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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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SCHEDULE 14A
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
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Filed by the Registrant ☒
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Filed by a Party other than the Registrant
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| Preliminary Proxy Statement |
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| Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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| Definitive Proxy Statement |
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| Definitive Additional Materials |
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| Soliciting Material Pursuant to Rule §240.14a-12 |
J & J SNACK FOODS CORP.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
J & J SNACK FOODS CORP.
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(Name of Registrant as Specified In Its Charter) |
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
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350 Fellowship Road, Mount Laurel, NJ 08054
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
February
16, 202213, 2024
We are pleased to invite you to the 2024 Annual Meeting of Shareholders
(the “Annual Meeting”) of J & J SNACK FOODS CORP.
(“J & J,” the “Company,” “our,” “us” or “we”), which will be held virtually on
Wednesday,Tuesday, February
16, 2022,13, 2024, at 10:00 A.M.,
E.S.T.,Eastern Time, for the following
purpose:purposes:
1. To elect
one director;Mary M. Meder and Vincent A. Melchiorre to serve as directors, each for a term ending at the 2029 Annual Meeting of Shareholders;
2. To ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending September 28, 2024;
3. To have an advisory vote on the approval of compensation of the Company’s named executive officers; and
3.
4. To consider and act upon such other matters as may properly come before the meeting and any adjournments thereof.
The Board of Directors has fixed December
20, 2021,19, 2023 as the record date for the determination of shareholders entitled to vote at the Annual Meeting. Only shareholders of record at the close of business on that date will be entitled to notice of, and to vote at, the Annual Meeting.
Due to the continuing public health impact of the COVID-19 pandemic and to support the health and well-being of our employees and shareholders, we
We are pleased to provide shareholders with the opportunity to participate in the Annual Meeting online via the Internet in a virtual-only meeting format to facilitate shareholder attendance and provide a consistent experience to all shareholders regardless of location. We will provide a live webcast of the Annual Meeting at
www.virtualshareholdermeeting.com/JJSF2022JJSF2024, where you will also be able to submit questions and vote online. You will not be able to attend the meeting at a physical location. Closed captioning will be provided for the virtual meeting.
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING ONLINE. WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING YOU ARE URGED TO SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY.
A SELF-ADDRESSED, STAMPED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. | | | By Order of the Board of Directors, | |
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| | /s/ Marjorie S. Roshkoff
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| | Marjorie S. Roshkoff, Esquire
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| | Michael A. Pollner
Senior Vice President, General Counsel
and Secretary | |
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Important Notice Regarding the Availability of Proxy Materials for the Annual
Meeting of Shareholders to be Held on February 13, 2024:
Our Proxy Statement and 2023 Annual Report are available on our Investor Relations website (www.jjsnack.com/investors) and at www.proxyvote.com. You may also request paper copies of these proxy materials free of charge by following the instructions for requesting such materials contained in the Notice of Internet Availability of Proxy Materials.
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INFORMATION CONCERNING CONTINUING DIRECTORS AND EXECUTIVE OFFICERS
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BENEFICIAL OWNERSHIP OF SHARES
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COMPENSATION DISCUSSION AND ANALYSIS
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EXECUTIVE
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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
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GRANTS
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OPTION EXERCISES
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TRANSACTIONS WITH RELATED PERSONS
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CERTAIN TRANSACTIONS
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POTENTIAL PAYMENT UPON TERMINATION OR CHANGE IN CONTROL
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REPORTAPPOINTMENT OF THE AUDIT COMMITTEE
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INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS ACCOUNTING FIRM | 27 | | |
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OTHER MATTERS
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ANNUAL REPORT TO SHAREHOLDERS
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General Information
February 13,
2024 | | | 10:00 a.m., Eastern
Time | | | Live webcast at
www.virtualshareholdermeeting.com/JJSF2024 | | | December 19,
2023 |
Voting Matters and Vote Recommendations
1 | | | To elect Mary M. Meder and Vincent A. Melchiorre to serve as directors, each for a term ending at the 2029 Annual Meeting of Shareholders | | | “FOR” the election of each of the director nominees |
2 | | | To ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending September 28, 2024 | | | “FOR” the ratification of Grant Thornton LLP as our independent registered public accounting firm for fiscal year 2024 |
3 | | | Approval, on a non-binding advisory basis, of the compensation of our Named Executive Officers | | | “FOR” the non-binding advisory resolution approving our executive compensation |
Additional Information
Admission to the Annual Meeting | | | • Admission to the Annual Meeting is restricted to shareholders and/or their designated representatives. |
Proxy Materials | | | • On or about January 3, 2024, a Notice of Internet Availability of Proxy Materials (the “Notice”) was mailed to our shareholders of record as of December 19, 2023.
• The proxy statement, the proxy or voting instruction card, and our 2023 Annual Report to Shareholders are available at www.proxyvote.com.
• All shareholders may choose to access these materials electronically or may request printed or emailed copies at no charge. |
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How to Vote | | | It is important that your shares be represented and voted.
• Shareholders who received the Notice may vote their shares electronically at www.proxyvote.com, by telephone, or by mail after requesting a paper copy of the proxy materials. There is no charge for requesting a paper or email copy.
• We have also mailed paper copies of the proxy materials, including the proxy card, to some of our beneficial shareholders. These shareholders may also view the proxy materials online at www.proxyvote.com. They may vote their shares by mail, telephone, or Internet. To vote by mail, these shareholders should simply complete, sign, and date the proxy card and return it in the envelope provided. To vote by telephone or Internet, 24 hours a day, 7 days a week, these shareholders should refer to the proxy card for voting instructions.
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• If you attend the Annual Meeting and want to vote at the Annual Meeting, you can withdraw your proxy. If your shares are held in the name of a broker, bank or other holder of record, you will need a control number and legal proxy from the holder of record in order to vote your shares. Please see the procedures described under “How can I participate in the Annual Meeting” on page 3 of the proxy statement.
• Please note the voting procedures described under “How do I Vote my shares?” on page 5 of the proxy statement. |
Voting | | | • Proposal 1 – you may vote “FOR” or “WITHHOLD”.
• Proposal 2 – you may vote “FOR”, “AGAINST,” or “ABSTAIN” from voting.
• Proposal 3 – you may vote “FOR”, “AGAINST,” or “ABSTAIN” from voting.
If you elect to “ABSTAIN” from voting on Proposal 2 or Proposal 3, your abstention will have the effect of a vote “AGAINST” the proposal. In addition, a failure to vote on Proposal 1 will have no effect, subject to the application of our Director Resignation Policy discussed below. |
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FREQUENTLY ASKED QUESTIONS ABOUT THE ANNUAL MEETING AND VOTING PROXY STATEMENT
Why did you send me
thisthese proxy
statement?J & J SNACK FOODS CORP.materials?
As permitted by the U.S. Securities and Exchange Commission (“J & J”,SEC”) rules, we are making the “Company”proxy materials available to our stockholders primarily via the Internet. By doing so, we can reduce the printing and delivery costs and the environmental impact of the Annual Meeting. On or “we”about January 3, 2024, we mailed a Notice of Internet Availability of Proxy Materials (the “Notice”) to our stockholders. The Notice contains instructions on how to access our proxy materials and how to vote online or by telephone. If you would like to receive a paper copy of the proxy materials, please follow the instructions in the Notice.
We sent this proxy statement and the enclosed proxy card to you because our Board of Directors is soliciting your proxy to vote at the virtual
2021 Annual
Meeting of Shareholders (the “Annual Meeting”).Meeting. This proxy statement summarizes information concerning the matters to be presented at the meeting and related information that will help you make an informed vote at the meeting.
This proxy statement and the accompanying proxy card are first being mailed to shareholders on or about December 27, 2021. When is the Annual Meeting?
The Annual Meeting will be held on Wednesday,Tuesday, February 16, 2022,13, 2024, at 10:00 A.M., E.S.T.Eastern Time. The Annual Meeting will be held via a live webcast, and there will not be a physical meeting location.
How can I participate in the Annual Meeting? You will be able to attend the Annual Meeting online and to vote your shares electronically on the virtual meeting platform by visiting
www.virtualshareholdermeeting.com/JJSF2022JJSF2024 and entering the 16-digit control number included on your proxy card or in the instructions that accompanied your proxy materials.
We have decided to have the shareholder meeting remotely due to the continuing global COVID-19 pandemic. Additionally, New Jersey law has amended the New Jersey Business Corporation Act of New Jersey (“NJBCA”) to permanently allow remote shareholder meetings, as long as the Board of Directors approve such and follows the required guidelines, which it has done.We encourage you to access the Annual Meeting before it begins. Online check-in will start approximately 15 minutes before the Annual Meeting on February
16, 2022.13, 2024. If you have difficulty accessing the meeting, please call the technical support number that will be posted on the Annual Meeting login page. We will have technicians available to assist you.
At the Annual Meeting, you will be voting:
To elect Mary M. Meder and Vincent A. Melchiorre to serve as directors, each for a term ending at the 2029 Annual Meeting of Shareholders;
To ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending September 28, 2024;
On an advisory vote on approval of executive compensation;
On any other matter, if any, as may properly come before the meeting and any adjournment or postponement of the annual meeting.
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| To elect one director for a five-year term;
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| On an advisory vote on approval of the compensation of executives; and
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| On any other matter, if any, as may properly come before the meeting and any adjournment or postponement of the annual meeting.
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How do you recommend that I vote on these items?
The Board of Directors recommends that you vote:
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FORthe director nominee.election of each of Mary M. Meder and Vincent A. Melchiorre to serve as directors, each for a term ending at the 2029 Annual Meeting of Shareholders. |
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FOR ratification of the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending September 28, 2024. |
| • | APPROVE on
FOR the advisory vote approving executive compensation. |
Who is entitled to vote?
You may vote if you owned our common share(s) as of the close of business on December
20, 2021,19, 2023, the record date for the annual meeting. On the record date, there were
19,088,83219,367,175 shares of J & J common stock, no par value (“Common Stock”) outstanding.
Holders of our Common Stock at the close of business on December 19, 2023 are generally entitled to one vote per share of Common Stock on each matter to be voted upon at the Annual Meeting.
Who pays expenses related to the proxy solicitation?
The expenses of the proxy solicitation will be borne by
J & J.the Company. In addition to solicitation by mail, proxies may be solicited in person or by telephone by directors, officers or employees of
J & Jthe Company and its subsidiaries without additional compensation.
J & JThe Company may engage the services of a proxy-soliciting firm.
J & J isWe are required to pay the reasonable expenses incurred by record holders of J & J Common Stock, who are brokers, dealers, banks or voting trustees, or their nominees, for mailing proxy material and annual shareholder reports to the beneficial owners of Common Stock they hold of record, upon request of such recordholders.
How many votes are needed
What constitutes a quorum?
The holders of a majority of the aggregate outstanding shares of Common Stock, present either in person or by proxy, will constitute a quorum for the transaction of business at the Annual Meeting and at any postponement or adjournment of the Annual Meeting. Pursuant to
electthe New Jersey Business Corporations Act (NJBCA), abstentions and broker non-votes (described below) will be counted for the purpose of determining whether a
director?quorum is present.
What vote is required to approve each proposal?
Proposal 1: Election of Directors
Pursuant to the NJBCA, the election of directors will be determined by a plurality vote and the one (1) nomineetwo (2) nominees receiving the most “FOR” votes will be elected. If any nominee for director in an uncontested election receives a greater number of votes “withheld” than votes “for” such election, our Director Resignation Policy requires that such nominee must promptly tender his or her resignation to the Board following certification of the vote, which the Board shall accept or reject within 90 days of the shareholder vote.
Proposal 2: Ratification of the Appointment of Independent Registered Public Accounting Firm
The affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting is required to ratify the selection of our independent registered public accounting firm.
Proposal 3: Advisory Vote Approving Executive Compensation
The affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting is required to approve, on an advisory basis, the executive compensation described in this proxy statement.
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Approval of any other proposal will require the affirmative vote of a majority of the
votes cast on the proposal.What constitutes a quorum?
The holders of a majority of the aggregate outstanding shares of Common Stock, present either in person or represented by proxy will constitute a quorum for the transaction of business at the Annual Meeting, and at any postponementunless otherwise required by our constituent documents or adjournment of the Annual Meeting. Pursuant to the NJBCA, abstentions and broker non-votes (described below) will be counted for the purpose of determining whether a quorum is present.
applicable law.
What is the effect of abstentions and broker non-votes?
Under the NJBCA, abstentions, or a withholding of authority,
or broker non-votes, are not counted as votes cast
but are counted as shares present in person or represented by proxy at the Annual Meeting and, therefore, will have
nothe effect
on any proposalof a vote “AGAINST” Proposal 2 and Proposal 3 at the Annual Meeting. Brokers who hold shares for the accounts of their clients may vote such shares either as directed by their clients or in their own discretion if permitted by the applicable stock exchange or other organization of which they are members. Members of the New York Stock Exchange (“NYSE”) are permitted to vote their clients’ shares in their own discretion as to certain “routine” matters if the clients have not timely furnished voting instructions prior to the Annual Meeting. The election of directors
isand the advisory vote regarding executive compensation are not considered
a routine
matter.matters and, consequently, without your voting instructions, your brokerage firm cannot vote your shares on these proposals. When a broker votes a client’s shares on some, but not all, of the proposals at a meeting, the omitted votes are referred to as “broker non-votes.”
Broker non-votes are not counted as votes cast or as present in person or represented by proxy at the Annual Meeting and, therefore, will have no effect on any proposal at the Annual Meeting.How do I vote my shares?
If you are a registered shareholder (that is, if your stock is registered in your name), you may attend
Registered shareholders can vote via the Internet during the Annual Meeting and vote onlinewebcast or by proxy. There are three ways to vote by proxy. Toproxy:
By Telephone – You can vote by mail - mark, signcalling 1-800-690-6903;
| • | By Internet – You can vote over the Internet at www.proxyvote.com and following the instructions on the proxy card; or |
By Mail – You can vote by completing, dating, signing and datereturning the enclosed proxy card. Please allow sufficient time for delivery of your proxy card if you decide to vote by mail.
Telephone and
return such card in the postage-paid envelope J & J has provided you.Internet voting facilities for shareholders of record will be available 24 hours a day and will close at 11:59 P.M. Eastern Time on February 12, 2024.
If you hold your shares in street name (that is, if you hold your shares through a broker, bank or other holder of record), you will receive a voting instruction form from your broker, bank or other holder of record. This form will explain which voting options are available to you. If you want to vote in person at the annual meeting, you must obtain an additional proxy card from your broker, bank or other holder of record authorizing you to vote. You must
bringhave this
proxy cardinformation available to
access the meeting.
J & J encourages you to vote your shares for matters to be covered at the Annual Meeting.
What if I do not specify how I want my shares voted?
If you submit a signed proxy card but do not indicate how you want your shares voted, the persons named in the enclosed proxy will vote your shares of Common Stock:
“for” the election of each of Mary M. Meder and Vincent A. Melchiorre to serve as directors, each for a term ending at the 2029 Annual Meeting of Shareholders;
“for” ratification of the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending September 28, 2024;
“for” the advisory vote approving executive compensation; and
with respect to any other matter that properly comes before the Annual Meeting, the proxy holders will vote the proxies in their discretion in accordance with their best judgment and in the manner they believe to be in the best interest of the Company.
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| “for” the election of the nominee for director;
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| “approve” the advisory vote approving executive compensation; and
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| with respect to any other matter that properly comes before the Annual Meeting, the proxy holders will vote the proxies in their discretion in accordance with their best judgment and in the manner, they believe to be in the best interest of J & J.
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Can I change my vote after submitting my
proxy?proxy?
Yes. You can change your vote at any time before your proxy is voted at the Annual Meeting. If you are a shareholder of record, you may revoke your proxy by:
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| submitting a later-dated proxy by mail; or
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| attending the Annual Meeting via the webcast and voting electronically on the virtual meeting platform. Your attendance alone will not revoke your proxy. You must also vote electronically at the Annual Meeting.
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submitting a later vote by telephone or the Internet;
submitting a later-dated proxy by mail; or
attending the Annual Meeting via the webcast and voting electronically on the virtual meeting platform. Your attendance alone will not revoke your proxy. You must also vote electronically at the Annual Meeting.
If you hold your shares in street name, you must contact your broker, bank or other nominee regarding how to change your vote.
Can shareholders speak or ask questions at the Annual Meeting?
Yes.
J & J encouragesWe encourage shareholders to ask questions or to voice their views.
J & JWe also
wisheswish to assure order and efficiency for all attending shareholders. Accordingly, the Chairman of the Annual Meeting will have sole authority to make any determinations on the conduct of the Annual Meeting, including time allotted for each shareholder inquiry or similar rules to maintain order. Such determination by the Chairman of the Annual Meeting will be final, conclusive and binding. Anyone who is disruptive or refuses to comply with such rules of order will be excused from the Annual Meeting.
Attendance
Who will tabulate the votes?
Votes cast by proxy or in person will be counted by Broadridge Financial Solutions, Inc. who was appointed by us to act as election inspectors for the meeting.
Where do I find the voting results of the meeting?
We will announce the preliminary voting results at the Annual Meeting?meeting and provide the final results in a Current Report on Form 8-K filed with the SEC within four business days following the meeting.
Householding
We are permitted by the SEC to send a single copy of our Notice of Internet Availability and, if you requested printed versions by mail, the set of our proxy statement and annual report to stockholders who share the same last name and address. This procedure is called “householding” and is intended to reduce our printing and postage costs. We will promptly deliver a separate copy of our Notice of Internet Availability and, if you requested printed versions by mail, our annual report and proxy statement to you if you contact us at Attn: Michael A. Pollner, Corporate Secretary, J & J Snack Foods Corp., 350 Fellowship Road, Mount Laurel, NJ 08054; telephone us at (856) 665-9533; or email us at InvestorRelations@jjsnack.com. In addition, if you want to receive separate copies of the proxy statement or annual report in the future; if you and another shareholder sharing an address are receiving more than one copy of the proxy materials and would like to request delivery of a single copy of the proxy statement or annual report at such address in the future; or if you would like to make a permanent election to receive either printed or electronic copies of the proxy materials and annual report in the future, you may contact us at the same address, telephone number or email address. If you hold your shares through a broker or other intermediary and would like additional copies of our proxy statement or annual report or would like to request householding, please contact your broker or other intermediary.
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Due
CORPORATE SOCIAL RESPONSIBILITY
J & J Snack Foods Corp. and its subsidiaries believe that every great snack starts with great products. This means committing to the continued publiclong-term health of people and the planet. We acknowledge that our activities have an impact on the environment both locally and globally. We recognize that the long-term success of our business is predicated on creating a cleaner and healthier environment, safeguarding and responsibly using natural resources, and reducing the impact of our operations while eliminating waste. We believe that a thoughtful approach to environmental, social and governance matters is critical to our ongoing success and is the global COVID-19 pandemicright thing to do.
The Company prioritizes the issues that fundamentally impact the company’s business and its stakeholders – focusing efforts and resources where they will have the greatest impact not just on our bottom line but on the communities we serve. During Fiscal Year 2023, we continued to supportwork on initiatives designed to simultaneously drive growth, foster social prosperity, and encourage environmental stewardship. We are committed to increasing the health and well-beinguse of recyclable materials in our packaging. We are taking steps to minimize the environmental impact of our employeesactivities from supply chain to production, implementing a procurement strategy to eliminate purchases from regions at risk for deforestations and shareholders,enforcing our Supplier Code of Conduct. We have encouraged the use of sustainable palm oil in four products since 2017 and we are pleasedRSPO (Roundtable for Sustainable Palm Oil) certified.
In 2023, we added new capacity and new lines designed and installed to provide shareholdersallow for regional production thereby reducing transportation costs. We have also added new regional distribution centers with the opportunity to participatemodern construction technology resulting in the Annual Meeting online via the Internet in a virtual-only meeting format to facilitate shareholder attendance and provide a consistent experience to all shareholders regardlessenergy efficiencies. Our new network of location. We will provide a live webcast of the Annual Meeting at www.virtualshareholdermeeting.com/JJSF2022, where youregional distribution centers will also be ableresult in fewer miles driven and less fuel consumed. This is in addition to submit questionscontinuing our efforts to reduce water usage at our facilities, converting from fluorescent lighting to LEDs, adopting food scrap and vote online. You will need your 16-digit control number included on your proxy cardoil reuse programs, and redesigned our packing materials to utilize less plastics.
Throughout our history, we have consistently demonstrated an outstanding enthusiasm of caring for each other, our customers, and the communities where we live and work. In 2023, we renewed this long-standing commitment by continuing our support of local outreach efforts like the 9/11 National Meal Pack Day serving greater Nashville’s Second Harvest Food Bank, “Clean the Park or
Creek” events and tree planting initiatives in
the instructions that accompanied your proxy materials. You will not be ablesupport of Earth Day, National Night out, and multiple giving back programs like back to
attend the meeting at a physical location. Closed captioning will be provided.If your shares are registered in street name, your method of voting is described above.
Methods of Voting
Shareholders can vote via the Internet during the Annual Meeting webcast or by proxy. There are three ways to vote by proxy:
school, and holiday support drives. CORPORATE GOVERNANCE PRACTICES
Size of the Board of Directors | ●
| By Telephone – You can vote by calling 1-800-690-6903;
| 8 |
Number of Independent Directors | | | 5 |
Audit, Compensation and Governance Committees Consist Entirely of Independent Directors | | | Yes |
Annual Advisory Approval of Named Executive Officer Compensation | | | Yes |
Corporate Governance Guidelines | | | Yes |
Stock Ownership Guidelines for Directors | | | Yes |
Clawback Policy | | | Yes |
Stockholder Rights Plan (Poison Pill) | | | No |
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| By Internet – You can vote over the Internet at www.proxyvote.com and following the instructions on the proxy card; or
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| By Mail – If you received proxy materials by mail you can vote by signing, dating and mailing the enclosed proxy card.
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Telephone
ELECTION OF DIRECTORS
Our Board of Directors currently consists of eight (8) members: Our founder and Internet voting facilitiesChairman Emeritus, Gerald B. Shreiber, whose term expires at our 2025 Annual Meeting; Mary M. Meder and Vincent A. Melchiorre, whose terms expire at our 2024 Annual Meeting; Peter G. Stanley, whose term expires at our 2026 Annual Meeting; Marjorie S. Roshkoff and Daniel J. Fachner, whose terms expire at our 2027 Annual Meeting; and Sidney R. Brown and Roy C. Jackson, whose terms expire at our 2028 Annual Meeting.
In November 2023, our Board of Directors voted to nominate Mary M. Meder and Vincent A. Melchiorre for
stockholders of record will be available 24 hours a day and will close at 11:59 P.M. E.S.T. on February 15, 2022.PROPOSAL 1
INFORMATION CONCERNING NOMINEE FOR ELECTION TO BOARD
One (1) director is expectedre-election to be elected at the Annual Meeting to serve on the Board of Directors for a term ending at the 2029 Annual Meeting of J & J until the expiration of hisShareholders. If either Ms. Meder or her term as indicated below and until his or her successor is elected and has qualified.
The following table sets forth information concerning J & J’s nominee for election to the Board of Directors. If the nomineeMr. Melchiorre becomes unable or for good cause will notunwilling to serve, the persons named in the enclosed form of proxy will vote in accordance with their best judgment for the election of such substitute nominee as shall be designated by the Board of Directors. The Board of Directors of J & J expects the nomineenominees to be willing and able to serve.
| | | | | | | Year of | |
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Name | | Age | | Position | | Term as Director | |
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Marjorie S. Roshkoff, Esquire | | 53 | | Director | | 2027 | |
Marjorie S. Roshkoff became
THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES.
Biographical Information about the Nominees and Directors Set forth below are the names of our directors, including the persons nominated to be reelected as a
Director in 2020. Since February 2016, she has been In-House Counsel with J & J Snack Foods Corp. and was made a Vice President in 2017 and General Counsel in 2021. She joineddirector, as well as their ages as of December 15, 2023, their offices within the
Company in February 2016 with more than 15 years of legal experience. As General Counsel, Ms. Roshkoff oversees outside counsel and is responsible for all of the Company’s legal matters. In addition to her litigation andcompany, if any, their principal occupations or employment
related expertise, she has extensive knowledge of the Company’s history, organization and culture and adds the perspective of a long-term highly committed director, shareholder and employee regarding Board decisions and matters. Ms. Roshkoff is a daughter of Gerald B. Shreiber, the founder of the Company and current Chairman of the Board.The Board recommends that you vote “FOR” the election of the nominee
INFORMATION CONCERNING CONTINUING
DIRECTORS AND NAMED EXECUTIVE OFFICERS
| | | | | | | Year of Expiration of | |
Name | | Age | | Position | | Term as Director | |
Gerald B. Shreiber | | 80 | | Chairman of the Board | | 2025 | |
| | | | | | | | |
Sidney R. Brown | | 64 | | Director | | 2023 | |
| | | | | | | | |
Vincent Melchiorre | | 61 | | Director | | 2024 | |
| | | | | | | | |
Peter Stanley | | 79 | | Director | | 2026 | |
| | | | | | | | |
Daniel Fachner | | 61 | | President, Chief Executive Officer | |
| | | | | | | | |
Ken A. Plunk | | 58 | | Senior Vice President, | | | |
| | | | | Chief Financial Officer | | | |
| | | | | | | | |
Robert M. Radano (1) | | 72 | | Senior Vice President, | | | |
| | | | | Chief Operating Officer | | | |
| | | | | | | | |
Robert Pape | | 64 | | Senior Vice President, Sales | | | |
| | | | | | | | |
Lynwood Mallard | | 53 | | Senior Vice President, Chief Marketing Officer | | | |
| | | | | | | | |
Stephen Every | | 59 | | Chief Operating Officer, the ICEE Company | | | |
| | | | | | | | |
Dennis G. Moore (2) | | 66 | | Former Senior Vice President, | | | |
| | | | | Former Chief Financial Officer and former Director | | | |
(1) Mr. Radano retired in March 2021.
(2) Mr. Moore retired as Chief Financial Officer in September 2020. Mr. Moore continued to work for the Company until December 2020,past five years, the length of their tenure as directors, the names of other public companies in which such persons hold directorships or held directorships within the past five years, and then served in a consulting role until July 2021.
the particular experience, qualifications attributes or skills that led the Board to determine that the individual should serve as director. Gerald B. Shreiber | | | 82 | | | Director and Chairman Emeritus | | | 2025 |
Sidney R. Brown | | | 66 | | | Director | | | 2028 |
Daniel J. Fachner | | | 63 | | | Director, Chairman, President and CEO | | | 2027 |
Roy C. Jackson | | | 63 | | | Director | | | 2028 |
Mary M. Meder | | | 61 | | | Director | | | 2024 |
Vincent A. Melchiorre | | | 63 | | | Director | | | 2024 |
Marjorie S. Roshkoff | | | 55 | | | Director | | | 2027 |
Peter G. Stanley | | | 81 | | | Director | | | 2026 |
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Gerald B. Shreiber
Director since 1971
Age 82
Chairman Emeritus
Committees:
None | | Professional Experience: Mr. Shreiber is the founder of the Company and serves as Chairman Emeritus. Mr. Shreiber previously served as the Company’s Chief Executive Officer from its inception in 1971 until 2021 and as Chairman of the Board from 1971 to 2023. Mr. Shreiber is the father of Marjorie S. Roshkoff, who also is on the Board.
Director Skills and Qualifications:
• Industry Experience
• Company History
• Management Experience |
Sidney R. Brown
Director since 2003
Age 66
Committees:
Compensation (Chair), Nominating | | Professional Experience: Mr. Brown is the Chief Executive Officer of NFI Industries, Inc., a global integrated supply chain solutions provider. Mr. Brown is also on the Board of FS Investments Energy and Power Fund, a specialty finance company that invests primarily in income-oriented securities of private energy-related companies. In addition, he is a member of the Board of Trustees of Cooper Health Systems, a non-profit provider of health services in Southern New Jersey. Mr. Brown has management experience in running a large company and experience in executing strategic acquisitions. He has broad and vast experience in freight transportation and supply chain solutions. He also has a strong background in sales, marketing and finance. He became a director of the Company in 2003.
Director Skills and Qualifications:
• Management Experience
• Finance
• Mergers and Acquisitions
• Transportation/Logistics |
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Roy C. Jackson
Director since 2022
Age 63
Committees:
Audit,
Nominating,
Compensation | | Professional Experience: Roy C. Jackson has spent nearly 25 years in the Foodservice Industry. He has held senior level positions with PepsiCo, YUM! Brands and The Coca-Cola Company, where he retired in 2018 as Senior Vice President, Business Development & Industry Affairs. Mr. Jackson most recently held the position of Executive Vice President, Development & Industry Relations at the National Restaurant Association, of which the Company is an active member. Mr. Jackson’s experience has encompassed areas of increasing responsibility in sales, general management and restaurant operations. He currently serves as a board member of CustomerX.i Inc. and has held previous board roles with the Multi-Cultural Foodservice Hospitality Alliance, International Franchise Association and The National Restaurant Educational Foundation. Mr. Jackson received the Chairman’s Award of the National Restaurant Association in 2017 and the Partnership Award for the Women’s Foodservice Forum in 2017.
Director Skills and Qualifications:
• Industry Experience
• Sales and Marketing
• Management Experience |
Daniel J. Fachner
Director since 2022
Age 63
Chairman
Committees:
None | | Professional Experience: Dan Fachner has been President and Chief Executive Officer of J & J Snack Foods Corp. since May 2021, became a member of its Board of Directors in May 2022 and was appointed Chairman of the Board in November 2023. Mr. Fachner began his career with the ICEE Company more than forty years ago and has held several roles with increasing responsibilities during that time, including President and CEO. During his tenure at The ICEE Company, he supported the organization’s growth in the United States, Mexico, Canada, Asia, Europe, Australia, Central America and the Middle East. Mr. Fachner is currently a member of the Board of Directors of In His Grip Golf. Mr. Fachner has also previously served on the Boards of Azusa Pacific University and Los Angeles Pacific University.
Director Skills and Qualifications
• CEO Experience
• Industry Experience |
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Mary M. Meder
Director since 2022
Age 61
Committees:
Nominating,
Audit | | Professional Experience: Mary Meder currently serves as President at Harmelin Media, a national independently-owned strategic media and marketing agency located in Bala Cynwyd, PA. During her tenure as President, she has led agency growth from 85 employees to over 300, with annual billings approaching one billion dollars. Ms. Meder led the agency’s transformation, launching new services and platforms including digital media, performance marketing, influencer marketing, ecommerce, sports marketing, analytics and business intelligence. She brings over 35 years of business and advertising experience with her, with significant board experience through her long-term involvement with nonprofit organizations including Special Olympics of Pennsylvania (SOPA), Philadelphia Ad Club, and Penn State’s School of Communications. In 2011, Meder received the Special Olympics Pennsylvania Hall of Fame Al Senavitis Lifetime Achievement Award; she was honored in 2012 by the Cradle of Liberty Council – BSA – Good Scout Award; and she was recognized in 2014 by the Epilepsy Foundation and as a Mover & Shaker for the Philly Ad Club.
Director Skills and Qualifications:
• Sales and Marketing
• Digital Media
• Management Experience |
Vincent A. Melchiorre
Director since 2013
Age 63
Committees:
Audit, Nominating (Chair) | | Professional Experience: Mr. Melchiorre has approximately 40 years experience in the food industry. Mr. Melchiorre was Senior Vice President of Bimbo Bakeries USA, a position he held from September 2010 until his retirement in December 2022. From June 2007 to August 2010, Mr. Melchiorre was employed by J & J Snack Foods Corp. as Senior Vice President – Food Group. From May 2006 to June 2007, he was Senior Vice President, Bread and Roll business, George Weston Foods. From January 2003 to April 2006, he was Senior Vice President, Sales and Marketing at Tasty Baking Company and from June 1982 to December 2002 he was employed by Campbell Soup Company in various capacities, most recently as Vice President of Marketing of Pepperidge Farm. These experiences provide Mr. Melchiorre with an extensive knowledge of the food business including relevant experience in the fresh, frozen and shelf stable segments. In addition, he has had leadership roles in finance, information technology, operations, sales and marketing.
Director Skills and Qualifications:
• Industry Experience
• Sales and Marketing
• Management Experience |
Gerald B. Shreiber is the founder of the Company and serves as the Chairman of the Board. Mr. Shreiber also served as the Company’s President, and Chief Executive Officer since its inception in 1971. In May 2020, Mr. Shreiber stepped down as President of J & J Snack Foods Corp. and in May 2021, he stepped down as the Chief Executive Officer. Mr. Shreiber is the father of Marjorie S. Roshkoff, Esquire, Vice-President, General Counsel and Secretary of the Company, who has been nominated for re-election to the Board pursuant to Proposal 1.
Sidney R. Brown is the Chief Executive Officer of NFI Industries, Inc., a global integrated supply chain solutions provider. Mr. Brown is also on the Board of FS Investments Energy and Power Fund, a specialty finance company that invests primarily in income-oriented securities of private energy-related companies. In addition, he is a member of the Board of Trustees of Cooper Health Systems, a non-profit provider of health services in Southern New Jersey. Mr. Brown has management experience in running a private company and experience in executing strategic acquisitions. He has broad and vast experience in freight transportation and supply chain solutions. He also has a strong background in sales, marketing and finance. He became a director of the Company in 2003.
Vincent Melchiorre is Senior Vice President of Bimbo Bakeries USA since September 2010. From June 2007 to August 2010, Mr. Melchiorre was employed by J & J Snack Foods Corp. as Senior Vice President – Food Group. From May 2006 to June 2007, he was Senior Vice President, Bread and Roll business, George Weston Foods. From January 2003 to April 2006, he was Senior Vice President, Sales and Marketing at Tasty Baking Company and from June 1982 to December 2002 he was employed by Campbell Soup Company in various capacities, most recently as Vice President of Marketing of Pepperidge Farm. These experiences provide Mr. Melchiorre with an extensive knowledge of the food business including relevant experience in the fresh, frozen and shelf stable segments. In addition, he has had leadership roles in finance, information technology, operations, sales and marketing. Mr. Melchiorre became a director of the Company in August 2013.
Peter Stanley became a director of the Company in 1983. Since November 1999, he has been the Chairman of the Board of Emerging Growth Equities, Ltd., an investment banking firm. Mr. Stanley brings to the Board experience as a commercial and investment banker, with knowledge of strategic acquisitions and corporate finance. He provides the Board with strong financial skills and chairs our Audit Committee.
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Marjorie S. Roshkoff
Director since 2020
Age 55
Committees:
None | | Professional Experience: Ms. Roshkoff served as Vice President and General Counsel of J & J from 2019 until 2022. Prior to the General Counsel role, Ms. Roshkoff was a Vice President and in-house counsel for the Company and also managed the Human Resources function. Ms. Roshkoff has more than 20 years of legal experience and extensive knowledge of the Company’s history, organization and culture. She also adds the perspective of a long-term highly committed director and shareholder. Ms. Roshkoff is a daughter of Gerald B. Shreiber, the founder and Chairman Emeritus of the Company.
Director Skills and Qualifications:
• Legal and Regulatory Experience
• Industry Experience
• Company Culture and History |
Peter G. Stanley
Director since 1983
Age 81
Committees:
Audit (Chair),
Compensation | | Professional Experience: Mr. Stanley is the former Chairman of the Board of Emerging Growth Equities, Ltd., an investment banking firm. Mr. Stanley brings to the Board experience as a commercial and investment banker, with knowledge of strategic acquisitions and corporate finance. He provides the Board with strong financial skills and chairs our Audit Committee. Mr. Stanley has developed a thorough understanding of the Company’s industry and history on account of his long service on our Board.
Director Skills and Qualifications:
• Finance
• Mergers and Acquisitions
• Company History |
Daniel Fachner has been an employee of the ICEE Company since 1979 and became its President in August 1997. In May 2020, Mr. Fachner was named President of J & J Snack Foods Corp. and in May 2021 Mr. Fachner was appointed Chief Executive Officer of J & J Snack Foods Corp.
Ken A. Plunk was appointed Senior Vice President and Chief Financial Officer onSeptember 21, 2020. Prior to joining J & J, Mr. Plunk spent 12 years at Walmart Inc. most recently as Senior Vice President of International Finance. Prior to Walmart, he worked at The Home Depot for four years, holding leadership positions in merchandise finance and internal audit.
Robert M. Radano joined the Company in 1972 and in May 1996 was named Chief Operating Officer of the Company. Mr. Radano retired as Chief Operating Officer in March 2021.
Robert Pape joined the Company in March 1998 as Senior Vice President of Sales and Marketing. Prior to joining the Company Mr. Pape worked for Campbell Soup Company as its National Sales Director. Mr. Pape is retiring from the Company in January 2022.
Lynwood Mallard joined the Company as Senior Vice President and Chief Marketing Officer in March 2021. Prior to joining J & J, Mr. Mallard worked at the Coca-Cola Company since 1998 where he held various ascending roles in areas of brand marketing, strategy, commercialization, and innovation.
Stephen Every was named Chief Operating Officer of the ICEE Company in August 2021. Mr. Every joined the ICEE Company as Director, Special Projects in 2009. In 2012, Mr. Every was promoted to Vice President of Sales with responsibility for the management and development of relationships with many of ICEE’s largest brand and service customers in the USA.
Dennis G. Moore joined the Company in 1984. He served in various controllership functions prior to becoming the Chief Financial Officer in June 1992. Mr. Plunk replaced Mr. Moore as Chief Financial Officer in September 2020. Mr. Moore continued to work for the Company until December 2020, and then served in a consulting role until July 2021.
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CORPORATE GOVERNANCE
Corporate Governance Guidelines
J & J is incorporated under the laws of the State of New Jersey. In accordance with New Jersey law and J & J’s
By-laws,Bylaws, the Board of Directors has responsibility for overseeing the conduct of J & J’s business. J & J has established a Code of Business Conduct and Ethics which is applicable to all directors, officers and employees of the Company. In addition, the Company has adopted a Code of Ethics for Chief Executive and Senior Financial Officers. Copies of these codes are available on the Company’s
website.website at www.jjsnack.com.
The rules of
the NASDAQ
Stock Market require that a majority of the Company’s Board of Directors and the members of the Audit Committee, Compensation Committee and the
Nominating/Nominating and Corporate Governance Committee meet its independence criteria. No director qualifies as independent unless the Board determines that the director has no direct or indirect material relationship with the
Company.Company that would interfere with the exercise of independent judgement in carrying out the responsibilities of a director. The Board considers all relevant facts and circumstances of which it is aware in making an independence determination.
Based on the NASDAQ Stock Market’s guidelines, the Board of Directors has determined that each of the following directors is independent: Sidney R. Brown, Roy C. Jackson, Mary M. Meder, Vincent A. Melchiorre and Peter G. Stanley. Neither Mr.Messrs. Jackson, Melchiorre and Stanley nor Mr. Melchiorre hasand Ms. Meder do not have a business, financial, family or other type of relationship with J & J. With respect to Mr. Brown, his company, NFI Industries providedand affiliated companies, provide the following services to the Company: (i) transportation and supply chain solutions servicesservices; (ii) operate the Company’s new regional distribution centers; and (iii) lease to the Company totaling $540,000 in 2019, $274,980 in 2020 and $633,056 in fiscal year 2021.the building where the Texas regional distribution center is located. The Board of Directors determined that Mr. Brown is independent irrespective of the services provided due to the amounts involved and the relative levels of revenue of J & J and NFI. As an employeeNFI Industries.
Certificate of Incorporation – Voting Provisions The Company’s Amended and Restated Certificate of Incorporation (the “Charter”) includes certain provisions relating to shareholder and director voting. Under the Charter, no shareholder may vote more than ten percent (10%) of the Company’s voting securities (the “Voting Threshold”), including the Company’s common stock, without approval from our Board of Directors, excluding those shareholders (such as Mr. Shreiber) who held shares of common stock in excess of the Voting Threshold as of the date of the Charter’s adoption in 1990. The Charter grants the Company the right to repurchase shares held in excess of the Voting Threshold upon a duly adopted resolution of the Board of Directors.
Generally, each director of the Company’s Board of Directors is entitled to one vote on all matters upon which the Board of Directors has determinedis entitled to vote, except that Ms. RoshkoffMr. Shreiber is granted certain special voting rights with respect to any matters to be voted upon by the Board of Directors. As a result, as of the date of this Proxy Statement, Mr. Shreiber is entitled to cast six (6) votes on all matters upon which the Board of Directors is entitled to vote. Further, in the event of a “hostile change of Board control,” which would occur only when one-half or more of the total number of directors serving on the Board of Directors have not independent.been nominated by the Board of Directors or by a duly-authorized committee of the Board of Directors, our Charter grants “Experienced Directors,” defined as those Directors with more than five years of experience of serving as Directors of the Company, certain expanded voting rights that could delay, deter or prevent an acquisition of the Company.
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We provide the following information about our directors for purposes of our compliance with NASDAQ rules. We ask our directors and director nominees to indicate their self-identification with respect to race/ethnicity, gender, gender identity, and sexual orientation, subject to applicable laws. Our Corporate Governance Guidelines place great emphasis on diversity and require that our Nominating and Corporate Governance Committee and full Board consider diversity as a factor in the recruitment and nomination of new directors.
Board Diversity Matrix (as of December 15, 2023)
| | | | | | | | | | | | |
Part I – Gender Diversity | | | | | | | | | | | | |
Directors | | | 2 | | | 6 | | | — | | | — |
| | | | | | | | | | | | |
Part II – Demographics Background | | | | | | | | | | | | |
African American or Black | | | — | | | 1 | | | — | | | — |
Alaskan Native or Native American | | | — | | | — | | | — | | | — |
Asian | | | — | | | — | | | — | | | — |
Hispanic or Latinx | | | — | | | — | | | — | | | — |
Middle Eastern | | | — | | | — | | | — | | | — |
Native Hawaiian or Pacific Island | | | — | | | — | | | — | | | — |
White | | | 2 | | | 5 | | | — | | | — |
Two or More Races or Ethnicities | | | — | | | — | | | — | | | — |
LGBTQ+ | | | — | | | — | | | — | | | — |
Did not disclose demographic background | | | — | | | — | | | — | | | — |
During the fiscal year, the Board of Directors held four
(4) regularly scheduled meetings. Each
Directordirector attended at least 75% of the total meetings of the Board of Directors and the Committees on which he or she
served.served, except Mr. Shreiber who attended 50% of the meetings of the Board of Directors.Annual Meeting Attendance
It has been longstanding practice of the Company for all
Directorsdirectors to attend the Annual Meeting of Shareholders. All
Directorsdirectors then serving virtually attended the Annual Meeting held in February
2021.2023.
Executive Sessions of Independent Directors
The Independent Directors meet in executive sessions without management present before or after regularly scheduled Board meetings.
Director Stock Ownership Guidelines
The Board has established stock ownership guidelines for the non-employee directors. Within twothree years of election as a director, the director must attain and hold 3,0001,500 shares of J & J’sJ Common Stock. All current non-employee directors meet this guideline.guideline except for Mr. Jackson and Ms. Meder, who were appointed in May 2022 and September 2022, respectively.
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The Board of Directors has reviewed and discussed the leadership structure at the Company, and
during fiscal 2021in November 2023 determined that it would be in the best interests of the Company for
the Board of DirectorsMr. Fachner to
separate the roles ofserve as Chairman of the Board,
and President and Chief Executive Officer. As of the date of this proxy statement, the offices of Chairman and President and Chief Executive Officer are held by two separate individuals. Mr. Shreiber, the founder of the Company and significant shareholder, servesin addition to serving as
Chairman and Mr. Fachner serves as the President and Chief Executive Officer of the Company.
The Board believesGiven the
separationcurrent size and composition of the
rolesBoard and Mr. Fachner’s strong knowledge and leadership of the Company, the Board determined that Mr. Fachner is
best suited to lead the board in its discussion of key business and strategic matters, and to focus the Board on the most
appropriate structure at this time as it allowscritical issues facing the
Company’s PresidentCompany. Mr. Fachner’s Company-specific expertise and
Chief Executive Officer toindustry knowledge will facilitate the Board’s focus
primarily on
establishing and implementing the Company’s strategic
planobjectives, as well as the Board’s oversight of the Company and
on day-to-day operations.its management. Mr. Shreiber, who served as Chairman of the Board until November 2023, continues to serve as a director in the role of Chairman Emeritus.
In order to fulfill its responsibilities, the Board has delegated certain authority to its Committees. There are three standing committees: (i) Audit Committee, (ii) Compensation Committee and (iii)
Nominating/Nominating and Corporate Governance Committee. Each Committee has its own Charter which is reviewed annually by each Committee to assure ongoing compliance with applicable law and sound governance practices. Committee charters may be found on our website at
www.jjsnack.com under the “Investors” tab and then under “Corporate
Governance”.Governance.” Paper copies are available at no cost by written request to
Marjorie S. Roshkoff,Michael A. Pollner, Corporate Secretary, J & J Snack Foods Corp.,
6000 Central Highway, Pennsauken, New Jersey 08109. Shareholders may also call Joe Jaffoni, Norberto Aja or Jennifer Neuman at our investor relations firm, JCIR. The telephone number is 212-835-8500 or contact jjsf@jcir.com for a paper copy.350 Fellowship Road, Mount Laurel, NJ 08054.
Gerald B. Shreiber | | | | | | | | | |
Sidney R. Brown | | | | | | Chair | | | X |
Daniel J. Fachner | | | | | | | | | |
Roy C. Jackson | | | X | | | X | | | X |
Mary M. Meder | | | X | | | | | | X |
Vincent A. Melchiorre | | | X | | | | | | Chair |
Marjorie S. Roshkoff | | | | | | | | | |
Peter G. Stanley | | | Chair | | | X | | | |
The Audit Committee is comprised of directors Mr. Stanley (Chairman), Mr.
BrownJackson, Mr. Melchiorre, and
Mr. Melchiorre,Ms. Meder, each of whom qualifies as an independent director and meets the other requirements to serve on the Audit Committee under rules of the NASDAQ Stock Market. The principal functions of the Audit Committee include, but are not limited to:
| ●
| The oversight of the accounting and financial reporting processes of the Company and its internal control over financial reporting.
|
The oversight of the accounting and financial reporting processes of the Company and its internal control over financial reporting.
The oversight of the quality and integrity of the Company’s financial statements and the independent audit thereof.
Discussion of the audited financials with the Company’s management.
9Recommend to the Company’s Board, as appropriate, that the Company’s audited financial statement be included in the Company’s annual report on Form 10-K.
The approval, prior to the engagement, of the Company’s independent auditors and, in connection therewith, to review and evaluate the qualifications, independence and performance of the Company’s independent auditors.
| ●
| The oversight of the quality and integrity of the Company’s financial statements and the independent audit thereof.
|
| ●
| Discussion of the audited financials with the Company’s management.
|
| ●
| Recommend to the Company’s Board, as appropriate, that the Company’s audited financial statement be included in the Company’s annual report on Form 10‑K.
|
| ●
| The approval, prior to the engagement of, the Company’s independent auditors and, in connection therewith, to review and evaluate the qualifications, independence and performance of the Company’s independent auditors.
|
The Audit Committee currently does not have an Audit Committee Financial Expert, as such term is defined in Section 407 of the Sarbanes-Oxley Act of 2002. The Audit Committee believes that the background and experience of its members allow them to perform their duties as members of the Audit Committee. This background and experience include
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a former banker and retired investment banker who
regularly reviewshas significant experience reviewing financial statements of companies, a
Chief Executive Officer of aretired executive with substantial
private companyfinancial experience with
financial oversight responsibilities who also is a former Chairman of the Board of a National Bank, andsophisticated, global business operations, a businessman who has had substantial financial oversight responsibilities with food
companies.companies, and a chief executive officer of a media communications company.
The Audit Committee held
six (6)eight (8) meetings during the
20212023 fiscal year.
The Compensation Committee
The Compensation Committee is comprised of directors Mr. Brown (Chairman)
, Mr. Jackson and Mr. Stanley, each of whom qualifies as an independent director under the rules of the NASDAQ Stock
Market, as non-employee directors under Rule 16b-3 of the Securities Exchange Act of 1934, and as outside directors under Section 162(m) of the Internal Revenue Service.Market. The Committee has responsibility for the following:
| ●
| Annually review and determine the compensation of the Chief Executive Officer and other officers without the Chief Executive Officer being present during the voting or deliberations of the compensation committee with respect to his or her compensation.
|
| ●
| Review and approve compensation paid to family members of officers and directors.
|
| ●
| Determine the Company’s policy with respect to the application of Internal Revenue Code Section 162(m).
|
Annually review and determine the compensation of the Chief Executive Officer and other officers.
Review and approve compensation paid to family members of officers and directors.
Approve the form of employment contracts, severance arrangements, change in control provisions and other compensatory arrangements with officers.
10Approve cash incentives and deferred compensation plans for officers (including any modification to such plans) and oversee the performance objectives and funding for executive incentive plans.
Approve compensation programs and grants involving the use of the Company’s stock and other equity securities.
Prepare an annual report on executive compensation for inclusion in the Company’s proxy statement for each annual meeting of shareholders in accordance with applicable rules and regulations.
Have direct responsibility for the appointment, compensation and oversight of the work of any compensation consultant, legal counsel and other advisor retained by the Compensation Committee.
Review the Committee’s performance annually.
Review and reassess the adequacy of the Committee’s Charter annually and recommend to the Board any appropriate changes.
Perform such other duties and responsibilities as may be assigned to the Committee, from time to time, by the Board.
| ●
| Approve the form of employment contracts, severance arrangements, change in control provisions and other compensatory arrangements with officers.
|
| ●
| Approve cash incentives and deferred compensation plans for officers (including any modification to such plans) and oversee the performance objectives and funding for executive incentive plans.
|
| ●
| Approve compensation programs and grants involving the use of the Company’s stock and other equity securities, including the administration of the J & J Snack Foods Corp. Amended and Restated Long-Term Incentive Plan
|
| ●
| Prepare an annual report on executive compensation for inclusion in the Company’s proxy statement for each annual meeting of shareholders in accordance with applicable rules and regulations.
|
| ●
| Retain or obtain the advice of a compensation consultant, legal counsel or other advisor.
|
| ●
| Have direct responsibility for the appointment, compensation and oversight of the work of any compensation consultant, legal counsel and other advisor retained by the Compensation Committee.
|
| ●
| Monitor compliance with legal prohibitions on loans to directors and officers of the Company.
|
| ●
| Review the Committee’s performance annually.
|
| ●
| Review and reassess the adequacy of the Committee’s Charter annually and recommend to the Board any appropriate changes.
|
| ●
| Perform such other duties and responsibilities as may be assigned to the Committee, from time to time, by the Board.
|
The Compensation Committee held four (4)
meeting(s)meetings during the
2023 fiscal
2021 year.
The Nominating and Corporate Governance Committee is comprised of directors Mr. Melchiorre (Chairman), Mr. Brown,
Ms. Meder, and Mr.
Stanley,Jackson, each of whom qualifies as an independent director under rules of the NASDAQ Stock Market. This Committee’s primary responsibilities are to:
| • | ●
| Make recommendations to the Board regarding composition of the Board and committees of the Board.
|
Identify individuals qualified to become Board members and recommend to the Board qualified individuals to be nominated for election or appointment to the Board.
Conduct background and qualifications checks of persons it wishes to recommend to the Board as candidates or to fill vacancies.
Recommend to the Board the slate of nominees of directors to be proposed for election by the shareholders and individuals to be considered by the Board to fill vacancies.
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Establish policies regarding the consideration of director candidates recommended by security holders.
11Develop a succession plan for the Company’s Chief Executive Officer.
Develop corporate governance guidelines applicable to the Company.
| ●
| Identify individuals qualified to become Board members and recommend to the Board qualified individuals to be nominated for election or appointed to the Board.
|
| ●
| Conduct background and qualifications checks of persons it wishes to recommend to the Board as candidates or to fill vacancies.
|
| ●
| Recommend to the Board the slate of nominees of directors to be proposed for election by the stockholders and individuals to be considered by the Board to fill vacancies. Approvals should follow a review by the Committee of the performance and contribution of fellow directors as well as the qualifications of proposed new directors.
|
| ●
| Establish policies regarding the consideration of director candidates recommended by security holders.
|
| ●
| Develop a succession plan for the Company’s Chief Executive Officer.
|
| ●
| Develop corporate governance guidelines applicable to the Company.
|
The Nominating and Corporate Governance Committee will consider nominees for directors recommended by stockholders.shareholders. Any stockholdershareholder may recommend a prospective nominee for such Committee’s consideration by submitting in writing to the Company’sMichael A. Pollner, Corporate Secretary, (at the Company’s address set forth below)J & J Snack Foods Corp., 350 Fellowship Road, Mount Laurel, NJ 08054, the prospective nominee’s name and qualifications.
The
Due to certain scheduling conflicts, the Nominating and Corporate Governance Committee
did not formally meet in fiscal year 2023. However, the Committee held
three (3)two meetings
in October 2023 and conducted certain Committee business informally through telephone calls and other communications during
the fiscal
2021 year.year 2023.
Shareholder Proposals and Nominations
Any stockholdershareholder who wishes to submit a proposal to be voted on or to nominate a person for election to the Board of Directors at the Company’s Annual Meeting of StockholdersShareholders in 20232025 must notify the Company’s Secretary (at the Company’s address set forth above)(Michael A. Pollner, Corporate Secretary, J & J Snack Foods Corp., 350 Fellowship Road, Mount Laurel, NJ 08054), no earlier than August 29, 2022September 5, 2024 and no later than September 28, 2022October 5, 2024 (unless the date of the 20232025 annual meeting is more than 30 days before or more than 60 days after February 16, 2023,13, 2025, in which case the notice of proposal must be received (a) not morelater than 90 daysthe 90th day prior to the annual anniversary of the date on which the Company first mailed proxy materials for the 20222024 annual meeting to shareholders and (b) not earlierlater than the close of business on the later of (i) 60 daysthe 60th day prior to the annual anniversarysuch date of the date on which the Company first mailedmailing of proxy materials for the 2022 annual meeting to shareholders, and (ii)or the 10th day following the dateday on which the Company first publicly announcespublic announcement of the date of the 2023 annual meeting).meeting is first made. The notice of a proposal or nomination must also include certain information about the proposal or nominee and about the stockholdershareholder submitting the proposal or nomination, as required by the Company’s By-Laws,bylaws, and must also meet the requirements of applicable securities laws. In addition, shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must comply with the additional requirements of Rule 14a-19 under the Securities Exchange Act of 1934 (the “Exchange Act”).
To be considered for inclusion in the proxy statement for the 2025 annual meeting of shareholders pursuant to Rule 14a-8 of the Exchange Act, proposals must be received no later than September 5, 2024 and otherwise comply with the proxy rules. Proposals or nominations not meeting these requirements will not be presented at the annual meeting.
For more information regarding stockholdershareholder proposals or nominations, you may request a copy of the Bylaws from the Company’sMichael A. Pollner, Corporate Secretary, at the Company’s address set forth below.
J & J Snack Foods Corp., 350 Fellowship Road, Mount Laurel, NJ 08054.
Communication with The Board
Shareholders, employees and others may contact any of the Company’s Directors by writing to them c/o J & J Snack Foods Corp.,
6000 Central Highway, Pennsauken, New Jersey 08109.350 Fellowship Road, Mount Laurel, NJ 08054, Attention: Corporate Secretary.
Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934 requires that the Company’s directors and executive officers, and persons who beneficially own more than ten percent of the Company’s Common Stock, file with the Securities and Exchange Commission reports of ownership and changes in ownership of Common Stock and other equity securities of the Company. To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations received by it from such directors and executive officers, all Section 16(a) filing requirements applicable to the Company’s officers, directors and greater than ten percent (10%) beneficial owners were complied with during fiscal 2021, except a Form 4 for the grant of awards to Mr. Brown which was filed late.year 2023.
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The Role of the Board in Risk Oversight
It
The Board of Directors is responsible for oversight of the Company’s risk management process. The Board delegates to the Compensation Committee responsibility for oversight of management’s compensation risk assessment. The Board delegates other risk management oversight matters, including cyber security risks, to the Audit Committee. Our Audit Committee periodically discusses and evaluates risk with members of management, our independent auditors and our internal audit group. Both the Compensation Committee and Audit Committee report to the full Board where appropriate.
Risk Assessment – Incentive Compensation Programs
Our Compensation Committee conducted a risk assessment of our compensation programs and practices. This process included a review of our incentive compensation plans. Based on this process, our Compensation Committee concluded that our compensation programs and practices are appropriately structured and do not create risks that are reasonably likely to have a material adverse effect on the Company.
Policy on Clawbacks
The Company has adopted a clawback policy, established in accordance with the listing requirements of the NASDAQ Stock Market, which provides for the mandatory recovery or “clawback” of certain erroneously awarded incentive-based compensation in the event that the Company is required to prepare an accounting restatement due to material noncompliance with the financial reporting requirements under the federal securities laws.
Policy Against Hedging
The Board of Directors also unanimously adopted an Anti-Hedging Policy in 2020. Under this policy, Executive Officers and Directors of the Company and its subsidiaries shall not, unless previously approved by the Nominating and Governance Committee of the Board, directly or indirectly:
Purchase any financial instrument, or enter into any transaction, that is designed to understandhedge or offset a decrease in the market value of Company stock (including, but not limited to, prepaid variable forward contracts, equity swaps, collars or exchange funds); or
Hypothecate, or otherwise encumber shares of Company stock as collateral for indebtedness. This prohibition includes, but is not limited to, holding such shares in a margin account.
Compensation Committee Interlocks and overseeInsider Participation
None of our executive officers serves as a member of the compensation committee of any other company that has an executive officer serving as a member of the Board. None of our executive officers serves as a member of the board of directors of any other company that has an executive officer serving as a member of our Compensation Committee.
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Our Board of Directors has adopted the J & J Snack Foods Corp. Non-Employee Director Compensation Plan. Under this Plan, each Non-Employee Director then serving shall receive an annual fee of $155,000 payable within ten days of the Company’s
strategic plans, and the steps that senior management is taking to manage and mitigate those risks. In the normal course of its business, the Company is exposed to a variety of risks, including marketing and sales, financial reporting and control, information technology, employee matters and legal issues. The identification and understanding of the risks are important in the successful management of the Company. Key management is responsible for the day to day management of the business risks.Director Compensation
Each non-employee director then serving received on January 1, 2021a payment of $150,000 (in Company stock or cash at the election of the director).annual meeting. In addition, the Chairman of the Audit Committee receives an additional annual fee of $10,000.
In the event a Non-Employee Director serves for less than an entire year, the yearly portion of the annual fee payable for such year shall be prorated based on the number of days in the year for which the Director served. Under the Plan, our Non-Employee Directors may elect to receive all or a portion of their annual fee in the form of shares of the Company’s common stock. The number of shares issuable pursuant to an election is equal to the value of the fee forgone divided by the fair market value of the Company’s common stock on the payment date. For 2023, all of our directors elected to receive their annual fee in the form of a cash payment, except Mr. Jackson and Ms. Meder.
2023 Director Compensation Table The following table shows the director compensation paid for service on the Board during the fiscal year ending on September 30, 2023. Neither Mr. Fachner nor Mr. Shreiber participates in the Non-Employee Director Compensation Table for Fiscal 2021Plan. Mr. Fachner’s compensation is described in the “2023 Summary Compensation Table” below.
Gerald B. Shreiber | | | — | | | $7,057(1) | | | $7,057 |
Sidney R. Brown | | | 155,000 | | | — | | | 155,000 |
Roy C. Jackson | | | 155,000(2) | | | — | | | 155,000 |
Mary M. Meder | | | 155,000(2) | | | — | | | 155,000 |
Vincent A. Melchiorre | | | 155,000 | | | — | | | 155,000 |
Marjorie S. Roshkoff | | | 155,000 | | | 39,021(3) | | | 194,021 |
Peter G. Stanley | | | 165,000 | | | — | | | 165,000 |
(1)
| Includes the value of certain health and welfare benefits provided to the Director. |
(2)
| Pursuant to our Non-Employee Director Compensation Plan, Mr. Jackson and Ms. Meder elected to receive a portion of their cash fees in the form of shares of our common stock. In the case of Mr. Jackson, $62,000 was received in the form of 441 shares of common stock (based on a closing price of $140.67). In the case of Ms. Meder, $155,000 was received in the form of 1,102 shares of common stock (based on a closing price of $140.67). |
(3)
| Includes COBRA premiums payable by the Company on Ms. Roshkoff’s behalf following her separation from the Company as General Counsel. |
| | | Fees Paid | | | Fees Paid | |
| | | in Cash | | | in Stock | |
Directors | | | | | | | | |
Sidney R. Brown | | $ | 89,263 | | | $ | 60,737 | |
Peter G. Stanley | | $ | 160,000 | | | | | |
Vincent Melchiorre | | $ | 150,000 | | | | | |
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REPORT OF THE AUDIT COMMITTEE 13The primary purpose of the Audit Committee is to oversee the Company’s accounting and financial reporting process and the audits of the Company’s financial statements.
The Company’s management is responsible for the integrity of the Company’s financial statements, as well as its accounting and financial reporting process and internal controls for compliance with applicable accounting standards, laws and regulations. The Company’s independent registered public accounting firm, Grant Thornton LLP (“Grant Thornton”), is responsible for performing an independent audit of the Company’s financial statements in accordance with generally accepted auditing standards and expressing an opinion in its report on those financial statements.
The Audit Committee is responsible for monitoring and reviewing these processes, as well as the independence and performance of the Company’s independent registered public accounting firm. The Audit Committee does not conduct auditing or accounting reviews or procedures.
The Audit Committee has relied on management’s representation that the financial statements have been prepared with integrity and in conformity with generally accepted accounting procedures in the U.S. and on the registered public accounting firm representations included in its report on the Company’s financial statements. The Company’s independent registered public accounting firm also audited and discussed with the Audit Committee the Company’s internal control over financial reporting.
The Audit Committee reviewed and discussed with management the Company’s audited financial statements for fiscal year 2023. The Audit Committee discussed with the Company’s registered public accounting firm, Grant Thornton, matters required to be discussed by the applicable standards of the Public Company Accounting Oversight Board.
The Audit Committee has received and reviewed the written disclosures and the letter from Grant Thornton required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accounting firm’s communications with the Audit Committee concerning independence. In addition, the Audit Committee discussed with Grant Thornton its independence from the Company and considered whether the providing of non-audit services to the Company by Grant Thornton is compatible with maintaining Grant Thornton’s independence.
Based on these reviews and discussions and in reliance thereon, the Audit Committee recommended to the Board of Directors that the audited financial statements for the Company be included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023.
Audit Committee of the Board of Directors:
Peter G. Stanley, Chairman
Roy C. Jackson
Vincent A. Melchiorre
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RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has appointed Grant Thornton LLP, an independent registered public accounting firm, (“Grant Thornton”) as the independent certified public accountants to audit the accounts of the Company and its subsidiaries for the fiscal year that began on October 1, 2023. Our Board is seeking shareholder ratification of this appointment at the Annual Meeting. Our Bylaws do not require that shareholders ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm. However, we are seeking ratification because we believe it is a good corporate governance practice. A representative of Grant Thornton will be present virtually at the Annual Meeting and will have an opportunity to make a statement if desired. The representative will be available to answer appropriate questions.
Fees of Independent Registered Public Accounting Firm
The following table sets forth aggregate fees billed or expected to be billed for services rendered by Grant Thornton for fiscal years 2023 and 2022, inclusive of out-of-pocket expenses.
Audit Fees(1) | | | $1,275 | | | $1,198 |
Audit-Related Fees | | | $97 | | | $448 |
Tax Fees | | | $539 | | | $286 |
All Other Fees | | | — | | | — |
Total | | | $1,911 | | | $1,932 |
(1)
| Audit fees include: fees rendered in connection with the annual audit of the Company’s consolidated financial statements; reviews of the Company’s unaudited consolidated interim financial statements; services for consultations and other current matters. |
Audit Committee Policies and Procedures on Pre-Approval of Audit and Permissible Non-Audit Services
The Audit Committee has adopted policies and procedures requiring that the Company obtain the Audit Committee’s pre-approval of all audit and permissible non-audit services to be provided by Grant Thornton as the Company’s independent accountants. Pre-approval is generally granted on a fiscal year basis, is detailed as to the particular service or category of services to be provided and is granted after consideration of the estimated fees for each service or category of service. Actual fees and any changes to estimated fees for preapproved services are reported to the Committee on a quarterly basis.
Other Matters
The Audit Committee of the Board of Directors has considered whether the provision of tax services described above is compatible with maintaining the independence of the Company’s independent registered public accounting firm. The Audit Committee has approved Grant Thornton’s performing these services.
Shareholder Approval Required
We are seeking ratification because we believe it is a good corporate governance practice. If shareholders do not ratify the appointment, the Audit Committee will reconsider whether to retain Grant Thornton, but in its discretion, may choose to retain Grant Thornton as the Company’s independent registered public accounting firm. Even if the appointment is ratified, the Audit Committee in its discretion may change the appointment at any time during the year if it determines that a change would be in the best interests of the Company and its shareholders.
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Votes may be cast in favor of or against this proposal or a shareholder may abstain from voting. Abstentions will have the effect of a vote “AGAINST” this proposal. As discussed above, the ratification of Grant Thornton as our independent registered public accounting firm is a “routine” matter, and your broker or nominee will have the discretion to vote your shares on this proposal absent voting instructions from you. Therefore, there are no broker non-votes on this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2024.
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ADVISORY VOTE ON APPROVAL OF
EXECUTIVE COMPENSATION
Section 14A to the Exchange Act requires that we provide our shareholders with the opportunity to vote to approve, on a nonbinding, advisory basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the Securities and Exchange Commission’s rules.
The vote on this resolution is not intended to address any specific element of compensation; rather, the advisory vote relates to the overall compensation of our named executive officers, as well as the philosophy, policies and practices, all as described in this proxy statement. The vote is advisory, and therefore it is not binding on the Company, the Compensation Committee or our Board of Directors. We have determined that our shareholders should cast an advisory vote on the compensation of our named executive officers on an annual basis. The next advisory vote on the compensation of our named executive officers will be at the 2025 Annual Meeting of Shareholders.
The affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting is required to approve this Proposal 3.
“RESOLVED, that the company’s shareholders approve, on a nonbinding, advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2024 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and disclosure.”
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS YOU VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE SECURITIES AND EXCHANGE COMMISSION.
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Set forth below are the names of our executive officers who are not also directors, their ages as of December 15, 2023, their offices within the company, their principal occupations or employment for the past five years and the names of other public companies in which such persons hold directorships.
Robert K. Cranmer | | | 67 | | | Senior Vice President, Operations |
| | | | | | |
Stephen J. Every | | | 61 | | | Chief Operating Officer, The ICEE Company |
| | | | | | |
Mary Lou Kehoe | | | 62 | | | Vice President, Human Resources |
| | | | | | |
Lynwood M. Mallard | | | 55 | | | Senior Vice President, Chief Marketing Officer |
| | | | | | |
Ken A. Plunk | | | 60 | | | Senior Vice President, Chief Financial Officer |
| | | | | | |
Michael A. Pollner | | | 50 | | | Senior Vice President, General Counsel & Secretary |
Robert K. Cranmer joined the Company in 2013. Since that time, he has served in various operational plant roles prior to becoming Senior Vice President of Operations in 2022.
Stephen J. Every was named Chief Operating Officer of The ICEE Company in August 2021. Mr. Every joined The ICEE Company as Director, Special Projects in 2009. In 2012, Mr. Every was promoted to Vice President of Sales with responsibility for the management and development of relationships with many of ICEE’s largest brand and service customers in the USA.
Mary Lou Kehoe joined the Company in January 2020 as the Director of Human Resources. Ms. Kehoe was promoted to Vice President Human Resources in March 2021 and has responsibility for the Human Resources function across all business lines. Prior to working at J & J Snack Foods Corp., Ms. Kehoe served in various Human Resource functions managing the HR Operations side of the business while working at various consumer packaged goods companies, including Campbell Soup, Pinnacle Foods and Conagra Brands.
Lynwood M. Mallard joined the Company as Senior Vice President and Chief Marketing Officer in March 2021. Prior to joining J & J, Mr. Mallard worked at the Coca-Cola Company since 1998 where he held various ascending roles in areas of brand marketing, strategy, commercialization, and innovation.
Ken A. Plunk was appointed Senior Vice President and Chief Financial Officer on September 21, 2020. Prior to joining J & J, Mr. Plunk spent 12 years at Walmart Inc. most recently as Senior Vice President of International Finance. Prior to Walmart, he worked at The Home Depot for four years, holding leadership positions in merchandise finance and internal audit.
Michael A. Pollner was appointed Senior Vice President and General Counsel in April 2022. Prior to joining J &J, Mr. Pollner spent 16 years at Knoll, Inc., most recently as Senior Vice President, Chief Administrative Officer, General Counsel and Secretary. Prior to Knoll, Inc., Mr. Pollner was a business lawyer with two prominent U.S. based law firms.
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SECURITY OWNERSHIP OF
SHARESCERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth information as of December
20, 202115, 2023 concerning
the beneficial ownership of our Common Stock by (i) each person or group known
to J & Jby us to be the beneficial owner of more than five percent (5%) of
our outstanding Common Stock, (ii) each director of the Company
and director nominee, (iii)
each of the Company’s Named Executive Officers for
the fiscal year
2021,2023, and (iv)
the beneficial ownershipall of
Common Stock by the Company’sour directors and
all Executive Officersexecutive officers as a group. Except as otherwise noted, each beneficial owner of the Common Stock listed below has sole investment and voting power.
| | | Shares of | | | | | | |
| | | Common | | | | | | |
| | | Stock | | | | | | |
| | | Owned | | | | | | |
Name and Address of Beneficial Owner | | Beneficially | | | | Percent of Class (1) | |
| | | | | | | | | | |
Directors, Nominees and Named Executive Officers | | | | | | | | | |
| | | | | | | | | | |
Gerald B. Shreiber | | | 3,602,814 | | (2)(6) | | | 19 | % |
| 6000 Central Highway | | | | | | | | | |
| Pennsauken, NJ 08109 | | | | | | | | | |
Sidney R. Brown | | | 14,684 | | (7) | | | * | |
Vincent Melchiorre | | | 3,000 | | (3) | | | * | |
Peter G. Stanley | | | 10,000 | | (3) | | | * | |
Marjorie S. Roshkoff | | | 75,334 | | (4)(8) | | | * | |
Daniel Fachner | | | 19,786 | | (4) | | | * | |
Ken A. Plunk | | | 1,579 | | (9) | | | * | |
Robert M. Radano | | | 95,353 | | (4)(10) | | | * | |
Robert Pape | | | 6,479 | | (4) | | | * | |
Steve Every | | | 2,663 | | (4) | | | * | |
Lynwood Mallard | | | -- | | | | | | |
Dennis G. Moore | | | 63,106 | | (11) | | | * | |
| | | | | | | | | | |
All executive officers and directors as a group (10 persons) | | | 3,736,339 | | (5) | | | 20 | % |
| | | | | | | | | | |
Five percent Shareholders | | | | | | | | | |
| | | | | | | | | | |
Black Rock Fund Advisors (12) | | | | | | | | | |
| 400 Howard Street | | | | | | | | | |
| San Francisco, CA 94105 | | | | | | | | 13 | % |
| | | | | | | | | | |
The Vanguard Group, Inc. (13) | | | | | | | | | |
| 100 Vanguard Blvd. | | | | | | | | | |
| Malvern, PA 19355-2331 | | | | | | | | 9 | % |
| | | | | | | | | | |
Wells Fargo & Company (14) | | | | | | | | | |
| 420 Montgomery Street | | | | | | | | | |
| San Francisco, CA 94163 | | | | | | | | 6 | % |
| | | | | | | | | | |
Macquarie Investment Management (15) | | | | | | | | | |
| 100 Independence | | | | | | | | | |
| 610 Market Street | | | | | | | | | |
| Philadelphia, PA 19106-2354 | | | | | | | | 5 | % |
* Less than 1 %
(1) The securities “beneficially owned” by a person are determined in accordance with the definition Percentage of “beneficial ownership” set forth in the regulations of the Securities and Exchange Commission and, accordingly, include securities owned by or for the spouse, children or certain other relatives of such person as well as other securities as to which the person has or shares voting or investment power or has the right to acquire within 60 days of Record Date. The same shares may be beneficially owned by more than one person. Beneficial ownership may be disclaimed as to certain of the securities.
(2) Includes 140,000is based on 19,366,375 shares of Common Stock issuable upon the exercisecommon stock outstanding as of options exercisable within 60 days from the date of this Proxy Statement.December 15, 2023.
Shareholders owning approximately 5% or more: | | | | | | |
2021 Irrevocable Trust for Gerald B. Shreiber(2) | | | 3,498,511 | | | 18.1 |
BlackRock, Inc.(3) | | | 2,364,130 | | | 12.2 |
The Vanguard Group(4) | | | 1,562,967 | | | 8.1 |
Allspring Global Investment Holdings, LLC(5) | | | 1,329,781 | | | 6.9 |
Macquarie Group Limited(6) | | | 1,273,361 | | | 6.6 |
Directors and Executive Officers: | | | | | | |
Daniel J. Fachner(7) | | | 28,987 | | | * |
Ken A. Plunk(8) | | | 1,846 | | | * |
Robert K. Cranmer(9) | | | 2,148 | | | * |
Stephen J. Every(10) | | | 5,102 | | | * |
Lynwood M. Mallard(11) | | | 312 | | | * |
Gerald B. Shreiber(12) | | | 3,928,167 | | | 20.2 |
Sidney R. Brown(13) | | | 17,284 | | | * |
Roy C. Jackson | | | 411 | | | * |
Mary M. Meder | | | 1,102 | | | * |
Vincent A. Melchiorre | | | 3,000 | | | * |
Marjorie S. Roshkoff(14) | | | 3,806,314 | | | 19.7 |
Peter G. Stanley | | | 10,000 | | | * |
All directors and executive officers as a group (14 persons)(15) | | | 4,307,007 | | | 22.2 |
*
| Represents beneficial ownership of less than one percent (1%) of our outstanding common shares |
(1)
| The securities “beneficially owned” by a person are determined in accordance with the definition of “beneficial ownership” set forth in the regulations of the Securities and Exchange Commission and, accordingly, include securities owned by or for the spouse, children or certain other relatives of such person as well as other securities as to which the person has or shares voting or investment power or has the right to acquire within 60 days after December 15, 2023. The same shares may be beneficially owned by more than one person. |
(2)
| Marjorie S. Roshkoff possesses the voting and dispositive power with respect to the securities beneficially owned by the 2021 Irrevocable Trust for Gerald B. Shreiber based upon a Schedule 13D filed with the SEC on September 3, 2021. The address for the Trust is 6000 Central Highway, Pennsauken, New Jersey 08109. |
(3)
| BlackRock, Inc. filed a Schedule 13G/A with the SEC on January 26, 2023, indicating that as of December 31, 2022, (a) it had sole voting power over 2,343,214 of these shares, and (b) it had sole dispositive power over all of these shares. The address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055. |
(4)
| The Vanguard Group filed a Schedule 13G/A with the SEC on February 9, 2023, indicating that as of December 30, 2022, (a) it had shared voting power over 26,183 of these shares, (b) it had shared dispositive power over 41,366 of these shares, and (c) it had sole dispositive power over 1,521,601 of these shares. The address of The Vanguard Group is 100 Vanguard Blvd, Malvern, PA 19355. |
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(5)
| Allspring Global Investments Holdings, LLC, Allspring Global Investments, LLC and Allspring Funds Management, LLC filed a Schedule 13G/A with the SEC on January 13, 2023, indicating that as of December 31, 2022, (a) Allspring Global Investment Holdings, LLC had sole voting power over 1,252,290 of these shares and sole dispositive power over all of these shares, (b) Allspring Global Investments, LLC had sole voting power over 240,634 of these shares and beneficial ownership of, and sole dispositive power over, 1,327,588 of these shares and (c) Allspring Funds Management, LLC had sole voting power over 1,011,656 of these shares, sole dispositive power over 2,193 of these shares and beneficial ownership of 1,013,849 of these shares. The address of Allspring Global Investments Holdings, LLC, Allspring Global Investments, LLC and Allspring Funds Management, LLC is 525 Market Street, 10th Floor, San Francisco, CA 94105. |
(6)
| Macquarie Group Limited, Macquarie Management Holdings Inc., and Macquarie Investment Management Business Trust filed a Schedule 13G/A with the SEC on February 14, 2023, indicating that as of December 30, 2022: (a) Macquarie Group Limited had beneficial ownership of all of these shares, and (b) Macquarie Management Holdings Inc. and Macquarie Investment Business Trust had sole voting power and sole dispositive power over 1,263,465 of these shares and beneficial ownership of all of these shares. The address of Macquarie Group Limited is 50 Martin Place Sydney, New South Wales, Australia. The address of Macquarie Management Holdings Inc. and Macquarie Investment Management Business Trust is 2005 Market Street, Philadelphia, PA 19103. |
(7)
| Excludes 28,556 restricted stock units held by Mr. Fachner which will not vest within 60 days of December 15, 2023. |
(8)
| Excludes 7,614 restricted stock units held by Mr. Plunk which will not vest within 60 days of December 15, 2023. |
(9)
| Includes options to purchase 2,000 shares of common stock. Excludes 2,856 restricted stock units held by Mr. Cranmer which will not vest within 60 days of December 15, 2023. |
(10)
| Excludes 2,856 restricted stock units held by Mr. Every which will not vest within 60 days of December 15, 2023. |
(11)
| Excludes 2,856 restricted stock units held by Mr. Mallard which will not vest within 60 days of December 15, 2023.
|
(12)
| Includes 3,498,511 shares held in the 2021 Irrevocable Trust for Gerald B. Shreiber, 259,755 shares held in the Gerald B. Shreiber Foundation of which Mr. Shreiber is a Trustee and options to purchase 120,000 shares of common stock. Excludes options to purchase 20,000 shares of common stock held by Mr. Shreiber which will not vest within 60 days of December 15, 2023. |
(13)
| Includes 14,469 shares held in the Sidney and Sandy Brown Foundation of which Mr. Brown is a Trustee. |
(14)
| Includes 3,498,511 shares held in the 2021 Irrevocable Trust for Gerald B. Shreiber, for which Ms. Roshkoff is Trustee, and options to purchase 1,321 shares of common stock. Also includes 217,642 shares held in an Intentionally Defective Grantor Trust for Ms. Roshkoff and her siblings, for which Ms. Roshkoff serves as the Trustee. Also includes 18,756 shares held for the benefit of Ms. Roshkoff’s children in trust or custodian accounts, each of which Ms. Roshkoff serves as the Trustee or Custodian. |
(15)
| Excludes 3,500 shares of common stock issuable to all directors and executive officers as a group upon the exercise of options and 47,816 restricted stock units held by all directors and executive officers as a group, all of which will not vest within 60 days after December 15, 2023. |
(3) Owned jointly with spouse with shared voting.
(4) Includes 32,336 shares of Common Stock issuable upon the exercise of options granted to executive officers of J & J and exercisable within 60 days from the date of this Proxy Statement.
(5) Includes 172,336 shares of Common Stock issuable upon the exercise of options exercisable within 60 days from the date of this Proxy Statement, and excludes shares owned by Mr. Moore and Mr. Radano.
(6) Includes 3,552,892 shares held in the 2021 Irrevocable Trust for Gerald B. Shreiber. Does not include 289,755 number of shares held in a Foundation of which Mr. Shreiber is a Trustee and who has disclaimed beneficial ownership of such shares.
(7) Does not include 2,600 number of shares held in a Foundation of which Mr. Brown is a Trustee and who has disclaimed ownership of such shares.
(8) Does not include 3,552,892 shares held in The 2021 Irrevocable Trust for Gerald B. Shreiber, for which the Ms. Roshkoff is Trustee, 217,642 shares held in a trust for Ms. Roshkoff and her siblings, IDGT, for which Ms. Roshkoff serves as the Trustee, nor 22,764 shares held by Ms. Roshkoff’s children individually, held in trust or custodian accounts, for each of which Ms. Roshkoff serves as the Trustee or Custodian. Ms. Roshkoff disclaims beneficial ownership of these securities except to the extent of her pecuniary interest therein, and the inclusion of these shares in this report shall not be deemed an admission of beneficial ownership of all of the reported shares for purposes of Section 16 or for any other purpose.
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(9) Includes 1,579 granted to Mr. Plunk thirty days after his appointment as Chief Financial Officer, which vest equally over three years.
(10) Mr. Radano retired in March 2021.
(11) Mr. Moore retired as Chief Financial Officer in September 2020. As of November 24, 2020, he owned 63,106 shares.
(12) As reported in Amendment No. 13 to its Schedule 13G filed with the SEC on January 27, 2021. Includes shares beneficially owned by BlackRock Life Limited, BlackRock Advisors, LLC, BlackRock (Netherlands) B.V., BlackRock Fund Advisors, BlackRock Institutional Trust Company, National Association, BlackRock Asset Management Ireland Limited, BlackRock Financial Management, Inc., BlackRock Japan Co., Ltd., BlackRock Asset Management Schweiz AG, BlackRock Investment Management, LLC, BlackRock Investment Management (UK) Limited, BlackRock Asset Management Canada Limited, BlackRock Investment Management (Australia) LimitedCompensation Discussion and BlackRock Fund Managers Ltd.
(13) As reported in Amendment No. 7 to its Schedule 13G filed with the SEC on February 10, 2021. Includes shares beneficially owned by Vanguard Asset Management, Limited, Vanguard Fiduciary Trust Company, Vanguard Global Advisors, LLC, Vanguard Group (Ireland) Limited, Vanguard Investments Australia Ltd, Vanguard Investments Canada Inc., Vanguard Investments Hong Kong Limited and Vanguard Investments UK, Limited.
(14) As reported in its Schedule 13G filed with the SEC on February 11, 2021. Includes shares beneficially owned by Wells Fargo Advisors Financial Network, LLC, Wells Fargo Bank, National Association, Wells Fargo Clearing Services, LLC, Wells Fargo Funds Management, LLC, Wells Fargo Delaware Trust Company, National Association, Wells Capital Management Incorporated.
(15) As reported in its Schedule 13G filed with the SEC on February 12, 2021. Includes shares beneficially owned by Macquarie Group Limited, Macquarie Bank Limited, Macquarie Affiliated Managers (USA) Inc., Macquarie Affiliated Managers Holdings (USA) Inc., Macquarie Americas Holdings Pty Ltd., Macquarie B.H. Pty Limited, Macquarie FG Holdings Inc., Macquarie Funding Holdings Inc., Macquarie Investment Management Limited, Macquarie Investment Management Global Limited, Macquarie Investment Management Australia Limited, Macquarie Investment Management Austria Kapitalanlage AG, ValueInvest LUX.
COMPENSATION DISCUSSION AND ANALYSIS
Analysis (“CD&A”)
J & J Snack Foods Corp. manufactures and sells snack foods and frozen beverages which it markets nationally to the food service and retail supermarket industries. Our compensation programs are designed to support our business goals and promote both short-term and long-term growth. This section of the proxy statement explains how our compensation programs are designed and operate in practice with respect to our Named Executive officers.Officers (each an “NEO” and, collectively, our “NEOs”). For fiscal year 2021,2023, our Named Executive OfficersNEOs are theDaniel J. Fachner, our Chairman, President and Chief Executive Officer, the former Chief Executive Officer, theKen A. Plunk, our Chief Financial Officer, the formerStephen J. Every, Chief FinancialOperating Officer - The ICEE Company, Lynwood M. Mallard, our Chief Marketing Officer, and the three most highly compensated executive officers, as well as an officer who retired during fiscal year 2021.Bob K. Cranmer, SVP – Operations. The “Executive Compensation” section presents compensation earned by the Named Executive Officers.Officers and references in this CD&A to our “executive officers” or “officers” refer to the NEOs unless the context indicates otherwise.
Overview- How Did We Perform?
We performed well in 2023, delivering record sales of $1.56 billion and record adjusted EBITDA of $181.6 million2. In 2023, we met our goal to achieve gross margins of at least 30%, delivering a yearly gross margin of 30.1%, with gross margins of 32.8% in the fourth quarter of 2023. This was, in part, the result of improved operating performance and efficient management of distribution expenses. This performance enabled us to return over $53.0 million of cash to our shareholders in the form of dividends in fiscal year 2023. The Compensation Committee recognized that this performance was delivered in a year where significant inflationary pressures carried over from 2022 for a significant part of fiscal year 2023.
In addition to achievement of the financial measures mentioned above, we completed the opening of six new production lines in 2023, significantly increasing our production capacity. We also successfully opened the first of our new regional distribution centers in Terrell, Texas in July 2023. The second regional distribution center opened in Woolwich, New Jersey in October 2023, and the third one is expected to open in Arizona in February 2024.
Based on the Company’s financial performance in 2023, delivering $181.6 million in adjusted EBITDA, relative to a target of $195.0 million, and taking into account the economic environment during the year and all the non-financial achievements the Company accomplished in 2023, the Compensation Committee approved 2023 short-term incentive payments that ranged between one hundred twenty-five percent (125%) of target and one hundred thirty-nine percent (139%) of target.
How did we respond to our 2023 Advisory Vote on Executive Compensation?
Approximately 97% of our shareholders voted in favor of our advisory say on pay proposal at our 2023 Annual Meeting. Our Compensation Committee has reviewed the results of this vote and, based in part on the substantial support we received, we did not make significant changes to our compensation programs for the 2023 fiscal year. We remain willing to discuss any compensation concerns with our shareholders if and when they arise.
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Executive Compensation Objectives
and Philosophy
Our executive compensation programs reflect our results-oriented corporate culture that rewards achievement of aggressive goals. Our compensation
programprograms for executive officers
isare designed to attract, retain, motivate and reward talented executives who will advance our strategic, operational and financial objectives and thereby enhance
stockholdershareholder value.
The
Our executive compensation program incorporates the following
principles are considered in setting compensation programs and pay levels:best practices: | ●
| Compensation and benefit programs offered by J & J should appropriately reflect the size and financial resources
| We provide a significant portion of our Company in order to maintain long-term viability. These programs should be increasingly market-based (rather than legacy) and competitive, without limiting our ability to adequately invest in our business. This approach supports our efforts to maintain a viable and sustainable enterprise for the future. |
| ●
| Compensation should reward Company and individual performance. Our programs should strive to deliver competitivenamed executive officers’ total compensation for exceptional individual and Company performance to companies with whom we compete for executive talent.
|
| ●
| Compensation of executive officers should be predominately performance-based. At higher levels in the Company, a greater proportionform of an executive’s compensation should be linkedawards tied to our long-term strategy and our performance.
|
| | | We balance both Company performance and stockholder returns. As discussed below,retention in our performance is measured against financialcompensation awards. |
| | | We have ongoing consideration and operational goals and objectives. We also place emphasis on relative performanceoversight by an independent Compensation Committee with respect to any potential risks associated with our competitor peer group.incentive compensation programs. |
| ●
| The objectives of rewarding performance and retention should be balanced. In periods of temporary downturns in Company performance, particularly when driven by unanticipated industry events or customer decisions, our
| We maintain a Clawback Policy for Section 16 Officers which permits the company to recover excess incentive compensation programs should continue to ensure that high-achieving, marketable executives remain motivated and committed to J & J. This principle is essential to our effort to encourage our leaders to remain with J & J for long and productive careers. |
| ●
| Executive officers should be J & J stockholders. Stock ownership aligns our executive officers’ interest with those of our stockholders. They should be required to maintain ownership of J & J stock at a level appropriate for their position in the company. J & J’s long-term equity-based compensation program should facilitate stock ownership and linkevent of a portion of compensation to stock price appreciation.
restatement. |
| | | We prohibit our Executive Officers from engaging in hedging transactions in our stock. |
Determining Compensation
– Role of Compensation Committee and Management
The Compensation Committee’s process for determining compensation levels for executive officers differs depending upon the compensation element and the position of the individual being considered. For each executive officer, other than the Chief Executive Officer, the Compensation Committee annually reviews each element of compensation described below in consultation with the Chief Executive Officer. With respect to the Chief Executive Officer, the Compensation Committee assesses the annual Company and individual performance. A number of factors are considered in determining individual compensation level, including performance of the individual and the business unit or function under his or her leadership, the Company’s performance, and economic and business conditions affecting J & J at the time of the review. Management and external sources provide relevant information and analyses as the Compensation Committee deems appropriate. While substantially guided by the applicable performance metrics of our programs, the Compensation Committee retains authority to exercise its judgment when approving individual
awards.In fiscal year 2021,awards and payouts.
Elements of Executive Compensation Program
Our executive compensation programs are comprised of: (i) base salary; (ii) annual non-equity incentive bonuses, which are discretionary, but based primarily on the
Compensation Committee, with the approval of the Board engaged a compensation consultant, Pearl Meyer, to provide competitive market information around executive and non-employee director compensation for select positions. Pearl Meyer benchmarked compensation in several executive positions including market data for base salary, annual incentives long term incentives and target total Director compensation. Pearl Meyer used a peer group of 15 publicly traded consumer staple goods (soft drinks, packaged foods, food distributors) companies with revenues between $500 million and $2.4 billion.In determining to engage Pearl Meyer, the Compensation Committee considered the independence of Pearl Meyer, taking into consideration relevant factors, including the absence of other services provided to the Company by Pearl Meyer, the amount of fees the Company paid to Pearl Meyer as a percentage of Pearl Meyer’s total revenue, the policies and procedures of Pearl Meyer that are designed to prevent conflicts of interest, any business or personal relationship of the individual compensation advisors employed by Pearl Meyer with any executive officer of the Company, any business or personal relationship the individual compensation advisors employed by Pearl Meyer have with any member of the Compensation Committee, and any stock of the Company owned by Pearl Meyer or the individual compensation advisors employed by Pearl Meyer. The Compensation Committee has determined, based on its analysis and in light of all relevant factors, including the factors listed above, that the work of Pearl Meyer and the individual compensation advisor employed by Pearl Meyer as a compensation consultant to the Compensation Committee has not created any conflicts of interest, and that Pearl Meyer is independent pursuant to the independence standards set forth in Nasdaq’s continued listing requirements promulgated pursuant to Section 10C of the Exchange Act.
J & J’s policies are generally not to have employment contracts or change in control provisions for its executive officers. None of these officers have employment contracts or change-in-control provisions. This substantial long-term commitment is also demonstrated in this group’s significant ownership of Company stock.
Annual Cash Incentive
The Annual Cash Incentive or Bonus for each Named Executive Officer is handled in a variety of ways. Certain executives are governed by various formula described below which have been developed over the years. The Compensation Committee determines bonuses based on Company and individual performance.
Gerald B. Shreiber. At our 2004 Annual Meeting, the shareholders approved a bonus formula for Mr. Shreiber whereby he receives annually a bonus equal to 2.5 percent of the Company’s Net Earnings. The Compensation Committee did not follow this formula for fiscal year 2019 due to the benefits of the Tax Cuts and Jobs Act of 2017. In 2019, Mr. Shreiber’s bonus was $2,270,469, which was again less than the pre-approved formula. Mr. Shreiber gave up his remaining salary for the year 2020 beginning in April 2020 in light of the global COVID-19 pandemic. He received a bonus of $457,604 in accordance with the formula set forth above for fiscal year 2020. For fiscal year 2021, Mr. Shreiber did not receive any salary, but did receive a grant of options.
Prior to assuming the role of Chief Executive Officer , Mr. Fachner’s annual bonus was aligned with his prior role and responsibilities. Upon promotion to the role of Chief Executive Officer, in recognition of Mr. Fachner’s increased duties and role as Chief Executive Officer of J & J, the Compensation Committee approved a bonus of $900,000 for Mr. Fachner.
Ken A. Plunk was appointed Senior Vice President, CFO on September 21, 2020. Based on Company performance, as well as his own performance, for fiscal 2021, the Compensation Committee approved a bonus of $375,000 for Mr. Plunk.
Robert Pape, Senior Vice President Sales, received a bonus that was discretionary based on Company and individual performance.
Stephen J. Every was appointed Chief Operating Officer of the ICEE Company in August 2021. He is entitled to a quarterly bonus which is dependent upon meeting certain income goals and can be adjusted as determined by the President. Mr. Every received a bonus of $42,000 in fiscal year 2021.
Lynwood Mallard was appointed Senior Vice President and Chief Marketing Officer in March 2021. In fiscal year 2021, he was entitled to a bonus equal to 40% of his annual salary, prorated based on his hire date. Mr. Mallard received a bonus of $58,000 in fiscal year 2021.
Robert Radano, the former Senior Vice President and Chief Operating Officer who retired in March 2021, did not receive a bonus in fiscal year 2021.
Dennis G. Moore, former Senior Vice President and former Chief Financial Officer did not receive a bonus in fiscal year 2021.
Long-Term Incentives
Long-term incentive compensation is designed to:
align executive officer and stockholder interests;
facilitate stock ownership among executive officers;
reward achievement of company objectives and performance; and (iii) long-term performance goals; and
provide incentives for executive retention;
Historically, the Compensation Committee has limited the use of long-termincentive compensation to stock options. During fiscal 2021, as a result of approval of the Company’s Amended and Restated Long Term Incentive Plan, the Compensation Committee has begun to consider the grant of other types of incentive awards including performance stock units and restricted stock.
In the first quarter of fiscal year 2022, the Compensation Committee made changes to our executive long-term compensation plan to grant half of our long-term incentives in the form of performance-based equity.periodic equity awards. Consistent with our overall compensation philosophy, a substantial component of overall compensation for each Executive Officer is performance-based.
The following sets forth the primary objectives addressed by each component of our executive compensation programs:
Base Salary | | | Provides NEOs with a competitive level of fixed compensation. Reflects individual performance and scope of responsibilities, as well as the competitive market for executive talent. | | | Competitive salaries help us attract and retain talented NEOs. |
Annual Non-Equity Incentive Bonus | | | Rewards executives for achieving annual company and individual goals. | | | Ensures that NEOs are focused on meeting key short-term business objectives and performance metrics. |
Long-Term Equity Incentive Awards | | | Provides equity awards for NEOs to focus on long-term shareholder value creation. | | | Award value is based on long-term growth in performance criteria correlated with an increase in market valuation.
Assists in retention of key executives and focus on long-term strategic objectives. |
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Base Salary: The Compensation Committee reviews base salary levels for NEOs on an annual basis and any changes are typically effective on January 1st of the next calendar year. We attempt to set base salary at levels that are competitive in the industry and in relation to the particular job function of the NEO. Base salaries are intended to provide a base level of compensation for services rendered during the year and are intended to reward the NEO for the day-to-day complexities of his or her job. Effective as of the end of the 2023 Fiscal Year (September 30, 2023), the base salaries for our NEOs are as follows:
Daniel J. Fachner | | | $950,000 |
Ken A. Plunk | | | $522,500 |
Robert K. Cranmer | | | $320,000 |
Stephen J. Every | | | $334,400 |
Lynwood M. Mallard | | | $320,000 |
Annual Non-Equity Incentive Bonus: Annual non-equity incentive bonuses are based primarily on adjusted earnings before interest, depreciation and taxes (EBITDA) but also may include supplemental goals considered by the Compensation Committee in its discretion. Our Compensation Committee may also consider the operating performance of individual business segments, subsidiaries or business functions. There is generally no quantitative formula in calculating incentive payments. Instead, the Compensation Committee considers a variety of factors, including: (i) the Company’s overall performance for the year, (ii) the individual NEO’s performance; (iii) the business environment existing during the year and (iv) any extraordinary obstacles or accomplishments that may have arisen during the course of the year. Target payouts on our annual non-equity incentive bonuses generally range from 40%-100% of base salary.
The Compensation Committee ultimately determines the amount of each NEO’s actual non-equity incentive payment based principally on our achievement of the Company’s goals. However, the Compensation Committee also has significant flexibility to increase or decrease the amounts paid irrespective of Company performance relative to its targets.
Long-Term Equity Incentive Awards: Long-term equity incentive grants are provided at levels intended to align the interests of our NEOs with those of our shareholders and to reward NEOs for performance resulting in positive increases in our stock price. Beginning inwith fiscal year 2022, the Compensation Committee has grantedour long-term incentive grants are generally structured as a mixcombination of long-term incentives, 50% in the form oftime-vested restricted stock units (“RSUs”) and 50% in the form of performance share units (“PSUs”). Theperformance-based restricted stock awards generallyunits. Our time-vested restricted stock units vest over a three-year service period in equal annual installments, subjectone-third installments. Our performance-based restricted stock units vest on the basis of our performance relative to continued employment, over three years. The PSUs are earned based on continued employment and financial performance. PSUsa two-year performance condition, followed by an additional one-year service-based vesting requirement. Performance-based stock units may be earned between 50% of the target level for threshold performance and up to 200% of the target level for maximum or aboveoutstanding performance. By utilizing equity grants that incorporate both types of vesting criteria, we believe our long-term equity incentive awards serve a retention, motivation and reward function over a longer performance horizon than our annual incentive payments.
We do not apply a rigid formula in determining the specific equity award levels for our NEOs. Instead, the Compensation Committee exercises its discretion and professional judgment as to what is appropriate for each individual NEO based on
the Company’s financial performance. The PSUs are forfeited in the case of performance below the threshold amount.The terms of the long-term incentive awards granted to Named Executive Officers are described in the narrative to Summary Compensation Tabletheir role and Grants of Plan-Based Awards table.
experience.
Retirement and Other Company Benefits
Our
Named Executive OfficersNEOs participate in the full range of
Company benefit and retirement plans provided to all salaried employees. These include health and welfare benefits, our 401(K) plan and our
Employee Stock Purchase Plan.
Perquisites
Perquisites
J & J provides a limited number of perquisites to its Named Executive Officers.NEOs. The most significant of these perquisites to the Named Executive OfficersNEOs is the use of a Company automobile.Company-owned automobiles. Mr. Fachner also receives an allowance to defray the cost of his Country Club membership.
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TaxClawback Policy
The Compensation Committee has adopted a mandatory clawback policy for current and
Accounting ConsiderationsPursuantformer executive officers aligned with the rules of the SEC and the NASDAQ Stock Market (the “Clawback Policy”). Under the Clawback Policy, in the event of an accounting restatement due to the Tax Cutsmaterial noncompliance of the Company with any financial reporting requirement under the securities laws, the Company will recover erroneously awarded incentive compensation received by current and Jobs Actformer executive officers during the three completed fiscal years immediately preceding the restatement date, unless one of 2017 compensation over $1 millionthe exceptions specified in the Clawback Policy is applicable to the particular circumstances.
2023 Compensation - Analysis
As described above, J & J delivered record sales and profitability performance in 2023. While the adjusted EBITDA results were a less than the Company’s plan for the year, the Compensation Committee recognized all of the other accomplishments in the year, many of which will have a significant impact on the Company’s performance in future years, especially the design and execution of six new production lines and significant product innovation, and approved 2023 non-equity incentive payments to our executivesNEOs that were above the target amounts.
Chief Executive Officer
Mr. Fachner was paid base salary at a rate of $950,000 per annum for FY 2023. On February 14, 2023, the Company entered into an Employment Agreement with Mr. Fachner (the “Fachner Agreement”), pursuant to which, among other things, Mr. Fachner will (i) receive a base salary of at least $950,000, (ii) receive an annual bonus with an annual target no less than Mr. Fachner’s base salary, (iii) receive an annual equity incentive award of not less than $1,500,000, and (iv) receive paid time off and other benefits on the same basis generally made available to other, similarly situated executives. The Fachner Agreement is for an initial term of four years (the “Term”) but may be extended upon mutual agreement of Mr. Fachner and the Company. If Mr. Fachner remains employed by the Company for the entire Term and the Company obtains a target EBITDA of $600 million in the aggregate over the course of fiscal years 2023 through 2026, Mr. Fachner will earn an additional bonus of $5,000,000. In the event the Fachner Agreement is terminated prior to the expiration of the Term or is not deductible. Stock-basedrenewed, Mr. Fachner will be eligible to receive one of three severance packages, depending upon the timing and reason for his termination or the non-renewal.
Based on our performance for 2023, both quantitative and qualitative as discussed above, Mr. Fachner received a 2023 non-equity incentive payment of $1,324,945, approximately one hundred thirty-nine percent (139%) of the target amount. The Compensation Committee was particularly focused on rewarding Mr. Fachner for his strong leadership of the Company, driving the right strategic initiatives in furtherance of the Company’s long-term success.
On November 16, 2022, Mr. Fachner was granted 4,949 time-vesting restricted stock units and 9,898 performance-vesting restricted stock units. The time-vesting restricted stock units vest in equal one-third annual installments over a three-year service period. The performance-vesting restricted stock units vest at the target level based on our achievement of $396.57 million in cumulative adjusted EBITDA over a two-year performance period, provided Mr. Fachner remains employed for an additional year thereafter. Our Compensation Committee believes that the combination of these grants will have a retentive influence over Mr. Fachner and, at the same time, incentivize him to achieve our goals.
Chief Financial Officer
Mr. Plunk was paid base salary at a rate of $500,000 per annum for the first few months of fiscal year 2023, and $522,500 per annum for the remainder of the fiscal year beginning in January 2023. Based on our performance for 2023, both quantitative and qualitative as discussed above, Mr. Plunk received a 2023 non-equity incentive payment of $491,850, approximately one hundred twenty-five percent (125%) of the target amount.
On November 16, 2022, Mr. Plunk was granted 1,320 time-vesting restricted stock units and 2,639 performance-vesting restricted stock units. The time-vesting restricted stock units vest in equal one-third annual installments over a three-year service period. The performance-vesting restricted stock units vest at the target level based on our achievement of $396.57 million in cumulative adjusted EBITDA over a two-year performance period, provided Mr. Plunk remains employed for an additional year thereafter. Our compensation expensecommittee believes that the combination of these grants will have a retentive influence over Mr. Plunk and, at the same time, incentivize him to achieve our goals.
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Senior Vice President-Operations
Mr. Cranmer was paid base salary at a rate of $285,000 per annum for all share-basedthe first few months of fiscal year 2023, and $320,000 per annum for the remainder of the fiscal year beginning in January 2023. Based on our performance for 2023, both quantitative and qualitative as discussed above, Mr. Cranmer received a 2023 non-equity incentive payment awards isof $165,510, approximately one hundred twenty-nine percent (129%) of the target amount.
On November 16, 2022, Mr. Cranmer was granted 495 time-vesting restricted stock units and 990 performance-vesting restricted stock units. The time-vesting restricted stock units vest in equal one-third annual installments over a three-year service period. The performance-vesting restricted stock units vest at the target level based on our achievement of $396.57 million in cumulative adjusted EBITDA over a two-year performance period, provided Mr. Cranmer remains employed for an additional year thereafter. Our Compensation Committee believes that the combination of these grants will have a retentive influence over Mr. Cranmer and, at the same time, incentivize him to achieve our goals.
Chief Operating Officer – ICEE Company
Mr. Every was paid base salary at a rate of $320,000 per annum for the first few months of fiscal year 2023, and $334,400 per annum for the remainder of the fiscal year beginning in January 2023. Based on our performance for 2023, both quantitative and qualitative as discussed above, Mr. Every received a 2023 non-equity incentive payment of $171,270, approximately one hundred twenty-eight percent (128%) of the target amount.
On November 16, 2022, Mr. Every was granted 495 time-vesting restricted stock units and 990 performance-vesting restricted stock units. The time-vesting restricted stock units vest in equal one-third annual installments over a three-year service period. The performance-vesting restricted stock units vest at the target level based on our achievement of $396.57 million in cumulative adjusted EBITDA over a two-year performance period, provided Mr. Every remains employed for an additional year thereafter. Our Compensation Committee believes that the combination of these grants will have a retentive influence over Mr. Every and, at the same time, incentivize him to achieve our goals.
Senior Vice President and Chief Marketing Officer
Mr. Mallard was paid base salary at a rate of $285,000 per annum for the first few months of fiscal year 2023, and $320,000 per annum for the remainder of the fiscal year beginning in January 2023. Based on our performance for 2023, both quantitative and qualitative as discussed above, Mr. Mallard received a 2023 non-equity incentive payment of $165,510, approximately one hundred twenty-nine percent (129%) of the target amount.
On November 16, 2022, Mr. Mallard was granted 495 time-vesting restricted stock units and 990 performance-vesting restricted stock units. The time vesting restricted stock units vest in equal one-third annual installments over a three-year service period. The performance-vesting restricted stock units vest at the target level based on our achievement of $396.57 million in cumulative adjusted EBITDA over a two-year performance period, provided Mr. Mallard remains employed for an additional year thereafter. Our Compensation Committee believes that the combination of these grants will have a retentive influence over Mr. Mallard and, at the same time, incentivize him to achieve our goals.
November 2023 Equity Grant
After the conclusion of the 2023 fiscal year, we granted an aggregate of 6,980 time-vesting units and 6,976 performance-vesting units on November 17, 2023 to our named executive officers in the following amounts: Mr. Fachner (4,454 time-vesting units and 4,454 performance-vesting units), Mr. Plunk (1,188 time-vesting units and 1,187 performance-vesting units), Mr. Cranmer (446 time-vesting units and 445 performance-vesting units), Mr. Every (446 time-vesting units and 445 performance-vesting units) and Mr. Mallard (446 time-vesting units and 445 performance-vesting units). The time-vesting units vest in equal one third annual installments on the anniversary of the grant date fair value.over a three-year service period. The performance-vesting units vest upon our achievement of a cumulative two-year adjusted EBITDA target, provided that the executive officer remains employed for an additional year thereafter. As explained above, our Compensation Committee determined the specific level of each of these awards by applying its discretion as to what is appropriate in light of all of the circumstances, including our strategic objectives and the responsibilities of our executive officers and their outstanding equity awards.
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REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
Compensation Committee of the Board of Directors:
Sidney R. Brown, Chairman
Peter G. Stanley
Roy C. Jackson
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE The following table summarizes compensation paid or earned for the three previous fiscal years for the Company’s NEOs.
Daniel J. Fachner,
President and Chief
Executive Officer | | | 2023 | | | 936,538 | | | 2,250,063 | | | | | | 1,324,945 | | | 57,813 | | | 4,569,359 |
| | 2022 | | | 896,154 | | | 1,500,032 | | | — | | | 630,000 | | | 21,972 | | | 3,048,158 |
| | 2021 | | | 575,692 | | | — | | | — | | | 900,000 | | | 17,526 | | | 1,493,218 |
Ken A. Plunk,
Chief Financial Officer | | | 2023 | | | 526,058 | | | 599,986 | | | | | | 491,850 | | | 17,773 | | | 1,635,667 |
| | 2022 | | | 493,942 | | | 399,926 | | | — | | | 262,500 | | | 2,925 | | | 1,159,293 |
| | 2021 | | | 455,000 | | | 207,749 | | | — | | | 375,000 | | | 2,412 | | | 1,040,161 |
Robert K. Cranmer Senior
Vice President-Operations | | | 2023 | | | 316,058 | | | 225,052 | | | | | | 165,510 | | | 28,253 | | | 734,873 |
| | 2022 | | | 271,154 | | | 150,050 | | | — | | | 79,800 | | | 10,047 | | | 511,051 |
Stephen J. Every,
Chief Operating Officer-
ICEE Company | | | 2023 | | | 330,523 | | | 225,052 | | | | | | 171,270 | | | 25,669 | | | 752,514 |
| | 2022 | | | 320,000 | | | 150,050 | | | — | | | 128,000 | | | 9,790 | | | 607,840 |
| | 2021 | | | 245,785 | | | | | | — | | | 42,000 | | | 10,183 | | | 297,968 |
Lynwood M. Mallard,
Senior Vice President and
Chief Marketing Officer | | | 2023 | | | 316,058 | | | 225,052 | | | | | | 165,510 | | | 27,221 | | | 733,841 |
| | 2022 | | | 274,231 | | | 150,050 | | | — | | | 79,800 | | | 2,451 | | | 506,531 |
| | 2021 | | | 139,423 | | | | | | — | | | 58,000 | | | 663 | | | 198,086 |
(1)
| Amounts shown in this column do not reflect the compensation actually received by the NEO. Instead, the amounts shown in this column represent the aggregate grant date fair value determined for financial accounting purposes. The aggregate grant date fair values of these awards were determined in accordance with Financial Accounting Standards Board’s Accounting Standards Codification Topic 718. The awards for which amounts are shown in this table are the equity awards granted to the NEOs in November 2022, November 2021, and October 2020, as further described in the Outstanding Equity Awards at Fiscal-Year End table below. The assumptions used in determining the grant date fair values of these awards are set forth in Notes A and K to our consolidated financial statements, which are included in our annual report on Form 10-K for the year ended September 30, 2023, filed with the SEC on November 28, 2023. |
(2)
| For 2023, represents amounts earned under a non-equity incentive award granted to the named executive officer in November 2022 for services rendered in fiscal 2023. See “Compensation Discussion and Analysis” on page 27 for more details on this compensation. For 2022, represents amounts earned under a non-equity incentive award granted to the named executive officer in November 2021 for services rendered in fiscal 2022. For 2021, represents amounts earned under a non-equity incentive award granted to the named executive officer in November 2020 for services rendered in fiscal 2021. |
(3)
| Includes automobile lease payments ($32,742 in the case of Mr. Fachner), company paid fuel cards, and 401(k) company match. For Mr. Fachner, also includes membership fees at a local country club. |
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GRANTS OF PLAN-BASED AWARDS The following table shows all plan-based awards granted to the NEOs during fiscal year 2023:
Dan Fachner | | | 11/16/2022 | | | 950,000 | | | — | | | | | | — | | | — | | | — | | | — |
| | 11/16/2022 | | | — | | | 9,898(2) | | | 19,796(2) | | | — | | | — | | | — | | | 1,500,042 |
| | 11/16/2022 | | | — | | | — | | | — | | | 4,949(3) | | | — | | | — | | | 750,021 |
Ken Plunk | | | 11/16/2022 | | | 391,875 | | | — | | | | | | — | | | — | | | — | | | — |
| | 11/16/2022 | | | — | | | 2,639(2) | | | 5,278(2) | | | — | | | — | | | — | | | 399,940 |
| | 11/16/2022 | | | — | | | — | | | — | | | 1,320(3) | | | — | | | — | | | 200,046 |
Robert Cranmer | | | 11/16/2022 | | | 128,000(2) | | | — | | | | | | — | | | — | | | — | | | — |
| | 11/16/2022 | | | — | | | 990(2) | | | 1,980(2) | | | — | | | — | | | — | | | 150,035 |
| | 11/16/2022 | | | — | | | — | | | — | | | 495(3) | | | — | | | — | | | 75,017 |
Stephen J. Every | | | 11/16/2022 | | | 133,760(2) | | | — | | | | | | | | | — | | | — | | | — |
| | 11/16/2022 | | | — | | | 990(2) | | | 1,980(2) | | | | | | — | | | — | | | 150,035 |
| | 11/16/2022 | | | — | | | — | | | | | | 495(3) | | | — | | | — | | | 75,017 |
Lynwood Mallard | | | 11/16/2022 | | | 128,000(2) | | | — | | | | | | | | | — | | | — | | | — |
| | 11/16/2022 | | | — | | | 990(2) | | | 1,980(2) | | | | | | — | | | — | | | 150,035 |
| | 11/16/2022 | | | — | | | — | | | — | | | 495(3) | | | — | | | — | | | 75,017 |
(1)
| The aggregate grant date fair values of these awards were determined in accordance with Financial Accounting Standards Board’s Accounting Standards Codification Topic 718. The awards for which amounts are shown in this table are the equity awards granted to the NEOs in November 2022, as further described in the Outstanding Equity Awards at Fiscal-Year End table below. The assumptions used in determining the grant date fair values of these awards are set forth in Notes A and K to our consolidated financial statements, which are included in our annual report on Form 10-K for the year ended September 30, 2023, filed with the SEC on November 28, 2023. |
(2)
| The awards indicated represent performance-based restricted stock units granted to the NEO on November 16, 2022. The restricted stock units vest based on our cumulative adjusted EBITDA performance over a two-year period, provided the named executive officer remains employed for an additional year thereafter. Fifty percent (50%) of the target units vest if we achieve $337.09 million in cumulative adjusted EBITDA over two years, one hundred percent (100%) of the target units vest if we achieve $396.57 million in cumulative adjusted EBITDA over two years, and two hundred percent (200%) of the target units vest if we achieve $436.23 million in cumulative adjusted EBITDA over two years. |
(3)
| The awards indicated represent time-vesting restricted stock units granted to the NEO on November 16, 2022. These restricted stock units vest in equal one-third annual installments over a three-year service period. |
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Outstanding Equity Awards at Fiscal Year-End The following table sets forth certain information regarding outstanding equity awards held by our NEOs as of September 30, 2023.
Dan Fachner | | | 5/14/2019 | | | 8,000 | | | | | | 163.29 | | | 5/13/2024 | | | | | | | | | | | | |
| | 5/21/2020 | | | 12,000(2) | | | | | | 125.83 | | | 5/20/2025 | | | | | | | | | | | | |
| | 11/10/2021 | | | | | | | | | | | | | | | 3,226(3) | | | 527,935 | | | | | | |
| | 11/10/2021 | | | | | | | | | | | | | | | | | | | | | 4,838(4) | | | 791,739 |
| | 11/16/2022 | | | | | | | | | | | | | | | 4,949(3) | | | 809,904 | | | | | | |
| | 11/16/2022 | | | | | | | | | | | | | | | | | | | | | 9,898(6) | | | 1,619,808 |
Ken Plunk | | | 10/20/2020 | | | | | | | | | | | | | | | 526(5) | | | 86,080 | | | | | | |
| | 11/10/2021 | | | | | | | | | | | | | | | 860(3) | | | 140,739 | | | | | | |
| | 11/10/2021 | | | | | | | | | | | | | | | | | | | | | 1,290(4) | | | 211,109 |
| | 11/16/2022 | | | | | | | | | | | | | | | 1,320(3) | | | 216,018 | | | | | | |
| | 11/16/2022 | | | | | | | | | | | | | | | | | | | | | 2,639(6) | | | 431,872 |
Robert Cranmer | | | 5/14/2019 | | | 500 | | | | | | 163.29 | | | 5/13/2024 | | | | | | | | | | | | |
| | 5/20/2020 | | | 1,500(2) | | | | | | 125.83 | | | 5/19/2025 | | | | | | | | | | | | |
| | 11/10/2021 | | | | | | | | | | | | | | | 323(3) | | | 52,859 | | | | | | |
| | 11/10/2021 | | | | | | | | | | | | | | | | | | | | | 484(4) | | | 79,207 |
| | 11/16/2022 | | | | | | | | | | | | | | | 495(3) | | | 81,007 | | | | | | |
| | 11/16/2022 | | | | | | | | | | | | | | | | | | | | | 990(6) | | | 162,014 |
Stephen J. Every | | | 11/10/2021 | | | | | | | | | | | | | | | 323(3) | | | 52,859 | | | | | | |
| | 11/10/2021 | | | | | | | | | | | | | | | | | | | | | 484(4) | | | 79,207 |
| | 11/16/2022 | | | | | | | | | | | | | | | 495(3) | | | 81,007 | | | | | | |
| | 11/16/2022 | | | | | | | | | | | | | | | | | | | | | 990(6) | | | 162,014 |
Lynwood M. Mallard | | | 11/10/2021 | | | | | | | | | | | | | | | 323(3) | | | 52,859 | | | | | | |
| | 11/10/2021 | | | | | | | | | | | | | | | | | | | | | 484(4) | | | 79,207 |
| | 11/16/2022 | | | | | | | | | | | | | | | 495(3) | | | 81,007 | | | | | | |
| | 11/16/2022 | | | | | | | | | | | | | | | | | | | | | 990(6) | | | 162,014 |
(1)
| Calculated based upon the closing price of our common stock on September 29, 2023, the last trading day of the fiscal year, which was $163.65 per share. |
(2)
| These stock options were granted in May 2020 and cliff vest on the third anniversary of the date of grant. |
(3)
| The awards indicated represent restricted stock units granted to the named executive officer on the date indicated. These restricted stock units vest in equal one-third annual installments over a three-year service period. |
(4)
| The awards indicated represent the target amount of performance-based restricted stock units granted to the named executive officer on November 10, 2021. The restricted stock units vest based on our cumulative EBITDA performance over a two-year period, provided the named executive officer remains employed for an additional year thereafter. Fifty percent (50%) of the target units vest if we achieve $336.2 million in cumulative EBITDA over two years, one hundred percent (100%) of the target units vest if we achieve $361.5 million in cumulative EBITDA over two years, and two hundred percent (200%) of the target units vest if we achieve $397.7 million in cumulative EBITDA over two years. |
(5)
| In October 2020, Mr. Plunk received 1,579 shares issued pursuant to an Inducement Restricted Stock Award Agreement with such shares vesting over three (3) years in equal annual installments. |
(6)
| The awards indicated represent performance-based restricted stock units granted to the NEO on November 16, 2022. The restricted stock units vest based on our cumulative adjusted EBITDA performance over a two-year period, provided the named executive officer remains employed for an additional year thereafter. Fifty percent (50%) of the target units vest if we achieve $337.09 million in cumulative adjusted EBITDA over two years, one hundred percent (100%) of the target units vest if we achieve $396.57 million in cumulative adjusted EBITDA over two years, and two hundred percent (200%) of the target units vest if we achieve $436.23 million in cumulative adjusted EBITDA over two years. |
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Option Exercises and Stock Vested Daniel J. Fachner | | | | | | | | | 1,613 | | | 229,853 |
Ken A. Plunk | | | — | | | — | | | 957 | | | 132,936 |
Robert K. Cranmer | | | | | | | | | 161 | | | 22,943 |
Stephen J. Every | | | 3,500 | | | 469,595 | | | 161 | | | 22,943 |
Lynwood M. Mallard | | | — | | | — | | | 161 | | | 22,943 |
(1)
| Calculated using the closing price on the applicable vesting date or exercise date. |
POTENTIAL PAYMENT UPON TERMINATION OR CHANGE IN CONTROL Dan Fachner, our Chairman, President and Chief Executive Officer, has entered into an employment agreement with the Company which provides for potential post-employment benefits in certain circumstances upon a termination or a change in control (the “Agreement”). The amount of such post-employment benefits depends upon the circumstances and timing of Mr. Fachner’s termination and is conditioned upon Mr. Fachner’s execution of a general release agreement.
In the event that Mr. Fachner is terminated by the Company without Cause, by Mr. Fachner for Good Reason, or due to a Change in Control during the Term of the Agreement, Mr. Fachner shall receive the following benefits:
base salary through the date of termination, compensation for accrued but unused paid time off; reimbursement of unreimbursed business expenses, and all compensation otherwise due under the terms of the Company’s benefit plans (collectively “Accrued Obligations”);
salary continuation equal to the greater of (i) base salary in effect at the time of termination for the remainder of the Term of the Agreement and (ii) three (3) times base salary in effect at time of termination;
lump sum bonus payment equal to three (3) times the greater of (i) his most recent annual bonus and (ii) the annual bonus received immediately prior to his most recent annual bonus;
payment of COBRA premiums until Mr. Fachner voluntarily elects not to receive COBRA benefit coverage or the date he becomes ineligible for COBRA continuation coverage benefits (“COBRA Benefits”); and
vesting of unvested, outstanding equity incentive awards in accordance with their original vesting schedule (“Equity Benefit”).
The benefits outlined above are referred to in the Agreement as “Severance Package III.”
In the event of a termination due to Death or Disability (as such terms are defined in the Agreement), Mr. Fachner will receive the benefits referenced above, except that Mr. Fachner will receive salary continuation benefits for two years and a reduced lump sum bonus equal to two (2) times the greater of (i) his most recent annual bonus and (ii) his annual bonus immediately received prior to his most recent Annual Bonus. These benefits are referred to in the Agreement as “Severance Package II.”
In the event Mr. Fachner is terminated by the Company due to non-renewal of the Agreement by the Company or by Mr. Fachner without Good Reason or for Retirement after completion of at least two years of the Term, Mr. Fachner shall receive the same benefits outlined in Severance Package III, except that he will receive one (1) one year of salary continuation at his base salary in effect at the time of termination; and (2) a lump sum bonus payment equal to the greater of his most recent annual bonus and the annual bonus received immediately prior to his most recent Annual Bonus. These benefits are referred to in the Agreement as “Severance Package I.”
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If Mr. Fachner is terminated by the Company for Cause, for non-renewal of the Agreement either by Mr. Fachner or upon mutual agreement of the parties, due to his termination without Good Reason or Retirement prior to completion of at least two (2) years of the Term, Mr. Fachner shall only be entitled to receive the Accrued Obligations.
The table below summarizes the potential post-employment benefits for Mr. Fachner pursuant to the Agreement under the situations identified in the table. The amounts shown in the table are approximate and reflect certain assumptions that the Company has made in accordance with the SEC’s rules. These assumptions include that the applicable event occurred on September 30, 2023, and that the value of a share of the Company’s common stock on that day was $163.65 (the closing price per share of the Company’s common stock on September 29, 2023). For the Equity Benefit column below, the amount is a lump sum amount based on full vesting at the time of separation; however, the equity would vest over time in accordance with the terms of the underlying agreements and, with respect to the performance-based awards, only if performance is achieved.
Termination by the Company without Cause, by Mr. Fachner for Good Reason or due to a Change in Control during the Term of the Agreement | | | $3,169,635 | | | $2,700,000 | | | $3,485,096 |
Termination due to Death or Disability | | | $1,900,000 | | | $1,800,000 | | | $3,485,096 |
Termination by the Company due to non-renewal of the Agreement by the Company or by Mr. Fachner without Good Reason or for Retirement after completion of at least two years of the Term | | | $950,000 | | | $900,000 | | | $3,485,096 |
Termination by the Company for Cause, for non-renewal of the Agreement either by Mr. Fachner or upon mutual agreement of the parties, due to his termination without Good Reason or Retirement prior to completion of at least two (2) years of the Term | | | — | | | — | | | — |
In addition to the above amounts, Mr. Fachner would be entitled to have his COBRA payments reimbursed by the Company and the Company would pay him for all Accrued Obligations as of the time of the termination/separation.
The Company does not offer similar post-employment benefits to its NEOs other than Mr. Fachner. However, our long-term incentive awards address the vesting of outstanding unvested equity awards in the event of the termination of an NEO under specified circumstances, including a change in control.
Our 2021 Performance Share and Service Share Unit Agreements allow for pro rata vesting of unvested units in the event of the executive’s death or disability during the performance or vesting period, respectively. In all other instances of termination, the unvested units are forfeited.
Our 2022 Performance Share and Service Share Unit Agreements address potential vesting of outstanding equity upon termination or a Change in Control (as defined in the Award). Specifically, all unvested equity awards are forfeited if the executive’s employment is terminated by the Company for Cause of if the executive resigns prior to the vesting date. In the event of a termination of executive’s employment due to death or disability, or by the Company for reasons other than for Cause (as defined in the Award) prior to the applicable vesting date, any outstanding, unvested equity shall vest on a pro rata basis upon termination.
In the event of a termination (other than for Cause) in connection with a Change in Control (as defined in the award agreements), the outstanding award shall become fully vested.
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The table below summarizes the value of outstanding equity awards under the situations identified in the table. The amounts shown in the table are approximate and reflect certain assumptions that the Company has made in accordance with the SEC’s rules. These assumptions include that the applicable event occurred on September 30, 2023, and that the value of a share of the Company’s common stock on that day was $163.65 (the closing price per share of the Company’s common stock on September 29, 2023).
Ken Plunk | | | $327,464 | | | — | | | — | | | $167,087 | | | $647,890 |
Robert Cranmer | | | $145,812 | | | — | | | — | | | $70,533 | | | $243,020 |
Stephen Every | | | $145,812 | | | — | | | — | | | $70,533 | | | $243,020 |
Lynwood Mallard | | | $145,812 | | | — | | | — | | | $70,533 | | | $243,020 |
Under rules adopted pursuant to the Dodd-Frank Act of 2010, the Company is required to calculate and disclose the total compensation paid to its median paid employee, as well as the ratio of the total compensation paid to the median employee as compared to the total compensation paid to the Company’s Chief Executive Officer.
We identified the median employee using our employee population on June 2021September 30, 2023 and total year-to-date cash compensation for all employees, excluding the Company’s Chief Executive Officer.
Median annual total compensation of all employees (excluding Mr. Fachner) | | | $40,089 |
| | | |
Annual total compensation of Mr. Fachner, CEO | | | $4,569,359 |
| | | |
Ratio of Mr. Fachner’s annual total compensation to the median of all employees | | | 114:1 |
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PAY VERSUS PERFORMANCE
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of the Company. For further information concerning how the Company aligns executive compensation with the Company’s performance, refer to “Compensation Discussion and Analysis.”
2023 | | | 4,569,359 | | | — | | | 5,061,370 | | | — | | | 964,224 | | | 1,024,944 | | | 132.13 | | | 114.15 | | | 78,906 | | | 181,555 |
2022 | | | 3,048,158 | | | — | | | 1,999,614 | | | — | | | 696,179 | | | 560,871 | | | 102.64 | | | 111.70 | | | 47,235 | | | 124,068 |
2021 | | | 1,493,218 | | | 561,299 | | | 1,908,781 | | | 955,872 | | | 393,859 | | | 480,685 | | | 118.98 | | | 104.52 | | | 55,607 | | | 127,952 |
(1)
| The dollar amounts reported in column (b1) are the amounts of total compensation reported for Mr. Fachner (our Chief Executive Officer) for each corresponding year in the “Total” column of the Summary Compensation Table. Mr. Fachner began serving as Chief Executive Officer in May 2021, subsequent to Mr. Shreiber’s service as Chief Executive Officer which ended in May 2021. |
(2)
| The dollar amounts reported in column (b2) are the amounts of total compensation reported for Mr. Shreiber (our Chief Executive Officer in fiscal year 2021) for fiscal year 2021 in the “Total” column of the Summary Compensation Table for fiscal year 2021. |
(3)
| The dollar amounts reported in column (c1) represent the amount of “compensation actually paid” to Mr. Fachner, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Fachner during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Fachner’s total compensation for each year to determine the compensation actually paid: |
2023 | | | $4,569,359 | | | $2,250,063 | | | $492,011 | | | $5,061,370 |
2022 | | | $3,048,158 | | | $1,500,032 | | | $(1,048,544) | | | $1,999,614 |
2021 | | | $1,493,218 | | | — | | | $415,563 | | | $1,908,781 |
(a)
| The equity award adjustments include the addition (or subtraction, as applicable) of the amounts specified in the following table, in accordance with Item 402(v) of Regulation S-K. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |
2023 | | | $(2,250,063) | | | $2,429,712 | | | $87,263 | | | $177,672 | | | — | | | $47,427 | | | $492,011 |
2022 | | | $(1,500,032) | | | $661,007(1) | | | $(120,401) | | | $(101,695) | | | — | | | $12,577 | | | $(1,048,544) |
2021 | | | — | | | — | | | $248,077 | | | $167,486 | | | — | | | — | | | $415,563 |
(1)
| The year end fair value of equity awards in fiscal year 2022 does not include the value of the performance-vesting restricted stock units granted during the fiscal year. The performance condition related to these awards was determined to not likely be met as of the end of the fiscal year in which the awards were granted. |
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Median annual total compensation of all employees (excluding Mr. Fachner) | | $ | 39,852 | |
| | | | | |
Annual total compensation of Mr. Fachner, CEO | | $ | 1,493,218 | |
| | | | | |
Ratio of Mr. Fachner’s annual total compensation to the median of all employees | | | 37:1 | |
(4)
| The dollar amounts reported in column (c2) represent the amount of “compensation actually paid” to Mr. Shreiber, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Shreiber during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Shreiber’s total compensation to determine the compensation actually paid: |
2021 | | | $561,299 | | | $560,600 | | | $394,573 | | | $955,872 |
(a)
| The equity award adjustments include the addition (or subtraction, as applicable) of the amounts specified in the following table, in accordance with Item 402(v) of Regulation S-K. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |
2021 | | | $(560,600) | | | $475,061 | | | $480,112 | | | — | | | — | | | — | | | $394,573 |
(5)
| The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s NEOs as a group (excluding Mr. Fachner and Mr. Shreiber) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding Mr. Fachner and Mr. Shreiber) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2023 and 2022, Ken Plunk, Stephen Every, Lynwood Mallard, and Bob Cranmer and (ii) for 2021, Ken Plunk, Robert Pape, Stephen Every, Lynwood Mallard, Robert Radano and Dennis Moore. |
(6)
| The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Fachner and Mr. Shreiber), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Fachner and Mr. Shreiber) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding Mr. Fachner and Mr. Shreiber) for each year to determine the compensation actually paid, using the same methodology described above in Note 3: |
2023 | | | $964,224 | | | $318,786 | | | $60,720 | | | $1,024,944 |
2022 | | | $696,179 | | | $212,519 | | | $(135,308) | | | $560,871 |
2021 | | | $393,859 | | | $34,625 | | | $86,826 | | | $480,685 |
(a)
| The amounts deducted or added in calculating the total average equity award adjustments in accordance with Item 402(v) of Regulation S-K are as follows: |
2023 | | | $(318,786) | | | $344,238 | | | $15,926 | | | $12,250 | | | — | | | $7,092 | | | $60,720 |
2022 | | | $(212,519) | | | $93,639(1) | | | $(13,268) | | | $(5,626) | | | — | | | $2,466 | | | $(135,308) |
2021 | | | $(34,625) | | | $40,436 | | | $48,407 | | | $31,972 | | | — | | | $636 | | | $86,826 |
(1)
| The year end fair value of equity awards in fiscal year 2022 does not include the value of the performance-vesting restricted stock units granted during the fiscal year. The performance condition related to these awards was determined to not likely be met as of the end of the fiscal year in which they were granted. |
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Policy(7)
| Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. |
(8)
| Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. The peer group used for this purpose is the following published industry index: S&P 500 Packaged Foods & Meats Index. |
(9)
| The dollar amounts reported represent the amount of net earnings (in thousands) reflected in the Company’s audited financial statements for the applicable year. |
(10)
| The dollar amounts reported reflect Adjusted EBITDA (in thousands), which is a performance measure used when determining annual non-equity incentive bonuses and a portion of our long-term equity grants. Adjusted EBITDA consists of net earnings adjusted to exclude: income taxes (benefit); investment income; interest expense; depreciation and amortization; share-based compensation expense; COVID-19 related expenses (recoveries); net (gain) loss on sale or disposal of assets; impairment charges, restructuring costs, merger and acquisition costs, acquisition related inventory adjustments, strategic business transformation costs, and integration costs. |
Financial Performance Measures
The financial measures that the Company uses for both our long-term and short-term incentive awards are selected based on Claw Backsan objective of incentivizing our NEOs to increase the value of our enterprise for our shareholders. The most important financial performance measures used by the Company to link executive compensation actually paid to the Company’s NEOs, for the most recently completed fiscal year, to the Company’s performance are as follows:
Adjusted EBITDA
Net Sales
Analysis of the Information Presented in the Pay versus Performance Table
In accordance with Item 402(v) of Regulation S-K, the Company is providing the following descriptions of the relationships between information presented in the Pay versus Performance table.
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Compensation Actually Paid and Cumulative TSR
As demonstrated by the following graph, the amount of compensation actually paid to Mr. Fachner and Mr. Shreiber, and the average amount of compensation actually paid to the Company’s NEOs as a group (excluding Mr. Fachner and Mr. Shreiber) is aligned with the Company’s cumulative TSR over the three years presented in the table. The alignment of compensation actually paid with the Company’s cumulative TSR over the period presented is because a significant portion of the compensation actually paid to Mr. Fachner, Mr. Shreiber, and to the other NEOs, is comprised of equity awards. The Company’s cumulative TSR over the three-year period presented in the table was 32%, while the cumulative TSR of the peer group presented for this purpose, the S&P 500 Packaged Foods & Meats Index, was 14% over the three years presented in the table. The Company’s cumulative TSR outperformed the S&P 500 Packaged Foods & Meats Index during the three years presented in the table, representing the Company’s superior financial performance as compared to the companies comprising the S&P 500 Packaged Foods & Meats Index.
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Compensation Actually Paid and Net Earnings
As demonstrated by the following graph, the amount of compensation actually paid to Mr. Fachner and Mr. Shreiber, and the average amount of compensation actually paid to the Company’s NEOs as a group (excluding Mr. Fachner and Mr. Shreiber) is generally aligned with the Company’s net earnings over the three years presented in the table. While the Company does not use net earnings as a performance measure in the overall executive compensation program, the measure of net earnings is correlated with the measure Adjusted EBITDA, which the company does use for when setting goals in the Company’s incentive plans.
Compensation Actually Paid and Adjusted EBITDA
As demonstrated by the following graph, the amount of compensation actually paid to Mr. Fachner and Mr. Shreiber and the average amount of compensation actually paid to the Company’s NEOs as a group (excluding Mr. Fachner and Mr. Shreiber) is generally aligned with the Company’s Adjusted EBITDA over the three years presented in the table. The Company has
a policy on Claw Backs. Under such policy a Claw Back review may be initiated as a result of any suspected non-compliance, which includes, butdetermined that Adjusted EBITDA is the financial performance measure that, in the Company’s assessment, represents the most important performance measure (that is not
limited to:• fraud, money laundering, bribery, corruption or other form of misconduct;
• any restatement of financial reports as a result of any misconduct;
• any act causing reputational harmotherwise required to be disclosed in the table) used by the Company to link compensation actually paid to the company’s NEOs, for the most recently completed fiscal year, to Company or its business activities;
• any other grossly negligent acts or omissions of executives, including a failure to supervise in appropriate circumstances;
• failure to identify, raise or assess in a timely manner any risks or concerns material toperformance. The Company utilizes Adjusted EBITDA when determining annual non-equity incentive bonuses and the Company, its business activities or its reputation; and
• any other violation of the Company's General Code of Ethics.
Company’s long term equity awards. 20
Policy Against Hedging
The Board of Directors also unanimously adopted an Anti-Hedging Policy in 2020. Under such policy Executive Officers and Directors of the Company and its subsidiaries shall not, unless previously approved by the Nominating and Governance Committee of the Board, directly or indirectly:
• Purchase any financial instrument, or enter into any transaction, that is designed to hedge or offset a decrease in the market value of Company stock (including, but not limited to, prepaid variable forward contracts, equity swaps, collars or exchange funds); or
• Hypothecate, or otherwise encumber shares of Company stock as collateral for indebtedness. This prohibition includes, but is not limited to, holding such shares in a margin account.
Compensation Committee Interlocks and Insider Participation
No member of our Compensation Committee has served as one of our officers or employees at any time. None of our executive officers serves as a member of the compensation committee of any other company that has an executive officer serving as a member of the Board. None of our executive officers serves as a member of the board of directors of any other company that has an executive officer serving as a member of our Compensation Committee.
Report of the Compensation Committee
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
Compensation Committee of the Board of Directors:
Sidney R. Brown, Chairman
Peter G. Stanley
Vincent Melchiorre
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes compensation paid or earned for the three fiscal years ended September 25, 2021 for the Company’s Named Executive Officers.
Name and Principal | | | | | | | | | | | Stock | | | Option | | | All other | | | | | |
Position | Year | | Salary ($) | | | Bonus ($) | | | awards $ | | | awards ($) (1) | | | compensation ($) (2) | | | Total ($) | |
Gerald B. Shreiber | 2021 | | | - | | | | - | | | | - | | | | 560,600 | | | | 699 | | | | 561,299 | |
| | 2020 | | | 498,077 | | | | 457,604 | | | | - | | | | - | | | | 8,434 | | | | 964,115 | |
| | 2019 | | | 950,000 | | | | 2,270,469 | | | | - | | | | 977,600 | | | | 9,770 | | | | 4,207,839 | |
Daniel Fachner | 2021 | | | 575,692 | | | | 900,000 | | | | - | | | | - | | | | 17,526 | | | | 1,493,218 | |
| | 2020 | | | 408,308 | | | | 643,119 | | | | - | | | | 171,840 | | | | 16,517 | | | | 1,239,784 | |
| | 2019 | | | 400,000 | | | | 643,119 | | | | - | | | | 210,320 | | | | 24,565 | | | | 1,278,004 | |
Ken Plunk | 2021 | | | 455,000 | | | | 375,000 | | | | 207,749 | (3) | | | - | | | | 2,412 | | | | 1,040,161 | |
| | 2020 | | | 8,750 | | | | - | | | | - | | | | - | | | | - | | | | 8,750 | |
Robert Pape | 2021 | | | 282,753 | | | | 54,438 | | | | - | | | | - | | | | 11,646 | | | | 348,837 | |
| | 2020 | | | 279,528 | | | | 44,300 | | | | - | | | | 38,664 | | | | 11,907 | | | | 374,399 | |
Stephen Every (7) | 2021 | | | 245,785 | | | | 42,000 | | | | - | | | | - | | | | 10,183 | | | | 297,968 | |
Lynwood Mallard (6) | 2021 | | | 139,423 | | | | 58,000 | | | | - | | | | - | | | | 663 | | | | 198,086 | |
Robert Radano (4) | 2021 | | | 253,928 | | | | - | | | | - | | | | - | | | | 9,529 | | | | 263,457 | |
| | 2020 | | | 400,305 | | | | 173,040 | | | | - | | | | 114,560 | | | | 11,904 | | | | 699,809 | |
| | 2019 | | | 400,383 | | | | 216,300 | | | | - | | | | 210,320 | | | | 15,625 | | | | 842,628 | |
Dennis Moore (5) | 2021 | | | 155,911 | | | | - | | | | - | | | | - | | | | 58,735 | | | | 214,646 | |
| | 2020 | | | 465,940 | | | | 229,120 | | | | - | | | | - | | | | 10,759 | | | | 705,819 | |
| | 2019 | | | 465,820 | | | | 286,400 | | | | - | | | | 210,320 | | | | 9,850 | | | | 972,390 | |
(1) The value of the option awards equals their grant date fair value as computed in accordance with FASB ASC Topic 718. For a discussion of the assumptions made in the valuation of the option awards in this column, please refer to Note A.13 to the financial statements included as part of our Annual Report on Form 10-K for the fiscal year ended September 25, 2021.
(2) Includes use of Company automobiles, 401(k) match, group term life insurance, membership fees at a local country club for Mr. Fachner, and consulting fees paid to Mr. Moore.
(3) In October 2020, Mr. Plunk received 1,579 shares issued pursuant to an Inducement Restricted Stock Award Agreement with such shares vesting over three (3) years in equal installments.
(4) Mr. Radano retired March 2021.
(5) Mr. Moore retired as Chief Financial Officer in September 2020. Mr. Moore continued to work for the Company until December 2020, and then served in a consulting role until July 2021.
(6) Mr. Mallard was appointed Senior Vice President and Chief Marketing Officer in March 2021.
(7) Mr. Every was promoted to Chief Operating Officer of the ICEE Company in July 2021.
OF CONTENTS
| | OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END | | | |
| | Option Awards | | Stock Awards | |
Name | Grant Date | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | Option Exercise Price $ | | Option Expiration Date | | Number of Shares or Units That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested ($) | | | Equity in Entire Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#) | | | Equity Incentive Plan Awards: Market or Payment Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |
Gerald B. Shreiber | 9/29/2012 | | | 20,000 | | | | | | | | 57.33 | | 9/28/2022 | | | | | | | | | | | | | | | | |
| | 9/27/2013 | | | 20,000 | | | | | | | | 80.79 | | 9/26/2023 | | | | | | | | | | | | | | | | |
| | 9/26/2014 | | | 20,000 | | | | | | | | 94.24 | | 9/25/2024 | | | | | | | | | | | | | | | | |
| | 9/26/2015 | | | 20,000 | | | | | | | | 117.85 | | 9/27/2025 | | | | | | | | | | | | | | | | |
| | 9/23/2016 | | | 20,000 | | | | | | | | 119.44 | | 9/22/2026 | | | | | | | | | | | | | | | | |
| | 9/29/2017 | | | 20,000 | | | | | | | | 131.30 | | 9/28/2027 | | | | | | | | | | | | | | | | |
| | 9/28/2018 | | | 20,000 | | | | | | | | 150.89 | | 9/27/2028 | | | | | | | | | | | | | | | | |
| | 9/27/2019 | | | | | | | 20,000 | | | | 191.40 | | 9/27/2029 | | | | | | | | | | | | | | | | |
| | 9/24/2021 | | | | | | | 20,000 | | | | 153.65 | | 9/23/2031 | | | | | | | | | | | | | | | | |
Daniel Fachner | 3/13/2018 | | | 8,000 | | | | | | | | 141.01 | | 3/12/2023 | | | | | | | | | | | | | | | | |
| | 5/14/2019 | | | | | | | 8,000 | | | | 163.29 | | 5/13/2024 | | | | | | | | | | | | | | | | |
| | 5/21/2020 | | | | | | | 12,000 | | | | 125.83 | | 5/20/2025 | | | | | | | | | | | | | | | | |
Ken Plunk | 10/20/2020 | | | | | | | | | | | | | | | | 1,579 | (1) | | | 242,613 | | | | | | | | | |
Robert M. Radano | 2/15/2017 | | | 8,000 | | | | | | | | 129.26 | | 2/14/2022 | | | | | | | | | | | | | | | | |
| | 3/13/2018 | | | 8,000 | | | | | | | | 141.01 | | 3/12/2023 | | | | | | | | | | | | | | | | |
| | 5/14/2019 | | | | | | | 8,000 | | | | 163.29 | | 5/13/2024 | | | | | | | | | | | | | | | | |
| | 5/21/2020 | | | | | | | 8,000 | | | | 125.83 | | 5/20/2025 | | | | | | | | | | | | | | | | |
Robert Pape | 2/15/2017 | | | 2,700 | | | | | | | | 129.26 | | 2/14/2022 | | | | | | | | | | | | | | | | |
| | 3/13/2018 | | | 2,700 | | | | | | | | 141.01 | | 3/12/2023 | | | | | | | | | | | | | | | | |
| | 5/14/2019 | | | | | | | 2,700 | | | | 163.29 | | 5/13/2024 | | | | | | | | | | | | | | | | |
| | 5/21/2020 | | | | | | | 2,700 | | | | 125.83 | | 5/20/2025 | | | | | | | | | | | | | | | | |
Stephen Every | 2/15/2017 | | | 727 | | | | | | | | 129.26 | | 2/14/2022 | | | | | | | | | | | | | | | | |
| | 3/13/2018 | | | 1,500 | | | | | | | | 141.01 | | 3/12/2023 | | | | | | | | | | | | | | | | |
| | 5/14/2019 | | | | | | | 1,500 | | | | 163.29 | | 5/13/2024 | | | | | | | | | | | | | | | | |
| | 5/20/2020 | | | | | | | 2,000 | | | | 125.83 | | 5/19/2025 | | | | | | | | | | | | | | | | |
Lynwood Mallard | | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | |
| (1)
| In October 2020, Mr. Plunk received 1,579 shares issued pursuant to an Inducement Restricted Stock Award Agreement with such shares vesting over three (3) years in equal installments.
|
GRANTS OF PLAN-BASED AWARDS IN FISCAL 2021
Long term awards granted in fiscal 2021 to the Named Executive officers are shown in the following table.
Name | Grant Date | | Number of Securities Underlying Options (1) # | | | Exercise or Base Price of Option Awards (2) $ | | | Grant Date Fair Value of Option Awards (3) $ | | | All other stock awards: Number of shares of stock or units | |
| | | | | | | | | | | | | | | | | | |
Gerald B. Shreiber | 9/24/2021 | | | 20,000 | | | | 153.65 | | | | 560,600 | | | | | |
| | | | | | | | | | | | | | | | | | |
Ken A. Plunk | 10/20/2020 | | | | | | | | | | | | | | | 1,579 | (4) |
(1) This column shows the number of stock options granted in fiscal 2021 to each Named Executive Officer. These options are not exercisable until three years after the date of grant.
(2) This column shows the exercise price for options granted in fiscal 2021 to each Named Executive Officer, which was the closing price of J & J’s common Stock on the date the options were granted.
(3) The value of the option awards equals their grant date fair value as computed in accordance with FASB ASC Topic 718. For a discussion of the assumptions made in the valuation of the option awards in this column, please refer to Note A.13 to the financial statements included as part of our Annual Report on Form 10-K for the fiscal year ended September 25, 2021.
(4) In October 2020, Mr. Plunk received 1,579 shares issued pursuant to an Inducement Restricted Stock Award Agreement with such shares vesting over three (3) years in equal installments.
OPTION EXERCISES
The following table provides information on stock options exercised by the Named Executive Officers during fiscal year 2021.
| | | Option Awards | |
Name | | Number of Shares Acquired on Exercise (#) | | | Value Realized On Exercise ($) | |
| | | | | | | | | |
Dan Fachner | | | 16,000 | | | | 631,604 | |
| Robert M. Radano | | | 8,000 | | | | 397,578 | |
| Dennis Moore | | | 24,000 | | | | 725,062 | |
| Robert Pape | | | 2,700 | | | | 131,210 | |
| Stephen Every | | | 2,273 | | | | 83,425 | |
TRANSACTIONS WITH RELATED PERSONS
The Compensation Committee is required to approve the compensation payable to officers and directors and to family members of officers and directors. The Company’s Code of Business Conduct and Ethics applies to all officers, directors and employees of the Company. This code requires that if any director or executive officer or their family members
or friends seek to provide goods or services to the Company or has or will have any transaction
with the Company that is expected to exceed $120,000
in value, they must notify the Company’s Chief Financial Officer, who
reviewswill review the proposed transaction and
notifiesnotify the Nominating and Corporate Governance Committee
forso that it may review and
take action as it sees fit.
The
Chartercharter of the Nominating and Corporate Governance Committee provides that the
Nominating and Corporate Governance Committee shall review the material terms of the transaction, including the approximate dollar amount, and the material facts and the related persons direct or indirect interest in, or relationship to, the transaction. In determining whether to approve or ratify a transaction, the
Nominating and Corporate Governance Committee is directed to consider, among other factors it may deem appropriate, whether the transaction was or will be on terms no less favorable that those generally available to an unaffiliated third party under the same or similar circumstances. No director may participate in the discussion or approval of a transaction in which he or she, or a member of his or her immediate family, has a direct or indirect interest.
The
Nominating and Corporate Governance Committee’s Charter provides that it is deemed to have approved any transaction, even if exceeding $120,000, in which a related person’s only interest is as a holder of the Company’s stock, and all holders received or will receive proportional benefits (such as the payment of regular quarterly dividends).
The directors and executive officers annually complete a proxy questionnaire in which they are asked to describe any transactions they or their immediate family have with the company in an amount that exceeds $120,000.
Robyn Shreiber, daughter of Gerald B. Shreiber, is Vice President,
National Account Sales of J & J Snack Foods Sales Corp., a subsidiary of J & J.Food Service at the Company. During fiscal
2021year 2023 she received
$279,754$326,191 in total compensation. Frank Shreiber, brother of Gerald B. Shreiber, is Director of
Purchasing.Procurement. During fiscal
2021,year 2023, he received
$183,345$183,838 in total compensation.
Marjorie Shreiber Roshkoff, daughter of Gerald B. Shreiber, is a member of the Board, Vice President and General Counsel of J & J Snack Foods Corp. During fiscal 2021, she received $293,998 in total compensation for her role as Vice President and General Counsel. Ms. Roshkoff’s husband, Ken Roshkoff, is the owner of a global marketing research company, AMC Global. In fiscal year
20212023 AMC Global provided attitudinal and research services to the Company in the amount of
$307,000.$124,625. Ken Roshkoff also received $50,000 in Board advisory consulting fees in fiscal year 2023. Aaron Winkelman, son-in- law of
DanielDan Fachner, is Senior
Director of Managed ServiceVice President-Sales for
theThe ICEE Company. During fiscal year
2021,2023, he received total compensation of
$201,941.$306,060. Jordan Vega, son-in-law of Dan Fachner, is Director, Safety for The ICEE Company and in fiscal year 2023 he received $124,364 in total compensation. Tyler Every, son of Steve Every, is Director of Business Development for
theThe ICEE Company. During fiscal year
2021,2023, he received total compensation of
$127,268.POTENTIAL PAYMENT UPON TERMINATION OR CHANGE IN CONTROL
The Company does not have any agreements to provide payment or benefits to any Named Executive Officer upon termination or change-in-control.
REPORT OF THE AUDIT COMMITTEE
The primary purpose of the Audit Committee is to oversee the Company’s accounting and financial reporting process and the audits of the Company’s financial statements, as further detailed in the Committee’s Charter attached as Exhibit B to the Proxy Statement for the 2005 Annual Meeting.
The Company’s management is responsible for the integrity of the Company’s financial statements, as well as its accounting and financial reporting process and internal controls for compliance with applicable accounting standards, laws and regulations. The Company’s independent registered public accounting firm, Grant Thornton LLP (“Grant Thornton”), is responsible for performing an independent audit of the Company’s financial statements in accordance with generally accepted auditing standards and expressing an opinion in its report on those financial statements.
$261,738.The Audit Committee is responsible for monitoring and reviewing these processes, as well as the independence and performance of the Company’s independent registered public accounting firm. The Audit Committee does not conduct auditing or accounting reviews or procedures. The Audit Committee has relied on management’s representation that the financial statements have been prepared with integrity and in conformity with generally accepted accounting procedures in the U.S. and on the registered public accounting firm representations included in its report on the Company’s financial statements. The Company’s independent registered public accounting firm also audited and discussed with the Audit Committee the Company’s internal control over financial reporting.
The Audit Committee reviewed and discussed with management the Company’s audited financial statements for fiscal year 2021. The Committee discussed with the Company’s registered public accounting firm, Grant Thornton, the matters required to be discussed by the Codification of Statements on Auditing Standards 61, Communication with Audit Committees (as modified or supplemented). In addition, the Audit Committee discussed with Grant Thornton its independence from the Company and considered whether the providing of non-audit services to the Company by Grant Thornton is compatible with maintaining Grant Thornton’s independence.
Based on these reviews and discussions and in reliance thereon, the Audit Committee recommended to the Board of Directors that the audited financial statements for the Company be included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 25, 2021.
Audit Committee of the Board of Directors:
Peter G. Stanley, Chairman
Sidney R. Brown
Vincent Melchiorre
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
It is contemplated that Grant Thornton will be selected to serve as the Company’s independent registered public accountants for fiscal year 2022. Grant Thornton also served as the Company’s independent accountants for fiscal year 2021. A representative of Grant Thornton is expected to attend the virtual Annual Meeting, will have an opportunity to make a statement if he or she so desires and will be available to respond to appropriate questions from stockholders.
Audit Fees
The following aggregate fees were billed to the Company in each of the last two fiscal years for professional services rendered by Grant Thornton for the audit of the Company’s annual financial statements and services that are normally provided by Grant Thornton in connection with statutory and regulatory filings or engagements for those fiscal years:
| Fiscal Year 2021 | | $ | 1,094,000 | |
| Fiscal Year 2020 | | $ | 1,097,000 | |
Audit-Related Fees
The following aggregate fees were billed to the Company in each of the last two fiscal years for (1) financial accounting and reporting services, and (2) acquisition-related services, in each case rendered by Grant Thornton and that were reasonably related to the performance of the audit or review of the Company’s financial statements but are not included in the audit fees reported above:
| Fiscal Year 2021 | | $ | 133,000 | |
| Fiscal Year 2020 | | $ | 35,000 | |
Tax Fees
The following aggregate fees were billed to the Company in each of the last two fiscal years for U.S. Federal, state and local tax planning, advice and compliance services, international tax planning, advice and compliance services:
| Fiscal Year 2021 | | $ | 378,000 | |
| Fiscal Year 2020 | | $ | 323,000 | |
All Other Fees
| Fiscal Year 2021 | | $ | 0 | |
| Fiscal Year 2020 | | $ | 0 | |
Audit Committee Policies and Procedures on Pre-Approval of Audit and Permissible Non-Audit Services
The Audit Committee has adopted policies and procedures requiring that the Company obtain the Committee’s pre-approval of all audit and permissible non-audit services to be provided by Grant Thornton as the Company’s independent accountants. Pre-approval is generally granted on a fiscal year basis, is detailed as to the particular service or category of services to be provided and is granted after consideration of the estimated fees for each service or category of service. Actual fees and any changes to estimated fees for preapproved services are reported to the Committee on a quarterly basis.
Other Matters
The Audit Committee of the Board of Directors has considered whether the provision of tax services described above is compatible with maintaining the independence of the Company’s principal accountant. The Audit Committee has approved Grant Thornton’s performing these services.
PROPOSAL 2
ADVISORY VOTE ON APPROVAL OF
THE COMPENSATION OF EXECUTIVES
The Dodd-Frank Wall Street Reform and Consumer Protection Act mandates that as part of their annual proxy vote companies conduct a separate vote to approve the compensation of executives named in the Executive Compensation Summary Compensation Table. Information about the Company’s current compensation of its executive officers is contained in the sections of this proxy entitled Compensation Discussion and Analysis and Executive Compensation Summary Compensation Table. According to the Dodd-Frank Act, this vote by the shareholders on approval of executive compensation is non-binding on the Company’s Board of Directors. At the 2021 Annual Meeting, the Company’s shareholders, in advisory votes, approved the 2020 compensation of executives and voted that this approval be held on a yearly basis. Based on this vote, the Board of Directors decided to submit to the shareholders on a yearly basis, the advisory vote on the compensation of Executives.
The Board of Directors recommends that you vote APPROVE on the following advisory (non-binding) shareholder resolution approving executive compensation.
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion is hereby APPROVED.”
OTHER MATTERS
The Company is not presently aware of any matters (other than procedural matters) which will be brought before the Annual Meeting which are not reflected in the attached Notice of the Annual Meeting.
The enclosed proxy confers discretionary authority toHowever, if a matter comes up for a vote
with respect to any and all of the following matters that may come before the Annual Meeting: (i) matters which the Company does not know, a reasonable time before the proxy solicitation, are to be presented at the Annual
Meeting; (ii) approval of the minutes of a prior meeting of shareholders, if such approval doesMeeting that is not
amount to ratification of the action taken at the meeting; (iii) the election of any person to any office for which a bona fide nominee nameddescribed in this
Proxy Statement is unable to serveproxy statement or
for good cause will not serve; (iv) any proposal omitted from this Proxy Statement andlisted on the
form of proxy
pursuant to Rules l4a 8 or l4a 9 under the Securities Exchange Act of 1934; and (v) matters incident to the conduct of the Annual Meeting. In conjunction with such matters,card, the persons named in the enclosed proxy
card will vote
your shares, under your proxy, in accordance with their best judgment.
ANNUAL REPORT TO SHAREHOLDERS AND FORM 10-K
This Proxy Statement is accompanied by the Company’s Annual Report to Shareholders for fiscal year 2021.
EACH PERSON SOLICITED HEREUNDER CAN OBTAIN A COPY OF J & J’S ANNUAL REPORT ON FORM 10-K FOR FISCAL 2021 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE YEAR ENDED SEPTEMBER 25, 2021, WITHOUT CHARGE, BY SENDING A WRITTEN REQUEST TO J & J SNACK FOODS CORP., 6000 CENTRAL HIGHWAY, PENNSAUKEN, NEW JERSEY 08109, ATTENTION: KEN A. PLUNK.
Important Notice Regarding the Availability of Proxy Materials
for the Shareholder Meeting to Be Held on February 16, 2022.
The proxy statement and annual report to security holders are available at www.jjsfannualreport.com.
| | | By Order of the Board of Directors, | |
| | | |
| | |
| | /s/ Marjorie S. Roshkoff | |
| Marjorie S. Roshkoff, Esquire
Michael A. Pollner, Senior Vice President,
General Counsel and Secretary | |
