This excerpt taken from the CALM DEF 14A filed Aug 26, 2009.
Employee Stock Ownership Plan
We maintain a payroll-based ESOP. Pursuant to the ESOP, originally established in 1976, all full time employees over age 21 with one or more years of service, participate. Its assets, which currently consist primarily of common stock of the Company, are managed by a trustee designated by the Board. Contributions by us 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 percent 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 for calendar year 2008 (up to $230,000 per employee), of all participating employees for calendar year 2008. Company contributions vest immediately upon the commencement of an employee's participation in the ESOP.
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. Our contributions to the ESOP amounted to approximately $1,212,726 in calendar year 2008. For calendar year 2008, our contributions to the ESOP on behalf of each of the executive officers named in the Summary Compensation Table were: Mr. Adams – $6,900; Mr. Baker – $6,900; Mr. Dawson – $6,900; Mr. Scott – $6,900; and Mr. Wyatt – $6,900.
1993 Stock Option Plan
Our 1993 Amended and Restated Stock Option Plan was adopted on May 25, 1993, and amended and restated on October 10, 1996. This Plan was approved by our shareholders on May 25, 1993. A total of 1,000,000 shares of our common stock was reserved for issuance under this Plan.
Inasmuch as 10 years have passed since the adoption of this Plan, by its terms no more options may be granted thereunder.
The exercise price for shares of stock subject to options under the Plan were not less than 100 percent of fair market value of our common stock on the date of grant of the options. The shares under this Plan are subject to adjustment to prevent dilution. There are currently options outstanding under this Plan for a total of 19,200 shares. All must be exercised within 10 years of grant. The exercise price is $2.125 (reflects stock split).
Shares subject to the 1993 Plan have been registered under the Securities Act of 1933.
1999 Stock Option Plan
Our 1999 Stock Option Plan was adopted on April 15, 1999, and approved by the shareholders on October 11, 1999. Under the 1999 Plan, 1,000,000 shares of Common Stock were reserved for issuance upon the exercise of options that could be granted under the 1999 Plan. Options granted under the 1999 Plan are accompanied by tandem stock appreciation rights ("SARs"). Options for 1,000,000 shares were awarded on December 13, 1999 by the Board of Directors.
No options are presently outstanding under the 1999 Plan. Shares subject to the 1999 Plan have been registered under the Securities Act of 1933.
2005 Incentive Stock Option Plan
Our 2005 Incentive Stock Option Plan was adopted by our Board of Directors on August 15, 2005, and ratified by our shareholders on October 13, 2005. Under the 2005 Plan, 500,000 shares of common stock were reserved for issuance upon the exercise of options that could be granted under the 2005 plan.
All options to be granted are intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code. The options vest at the rate of 20 percent per year.
The exercise price per share for any options granted may not be less than 100 percent of the fair market value of the Common Stock on the date of grant. The number of shares subject to an option and the exercise price may be adjusted in certain circumstances to prevent dilution. The method of payment of the exercise price will be as prescribed by the Board of Directors in the individual stock option agreements.
The options presently outstanding, all of which are held by officers of the Company, total 156,000. The options were granted on August 17, 2005, for an exercise price of $5.93.
Shares subject to the 2005 Plan have been registered under the Securities Act of 1933.
Cal-Maine Foods, Inc. Stock Appreciation Rights Plan
The Cal-Maine Foods Stock Appreciation Rights Plan (the “SARs Plan”) was adopted by our Board of Directors on August 15, 2005, and ratified by our shareholders on October 13, 2005. The SARs Plan covers 1,000,000 shares of common stock and is administered by the Executive Committee of the Board of Directors.
The SARs Plan continues for a period of 10 years from August 15, 2005, unless earlier terminated. SARs vest at the rate of 20 percent per year, are non-transferable and contain anti-dilution provisions. Upon exercise, the Company will pay the holder of the SARs an amount in cash equal to the difference between the fair market value on the date of grant and the fair market value as of the date of exercise.
As of August 1, 2009, employees and directors hold a total of 233,250 SARs with a base price of $5.93 per share, 9,000 SARs with a base price of $6.71 per share, and 12,000 SARs with a base price of $6.93 per share. Shares of common stock are not issued under the SARs Plan, but only serve as the measure for determining the amount to be paid by the Company.
As of August 1, 2009, our independent directors, Dr. Triplett and Ms. Hughes, each hold 15,000 and 16,250 SARs, respectively, while Mr. Poole holds 15,000 SARs all with a base price of $5.93.
Shares covered by the SARs Plan are registered under the Securities Act of 1933. The settlement of awards in cash resulted from an amendment to the SARs Plan on August 24, 2006, as permitted by its terms.
Savings and Retirement Plan
Since 1985, we have 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 after having attained age 21 and after one year of full time service. The Retirement Plan permits participants to contribute up to the maximum allowed by the IRS regulations. Participating employees are 100 percent vested in their account balances under the Retirement Plan. We may make discretionary contributions. At the present time, we do not make discretionary contributions. The Retirement Plan is intended to comply with the Employee Retirement Income Security Act of 1974, as amended.
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.
Compensation Committee Interlocks and Insider Participation
In 1996, the Board of Directors established a Compensation Committee. As indicated above, the members of the Committee are Mr. Adams, Chairman of the Board of Directors and Chief Executive Officer, Mr. Poole, and Dr. Triplett, independent directors of the Company. Only Mr. Adams is an employee of the Company.
PROPOSAL OF THE HUMANE SOCIETY OF THE UNITED STATES
Under Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended, a shareholder of the Company meeting prescribed eligibility standards may request that the Company include in its proxy statement a proposal from such eligible shareholder. The Humane Society of the United States (the “Humane Society”) has requested its proposal for a resolution to be adopted by the shareholders of the Company be included in this proxy statement.
The Humane Society has furnished evidence of its eligibility to request its proposed resolution be included in this proxy statement. The full name and address of the requesting shareholder is The Human Society of the United States, 2100 L Street NW, Washington, D.C. 20037. The Humane Society beneficially owns 476 shares of the Company’s common stock.
The full text of the resolution submitted by the Humane Society for consideration by the shareholders of the Company is as follows: