UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
Date of Report (Date of Earliest Event Reported):
November 15, 2021
Cal-Maine Foods, Inc.
(Exact name of registrant as specified in its charter)
Delaware
001-38695
64-0500378
(State or other jurisdiction of
incorporation)
(Commission File Number)
(IRS Employer Identification No.)
1052 Highland Colony Pkwy
,
Suite 200
,
Ridgeland
,
MS
39157
(Address of principal executive offices (zip code))
601
-
948-6813
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions (see General Instruction A.2 below):
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 par value per share
CALM
The
NASDAQ
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of
1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange
Act.
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Item 1.01. – Entry into a Material Definitive Agreement
On November 15, 2021, Cal-Maine Foods, Inc. (the “Company”) entered into an Amended and Restated Credit Agreement
effective as of that date (the “Credit Agreement”), among the Company, as borrower (the “Borrower”), the wholly-owned direct
and indirect domestic subsidiaries of the Company as guarantors (the “Guarantors”), BMO Harris Bank N.A. (the
“Administrative Agent”), as Administrative Agent, Swingline Lender and L/C Issuer, BMO Harris Bank N.A., Greenstone Farm
Credit Services, ACA, AgFirst Farm Credit Bank, Compeer Financial, ACA and Farm Credit Bank of Texas, as the initial lenders
and such other lenders from time to time party thereto (the “Lenders”), and BMO Capital Markets, as the sole Lead Arranger and
sole Book Runner and GreenStone Farm Credit Services, ACA, as Syndication Agent. The Credit Agreement amends and restates
the Company’s existing Credit Agreement dated July 10, 2018.
The Credit Agreement provides for an increased senior secured revolving credit facility in an initial aggregate principal amount
of up to $250 Million (the “Credit Facility” or “Revolver”), which includes a $15 Million sublimit for the issuance of standby
letters of credit and a $15 Million sublimit for swingline loans. The Credit Facility also includes an accordion feature permitting
the Borrower, with the consent of the Administrative Agent, to increase the Credit Facility in the aggregate up to $200 Million by
adding one or more incremental senior secured term loans or increasing one or more times the revolving commitments under the
Revolver. The proceeds of the Credit Facility can be used by the Company for general working capital and corporate purposes,
capital expenditures, to refinance existing indebtedness, to finance permitted acquisitions and fund fees and expenses associated
with the Credit Agreement. As of November 18, 2021, no amounts were borrowed under the Credit Facility and $4.1 Million in
standby letters of credit were issued under the Credit Facility.
The Credit Facility has a term of five years and will mature on November 15, 2026, at which time all amounts outstanding under
the Credit Agreement will be due and payable in full.
The interest rate in connection with loans made under the Credit Facility will be based, at the Borrower’s election, on either the
Eurodollar Rate plus the Applicable Margin or the Base Rate plus the Applicable Margin. The “Base Rate” means a fluctuating
rate per annum equal to the highest of (a) the federal funds rate plus 0.50% per annum, (b) the prime rate of interest established
by the Administrative Agent, and (c) the Eurodollar Rate for an interest period of one month plus 1% per annum, subject to certain
interest rate floors. The “Eurodollar Rate” means the reserve adjusted rate at which Eurodollar deposits in the London interbank
market for an interest period of one, two, three, six or twelve months (as selected by the Borrower) are quoted. The “Applicable
Margin” means 0.00% to 0.75% per annum for Base Rate Loans and 1.00% to 1.75% per annum for Eurodollar Rate Loans, in
each case depending upon the Total Funded Debt to Capitalization Ratio for the Company at the quarterly pricing date. In
addition, the Company will pay a commitment fee on the unused portion of the Credit Facility payable quarterly from 0.15% to
0.25% in each case depending upon the Total Funded Debt to Capitalization Ratio for the Company at the quarterly pricing date.
The Credit Agreement contains customary provisions regarding replacement of the Eurodollar Rate.
The Credit Facility is secured by a first-priority perfected security interest in substantially all of the Borrower’s and the guarantors’
accounts, payment intangibles, instruments (including promissory notes), chattel paper, inventory (including farm
products) and deposit accounts maintained with BMO Harris Bank N.A., the Administrative Agent.
The Credit Agreement contains customary covenants, including, but not limited to, restrictions on the incurrence of liens,
incurrence of additional debt, sales of assets and other fundamental corporate changes and investments. The Credit Agreement
requires maintenance of two financial covenants: (i) a maximum Total Funded Debt to Capitalization Ratio tested quarterly of no
greater than 50%; and (ii) requirement to maintain Minimum Tangible Net Worth at all times of $700 Million plus 50% of net
income (if net income is positive) less permitted restricted payments for each fiscal quarter after November 27, 2021.
Additionally, the Credit Agreement requires that Fred R. Adams Jr., his spouse, natural children, sons-in-law or grandchildren, or
any trust, guardianship, conservatorship or custodianship for the primary benefit of any of the foregoing, or any family limited
partnership, similar limited liability company or other entity that 100% of the voting control of such entity is held by any of the
foregoing, shall maintain at least 50% of the Company's voting stock. Failure to satisfy any of these covenants will constitute a
default under the terms of the Credit Agreement. Further, under the terms of the Credit Agreement, payment of dividends under
the Company's current dividend policy of 1/3 of the Company's net income computed in accordance with generally accepted
accounting principles and payment of other dividends or repurchases by the Company of its capital stock is allowed, as long as
after giving effect to such dividend payments or repurchases no default has occurred and is continuing and the sum of cash and
cash equivalents of the Company and its subsidiaries plus availability under the Revolving Facility equals at least $50 Million.
The Credit Agreement also includes customary events of default and customary remedies upon the occurrence of an event of
default, including acceleration of the amounts due under the Credit Facility and foreclosure of the collateral securing the Credit
Facility.
The Credit Facility is guaranteed by all the wholly-owned direct and indirect domestic subsidiaries of the Company and the Credit
Agreement requires that any future wholly-owned direct or indirect subsidiaries of the Company guarantee the Credit Facility
and pledge the same collateral as pledged by the Company to secure the Credit Facility.
Item 2.03 – Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a
Registrant
The information contained in Item 1.01. Entry into a Material Definitive Agreement of this Current Report on Form 8-K is
incorporated herein by reference.
Item 5.02 – Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
Retirement and Appointment of Principal Accounting Officer
On November 17, 2021, Cal-Maine Foods, Inc. (the “Company”) issued a press release announcing Michael D. (Mike)
Castleberry, Vice President and Controller and the Company’s principal accounting officer, will retire from Cal-Maine Foods
effective early January 2022 and will no longer serve as the principal accounting officer effective November 29, 2021. Castleberry
has held this position since 2014 after serving as Director of Accounting since 2013.
Effective November 29, 2021, Matthew S. Glover has been appointed Vice President – Accounting of the Company and will
assume the role of principal accounting officer.
Glover (age 35) has served as Director of Financial Reporting for Cal-Maine Foods since 2019. He previously was a Senior Audit
Manager at BKD, LLP, for ten years where he worked with audit clients in a variety of industries. Glover holds a Bachelor of
Accountancy degree and a Master of Accountancy degree from the University of Mississippi. He is a Certified Public Accountant.
Glover is a subject to the Company’s standard at-will employment and as a non-executive officer will receive compensation in a
manner consistent with the Company's compensation of its similarly situated non-executive officers, including any grants of long-
term equity incentive awards under the Company's long-term incentive plans.
There are no arrangements or understandings between Glover and any other person pursuant to which Glover was selected as an
officer of the Company. Glover does not have any family relationship with any director or executive officer of the Company.
There are no related party transactions as of the date hereof between Glover and the Company that would require disclosure under
Item 404(a) of Regulation S-K.
A copy of the Company’s press release is attached hereto as Exhibit 99.1 to this Current Report.
Deferred Compensation Plan
On November 15, 2021, the Compensation Committee of the Board of Directors of Cal-Maine Foods, Inc. (the “Company”)
approved and recommended to the Executive Committee of the Board of Directors of Cal-Maine Foods, Inc. the Cal-Maine
Foods, Inc. Amended and Restated Deferred Compensation Plan (the “Plan”), an unfunded deferred compensation plan designed
to provide deferred compensation for a select group of management or highly compensated employees of the Company. The
Executive Committee approved the Plan to be effective on December 1, 2021. The Plan is not a qualified plan under Section
401(a) of the Internal Revenue Code of 1986, as amended, or subject to the provisions of the Employment Retirement Income
Security Act of 1974, as amended, as set forth in the Plan. The Plan amends and restates the Cal-Maine Foods, Inc. Deferred
Compensation Plan adopted by the Board of Directors of the Company on December 28, 2006, and previously amended on
September 25, 2008, and December 10, 2008.
A committee of three persons (the “Committee”) has been appointed by the Executive Committee of the Board of Directors to
administer the Plan. The Committee is the named fiduciary and plan administrator under the Plan and in general is responsible
for the management and administration of the Plan. The Chief Executive Officer of the Company may remove, with or without
cause, any member of the Committee, and name his or her successor, and fill any vacancy caused by death, resignation, or any
other reason. The members of the Committee currently are Adolphus B. Baker, Chairman of the Board, Chief Executive Officer
and Director, Sherman L. Miller, President, Chief Operations Officer and Director, and Max P. Bowman, Vice President, Chief
Financial Officer, Treasurer, Secretary and Director of the Company.
Eligibility to participate in the Plan is limited to employees of the Company who are part of a select group of management or
highly compensated employees, as selected by the Committee (“Participants”), except that the Compensation Committee shall
determine the amount of any contributions and other incentives or benefits under the Plan for any Participants who are members
of the Executive Committee of the Board of Directors. A Deferral Account, a Long-Term Incentive Contribution Account, and an
In-Service Account will be established for each Participant for the purpose of determining the deferred compensation payable to
a Participant. The Deferral Amounts made pursuant to a Participant’s annual Deferral Election to defer a portion of his or her
Base Salary and/or Bonus Compensation will be allocated to a Participant’s Deferral Account or In-Service Account. Long-Term
Incentive Contributions credited on behalf of a Participant by the Company will be allocated to a Participant’s Long-Term
Incentive Contribution Account. The “Deemed Investment Options” selected by the Participant for each of his or her Account(s)
will be used as a measuring device for determining the Deemed Investment gains or losses of a Participant’s Account(s). A
Participant will have no real or beneficial ownership in any security or other investment represented by the Deemed Investment
Options. A Participant’s interest in his or her Deferral Account and In-Service Account will be 100% vested at all times. Unless
otherwise set forth in a Participant’s Participation Agreement, and subject to certain accelerated vesting provisions, Long-Term
Incentive Contributions will become 100% vested on December 31 of the fifth Plan Year following the year the Long-Term
Incentive Contribution is credited on behalf of a Participant by the Company to the Participant’s Long-Term Incentive
Contribution Account. However, any Employee who was a Participant as of December 11, 2006, is 100% vested in all Long-Term
Incentive Contributions, except that all Participants forfeit any Long-Term Incentive Contributions credited in 2021 or after
(including deemed investment gains or losses) if terminated for Cause.
Deferred compensation benefits that are based on Deferred Compensation Accounts established prior to the 2022 Plan Year will
be payable upon separation from service, as determined by the Committee. Benefit payments will be made in a single lump sum
or in annual installments as provided in the Plan, subject to permitted delays in payment in specified circumstances. Payments,
in any case, will be made in a single lump sum if a Participant terminates employment before age 55 for reasons other than death,
or if the value of the Participant’s account is $10,000 or less upon termination of employment for any reason. All costs of the Plan
will be borne by the Company.
Long-Term Incentive Contribution Accounts and Deferral Accounts will be paid to Participants on the earlier of their separation
from service or death. In-Service Accounts will be paid to Participants at the Specified Time selected in the Participant’s In-
Service Account Election. Each year during the annual enrollment, Participants will elect whether the following year Deferral
Amounts and Long-Term Incentive Contributions will be paid in a lump sum or 5, 10 or 15 annual installments. If a Participant’s
balance is less than $10,000 at their separation from service, the payments shall be made in a lump sum.
The Plan may be amended or terminated by the Board at any time, without decreasing the interests of Participants. Participants
are not conferred any right to continued employment with the Company, or any other rights against the Company except as
specified in the Plan. A copy of the Plan is filed with this Form 8-K as Exhibit No. 10.2. As of the date of this Form 8-K, there
are 8 Participants under the Plan.
Item 9.01 – Financial Statements and Exhibits
(d) Exhibits
Exhibit
Number
Description
104
Cover Page Interactive Data File, (embedded within the Inline XBRL document)
SIGNATURES
Pursuant to the requirements for the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
CAL-MAINE FOODS, INC.
Date:
November 18, 2021
By:
/s/ Max P. Bowman
Max P. Bowman
Director, Vice President, and Chief Financial Officer