☐
|
Preliminary Proxy Statement
|
☐
|
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
|
☒
|
Definitive Proxy Statement
|
☐
|
Definitive Additional Materials
|
☐
|
Soliciting Material Pursuant to Section 240.14a-12
|
INGLES MARKETS, INCORPORATED
|
||
(Name of Registrant as Specified in its Charter)
|
||
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
|
||
Payment of Filing Fee (Check the appropriate box):
|
||
☒
|
No fee required.
|
|
☐
|
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
|
|
1)
|
Title of each class of securities to which transaction applies:
|
|
2)
|
Aggregate number of securities to which transaction applies:
|
|
3)
|
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):
|
|
4)
|
Proposed maximum aggregate value of transaction:
|
|
5)
|
Total fee paid:
|
|
☐
|
Fee paid previously with preliminary materials.
|
|
☐
|
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.
|
|
1)
|
Amount Previously Paid:
|
|
2)
|
Form, Schedule or Registration Statement No.:
|
|
3)
|
Filing Party:
|
|
4)
|
Date Filed:
|
|
1.
|
To elect eight directors to serve until the 2022 Annual Meeting of Stockholders; and
|
2.
|
To consider and vote on a non-binding approval of the Company’s compensation for named executive officers, as disclosed in this Proxy Statement;
|
3.
|
To consider and vote on how frequently advisory votes on executive compensation, such as proposal 2 above, will occur; and
|
4.
|
To vote on a stockholder proposal, if properly presented at the meeting.
|
By Order of the Board of Directors
|
||
Robert P. Ingle, II
|
||
Chairman of the Board
|
PROXY STATEMENT
|
1
|
|
Execution and Revocation of Proxies
|
1
|
|
Actions to Be Taken by Proxy
|
1
|
|
Voting Rights
|
2
|
|
ELECTION OF DIRECTORS
|
3
|
|
Identification of Directors and Executive Officers
|
3
|
|
Committees of the Board of Directors
|
5
|
|
Compensation Committee Interlocks and Insider Participation in Compensation Decisions
|
5
|
|
Meetings of the Board of Directors and Committees
|
6
|
|
Director Nominations
|
6
|
|
Stockholder Communication with Board Members
|
7
|
|
Board Member Attendance at Annual Meetings
|
7
|
|
AUDIT/COMPENSATION COMMITTEE REPORT
|
8
|
|
EXECUTIVE COMPENSATION AND OTHER INFORMATION
|
9
|
|
Compensation Discussion and Analysis
|
9
|
|
Elements of Executive Compensation
|
10
|
|
Management of Compensation – Related Risk
|
11
|
|
Audit/Compensation Committee Report on Executive Compensation
|
12
|
|
Executive Compensation Summary
|
13
|
|
CEO Pay Ratio
|
14
|
|
Proposal for Advisory Vote on Executive Compensation
|
14
|
|
Proposal for Advisory Vote on Frequency of Advisory Votes on Executive Compensation
|
15
|
|
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
|
16
|
|
TRANSACTIONS WITH RELATED PERSONS
|
18
|
|
RELATIONSHIP WITH INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
18
|
|
Principal Accountant Fees and Services
|
19
|
|
CORPORATE SOCIAL RESPONSIBILITY
|
19
|
|
Environmental Stewardship
|
19
|
|
Social Impact
|
20
|
|
Governance
|
20
|
|
STOCKHOLDER PROPOSAL ON EQUAL VOTING RIGHTS FOR EACH SHARE
|
20
|
|
OTHER MATTERS
|
22
|
|
Solicitation of Proxies
|
22
|
|
Stockholders’ Proposals for the 2022 Annual Meeting
|
22
|
|
Action on Other Matters at the 2021 Annual Meeting
|
22
|
|
Section 16(a) Beneficial Ownership Reporting Compliance
|
22
|
|
Delinquent Section 16(a) Reports
|
22
|
|
Availability of Form 10-K
|
23
|
● |
by attending the Annual Meeting and voting the shares covered by the original proxy in person at the Annual Meeting;
|
● |
by delivering to the Secretary an instrument revoking the proxy prior to the Annual Meeting; or
|
● |
by delivering a later-dated, properly executed proxy with respect to shares covered by the original proxy prior to the Annual Meeting.
|
● |
“FOR” the election of each of the Board nominees named under the heading “ELECTION OF DIRECTORS – Identification of Directors and Executive Officers”;
|
● |
“FOR” Management’s proposal under the heading “EXECUTIVE COMPENSATION AND OTHER INFORMATION – Proposal for Advisory Vote on Executive Compensation”; and
|
● |
“1 YEAR” on Management’s proposal under the heading “EXECUTIVE COMPENSATION AND OTHER INFORMATION – Proposal for Advisory Vote on Frequency of Advisory Votes on
Executive Compensation”; and
|
● |
“AGAINST” the stockholder proposal under the heading “STOCKHOLDER PROPOSAL ON EQUAL VOTING RIGHTS FOR EACH SHARE”.
|
DIRECTORS AND EXECUTIVE OFFICERS
|
||
Robert P. Ingle, II
|
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 52.
|
James W. Lanning
|
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 61.
|
|
Ronald B. Freeman
|
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 63.
|
|
Fred D. Ayers
|
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 78.
|
|
Ernest E. Ferguson
|
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 73.
|
|
John R. Lowden
|
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
63.
|
|
Laura Ingle Sharp
|
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 63.
|
|
Brenda S. Tudor
|
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 63.
|
● |
approve compensation levels and increases in compensation of each executive officer and of other associates of the Company whose annual base salary is in excess of $150,000; and
|
● |
approve all incentive payments to executive officers and any incentive payments in excess of $25,000, paid in cash or property, in any calendar year to any other associate that does not work in one of the Company’s supermarkets.
|
Name
|
Fees
Earned or Paid
in Cash
($)
|
Total
($)
|
|||||
Fred D. Ayers
|
36,250
|
36,250
|
|||||
Ernest E. Ferguson
|
31,258
|
31,258
|
|||||
John R. Lowden
|
20,000
|
20,000
|
|||||
Laura Ingle Sharp
|
20,000
|
20,000
|
|||||
Brenda S. Tudor
|
31,258
|
31,258
|
SUBMITTED BY:
|
|
THE AUDIT/COMPENSATION COMMITTEE
|
|
Fred D. Ayers Ernest E. Ferguson Brenda S. Tudor
|
• |
Base annual cash salary;
|
• |
Annual cash incentive bonuses; and
|
• |
Retirement, health and other benefits.
|
• |
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 associate 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 associate 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 $25,000 and are not approved by the Audit/Compensation Committee.
|
SUBMITTED BY:
|
|
THE AUDIT/COMPENSATION COMMITTEE
|
|
Fred D. Ayers Ernest E. Ferguson Brenda S. Tudor
|
Name and Principal
Position during 2020
|
Fiscal
Year
|
Salary
($)
|
Bonus
($)
|
Non-Equity
Incentive Plan
Compensation
($)
|
All Other
Compensation
($) (1)
|
Total
($)
|
||||||||||||
James W. Lanning
|
2020 |
752,892
|
475,000
|
—
|
32,048
|
1,259,940
|
||||||||||||
Chief Executive Officer and
|
2019 |
742,293
|
470,000
|
—
|
27,246
|
1,239,539
|
||||||||||||
President
|
2018 |
722,692
|
450,000
|
—
|
26,987
|
1,199,679
|
||||||||||||
Robert P. Ingle
|
2020 |
693,293
|
400,000
|
—
|
37,545
|
1,130,838
|
||||||||||||
Chairman of the Board
|
2019 |
682,692
|
400,000
|
—
|
32,967
|
1,115,660
|
||||||||||||
|
2018 |
672,692
|
400,000
|
—
|
37,440
|
1,110,132
|
||||||||||||
Ronald B. Freeman
|
2020 |
371,803
|
130,000
|
—
|
11,257
|
513,060
|
||||||||||||
Vice President Finance,
|
2019 |
363,117
|
112,000
|
—
|
9,415
|
484,532
|
||||||||||||
Chief Financial Officer
|
2018 |
354,654
|
105,000
|
—
|
9,425
|
469,079
|
||||||||||||
L. Keith Collins (2)
|
2020
|
261,362
|
—
|
46,187
|
13,928
|
321,477
|
||||||||||||
President, Milkco, Inc.
|
2019 |
248,761
|
—
|
45,981
|
11,830
|
306,572
|
||||||||||||
|
2018 |
234,308
|
—
|
49,950
|
11,758
|
296,016
|
(1)
|
All other fiscal 2020 compensation for each of the Executive Officers consists of the following:
|
Fiscal 2020
|
|||||||||||||
James W.
Lanning
|
Robert P.
Ingle, II
|
Ronald B.
Freeman
|
L. Keith
Collins
|
||||||||||
Employer Match for 401(k) Plan
|
$
|
6,161
|
$
|
6,100
|
$
|
4,901
|
$
|
5,291
|
|||||
Employer Match for Non-Qualified Plan
|
14,964
|
13,408
|
5,033
|
4,015
|
|||||||||
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
|
16,714
|
—
|
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.
|
● |
Mr. Lanning’s total compensation: $1,259,940
|
● |
Median Annual Compensation: $18,132
|
● |
Ratio of CEO total compensation to Median Annual Compensation: 69:1
|
●
|
For the week ending with the Determination Date 23,323 active associates received cash compensation. This population consisted of full-time, part-time and
temporary associates 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 associate.
|
●
|
For this associate, we multiplied the weekly wages by 52 weeks to determine Median Annual Compensation of $18,132.
|
●
|
We calculated the CEO pay ratio taking into account that CEO compensation includes amounts other than weekly salary.
|
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)
|
5,675,799
|
(3)(4)
|
5,672,799
|
(3)(4)
|
28.5
|
%(3)(4)
|
93.8
|
%(3)(4)
|
76.0
|
%(3)(4)
|
||||||||||
James W. Lanning(1)
|
217,149
|
(3)
|
204,149
|
(3)
|
1.5
|
%(3)
|
3.4
|
%(3)
|
2.8
|
%(3)
|
||||||||||
Laura Ingle Sharp(1)
|
112,911
|
(5)
|
79,725
|
(5)
|
*
|
(5)
|
1.3
|
%(5)
|
1.1
|
%(5)
|
||||||||||
Ronald B. Freeman(1)
|
210,063
|
(3)
|
204,149
|
(3)
|
1.5
|
%(3)
|
3.4
|
%(3)
|
2.7
|
%(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)
|
1,982,892
|
(7)
|
0
|
14.0
|
%(7)
|
*
|
2.7
|
%(7)
|
||||||||||||
Dimensional Fund Advisors, LP(8)
|
1,191,693
|
(9)
|
0
|
8.4
|
%(9)
|
*
|
1.6
|
%(9)
|
||||||||||||
The Vanguard Group (10)
|
1,175,893
|
(11)
|
0
|
8.3
|
%(11)
|
*
|
1.6
|
%(11)
|
||||||||||||
Black Rock, Inc.(12)
|
1,073,475
|
(13)
|
0
|
7.6
|
%(13)
|
*
|
1.4
|
%(13)
|
||||||||||||
River Road Asset Management, LLC (14)
|
804,556
|
0
|
5.7
|
%
|
*
|
1.1
|
%
|
|||||||||||||
LSV Asset Management (15)
|
885,856
|
0
|
6.2
|
%
|
*
|
1.2
|
%
|
|||||||||||||
Ingles Investment/Profit Sharing Plan(1)
|
207,149
|
204,149
|
1.4
|
%
|
3.4
|
%
|
2.7
|
%
|
||||||||||||
All Directors and Executive Officers as a group (8 persons)
|
5,802,637
|
(3)
|
5,752,524
|
(3)
|
29.1
|
%(3)
|
95.1
|
%(3)
|
77.1
|
%(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.
|
(3)
|
Includes the 204,149 shares of Class B Common Stock and 3,000 shares of Class A Common Stock held by the Company’s Profit Sharing Plan 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 April 6, 2020. 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 12, 2020. 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 52nd 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. 4th Street, Suite 2000, Louisville, KY 40202.
|
(15)
|
The address for this beneficial owner is 155 N. Wacker Drive, Suite 4600, Chicago, IL 60606.
|
Year Ended
September 26, 2020
|
Year Ended
September 28, 2019
|
|||||||
Audit Fees
|
$
|
1,025,000
|
$
|
967,000
|
||||
Audit-related Fees
|
—
|
—
|
||||||
Tax Fees
|
—
|
—
|
||||||
All Other Fees
|
—
|
—
|
||||||
Total Fees
|
$
|
1,025,000
|
$
|
967,000
|
●
|
LED lighting in our glass enclosed fixtures, saving 55-65% in energy consumption;
|
●
|
Skylights and automated energy management systems in our stores to turn down/turn off lights and equipment based on ambient light levels and customer proximity
to coolers and freezers;
|
●
|
Heat rejection systems to recapture and recycle heat from refrigeration compressors;
|
●
|
Recycling of all plastic wrap, bags, pallets and wood products in our stores and our distribution center;
|
●
|
Recycling single-use plastic bags and promoting the use of re-usable bags, subject to safe COVID-19 practices; and
|
●
|
Replacing our trucks with more energy efficient models and using backhauls wherever possible to minimize empty trucks on the roads.
|
By Order of the Board of Directors
|
||
Robert P. Ingle, II
|
||
Chairman of the Board
|