderson, Jr. (Class A Director) and the nephew of Joe
Frank Sanderson (Class C Director).
<TABLE>
<CAPTION>
Shares
Nominees for Director Beneficially Percent
Class C Director Age Since Owned (1) of Class
<S> <C> <C> <C> <C>
Class C (Term expiring in 1998)
Joe Frank Sanderson (2) 69 1955 2,152,838 23.72%
Robert Buck Sanderson 41 1992 169,391 1.87%
Donald W. Zacharias 59 1988 100 (3)
</TABLE>
(1) The shares are owned of record by the beneficial owners shown with
sole voting and investment power, except as set forth in the notes below.
(2) See note (3) to the table under the caption "Proxy Statement,
Beneficial Ownership" for description of the nature of Mr. Sanderson's
beneficial ownership.
(3) Less than 1%.
Directors Continuing in Office
The following table lists the Class A and Class B Directors of the
Company, whose terms expire at the 1996 and 1997 annual meetings,
respectively, and shows as of January 6, 1995, the beneficial ownership of
common stock by each of them. Joe F. Sanderson, Jr. is the son of Joe
Frank Sanderson (Class C Director), the nephew of Dewey R. Sanderson, Jr.
(Class B Director) and the cousin of Robert Buck Sanderson (Class C
Director). Dewey R. Sanderson, Jr. is the father of Robert Buck
Sanderson (Class C Director), the brother of Joe Frank Sanderson (Class
C Director) and the uncle of Joe F. Sanderson, Jr. (Class A Director).
<TABLE>
<CAPTION>
Shares
Name of Director Beneficially Percent
Continuing Director Age Since Owned (1) of Class
<S> <C> <C> <C> <C>
Class A (Term expiring in 1996)
Joe F. Sanderson, Jr.(2) 47 1984 740,010 8.11%
Charles W. Ritter, Jr. 61 1988 7,000 (6)
Phil K. Livingston(3) 51 1989 1,920 (6)
Class B (Term expiring in 1997)
Dewey R. Sanderson, Jr.(4) 72 1955 2,178,988 24.11%
Rowan H. Taylor 69 1989 3,000 (6)
John H. Baker, III(5) 53 1994 40,000 (6)
</TABLE>
__________________________
(1) The shares are owned of record by the beneficial owners shown
with sole voting and investment power, except as set forth in the following
notes.
(2) See notes (2) and (6) to the table under the caption "Proxy
Statement, Beneficial Ownership" for a description of the nature of Mr.
Sanderson's beneficial ownership.
(3) Mr. Livingston owns 1,090 shares of common stock of the Company
through an IRA, over which he exercises sole voting and investment power. A
retirement account belonging to Mr. Livingston's wife owns of record 830
shares, over which she exercises sole voting and investment power, and as
to which Mr. Livingston, pursuant to Rule 13d-4, disclaims beneficial
ownership.
(4) See note (4) to the table under the caption "Proxy Statement,
Beneficial Ownership" for a description of the nature of Mr. Sanderson's
beneficial ownership.
(5) The amount in the table includes 20,000 shares owned of record by
Mr. Baker's wife, as to which she exercises sole voting and investment
power, and 20,000 shares owned of record by a trust for the benefit of Mr.
Baker's daughter, as to which an institutional trustee exercises sole voting
and investment power, and as to all of which Mr. Baker, pursuant to Rule
13d-14, disclaims beneficial ownership.
(6) Less than 1%.
Principal Occupations and Certain Directorships
The following paragraphs identify the principal occupations of all
Directors of the Company and directorships they hold in other companies
with securities registered with the Securities and Exchange Commission.
Except as otherwise indicated, each Director has served for at least five
years in the position shown.
Joe F. Sanderson, Jr. has served as President and Chief Executive
Officer of the Company since November 1, 1989. From January 1984, through
October 1989, Mr. Sanderson served as Vice-President, Processing and
Marketing, of the Company.
Charles W. Ritter, Jr. has served, since 1967, as President and a
Director of the Attala Company, which is principally engaged in the business
of milling and selling feed and corn meal. He has also served as President
of JRS, Inc., a family owned real estate investment firm, since 1973. Mr.
Ritter is a director of First M & F Corp. and Merchants & Farmers Bank,
Kosciusko, Mississippi.
Phil K. Livingston has served as President and Chief Executive Officer
of Citizens National Bancshares, Inc., Hammond, Louisiana, since its
organization in 1983. Citizens National Bancshares, Inc. is the parent
company of Citizens National Bank, which Mr. Livingston has also served as
Chief Executive Officer and Chairman of the Board for all of the last five
years.
Dewey R. Sanderson, Jr., a founder of the Company, has been retired
for more than the past five years.
Rowan H. Taylor served as President of Mississippi Valley Title
Insurance Company from 1975 until 1989, and as Chairman of the Board
and Chief Executive Officer of that company from 1989 until 1992. Mr.
Taylor currently serves as counsel for First American Title Insurance
Company of Santa Anna, California, and as counsel to the Jackson,
Mississippi law firm of Alston, Rutherford, Tardy & Van Slyke. Mr. Taylor
is an advisory director of Trustmark Corporation and Trustmark National
Bank located in Jackson, Mississippi.
John H. Baker, III has been the sole proprietor of John H. Baker
Interests, a real estate and development company in Houston, Texas since
1968.
Joe Frank Sanderson, a founder of the Company, has been serving as
Chairman of the Board of Directors of the Company since November 1, 1989.
For more than five years prior to November 1, 1989, Mr. Sanderson served
as Chairman of the Board, Chief Executive Officer and Treasurer of the
Company.
Donald W. Zacharias has served as President of Mississippi State
University since 1985.
Robert Buck Sanderson has been employed by the Company since January 1,
1993. From 1978 through 1992, Mr. Sanderson served as President of Pioneer
Hardware & Supply Co., Inc. in Laurel, Mississippi.
Committees of the Board of Directors; Attendance at Meetings
The Company's Board of Directors has not appointed any standing
committees as of the date of this proxy statement, except an Audit Committee.
The members of the Audit Committee are Messrs. Ritter, Livingston and
Zacharias. The function of the Audit Committee is, among other things, to
recommend the independent auditors to the Board of Directors, to review
the scope of the independent auditors' audit, to review the Company's
major accounting and financial reporting policies and practices and systems
for compliance with applicable statutes and regulations, and to review the
Company's internal auditing functions. During the fiscal year ended
October 31, 1994, the Board of Directors met 5 times and the Audit Committee
met 4 times and each incumbent Director attended at least 75% of the
aggregate of (i) the total number of Board of Directors meetings held during
the period for which he was a director and (ii) the total number of meetings
held by the Audit Committee, as applicable.
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, officers and persons who own more than 10% of the outstanding
common stock of the Company, to file with the Securities and Exchange
Commission reports of changes in ownership of the common stock of the Company
held by such persons. Officers, directors and greater than 10% stockholders
are also required to furnish the Company with copies of all forms they
file under this regulation. Based solely on a review of the copies of the
reports furnished to the Company, the officers and directors of the Company
are in full compliance with all Section 16(a) filing requirements, except
that Mr. Lampkin Butts, who is a reporting person by virtue of his membership
on the Company's Executive Committee, inadvertently failed to timely file a
Form 4 reporting the acquisition of stock through a dividend reinvestment
feature in an IRA and cash account maintained by him. As of the
date of this Proxy Statement, Mr. Butts had made the appropriate filing.
Executive Compensation
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation
(a) (b) (c) ( d) (e)
Name and All Other
Principal Position Year Salary($) Bonus($)(1) Compensation($)(3)
<S> <C> <C> <C> <C>
Joe F. Sanderson, Jr. 1994 300,000 12,873 (3)
Chief Executive Officer 1993 235,236 25,996 5,716
and President 1992 229,318 41,528 2,936
D. Michael Cockrell 1994 121,120 3,670 (3)
Treasurer and 1993 (2) (2) (2)
Chief Financial Officer 1992 (2) (2) (2)
</TABLE>
(1) The amounts in this column represent the bonuses paid to the named
individuals pursuant to the Company's Bonus Award Program, which covers all
salaried employees of the Company.
(2) Mr. Cockrell became an executive officer of the Company during fiscal
1994.
(3) The amounts in this column represent the value of the 1993 and 1992
annual contributions made by the Company to the accounts of the named
individuals under the General Employees' Profit Sharing Plan. With respect
to the General Employees' Profit Sharing Plan, the Company contributed
$5,716 and $2,936 to Mr. Sanderson's account in 1993 and 1992, respectively.
Although all salaried employees of the Company, including executive officers,
participate in the Company's Employee Stock Ownership Plan (the "ESOP"),
the Company has made no contribution to the ESOP since 1991. Allocations
to participants under each of these plans are made in late January or
early February of each year and therefore, as of the date of this Proxy
Statement, no amounts have been allocated to the accounts of the named
individuals under the General Employees' Profit Sharing Plan with respect
to the fiscal year ended October 31, 1994. Both the General Employees'
Profit Sharing Plan and the ESOP cover all salaried employees of the
Company, including executive officers, with one year of service who have
attained age 21.
<TABLE>
<CAPTION>
Stock Options Granted During Fiscal 1994 to the Named Executives
% of Total Potential Realizable Value
Number Options at Assumed Annual Rates
of Granted to of Stock Appreciation
Name and Options Employees in Exercise for Option Term
Principal Position Granted Fiscal Year Price Exp. Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
D. Michael Cockrell
Treasurer and Chief
Financial Officer 5,000 8.77% $16.50 4/28/99 $22,800 $50,400
</TABLE>
Director's Fees
During fiscal 1993, Directors who were not also officers or employees
of the Company received a fee of $500 per meeting attended plus an annual
stipend of $7,500.
Board Report on Executive Compensation
The Company does not have a standing Compensation Committee, and
therefore the Board of Directors prepared the following Report.
Generally, executive officer compensation is not directly related to
factors such as profitability, sales growth, return on equity or market
share, except to the extent that such factors impact the Company's overall
ability to satisfy its compensation obligations to all employees.
Annual compensation for the Chief Executive Officer ("CEO") and
President, and the Chairman of the Board, is determined by the full Board
of Directors of the Company. The Stock Option Committee of the Company's
Board of Directors makes decisions relating to stock option awards to
executive officers and other key personnel pursuant to the Company's Stock
Option Plan. The annual compensation for the Treasurer and Chief Financial
Officer ("CFO") is determined by the President. The components of the annual
compensation paid to the CEO and CFO are as follows: (i) base salary; (ii) a
bonus calculated pursuant to the provisions of the Company's Bonus Award
Program; (iii) allocation of contributions made by the Company to the
respective accounts of the CEO and CFO under the ESOP; and (iv) allocation
of contributions made by the Company to the respective accounts of the CEO
and CFO under the Company's General Employees' Profit Sharing Plan.
Base salaries for executive officers of the Company are originally
fixed using a comparison of similarly situated officers of other poultry
companies. Also taken into account are benefits, years of service,
responsibilities, Company growth, future plans and the Company's current
ability to pay. Periodic increases in base salary are based on evaluations
of past and current performance and current market conditions. In addition,
in accordance with the Company's Wage and Salary Administration manual in
effect since 1979, the base salary of each salaried employee of the Company,
including the executive officers, is increased on January 1 of each year to
reflect cost of living increases, provided that the Company is in a
financial position to make an increase. In January, 1994, the base salary
of all salaried employees of the Company, including the executive officers,
was increased by 2.0%.
The CEO and CFO are participants in the Company's Bonus Award Program,
which covers all salaried employees of the Company. The amounts payable to
all salaried employees, including the executive officers, are based on
the Company's financial performance. The bonus for the CEO and CFO is
calculated by multiplying such person's average monthly salary by 12 and
multiplying that product by a percentage ranging from .5% to 25%, depending
on the performance of the Company. Bonuses paid in fiscal 1994 related
to performance in fiscal 1993. No bonuses have been or will be paid for
fiscal 1994.
In addition, all executive officers participate in the Company's Employee
Stock Ownership Plan and the General Employees' Profit Sharing Plan which
covers all salaried employees of the Company. Awards to the executive
officers under each of these plans are made on the same basis as are awards
to all other participants.
Joe F. Sanderson, Jr. Charles W. Ritter, Jr.
Joe Frank Sanderson Donald W. Zacharias
Dewey R. Sanderson, Jr. Rowan H. Taylor
Phil K. Livingston John H. Baker, III
Robert Buck Sanderson
Performance Graph
The following graph presents a comparison of the five year cumulative
total stockholder return* among the Company, the NASDAQ Composite Index,
and a self-constructed peer group index comprised of Cagles, Inc., Golden
Poultry Co., Hudson Foods, Inc., Pilgrim's Pride, Inc. and WLR Foods, Inc.
(the "Peer Group Index"). The Company selected the Peer Group Index because
the return reflected in the Peer Group Index presents stockholders with a
comparison of total stockholder return with companies of similar size,
product and market capitalization.
<TABLE>
<CAPTION>
YEARS**
<S> <C> <C> <C> <C> <C> <C>
Sanderson Farms, Inc. 100 60 69 89 104 135
NASDAQ Composite Index 100 74 126 141 181 182
Peer Group 100 77 90 93 123 163
</TABLE>
*Assumes $100 invested on November 1, 1989; total return, other than
for NASDAQ Composite Index, assumes reinvestments of dividends.
**Fiscal year ends October 31.
INDEPENDENT AUDITORS
Ernst & Young LLP, Independent Auditors, Jackson, Mississippi, were the
independent auditors for the Company during the fiscal year ended October 31,
1994. A representative of Ernst & Young LLP is expected to be present at
the Annual Meeting. The representative will have the opportunity to make a
statement at the meeting if he desires to do so, and will be available to
respond to any appropriate questions.
The Board of Directors of the Company has selected the firm of Ernst &
Young LLP as the Company's independent auditors for the fiscal year ending
October 31, 1995. Stockholder approval and ratification of this selection
is not required by law or by the By-Laws of the Company. Nevertheless,
the Board has chosen to submit it to the stockholders for their approval
and ratification. Of the shares represented and entitled to vote at the
Annual Meeting (whether in person or by proxy), more votes must be cast
in favor of than votes cast against the proposal to ratify and approve
the selection of Ernst & Young LLP as the Company's independent
auditors for the fiscal year ending October 31, 1995, in order for this
proposal to be adopted. The Proxyholders named in the accompanying proxy
card will vote FOR the foregoing proposal unless otherwise directed
therein. Abstentions will not be counted either as a vote FOR or as a
vote AGAINST the proposal to ratify and approve the selection of Ernst
& Young LLP as the Company's independent auditors for the fiscal year
ending October 31, 1995. Broker non-votes will be treated as not present
for purposes of calculating the vote with respect to the foregoing proposal,
and will not be counted either as a vote FOR or AGAINST or as an ABSTENTION
with respect thereto.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows
of no matters likely to be brought before the Annual Meeting other than
those set forth in the Notice of the Meeting. If other matters properly
come before the Meeting, each Proxy will be voted in accordance with the
discretion of the Proxyholders named therein.
STOCKHOLDER PROPOSALS
Procedure
The Company's By-laws provide that stockholders may nominate
individuals for election as directors from the floor at any annual or
special meeting of stockholders called for the election of directors only
if timely written notice of such nomination has been given to the
Secretary of the Company. To be timely, such notice must be received at
the principal office of the Company no later than the close of business on
the 15th day following the day on which notice of the date ofthe meeting
is given or made to stockholders in accordance with the By-laws. The
By-laws specify what such a notice of such nomination must include. In
addition, the By-laws set forth the procedure that must be followed by
stockholders to properly bring a matter before a stockholders' meeting.
If a stockholder wishes to bring a matter before the meeting that has not
been specified in the notice of the meeting, the stockholder must deliver
written notice of said stockholder's intent to bring the matter before the
meeting of stockholders so that the notice is received by the Secretary of
the Company no later than the close of business on the 15th day following
the date on which notice of the day of the meeting is given or made to
stockholders in accordance with the By-laws. The By-laws also specify what
such a notice must include.
<PAGE>
1996 Annual Meeting
A stockholder who intends to present a proposal, which relates to a
proper subject for stockholder action, at the 1996 Annual Meeting of
Stockholders and who wishes such proposal to be considered for inclusion
in the Company's proxy materials for such meeting must cause such proposal
to be received, in proper form, at the Company's principal executive offices
no later than September 26, 1995. Any such proposals, as well as any
questions relating thereto, should be directed to the Company to the
attention of its President.
METHODS AND COST OF SOLICITING PROXIES
The Proxy card enclosed with this Proxy Statement is solicited by and on
behalf of the Board of Directors of the Company. In addition to
solicitation of stockholders of record by mail, telephone or personal
contact, arrangements will be made with brokerage houses to furnish proxy
materials to their principals, and the Company will reimburse them for
their mailing expenses. Custodians and fiduciaries will be supplied with
proxy materials to forward to beneficial owners of common stock. Whether
or not you expect to be present at the Annual Meeting, please sign,
date and return the enclosed Proxy card promptly. No postage is
necessary if mailed in the United States. The cost of solicitation,
including the preparation, printing and mailing, is being paid by the Company.
BY ORDER OF THE BOARD OF DIRECTORS:
/s/ James A. Grimes
James A. Grimes, Secretary
Dated: January 25, 1995
<PAGE>
"APPENDIX A"
SANDERSON FARMS, INC.
The undersigned hereby appoints D. Michael Cockrell and James A. Grimes
and each of them, as proxies for the undersigned, with full power of
substitution, to vote all of the undersigned's shares of common stock,
$1.00 per share par value, of Sanderson Farms, Inc. at the Annual Meeting
on February 23, 1995 (and any adjournments thereof), as instructed herein
with respect to the matters herein set forth (and, to the extent not so
instructed, as set forth in the related Proxy Statement), and according
to their discretion upon all other matters which may properly come before
such Meeting.
BALLOT
MANAGEMENT RECOMMENDS A VOTE
"FOR" THE FOLLOWING PROPOSALS
1. To elect three Class C Directors to serve until the 1998 annual meeting:
/ / FOR all nominees / / WITHHOLD AUTHORITY
listed below (except (to vote for all
as indicated to the nominees listed below)
contrary below)
Joe Frank Sanderson, Donald W. Zacharias and Robert Buck Sanderson
INSTRUCTIONS: To withhold authority to vote for any individual
nominee, write the nominee's name here:
__________________ _________________
2. To consider and act upon a proposal to ratify and approve the selection
of Ernst & Young LLP as the Company's independent auditors for the
fiscal year ending October 31, 1995:
/ / FOR / / AGAINST / / ABSTAIN
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
SANDERSON FARMS, INC.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED UPON THE
MATTERS SET FORTH ON THE REVERSE. IF NO DIRECTION IS INDICATED, THIS
PROXY WILL BE VOTED "FOR" PROPOSALS 1 and 2. THIS PROXY CONFERS
DISCRETIONARY VOTING AUTHORITY AS TO ALL OTHER MATTERS WHICH MAY PROPERLY
COME BEFORE THE ANNUAL MEETING. SEE ACCOMPANYING PROXY STATEMENT.
Dated: , 1995
Signature(s)
Executors, Administrators,
Trustees, etc. should give full
title. This proxy should be
signed as name appears on
certificate(s).
THIS PROXY IS SOLICITED BY THE BOARD OF
DIRECTORS OF SANDERSON FARMS, INC.
(SEE BALLOT ON REVERSE)
<PAGE>
SANDERSON FARMS, INC.
BALLOT
1. (A) To elect three Class C Directors to serve until the 1998 annual
meeting:
___ ___
/ / FOR all nominees / / WITHHOLD AUTHORITY
listed below (except (to vote for all
as indicated to the nominees listed below)
contrary below)
Joe Frank Sanderson, Donald W. Zacharias and Robert Buck Sanderson
INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write the nominee's name here:
2. To consider and act upon a proposal to ratify and approve the selection
of Ernst & Young LLP as the Company's independent auditors for the
fiscal year ending October 31, 1995:
___ ____ ____
/ / FOR / / AGAINST / / ABSTAIN
Dated: , 1995
Participant
(Print Name)
PLEASE DATE, SIGN AND RETURN THIS BALLOT IN THE ENCLOSED ADDRESSED AND POSTAGE
PREPAID ENVELOPE TO THE ADMINISTRATIVE COMMITTEE OF THE ESOP NO LATER THAN
FEBRUARY 15, 1995, THROUGH COMPANY MAIL OR BY UNITED STATES MAIL.
