UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
Filed
by the Registrant [X]
Filed
by a Party other than the Registrant [ ]
Check
the appropriate box:
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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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[X]
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Definitive
Proxy Statement
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[ ]
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Definitive
Additional Materials
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[ ]
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Soliciting
Material Pursuant to Section 240.14a-12
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Bridgford
Foods Corporation
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
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computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title
of each class of securities to which transaction applies:
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Aggregate
number of securities to which transaction applies:
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Per
unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date
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Form,
Schedule or Registration Statement No.:
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BRIDGFORD
FOODS CORPORATION
NOTICE
OF 2019 ANNUAL MEETING OF SHAREHOLDERS
March
13, 2019
10:00
a.m. Pacific Time
To
the Shareholders of BRIDGFORD FOODS CORPORATION:
The
annual meeting of the shareholders of Bridgford Foods Corporation, a California corporation, will be held at the offices of Bridgford
Foods Corporation, 1308 North Patt Street, Anaheim, California 92801, on Wednesday, March 13, 2019 at 10:00 a.m. Pacific Time,
for the following purposes:
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(1)
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To
elect nine directors to hold office for one year or until their successors are elected and qualified;
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(2)
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To
ratify the appointment of Squar Milner LLP as the Company’s independent registered public accountants for the fiscal
year ending on November 1, 2019; and
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(3)
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To
transact such other business as may properly come before the meeting, or any postponements or adjournments thereof.
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The
Board of Directors recommends that you vote “FOR” each of the director nominees referenced in Proposal 1 and “FOR”
Proposal 2. Each of the proposals is described in greater detail in the Proxy Statement accompanying this Notice of 2019 Annual
Meeting of Shareholders, or this Notice.
Only
shareholders of record at the close of business on February 1, 2019 are entitled to notice of and to vote at the meeting or any
postponement or adjournment thereof.
Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to Be Held on Wednesday, March 13,
2019.
Pursuant
to the rules of the Securities and Exchange Commission, or the SEC, the Company has elected to provide access to its proxy materials
both by sending you a full set of proxy materials, including this Notice, the accompanying Proxy Statement and Proxy Card, and
the 2018 Annual Report to Shareholders, and by notifying you of the availability of the proxy materials on the Internet.
The
Notice, Proxy Statement, Proxy Card and 2018 Annual Report to Shareholders are available at:
https://materials.proxyvote.com/108763
All
shareholders are cordially invited to attend the annual meeting. HOWEVER, TO ENSURE YOUR REPRESENTATION AT THE MEETING, THE BOARD
OF DIRECTORS RESPECTFULLY URGES YOU TO SIGN, DATE AND RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
If you attend the meeting in person, you may withdraw your proxy and vote your shares at the meeting. Shareholders attending the
meeting whose shares are held in the name of a broker or other nominee who desire to vote their shares at the meeting should bring
with them a letter or account statement from that firm confirming their ownership of shares.
The
meeting will be held at the principal offices of Bridgford Foods Corporation, which are located at 1308 North Patt Street, Anaheim,
California 92801, one block east of Anaheim Blvd. and just south of the 91 Freeway in the city of Anaheim, California. Driving
directions may be obtained by contacting the receptionist at (714) 526-5533.
Your
vote is extremely important. Please vote as soon as possible to ensure that your vote is recorded promptly even if you plan to
attend the annual meeting.
By
order of the Board of Directors
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/
s/
Cindy Matthews-Morales
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Cindy
Matthews-Morales
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Secretary
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Anaheim,
California
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February
18, 2019
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BRIDGFORD
FOODS CORPORATION
1308
North Patt Street, Anaheim, California 92801
2019
ANNUAL MEETING OF SHAREHOLDERS
to
be held March 13, 2019
PROXY
STATEMENT
GENERAL
INFORMATION
The
enclosed proxy is solicited by the Board of Directors of Bridgford Foods Corporation, a California corporation, which we refer
to as “the Company,” “we,” “us,” or “our,” for use at the 2019 Annual Meeting
of Shareholders of the Company, or the Annual Meeting, to be held at the offices of the Company, which are located at 1308 North
Patt Street, Anaheim, California 92801, on Wednesday, March 13, 2019 at 10:00 a.m. Pacific Time, and at any postponement or adjournment
thereof. All shareholders of record at the close of business on February 1, 2019 are entitled to notice of and to vote at such
meeting. This Proxy Statement and the accompanying proxy are being mailed on or about February 18, 2019.
QUESTIONS
AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
The
following questions and answers are intended to briefly address potential questions that our shareholders may have regarding this
Proxy Statement and the Annual Meeting. They are also intended to provide our shareholders with certain information that is required
to be provided under the rules and regulations of the SEC. These questions and answers may not address all of the questions that
are important to you as a shareholder. If you have additional questions about the Proxy Statement or the Annual Meeting, please
see “Whom should I contact with other questions?” below.
1.
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What
is the purpose of the Annual Meeting?
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At
the Annual Meeting, our shareholders will be asked to consider and vote upon the matters described in this Proxy Statement and
in the accompanying Notice, and any other matters that properly come before the Annual Meeting.
2.
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What
is a proxy statement and what is a proxy?
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A
proxy statement is a document that the SEC regulations require us to give you when we ask you to sign a proxy designating individuals
to vote on your behalf. A proxy is your legal designation of another person to vote the stock you own. That other person is called
a proxy. If you designate someone as your proxy in a written document, that document also is called a proxy or a proxy card.
3.
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Why
did I receive these proxy materials?
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We
are providing these proxy materials in connection with the solicitation by the Board of Directors of the Company of proxies to
be voted at the Annual Meeting, and at any postponement or adjournment thereof. This Proxy Statement contains important information
for you to consider when deciding how to vote on the matters brought before the Annual Meeting. You are invited to attend the
Annual Meeting in person to vote on the proposals described in this Proxy Statement. However, you do not need to attend the Annual
Meeting to vote your shares. Instead, you may vote your shares using one of the other voting methods described in this Proxy Statement.
Whether or not you expect to attend the Annual Meeting, please vote your shares as soon as possible in order to ensure your representation
at the Annual Meeting and to minimize the cost to the Company of proxy solicitation.
4.
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What
am I being asked to vote upon at the Annual Meeting?
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At
the Annual Meeting, you will be asked to:
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Vote
on the election of nine director nominees to serve for one year or until their successors are elected and qualified (Proposal
1);
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Ratify
the appointment of Squar Milner LLP as the Company’s independent registered public accountants for the fiscal year ending
on November 1, 2019 (Proposal 2); and
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Act
upon such other matters as may properly come before the Annual Meeting or any postponement or adjournment thereof.
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5.
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Does
the Board of Directors recommend voting in favor of the proposals?
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Yes.
The Board of Directors unanimously recommends that you vote your shares:
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“FOR”
each of the director nominees (Proposal 1); and
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“FOR”
the ratification of the appointment of Squar Milner LLP as the Company’s independent registered public accountants for
the fiscal year ending on November 1, 2019 (Proposal 2).
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6.
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Who
can vote at the Annual Meeting?
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Only
our “shareholders of record” at the close of business on February 1, 2019, the Record Date, will be entitled to vote
at the Annual Meeting. On the Record Date, there were 9,076,832 shares of our common stock outstanding and entitled to vote. Each
share of common stock entitles the holder thereof to one vote on each matter to be voted upon by such shareholders and, upon prior
notice, to cumulate votes for the election of directors as discussed in Proposal 1 below.
Beneficial
Owners
If,
on the Record Date, your shares were held in an account at a bank, broker, dealer, or other nominee, then you are the “beneficial
owner” of shares held in “street name” and this Proxy Statement is being forwarded to you by that nominee. The
nominee holding your account is considered the “shareholder of record” for purposes of voting at the Annual Meeting.
As a beneficial owner, you have the right to direct your nominee on how to vote the shares in your account. You are also invited
to attend the Annual Meeting. However, since you are not the “shareholder of record,” you may not vote your shares
in person at the Annual Meeting unless you request and obtain a valid proxy from your nominee. Please contact your nominee directly
for additional information.
Brokers,
banks or other nominees holding shares of record for their respective customers generally are not entitled to vote on the election
of directors unless they receive voting instructions from their customers. As used herein, “uninstructed shares” means
shares held by a nominee who has not received instructions from its customers on a particular matter. As used herein, “broker
non-vote” means the votes that could have been cast on the matter by nominees with respect to uninstructed shares if the
nominees had received instructions. The effect of proxies marked “withheld” as to any director nominee or “abstain”
as to any other proposal, and the effect of broker non-votes on each of the proposals, is discussed in each proposal below.
7.
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What
are the voting requirements to approve the proposals?
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All
proxies, which are properly completed, signed and returned to the Company prior to the Annual Meeting, and not revoked, will be
voted in accordance with the instructions given in the proxy. Please see each proposal below for voting requirements to approve
the proposals.
8.
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What
happens if I do not vote?
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Please
see each proposal below for the effect of not voting as well as the effect of withholdings, abstentions and broker non-votes.
9.
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What
is the quorum requirement for the Annual Meeting?
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The
presence at the Annual Meeting of a majority of the outstanding shares, in person or by proxy, relating to any matter to be acted
upon at the Annual Meeting, is necessary to constitute a quorum for the Annual Meeting. For purposes of the quorum, shareholders
of record who are present at the Annual Meeting in person or by proxy and who abstain or withhold their vote, including brokers,
dealers or other nominees holding shares of their respective customers of record who cause abstentions to be recorded at the Annual
Meeting, are considered shareholders who are present and entitled to vote and count toward the quorum. If a quorum is not present,
the Annual Meeting will be adjourned until a quorum is obtained.
10.
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How
can I vote my shares?
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Shareholders
of record can vote by proxy or by attending the Annual Meeting and voting in person. The persons named as proxies were designated
by the Board of Directors. If you vote by proxy, you can vote by mail as described below. If you are the beneficial owner of shares
held in “street name,” please refer to the information forwarded by your bank, broker, dealer or other nominee to
see which voting options are available to you.
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Vote
by Mail.
You can vote by mail pursuant to the instructions provided on the Proxy Card. If you hold shares beneficially
in “street name,” you can vote by mail by following the voting instruction card provided to you by your broker,
bank, trustee or nominee. If you choose to vote by mail, simply mark, sign, date and return your Proxy Card in the enclosed
postage-prepaid envelope provided with this Proxy Statement.
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Vote
at the Annual Meeting.
Voting by mail will not limit your right to vote at the Annual Meeting if you decide to attend
in person. Nevertheless, to ensure your representation at the Annual Meeting, the Board of Directors respectfully urges you
to vote by mail. If you attend the meeting in person, you may withdraw your proxy and vote your shares at the meeting. Shareholders
attending the meeting whose shares are held in “street name” by a bank, broker, dealer or other nominee who desire
to vote their shares at the meeting should bring with them a letter or account statement from that firm confirming their ownership
of shares prior to the Record Date.
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All
shares that have been properly voted and not revoked will be voted at the Annual Meeting. If you sign and return your Proxy Card
but do not give voting instructions, the shares represented by that proxy will be voted as recommended by the Board of Directors
(as described in each proposal below).
11.
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How
may I attend the Annual Meeting?
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You
are entitled to attend the Annual Meeting only if you were a shareholder as of the Record Date or hold a valid proxy for the Annual
Meeting. Since seating is limited, admission to the Annual Meeting will be on a first-come, first-served basis. You should be
prepared to present valid government-issued photo identification for admittance, such as a passport or driver’s license.
If your shares are held in “street name,” you also will need proof of ownership as of the Record Date to be admitted
to the Annual Meeting, such as a letter or account statement from the bank, broker, dealer or other nominee confirming your ownership
of shares prior to the Record Date, a copy of the voting instruction card provided by your bank, broker, dealer or other nominee,
or similar evidence of ownership. If you do not comply with each of the foregoing requirements, you may not be admitted to the
Annual Meeting.
The
meeting will be held at the principal offices of the Company, which are located at 1308 North Patt Street, Anaheim, California
92801, one block east of Anaheim Blvd. and just south of the 91 Freeway in the city of Anaheim, California. Driving directions
may be obtained by contacting the receptionist at (714) 526-5533.
12.
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What
can I do if I change my mind after I vote my shares?
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Any
proxy may be revoked or superseded by (i) executing a later proxy, (ii) giving notice of revocation in writing prior to, or at,
the Annual Meeting, or (iii) attending the Annual Meeting, withdrawing the proxy and voting in person. Attendance at the Annual
Meeting will not in and of itself constitute revocation of the proxy. If you have instructed your bank, broker, dealer or other
nominee to vote your shares, you must follow directions received from your nominee to change those instructions.
13.
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Could
other matters be decided at the Annual Meeting?
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As
of the date this Proxy Statement went to press, the Board of Directors did not know of any matters which will be brought before
the Annual Meeting other than those specifically set forth in the Notice hereof. However, if any other matter properly comes before
the Annual Meeting, it is intended that the proxies, or their substitutes, will vote on such matters in accordance with their
best judgment.
14.
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Who
is paying for the cost of this proxy solicitation?
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Solicitation
of proxies will be primarily by mail, although some of the officers, directors and employees of the Company may solicit proxies
personally or by telephone, facsimile or electronic mail. All expenses incurred in connection with this solicitation will be borne
by the Company. The Company will reimburse brokers and others who incur costs to send proxy materials to beneficial owners of
stock in the name of a broker or nominee.
15.
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I
share an address with another shareholder, and we received only one paper copy of the proxy materials. How may I obtain an
additional copy of the proxy materials?
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The
SEC rules permit brokers and other persons who hold the Company’s shares for beneficial owners, to participate in a practice
known as “householding,” which means that only one copy of the Proxy Statement and annual report will be sent to multiple
shareholders who share the same address unless other instructions are provided to the Company. Householding is designed to reduce
printing and postage costs and therefore results in cost savings for the Company. If you receive a household mailing this year
and would like to have additional copies of this Proxy Statement and/or the 2018 Annual Report mailed to you, or if you would
like to opt out of this practice for future mailings, please contact your broker or other nominee record holder, or submit your
request to:
Bridgford
Foods Corporation
1308
North Patt Street
Anaheim,
California 92801
Attention:
Corporate Secretary
Phone:
(714) 526-5533
Upon
receipt of any such request, the Company agrees to promptly deliver a copy of this Proxy Statement and/or the 2018 Annual Report
to you. In addition, if you are currently a shareholder sharing an address with another shareholder and wish to receive only one
copy of future proxy materials for your household, please contact us using the contact information set forth above.
16.
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Where
can I find voting results of the Annual Meeting?
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We
will announce preliminary voting results with respect to each proposal at the Annual Meeting. In accordance with SEC rules, final
voting results will be published in a Current Report on Form 8-K within four business days following the Annual Meeting, unless
final results are not known at that time in which case preliminary voting results will be published within four business days
of the Annual Meeting and final voting results will be published once they are known by the Company.
17.
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What
is the deadline to submit shareholder proposals or director nominations for the 2020 Annual Meeting?
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Proposals
of shareholders intended to be presented at the 2020 Annual Meeting of Shareholders must be received at the Company’s principal
office no later than 120 days prior to the first anniversary of the date on which the proxy materials for the 2019 Annual Meeting
were first sent to shareholders for inclusion in the Proxy Statement and form of proxy relating to that meeting. However, if the
date of the 2020 Annual Meeting of Shareholders has been changed by more than 30 days from the date of the 2019 Annual Meeting,
then the deadline is a reasonable time before the Company begins to print and send its proxy materials. Matters pertaining to
such proposals, including the number and length thereof, eligibility of persons entitled to have such proposals included and other
aspects are regulated by the Securities Exchange Act of 1934 and the rules and regulations of the SEC.
Additionally,
any shareholder desiring to submit a proposal for action or to nominate one or more persons for election as directors at our 2020
Annual Meeting of Shareholders must submit a notice of the proposal or nomination including the information required by our bylaws
to the Company’s Corporate Secretary, c/o Bridgford Foods Corporation, 1308 North Patt Street, Anaheim, California 92801,
between 60 and 90 days prior to the first anniversary on the date on which the proxy materials for the 2019 Annual Meeting were
first sent to shareholders, or else it will be considered untimely and ineligible to be properly brought before the Annual Meeting.
However, if our 2020 Annual Meeting of Shareholders is not held within 30 days of the first anniversary of the 2019 Annual Meeting,
under our bylaws, this notice must be provided not later than the close of business on the tenth day following the date on which
notice of the date of the 2020 Annual Meeting of Shareholders is first mailed to shareholders or otherwise publicly disclosed,
whichever first occurs.
18.
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Where
can I find information about the Annual Report of the Company?
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The
Company will furnish without charge to each person whose proxy is being solicited, upon request of any such person, a copy of
the Annual Report of the Company on Form 10-K for the fiscal year ended November 2, 2018, as such was filed with the SEC, including
financial statements and associated schedules. Such report was filed with the SEC on January 18, 2019 and is available on the
SEC’s website at
www.sec.gov
, as well as the Company’s website at
www.bridgford.com
. Requests for copies
of such report should be directed to:
Bridgford
Foods Corporation
1308
North Patt Street
Anaheim,
California 92801
Attention:
Corporate Secretary
19.
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Whom
should I contact with other questions?
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If
you have additional questions about this Proxy Statement or the Annual Meeting, or if you would like additional copies of this
Proxy Statement, please contact:
Bridgford
Foods Corporation
1308
North Patt Street
Anaheim,
California 92801
Attention:
Corporate Secretary
Phone:
(714) 526-5533
PROPOSAL
1
ELECTION
OF DIRECTORS
The
directors of the Company are elected annually to serve until the next annual meeting of the shareholders or until their respective
successors are elected and duly qualified. At the Annual Meeting, nine directors have been nominated for election. The election
of directors shall be by the affirmative vote of the holders of a plurality of the shares voting in person or by proxy at the
Annual Meeting. Every shareholder, or his or her proxy, entitled to vote upon the election of directors may cumulate his or her
votes and give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes
to which his or her shares are entitled, or distribute his or her votes on the same principle among as many candidates as he or
she deems appropriate. No shareholder or proxy, however, shall be entitled to cumulate votes unless such candidate or candidates
have been nominated prior to the voting and the shareholder has given notice at the meeting, prior to the voting, of the shareholder’s
intention to cumulate such shareholder’s votes. If any shareholder gives such notice, all shareholders may cumulate their
votes for candidates in nomination. All nominees are presently directors of the Company. All directors were elected to the Board
of Directors by the Company’s shareholders at the 2018 Annual Meeting. All current directorships are being filled.
Unless
otherwise instructed, shares represented by the proxies will be voted “FOR” the election of each of the nominees listed
below. Broker non-votes and proxies marked “WITHHELD” as to one or more of the nominees will result in the respective
nominees receiving fewer votes. However, the number of votes otherwise received by the nominee will not be reduced by such action.
Each
nominee has indicated that he is willing and able to serve as director if elected. In the event that any of such nominees shall
become unavailable for any reason, an event which management does not anticipate, it is intended that proxies will be voted for
substitute nominees designated by management.
THE
BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES NAMED BELOW.
The
following table and biographical summaries set forth, with respect to each nominee for director, his age, his principal occupation
and the year in which he first became a director of the Company. Data with respect to the number of shares of the Company’s
common stock beneficially owned by each of such persons as of February 1, 2019 appears under the caption “PRINCIPAL SHAREHOLDERS
AND MANAGEMENT” below.
Name
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Age
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Principal Occupation
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Year First
Became
Director
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William L. Bridgford
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64
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Chairman of the Board and Member of the Executive Committee of the Company (1)(4)
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2004
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Allan L. Bridgford, Jr.
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60
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Retired Executive of the Company (1)(4)
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2011
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Bruce H. Bridgford
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66
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President of Bridgford Foods of California (1)(4)
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2009
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John V. Simmons
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63
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President and Member of the Executive Committee of the Company (4)
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2011
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Todd C. Andrews
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53
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Vice President and Controller of Public Storage (2)(3)(4)
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2004
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D. Gregory Scott
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62
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Managing Director of Peak Holdings, LLC (2)(3)(4)
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2006
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Raymond F. Lancy
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65
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Chief Financial Officer, Vice President, Treasurer and Member of the Executive Committee of the Company (4)
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2013
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Keith A. Ross
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56
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Real Estate Consultant (4)
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2016
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Paul R. Zippwald
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81
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Director (2)(3)(4)
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1992
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(1)
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William
L. Bridgford, Allan L. Bridgford, Jr. and Bruce H. Bridgford are cousins.
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(2)
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Member
of the Compensation Committee.
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(3)
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Member
of the Audit Committee.
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(4)
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Member
of the Nominating Committee.
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Directors
William
L. Bridgford
William
L. Bridgford has served as Chairman of the Board since March of 2006. He previously served as President of the Company from June
of 2004 until March of 2006, and Secretary of the Company for more than five years. Mr. Bridgford has been a full-time employee
of the Company since 1981. He has also served as a member of the Executive Committee since 2004. Mr. Bridgford is a graduate of
California State University, Fullerton with a degree in Business Management.
Mr.
Bridgford is one of the principal owners of Bridgford Industries Incorporated, the Company’s majority shareholder. He brings
to the Board extensive experience in the operations of the Company and provides strong leadership skills that provide strategic
business guidance to the Company. The Board believes his executive managerial experience and Company knowledge base combined with
his understanding of corporate values and culture qualify him to serve as a member of the Board.
Allan
L. Bridgford, Jr.
Allan
L. Bridgford, Jr. served as President of Bridgford Foods Processing Corporation, formerly known as Bridgford Foods of Illinois,
Inc., a division of the Company, from January 1983 until his retirement in October of 2002. Mr. Bridgford is a graduate of the
University of Missouri with a degree in Economics.
Mr.
Bridgford is one of the principal owners of Bridgford Industries Incorporated, the Company’s majority shareholder. He brings
to the Board extensive sales, marketing and distribution experience in the food industry. The Board believes these skills and
experiences qualify him to serve as a member of the Board. In addition to his service on the Board, Mr. Bridgford provides business
consulting services to the Company.
Bruce
H. Bridgford
Bruce
H. Bridgford has served as President of Bridgford Foods of California, a division of the Company, since March of 1999. Mr. Bridgford
has been a full time employee of the Company since 1977 and earned a B.S. degree in Business with a concentration in finance and
marketing from the University of Southern California.
Mr.
Bridgford is one of the principal owners of Bridgford Industries Incorporated, the Company’s majority shareholder. He provides
key insight into the direct store delivery operations of the Company as well as strategic direction for the sales management and
marketing functions of the Company. The Board believes these skills and experiences qualify him to serve as a member of the Board.
John
V. Simmons
John
V. Simmons has served as President of the Company and member of the Executive Committee since 2006. He previously served as Vice
President of the Company for more than five years. Mr. Simmons earned a B.A. degree in Psychology from the University of Wisconsin.
Mr.
Simmons has extensive knowledge and experience in the areas of marketing, product research and development, trade relations and
operations developed as an employee of the Company since 1979. The Board believes these skills and experiences qualify him to
serve as a member of the Board.
Todd
C. Andrews
Todd
C. Andrews is a Certified Public Accountant (inactive) and presently serves as Vice President and Controller of Public Storage,
a member of the S&P 500, headquartered in Glendale, California. Mr. Andrews has been employed by Public Storage since 1997.
Mr. Andrews graduated cum laude with a Bachelor of Science degree in Business Administration with an emphasis in accounting and
finance from California State University, Northridge.
Mr.
Andrews has extensive experience in multiple accounting and finance roles over a period of more than 20 years. In particular,
Mr. Andrews is experienced in the areas of financial reporting and analysis, treasury management, SEC reporting, internal controls
and procedures and operational analysis. In addition, Mr. Andrews brings a diverse set of perspectives to the Board from serving
in positions in multiple industries, including public accounting, entertainment, and real estate. The Board believes these skills
and experiences qualify him to serve as a member of the Board. Mr. Andrews also qualifies as an audit committee financial expert
and is financially sophisticated within the meaning of the NASDAQ Listing Rules.
D.
Gregory Scott
D.
Gregory Scott is a Certified Public Accountant (inactive) and currently serves as the Managing Director of Peak Holdings, LLC,
an investment management company based in Beverly Hills, California. Mr. Scott has been with Peak Holdings, LLC for more than
the past five years. Peak Holdings, LLC and its affiliates own and manage in excess of three million square feet of office, retail
and warehouse space throughout the United States.
Mr.
Scott brings to the Board extensive financial and managerial experience, which qualifies him to serve as a member of the Board.
Mr. Scott also qualifies as an audit committee financial expert and has financial sophistication as described in the NASDAQ Listing
Rules.
Raymond
F. Lancy
Raymond
F. Lancy has served as Treasurer of the Company for more than the past five years. He has also served as a member of the Executive
Committee since 2001, Vice President since 2001 and Chief Financial Officer since 2003. Mr. Lancy is a Certified Public Accountant
(inactive) and worked for ten years as an auditor at PricewaterhouseCoopers LLP. He earned a Bachelor of Science degree with a
major in Administration with high honors from California State University, San Bernardino.
Mr.
Lancy has extensive knowledge and experience in the areas of finance and management developed at PricewaterhouseCoopers LLP and
as an employee of the Company since July of 1992 and as Chief Financial Officer since 2003. The Board believes these skills and
experiences qualify him to serve as a member of the Board.
Keith
A. Ross
Keith
A. Ross is a real estate consultant. From August 2013 to the present, Mr. Ross has served as Executive Vice President of CT Realty,
or CTR, a real estate investment, development and management company based in Aliso Viejo, California. At CTR, Mr. Ross is in
charge of all development and is responsible for sourcing, evaluating, and closing on all commercial development opportunities.
In addition, Mr. Ross serves on CTR’s Executive Committee and Investment Committee. CTR was founded in 1994 and has successfully
acquired in excess of $2.5 billion in commercial real estate properties across Northern and Southern California. Prior to joining
CTR, from 2001 to 2009, Mr. Ross was Founder and Principal of Centra Realty Corporation and oversaw the company’s land acquisitions,
capital raises of both equity and debt, architectural design, engineering, construction and sales/leasing efforts. Centra was
consistently ranked as one of the most active real estate development companies in Orange County, California. From June 2009 to
January 2014, Mr. Ross was Founder, President and CEO of Peligroso Spirits which sold to Diageo in London (the world’s largest
spirits company).
Mr.
Ross began his professional career at the Koll Company and was with Koll for over a decade and served in various roles from project
manager to marketing before leading the real estate development efforts of the company in Southern California. Mr. Ross attended
San Diego State University. He currently serves on the Board of Directors and is a Co-Founder of Miocean, a nonprofit foundation
that applies proven business approaches to curb the harmful effects of urban run-off pollution.
Mr.
Ross brings to the Board extensive real estate acquisition and development experience as well as project management and marketing
expertise, which the Board believes qualifies him to serve as a member of the Board. In addition to his service on the Board,
Mr. Ross continues to provide real estate consulting services to the Company.
Paul
R. Zippwald
Paul
R. Zippwald was Regional Vice President and Head of Commercial Banking for Bank of America NT&SA, North Orange County, California,
for more than five years prior to his retirement in July 1992. Mr. Zippwald is currently retired. He is a graduate of the Graduate
School of Credit and Financial Management at the Amos Tuck School of Business Administration of Dartmouth College and also holds
a graduate degree from the American Institute of Banking.
Mr.
Zippwald brings to the Board a background and expertise in banking and investment advisory services. The Board believes that Mr.
Zippwald is qualified to serve as a director of the Company due to his business expertise and executive managerial experience.
Mr. Zippwald also qualifies as an audit committee financial expert and is financially sophisticated within the meaning of the
NASDAQ Listing Rules.
Public
Company Directorships
Except
as indicated above, none of the directors have been a director of any other public company in the past five years.
Involvement
in Certain Legal Proceedings
None
of the directors have been involved in any legal events reportable under Item 401(f) of Regulation S-K during the last ten years.
Board
Meetings
During
fiscal year 2018, the Company’s Board of Directors held ten regularly scheduled monthly meetings. All directors attended
at least 75% of the aggregate number of meetings of the Board of Directors and meetings of committees upon which they served.
Arrangements
or Understandings with Directors
There
are no agreements or understandings pursuant to which any of the directors was or is to be elected to serve as a director or nominee.
Further,
none of our directors have agreements or arrangements with any person or entity, other than the Company, relating to compensation
or other payments in connection with such director’s service to the Company.
Controlled
Company Status
The
Company is considered a “controlled company” within the meaning of Rule 5615(c)(1) of the NASDAQ Listing Rules based
on the approximate 78.8% ownership of the Company by Bridgford Industries Incorporated and is therefore exempted from certain
independence requirements of the NASDAQ Listing Rules, including the requirement to maintain a majority of independent directors
on the Company’s Board of Directors and certain requirements with respect to the committees of the Board. Nevertheless,
the Board of Directors has determined that Messrs. Andrews, Scott, and Zippwald are “independent directors” within
the meaning of Rule 5605 of the NASDAQ Listing Rules.
Board
Committees
The
Board of Directors maintains three committees, the Compensation Committee, the Audit Committee and the Nominating Committee.
Compensation
Committee
The
Compensation Committee currently consists of three members, including Messrs. Zippwald (Chairman), Andrews and Scott. Each of
the current members of the Compensation Committee is a non-employee director, and notwithstanding that the Company is a “controlled
company” within the meaning of the NASDAQ Listing Rules, each member is independent as defined in Rule 5605(a)(2) of the
NASDAQ Listing Rules. The Compensation Committee is responsible for establishing and administering the Company’s compensation
arrangements for all executive officers.
The
Compensation Committee meets no less frequently than annually (and more frequently as circumstances dictate) to discuss and determine
executive officer and director compensation. The Compensation Committee does not generally retain the services of any compensation
consultants. However, from time to time it utilizes compensation data from companies that the Compensation Committee deems to
be competitive with the Company in connection with its annual review of executive compensation. The Compensation Committee has
the power to form and delegate authority to subcommittees when appropriate, provided that such subcommittees are composed entirely
of directors who would qualify for membership on the Compensation Committee pursuant to applicable NASDAQ Listing Rules. See “Compensation
Discussion and Analysis” and “Director Compensation.”
The
Compensation Committee held one meeting during fiscal year 2018. No additional compensation is paid to directors for participation
on the Compensation Committee. The Compensation Committee operates under a written charter, which was adopted on October 11, 2010,
and is attached as
Exhibit B
to the Proxy Statement for the 2017 Annual Meeting of Shareholders. The charter is not available
on the Company’s website.
Audit
Committee
The
Audit Committee currently consists of Messrs. Scott (Chairman), Andrews and Zippwald.
The
Audit Committee has been established in accordance with the rules and regulations of the SEC and each of the current members of
the Audit Committee is an “independent director” as defined in Rule 5605(c)(2) of the NASDAQ Listing Rules. In addition,
the Board has determined that Messrs. Andrews, Scott and Zippwald qualify as “audit committee financial experts” as
such term is used in the rules and regulations of the SEC.
The
Audit Committee meets periodically with the Company’s independent registered public accountants and reviews the Company’s
accounting policies and internal controls. It also reviews the scope and adequacy of the independent registered public accountants’
examination of the Company’s annual financial statements. In addition, the Audit Committee selects the firm of independent
registered public accountants to be retained by the Company, subject to shareholder approval, pre-approves services rendered by
its independent registered public accountants and pre-approves all related-party transactions.
The
Audit Committee held six meetings during fiscal year 2018. Each of the members of the Audit Committee receives $350 to $550 per
meeting depending on the length of each meeting attended. In addition, the Audit Committee holds a pre-earnings release conference
with the Company’s independent registered public accountants on a quarterly basis. The Audit Committee operates under an
Amended and Restated Audit Committee Charter, which was approved on November 8, 2010, and is attached as
Exhibit C
to the
Proxy Statement for the 2017 Annual Meeting of Shareholders. The charter is not available on the Company’s website.
Nominating
Committee
The
Board of Directors has decided that the full Board should perform the functions of a Nominating Committee for the Company. It
made that decision because the Board believes that selecting new Board nominees is one of the most important responsibilities
the Board members have to the Company’s shareholders, and for that reason, all of the members of the Board should have the
right and responsibility to participate in the selection process. Because of its status as a “controlled company”
within the meaning of Rule 5615(c)(1) of the NASDAQ Listing Rules, the Company is not required to have a Nominating Committee
comprised solely of independent directors. The Nominating Committee does not act pursuant to a written charter.
In
its role as Nominating Committee, the full Board identifies and screens new candidates for Board membership. Nevertheless, actions
of the Board, in its role as Nominating Committee, can be taken only with the affirmative vote of a majority of the independent
directors on the Board, as defined by the NASDAQ Listing Rules.
Director
Nomination Process
In
identifying new Board candidates, the Board will seek recommendations from existing Board members and executive officers. In addition,
the Board will consider any candidates that may have been recommended by any of the Company’s shareholders who have made
those recommendations in accordance with the shareholder nomination procedures described below. The Board, in its capacity as
Nominating Committee, does not evaluate nominees recommended by shareholders differently from its evaluation of other director
nominees. The Board also has the authority to engage an executive search firm and other advisors as it deems appropriate to assist
in identifying qualified candidates for the Board.
Any
shareholder desiring to submit a recommendation for consideration by the Board of a candidate that the shareholder believes is
qualified to be a Board nominee at any upcoming shareholders meeting may do so by submitting that recommendation in writing, and
in accordance with the time periods and information requirements set forth in the bylaws, to the Company’s Corporate Secretary,
c/o Bridgford Foods Corporation, 1308 North Patt Street, Anaheim, California 92801. No director nominations by stockholders have
been received as of the filing of this Proxy Statement.
In
assessing and selecting Board candidates, the Board will consider such factors, among others, as: the candidate’s independence,
experience, knowledge, skills and expertise, as demonstrated by past employment and board experience; the candidate’s reputation
for integrity; and the candidate’s participation in local community and local, state, regional or national charitable organizations.
When selecting a nominee from among candidates considered by the Board, it will conduct background inquiries of and interviews
with the candidates the Board members believe are best qualified to serve as directors. The Board members will consider a number
of factors in making their selection of a nominee from among those candidates, including, among others: whether the candidate
has the ability, willingness and enthusiasm to devote the time and effort required of members of the Board; whether the candidate
has any conflicts of interest or commitments that would interfere with the candidate’s ability to fulfill the responsibilities
of directors of the Company, including membership on Board committees; whether the candidate’s skills and experience would
add to the overall competencies of the Board; and whether the candidate has any special background or experience relevant to the
Company’s business.
Board
Consideration of Diversity
The
Board believes that differences in experience, knowledge, skills and expertise enhance the performance of the Board. Accordingly,
the Board, in its capacity as Nominating Committee, considers such diversity in selecting and evaluating proposed Board nominees.
However, the Board has not implemented a formal policy with respect to the consideration of diversity for the composition of the
Board.
Board
Leadership Structure and the Role of the Board in Risk Management Oversight
Board
Leadership Structure
.
The
Board is currently comprised of a total of nine directors. One of those directors, William L. Bridgford, serves as the Chairman
of the Board. In this capacity, he is principally charged with fulfilling the following duties:
|
●
|
Presiding
as the Chairman of the meetings of the Board of Directors;
|
|
|
|
|
●
|
Serving
as a conduit of information between the independent directors and members of management;
|
|
|
|
|
●
|
Approving
Board of Directors meeting agendas and schedules;
|
|
|
|
|
●
|
Calling
executive session meetings of the independent directors, as needed;
|
|
|
|
|
●
|
Reviewing
information sent to the Board of Directors;
|
|
|
|
|
●
|
Working
with the Chief Financial Officer and Corporate Secretary to ensure the Board has adequate resources to support its decision-making
obligations;
|
|
|
|
|
●
|
Meeting
with shareholders as appropriate; and
|
|
|
|
|
●
|
Such
other responsibilities and duties as the Board of Directors shall designate.
|
The
Company has not appointed a Chief Executive Officer. Instead, the Company has historically utilized an Executive Committee to
serve in the capacity of Chief Executive Officer. The Board believes that the Executive Committee structure is appropriate for
the Company because it requires a full committee of officers, each of whom bring their own experiences and perspectives to bear
on their decision making, to discuss and vote on important decisions affecting the Company. The Company has utilized an Executive
Committee in lieu of appointing a Chief Executive Officer for more than twenty years. See “Executive Officers” for
further discussion about the role and membership of the Executive Committee.
The
Chairman of the Board serves on the Executive Committee. Thus, the roles of Chairman of the Board and Chief Executive Officer
are intertwined to some extent. However, the Chairman of the Board, the President, and the Chief Financial Officer represent only
three of the four members of the Executive Committee and no other directors currently serve on the Executive Committee. Accordingly,
six of nine members of the Board are not members of the Executive Committee. The Board believes that this structure properly maintains
the independence of the Board as a whole, and of the Chairman of the Board, from the Executive Committee.
The
Board’s Role in Risk Oversight
.
The
responsibility for the day-to-day management of risk lies with the Executive Committee. Risk management is not viewed by the Executive
Committee as a separate function, but rather is viewed as part of the day-to-day process of running the Company. It is the Board’s
responsibility to oversee the Executive Committee with respect to its risk management function and to ensure that the Company’s
risk management system is well-functioning and consistent with the Company’s overall corporate strategy and financial goals.
In fulfilling that oversight role, the Board focuses on the adequacy of the Company’s overall risk management system. The
Board believes that an effective risk management system will adequately identify the material risks to the Company’s business,
monitor the effectiveness of the risk mitigating policies and procedures, and provide the Executive Committee with input with
respect to the risk management process.
Code
of Ethics
The
Company adopted a code of ethics that is applicable to, among other individuals, its principal executive officer, principal financial
officer, principal accounting officer or controller, or persons performing similar functions, and posted the code of ethics on
its website at
www.bridgford.com
(and designated therein as the Code of Conduct). Any amendment or waiver to the Company’s
code of ethics that applies to its directors or executive officers will be posted on its website or in a report filed with the
SEC on Form 8-K.
Communications
with the Board
Shareholders
may communicate with the Board or any of the directors by sending written communications addressed to the Board of Directors generally,
or to any director(s), to Bridgford Foods Corporation, 1308 North Patt Street, Anaheim, California 92801, Attention: Corporate
Secretary. All communications are compiled by the Corporate Secretary and forwarded to the Board or the individual director(s)
accordingly.
Director
Attendance at Annual Meetings
The
Company does not currently have a specific policy regarding director attendance at annual shareholder meetings. However, directors
are strongly encouraged to attend annual shareholder meetings. Nine directors (which represented all of the directors then serving
on the Board of the Company) attended the Company’s 2018 Annual Meeting of Shareholders.
Executive
Officers
Members
of the Company’s Executive Committee, currently comprised of the four executive officers named below, act in the capacity
of Chief Executive Officer of the Company. A fifth member of the Executive Committee, Hugh Wm. Bridgford, who is the father of
William L. Bridgford and the brother of Allan L. Bridgford, passed away on January 12, 2018.
The
following four executive officers are elected annually to serve on the Executive Committee at the pleasure of the Board of Directors:
Allan
L. Bridgford
|
Vice
President and Chairman of the Executive Committee (1)
|
William
L. Bridgford
|
Chairman
of the Board and Member of the Executive Committee (1)
|
John
V. Simmons
|
President
and Member of the Executive Committee
|
Raymond
F. Lancy
|
Chief
Financial Officer, Executive Vice President, Treasurer and Member of the Executive Committee
|
(1)
|
William
L. Bridgford is the nephew of Allan L. Bridgford. Allan L. Bridgford is the father of Allan L. Bridgford, Jr., who serves
on the Company’s Board of Directors.
|
A
biographical summary regarding William L. Bridgford, Raymond F. Lancy and John V. Simmons is set forth above under the caption
“Directors.” Biographical information with respect to the Company’s other executive officer, Allan L. Bridgford,
is set forth below:
Allan
L. Bridgford
Allan
L. Bridgford, age 83, previously served as Senior Chairman of the Board from March of 2006 to October of 2011. From March of 1995
through March of 2006, Mr. Bridgford served as Chairman of the Board. He has been an employee of the Company since 1957, and reduced
his work schedule to 80% in March of 2000, 60% in March of 2005 and 50% in November 2014. Mr. Bridgford’s base compensation
was reduced by the same percentage as his regular work schedule reduction. Mr. Bridgford has also served as a member of the Executive
Committee since 1972. He is a graduate of Stanford University with a degree in Economics.
Agreements
or Understandings with Officers
There
are no agreements or understandings pursuant to which any of the executive officers was or is selected to serve as an executive
officer.
PRINCIPAL
SHAREHOLDERS AND MANAGEMENT
The
table below sets forth certain information known to the Company with respect to the beneficial ownership of the Company’s
common stock as of February 1, 2019 by each shareholder known by the Company to be the beneficial owner of more than 5% of the
Company’s common stock, by each director and nominee for director, by each executive officer named in the Summary Compensation
Table and by all executive officers and directors as a group. The information as to each person or entity has been furnished by
such person or group.
Amount
and Nature of Shares Beneficially Owned
Name and Address
of Beneficial Owner
(1)
|
|
Sole Voting and Investment Power
|
|
|
Shared Voting and Investment Power
(2)
|
|
|
Total Beneficially Owned
(3)
|
|
|
Percentage of Outstanding Shares Beneficially Owned
(3)
|
|
Bridgford Industries Incorporated
1707 Good-Latimer Expressway
Dallas, TX 75226
|
|
|
7,156,396
|
|
|
|
—
|
|
|
|
7,156,396
|
|
|
|
78.8
|
%
|
Hugh Wm. Bridgford
(4)
|
|
|
48,917
|
|
|
|
7,156,396
|
|
|
|
7,205,313
|
|
|
|
79.4
|
%
|
Allan L. Bridgford
|
|
|
155,882
|
|
|
|
7,156,396
|
|
|
|
7,312,278
|
|
|
|
80.6
|
%
|
Bruce H. Bridgford
|
|
|
3,448
|
|
|
|
7,156,396
|
|
|
|
7,159,844
|
|
|
|
78.9
|
%
|
Baron R.H. Bridgford
170 North Green St.
Chicago, IL 60607
|
|
|
1,654
|
|
|
|
7,156,396
|
|
|
|
7,158,050
|
|
|
|
78.9
|
%
|
William L. Bridgford
|
|
|
12,517
|
|
|
|
7,156,396
|
|
|
|
7,168,913
|
|
|
|
79.0
|
%
|
Allan L. Bridgford, Jr.
|
|
|
20,000
|
|
|
|
7,156,396
|
|
|
|
7,176,396
|
|
|
|
79.1
|
%
|
Raymond F. Lancy
|
|
|
242
|
|
|
|
—
|
|
|
|
242
|
|
|
|
*
|
|
John V. Simmons
1707 Good-Latimer Expressway
Dallas, TX 75226
|
|
|
363
|
|
|
|
—
|
|
|
|
363
|
|
|
|
*
|
|
Todd C. Andrews
|
|
|
200
|
|
|
|
—
|
|
|
|
200
|
|
|
|
*
|
|
D. Gregory Scott
|
|
|
8,550
|
|
|
|
—
|
|
|
|
8,550
|
|
|
|
*
|
|
Keith A. Ross
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
*
|
|
Paul R. Zippwald
|
|
|
1,452
|
|
|
|
—
|
|
|
|
1,452
|
|
|
|
*
|
|
All directors and executive officers
as a group (11 persons)
|
|
|
7,409,621
|
|
|
|
7,156,396
|
|
|
|
7,409,621
|
|
|
|
81.6
|
%
|
*
|
Represents
ownership of less than one percent (1%) of the outstanding shares.
|
(1)
|
Unless
otherwise indicated, the address of such beneficial owner is the Company’s principal executive offices, which are located
at 1308 North Patt Street, Anaheim, California 92801.
|
|
|
(2)
|
Represents
shares beneficially owned by Bridgford Industries Incorporated, a Delaware corporation (“BII”) as reported on
Amendment No. 1 to Schedule 13D filed with the SEC on February 7, 2017. Other than ownership of these shares, BII does not
presently have any significant business or assets. Allan L. Bridgford, Hugh Wm. Bridgford, William L. Bridgford, Bruce H.
Bridgford, Baron R.H. Bridgford and Allan L. Bridgford, Jr. presently own 18.47%, 8.88%, 7.77%, 9.99%, 9.34% and 4.18%, respectively,
of the outstanding voting capital stock of BII. The remaining shares of BII capital stock are owned of record, or beneficially,
by 32 additional members of the Bridgford family. The officers of BII jointly vote all of the Company’s shares held
by BII. With respect to Hugh Wm. Bridgford, such amount also includes 1,000 shares held by his wife. Hugh Wm. Bridgford’s
shares are currently held in trust.
|
|
|
(3)
|
Applicable
percentage of ownership as of February 1, 2019 is based upon 9,076,832 shares of common stock outstanding. Beneficial ownership
is determined in accordance with the rules of the SEC and includes voting and investment power with respect to shares shown
as beneficially owned. Except as otherwise indicated, and subject to community property laws where applicable, to the knowledge
of the Company the persons listed above have sole voting and investment power with respect to all shares shown as beneficially
owned by them.
|
|
|
(4)
|
Hugh
Wm. Bridgford passed away on January 12, 2018. His shares are held under Hugh Wm. Bridgford Irrevocable Trust.
|
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s directors, executive officers, and holders
of more than 10% of the Company’s common stock, to file with the SEC initial reports of ownership and reports of changes
in ownership of common stock of the Company. Officers, directors and 10% shareholders are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file. To the Company’s knowledge, based solely on the review of
copies of such reports furnished to the Company and written representations that no other reports were required, during the fiscal
year ended November 2, 2018, all of the Company’s officers, directors and 10% shareholders complied with all applicable
Section 16(a) filing requirements.
REPORT
OF THE AUDIT COMMITTEE
Pursuant
to a meeting of the Audit Committee on January 7, 2019, the Audit Committee reports that it has: (i) reviewed and discussed the
Company’s audited financial statements with management; (ii) discussed with the independent registered public accountants
the matters (such as the quality of the Company’s accounting principles and internal controls) required to be discussed
by Auditing Standard No. 16, “Communications with Audit Committees” (formerly known as Statement on Auditing Standards
No. 16, which superseded Statement on Auditing Standards No. 61, for fiscal years beginning after December 15, 2012) of the Public
Company Accounting Oversight Board; and (iii) received the written disclosures and the letter from Squar Milner LLP required by
applicable requirements of the Public Company Accounting Oversight Board regarding its communications with the audit committee
concerning independence, and has discussed with them their independence. Based on the review and discussions referred to in items
(i) through (iii) above, the Audit Committee recommended to the Board that the audited financial statements be included in the
Company’s annual report for the Company’s fiscal year ended November 2, 2018.
AUDIT
COMMITTEE
D.
Gregory Scott, Chairman
Todd
C. Andrews
Paul
R. Zippwald
The
foregoing Audit Committee Report shall not be deemed soliciting material, shall not be deemed filed with the SEC and shall not
be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in
any such filing.
COMPENSATION
OF EXECUTIVE OFFICERS
Compensation
Discussion and Analysis
Compensation
Overview
This
section provides information regarding the compensation paid to the Company’s “named executive officers” or
“NEOs,” all of whom are members of the Executive Committee. The Company has historically been and continues to be
principally managed by the Executive Committee. The Executive Committee, as a unit, serves as the Company’s “Chief
Executive Officer.” Prior to the passing of Hugh Wm. Bridgford on January 12, 2018, the Executive Committee consisted of
five members. The Executive Committee currently consists of the following four members:
|
●
|
Allan
L. Bridgford, Vice President and Chairman of the Executive Committee
|
|
●
|
William
L. Bridgford, Chairman of the Board (Principal Executive Officer)
|
|
●
|
John
V. Simmons, President
|
|
●
|
Raymond
F. Lancy, Chief Financial Officer, Executive Vice President and Treasurer (Principal Financial Officer)
|
The
Company’s executive compensation program is overseen by the Compensation Committee, which is comprised of certain non-employee
members of the Board. The basic responsibility of the Compensation Committee is to review the performance of the officers and
key employees toward achieving the Company’s strategic goals and to help ensure that the Company is able to attract and
retain individuals who can lead the Company to achieve those goals.
One
of the Company’s primary strategic goals is to increase shareholder value while meeting its objectives for customer satisfaction,
improved sales and financial performance, sound corporate governance, and competitive advantage. The Company’s current emphases
on controlling costs and improving profit margins on a consistent basis are also important factors which affect the Company’s
compensation decisions. The Compensation Committee’s goal is to work with management to balance the Company’s financial
goals and circumstances with the need to attract, motivate and retain the fully qualified and capable individuals the Company
needs to meet and surpass its customers’ and shareholders’ expectations in a highly-competitive industry.
Compensation
Philosophy and Objectives
The
core of the Company’s executive compensation philosophy is to pay for performance. To that end, incentive bonus targets
are set each year to reward excellent executive performance based upon the achievement of profit objectives by business units
and the Company’s overall profitability based on pretax income, thus stimulating all executives to assume broad responsibility
for the Company’s overall financial welfare and financial performance.
The
Compensation Committee’s guiding principles are as follows:
|
●
|
Work
with management to provide a compensation program that recognizes individual contributions as well as the Company’s
overall business results;
|
|
●
|
Provide
reasonable levels of total compensation which will enable the Company to attract and retain qualified and capable executive
talent within its industry, while also considering the Company’s current goals of controlling costs and effecting consistent
improvements in its overall financial condition;
|
|
●
|
Motivate
executive officers to deliver optimum individual and business unit performance;
|
|
●
|
Develop
and retain a leadership team that is capable of successfully operating and growing an increasingly competitive and complex
business in a rapidly changing industry; and
|
|
●
|
Ensure
that executive compensation-related disclosures are made to the public on a timely basis.
|
Role
of the Compensation Committee
The
compensation of all NEOs and other executive officers is determined by the Compensation Committee. The Compensation Committee
met one time during fiscal year 2018. The primary responsibilities of the Compensation Committee include, without limitation,
the following:
|
●
|
Determine
the compensation of the members of the Executive Committee, after taking into account the Board’s assessment of the
performance of the Executive Committee, as well as any other executive officers of the Company.
|
|
●
|
Determine
the compensation of the Chairman of the Board and the other directors of the Company.
|
|
●
|
Assess
the performance of the executive officers of the Company other than the members of the Executive Committee (whose performance
is assessed by the Board).
|
|
●
|
Review
and make recommendations to the Board regarding the Company’s compensation policies and philosophy.
|
|
●
|
Review
and make recommendations to the Board with respect to the employment agreements, severance agreements, change of control agreements
and other similar agreements between the Company and its executive officers.
|
|
●
|
Administer
the Company’s equity incentive plans, including the review and grant of stock option and other equity incentive grants.
|
|
●
|
Review
and discuss the Compensation Discussion and Analysis (“CD&A”) section of the Company’s annual proxy
statement with management, and recommend to the Board that the CD&A be included in the Company’s proxy statement
as required.
|
|
●
|
Produce
an annual report on executive compensation for inclusion in the Company’s proxy statement.
|
|
●
|
As
requested by Company management, review, consult and make recommendations and/or determinations regarding employee compensation
and benefit plans and programs generally, including employee bonus and retirement plans and programs.
|
|
●
|
Assist
the Board and management in developing and evaluating potential candidates for executive officer positions.
|
|
●
|
Advise
the Board in its succession-planning initiatives for the Company’s executive officers and other senior officers.
|
Role
of Management in the Compensation Determination Process
The
Company’s senior management team, particularly the Chairman of the Board and the Chairman of the Executive Committee, support
the Compensation Committee in the executive compensation decision-making process. At the request of the Compensation Committee,
one or more members of the Executive Committee may present a performance assessment and recommendations to the Compensation Committee
regarding base salaries, bonus payments, incentive plan structure and other compensation-related matters for the Company’s
executive officers (other than with respect to their own compensation).
Role
of Compensation Consultant
The
Compensation Committee has decided not to utilize the services of a paid compensation consultant after concluding that such a
consultant would provide insufficient value compared to the cost.
Total
Compensation for Executive Officers
The
compensation packages offered to the Company’s executive officers are comprised of one or more of the following elements:
|
●
|
Base
salary;
|
|
●
|
Discretionary
cash bonuses; and
|
|
●
|
Post-retirement
healthcare and pension benefits.
|
The
Company does not have any formal policies which dictate the amount to be paid with respect to each element, nor does it have any
policies which dictate the relative proportion of the various elements. The Company also does not have any formal policies for
allocating between cash and non-cash compensation and short-term and long-term compensation. Instead, the Company relies on the
judgment of the Compensation Committee and input and feedback from the management team, including in particular members of the
Executive Committee. The Compensation Committee has no plans to adopt any such formulas, ratios or other such targets that might
artificially dilute the Company’s effectiveness in achieving its overall profit objectives. In fact, all of the Company’s
compensation policy decisions are made in the context of its current financial position and are subordinated to the Company’s
current goal of achieving overall profitability on an annual basis. Each of the compensation components is described in more detail
below.
Base
Salary
The
Company provides executive officers and other employees with base salary to compensate them for services rendered during the fiscal
year. The purpose of base salary is to reward effective fulfillment of an executive’s assigned job responsibilities, and
to reflect the position’s relative value to the Company and competitiveness of the executive job market. Base salaries for
executive officers are determined based on the nature and responsibility of the position, salary norms for comparable positions
at similar companies, the expertise and effectiveness of the individual executive, and the competitiveness of the market for the
executive officer’s services.
The
Company has successfully held most base salaries at the low end of the competitive range in order to reduce its overall cost structure
and to achieve systematic improvement in the financial performance of the business without incurring a large turnover in executive
talent and leadership.
Any
“merit increases” for the Company’s executive officers are subject to the same budgetary constraints that apply
to all other employees. Executive officer salaries are evaluated as part of the Company’s annual review process and may
be adjusted where justified in the context of the Company’s current focus on profitability and controlling expenses.
For
fiscal year 2018, the Compensation Committee set a base salary of $5,343 per week for each Executive Committee member, reduced
on a pro-rata basis for any member working less than a full time schedule. This change represented a 3% increase in the base salary
compared to fiscal year 2017, which was derived from management’s assessment of the increase in the cost of living.
Discretionary
Cash Bonuses
The
Company’s policy is to make a significant portion of each NEO’s total compensation contingent upon the Company’s
financial performance. The Compensation Committee believes that the payment of cash bonuses based on the Company’s financial
success allows the Company to offer a competitive total compensation package despite relatively lower base salaries, while aligning
a significant portion of executive compensation with the achievement of positive Company financial results. However, while the
payment of these cash bonuses to the NEOs is generally correlated with the achievement of positive Company financial results,
there are no specific performance targets communicated to the NEOs in advance, and the bonuses are ultimately paid at the discretion
of the Compensation Committee after receiving input from the Chairman of the Board. For the fiscal year ended November 2, 2018,
discretionary bonuses were awarded to the members of the Company’s Executive Committee as disclosed in detail in the Summary
Compensation Table.
Long-Term
Equity-Based Incentive Compensation
The
Compensation Committee has concluded that long-term stock-related compensation has very limited value as an employee incentive
or retention tool because the Company’s equity-based incentive awards have historically provided little or no value to the
recipient. In addition, beginning in 2005, U.S. accounting rules required the Company to expense any stock option awards according
to a formula which could impose a costly charge on the Company’s income statements, thereby burdening or erasing its profit
margins. Because of these factors, the Company has not granted stock options or restricted stock awards for many years. Instead,
the Compensation Committee aims to align the interests of the NEOs with those of the Company’s shareholders by creating
a link between the payment of executive compensation and the achievement of Company financial goals as described above. The Company’s
1999 Stock Incentive Plan expired by its own terms on April 29, 2009 and no additional stock options or restricted stock may be
granted thereunder.
Pension
and Retirement Benefits
Retirement
Plan for Administrative and Sales Employees of Bridgford Foods Corporation
. The Company has a defined benefit plan (the “Primary
Benefit Plan”) for certain of its employees not covered by collective bargaining agreements. The Primary Benefit Plan, administered
by a major life insurance company, presently provides that participants receive an annual benefit on retirement equal to 1.5%
of their total compensation from the Company during their period of participation from 1958. Benefits are not reduced by Social
Security payments or by payments from other sources and are payable in the form of a monthly lifetime annuity commencing at age
65 or the participant’s date of retirement, whichever is later. Effective May 12, 2006, future benefit accruals under the
Primary Benefit Plan were frozen.
Supplemental
Executive Retirement Plan
. Retirement benefits otherwise available to certain key executives under the Primary Benefit Plan
have been limited by the effects of the Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”) and the Tax Reform
Act of 1986 (“TRA”). To offset the loss of retirement benefits associated with TEFRA and TRA, the Company has adopted
a non-qualified “makeup” benefit plan (the “Supplemental Executive Retirement Plan”). Benefits will be
provided under the Supplemental Executive Retirement Plan in an amount equal to 60% of each participant’s final average
earnings minus any pension benefits and primary insurance amounts available to them under Social Security. However, in all cases
the benefits are capped at $120,000 per year for Allan L. Bridgford. Benefits provided under this plan for William L. Bridgford
and Raymond F. Lancy are calculated at 50% of final average earnings, capped at $200,000 per year, without offsets for other pension
or Social Security benefits.
Bridgford
Foods Retirement Savings 401(k) Plan
. The Company implemented a 401(k) plan effective May 13, 2006. The Company makes a matching
contribution to each employee’s account based on pretax contributions in an amount equal to 100% of the first 3% of compensation
and 50% of the next 2% of compensation contributed to the Plan. Certain limitations on optional pre-tax contributions to the plan
are imposed pursuant to the Internal Revenue Code of 1986, as amended. No amounts are contributed by the Company unless the employee
elects to make a pretax contribution to the Plan.
Non-Qualified
Deferred Compensation
Effective
January 1, 1991 the Company adopted a deferred compensation savings plan for certain key employees. Under this arrangement, selected
employees contributed a portion of their annual compensation to the plan. The Company contributed an amount to each participant’s
account by computing an investment return equal to Moody’s Average Seasoned Bond Rate plus 2%. The purpose of the plan was
to provide tax planning and supplemental funds upon retirement or death for certain selected employees and to aid in retaining
and attracting employees of exceptional ability. Separate accounts are maintained for each participant to properly reflect his
or her total vested account balance. No contributions or salary deferrals have been made in the past ten years.
Perquisites
and Other Benefits
The
Company provides its executive officers with various health and welfare programs and other employee benefits which are generally
available on the same cost-sharing basis to all of its employees. However, in keeping with the Company’s policy of controlling
costs in connection with its profitability objectives, it does not provide any significant perquisites or other special benefits
to its executive officers including, but not limited to, payment of club memberships, fees associated with financial planning,
executive dining rooms or special transportation rights. The Company does not own an airplane and does not provide aircraft for
executives for business or personal purposes.
The
Company provides post-retirement healthcare benefits for certain executives and their spouses (who are within fifteen years of
age of the employee) who have reached normal retirement age. This coverage is secondary to Medicare. Coverage for spouses continues
upon the death of the employee. The maximum benefit under the plan is $100,000 per year per retiree. The combined gain on this
plan during fiscal year 2018 was $142,000 for all active and retired participants.
The
Company pays life and disability insurance premiums on policies for the Company’s President under which he is the named
owner and beneficiary.
Employment
Agreements
The
Company currently does not have any employment, severance, change of control or similar agreements with any of its NEOs. Refer
to the compensation discussion below for information on pension, deferred compensation, and benefit-related payments payable in
the event of a qualifying event such as employment termination, disability, death, or sale/merger/acquisition.
Tax
and Accounting Implications
The
Compensation Committee is responsible for considering the deductibility of executive compensation under Section 162(m) of the
Internal Revenue Code, which in fiscal year 2018 provided that it could not deduct compensation of more than $1,000,000 that is
paid to its executive officers. The Company believes that the compensation paid under the current management incentive programs
is fully deductible for federal income tax purposes. In certain situations, the Compensation Committee may approve compensation
that will not meet the requirements for deductibility in order to ensure competitive levels of compensation for its executives
and to meet its obligations under the terms of various incentive programs. However, the issue of deductibility has not come before
the Compensation Committee in recent years and is not expected to be a concern for the foreseeable future.
Shareholder
Advisory Vote on Executive Compensation and Frequency of Advisory Vote
Pursuant
to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), the Company held
an advisory (non-binding) shareholder vote on the compensation of the Company’s NEOs (commonly known as a “say-on-pay”
proposal), and a shareholder vote on the frequency of such say-on-pay proposal, at its 2017 Annual Meeting of Shareholders. At
such meeting, the shareholders of the Company approved the overall compensation of the Company’s NEOs and elected to hold
a say-on-pay vote every three years. The Company’s next “say-on-pay” shareholder vote shall be at the 2020 Annual
Meeting of Shareholders and its next shareholder vote on frequency shall be at the 2023 Annual Meeting of Shareholders.
Summary
Compensation Table
The
table below provides summary information concerning cash and certain other compensation paid to or accrued for the Company’s
NEOs during fiscal years 2017 and 2018, respectively. Each of the NEOs named below were also members of the Executive Committee
during the referenced periods, which Committee acts in the capacity of Chief Executive Officer of the Company. See “Compensation
Discussion and Analysis” for further discussion of compensation arrangements pursuant to which the amounts listed in the
table below were paid or awarded and the criteria for such payment or award.
Name and
Principal Position
|
|
Year
|
|
|
Base
Salary($)
(1)
|
|
|
Bonus($)
|
|
|
Stock
Awards($)
(2)
|
|
|
Option
Awards($)
(3)
|
|
|
Non-Equity
Incentive
Plan
Compensation($)
(4)
|
|
|
Change
in Pension
Value
and Non-
Qualified
Deferred Compensation
Earnings($)
(5)
|
|
|
All
Other
Compensation($)
(6)
|
|
|
Total($)
|
|
Allan L. Bridgford
|
|
|
2018
|
|
|
|
143,507
|
|
|
|
141,339
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8,000
|
|
|
|
292,846
|
|
Vice President
|
|
|
2017
|
|
|
|
138,918
|
|
|
|
225,585
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8,000
|
|
|
|
372,503
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hugh Wm. Bridgford
(7)
|
|
|
2018
|
|
|
|
8,831
|
|
|
|
29,415
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19,000
|
|
|
|
57,246
|
|
Vice President
|
|
|
2017
|
|
|
|
111,134
|
|
|
|
180,468
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19,000
|
|
|
|
310,602
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William L. Bridgford
|
|
|
2018
|
|
|
|
287,014
|
|
|
|
282,681
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19,000
|
|
|
|
588,695
|
|
Chairman of the Board
|
|
|
2017
|
|
|
|
277,836
|
|
|
|
451,167
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19,000
|
|
|
|
748,003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John V. Simmons
|
|
|
2018
|
|
|
|
287,014
|
|
|
|
282,681
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
43,376
|
|
|
|
613,071
|
|
President
|
|
|
2017
|
|
|
|
277,836
|
|
|
|
451,167
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
43,376
|
|
|
|
772,379
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raymond F. Lancy
|
|
|
2018
|
|
|
|
287,014
|
|
|
|
282,681
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19,000
|
|
|
|
588,695
|
|
Chief Financial Officer
|
|
|
2017
|
|
|
|
277,836
|
|
|
|
451,167
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19,000
|
|
|
|
748,003
|
|
(1)
|
Years
2017 and 2018 were 53 weeks and 52 weeks, respectively.
|
(2)
|
The
Company did not grant any stock awards to any of the NEOs during fiscal years 2017 or 2018.
|
(3)
|
The
Company did not grant any option awards to any of the NEOs during fiscal years 2017 or 2018.
|
(4)
|
The
Company did not utilize any non-equity incentive plans in order to pay compensation to its NEOs in fiscal year 2018. While
it is the Company’s policy to provide each of the NEOs with an opportunity to earn cash bonuses that are correlated
with the Company’s financial performance, the payment of the bonuses are ultimately subject to the discretion of the
Compensation Committee. See “Compensation Discussion and Analysis – Total Compensation for Executive Officers
– Discretionary Cash Bonuses.”
|
(5)
|
This
column includes the aggregate positive change in actuarial present value of each NEO’s accumulated benefit under all
defined benefit and supplemental pension plans. In accordance with SEC rules, to the extent the aggregate change in present
value of all defined benefit and supplemental pension plans for a particular fiscal year would have been a negative amount,
the amount has instead been reported as $0 and the aggregate compensation for the NEO in the “Total” column has
not been adjusted to reflect the negative amount. In addition, to the extent that the change in present value of any particular
defined benefit or supplemental pension plan for a particular year was a negative amount, the negative amount has not been
used to offset the positive change in present value associated with the other applicable defined benefit or supplemental pension
plans. The aggregate negative change in the present value of the non-qualified deferred compensation plan and pension and
retirement benefits for the NEOs in fiscal years 2018 and 2017 was as follows: (i) for fiscal year 2018, Allan L. Bridgford
($72,490), Hugh Wm. Bridgford ($67,608), William L. Bridgford ($43,452), John V. Simmons ($39,477), and Raymond F. Lancy ($27,447),
and (ii) for fiscal year 2017, Allan L. Bridgford ($101,445), Hugh Wm. Bridgford ($81,950), William L. Bridgford ($22,032),
John V. Simmons ($19,940), and Raymond F. Lancy ($13,911).
|
(6)
|
Consists
of matching contributions to the Bridgford Foods Retirement Savings 401(k) plan made by the Company on behalf of each of the
NEOs, except Allan L. Bridgford, and an $8,000 payment to offset the negative impacts arising from the cancellation of supplemental
executive health benefits. In addition, the amount for Mr. Simmons includes premiums in the amount of $24,376 for life and
disability insurance policies issued for the benefit of Mr. Simmons and his designees.
|
(7)
|
Hugh
W. Bridgford passed away on January 12, 2018.
|
Narrative
to Summary Compensation Table
See
“Compensation Discussion and Analysis” for further discussion of compensation arrangements pursuant to which amounts
listed under the Summary Compensation Table were paid or awarded and the criteria for such payment or award.
Grants
of Plan-Based Awards
There
were no stock options, restricted stock, restricted stock units or equity or non-equity-based performance awards granted to the
Company’s NEOs during fiscal years 2018 or 2017.
Outstanding
Equity Awards at Fiscal Year-End
There
were no outstanding options or stock awards held by any NEOs as of November 2, 2018.
Option
Exercises and Stock Vested
There
were no shares acquired upon the exercise of stock options or vesting of stock awards by any NEOs during fiscal years 2018 or
2017.
Pension
Benefits
The
tables below provide information concerning retirement plan benefits for each NEO and payments due upon certain termination scenarios.
Retirement
Plan for Administrative and Sales Employees of Bridgford Foods Corporation
Normal
Retirement
: Benefits commence upon reaching the “Normal Retirement Date”, which is the first day of the month
on or after attainment of age 65. Pension benefit payments begin on the normal retirement date and continue until death.
Early
Retirement
: A participant may choose to retire up to ten years before the normal retirement date. If a participant retires
early, the accrued pension will be reduced by a percentage to reflect the longer period over which pension benefits will be received.
If a participant is married for at least one year and dies before retirement, a pension benefit will be payable to the surviving
spouse for his or her life, provided certain eligibility requirements have been met.
Death
Benefits
: Payments to a surviving spouse will begin on the first day of the month following a participant’s death but
not sooner than the earliest date a participant could have elected to retire.
Disability
Benefits
: A disability benefit is the accrued pension credited to a participant as of the date of disability.
The
years of credited service, present value of accumulated plan benefits and payments made during the fiscal year were as follows:
For
the Fiscal Year ended November 2, 2018:
Name
|
|
Number
of Years Credited Service
|
|
|
Present Value
of Accumulated
Benefit (1)
|
|
|
Payments During
Fiscal Year
|
|
Allan L. Bridgford
|
|
|
51
|
|
|
$
|
815,724
|
|
|
$
|
80,738
|
|
Hugh Wm. Bridgford
|
|
|
50
|
|
|
$
|
753,378
|
|
|
$
|
14,528
|
|
William L. Bridgford
|
|
|
45
|
|
|
$
|
730,213
|
|
|
$
|
—
|
|
John V. Simmons
|
|
|
39
|
|
|
$
|
585,333
|
|
|
$
|
—
|
|
Raymond F. Lancy
|
|
|
26
|
|
|
$
|
534,132
|
|
|
$
|
—
|
|
(1)
|
The
assumed discount rate used was 4.30% to compute the present value of the accumulated benefit. The SOA RP-2014 Mortality Total
Dataset, adjusted to 2006 with Scale MP-2016, Scaling to RP-2014 Mortality Total Dataset, adjusted to 2006, with MP-2017 scaling
was used and an expected return on assets of 7.00% was assumed.
|
For
the Fiscal Year ended November 3, 2017:
Name
|
|
Number
of Years Credited Service
|
|
|
Present Value
of Accumulated
Benefit (1)
|
|
|
Payments During
Fiscal Year
|
|
Allan L. Bridgford
|
|
|
50
|
|
|
$
|
888,214
|
|
|
$
|
85,503
|
|
Hugh Wm. Bridgford
|
|
|
49
|
|
|
$
|
820,986
|
|
|
$
|
61,541
|
|
William L. Bridgford
|
|
|
44
|
|
|
$
|
773,665
|
|
|
$
|
—
|
|
John V. Simmons
|
|
|
38
|
|
|
$
|
624,810
|
|
|
$
|
—
|
|
Raymond F. Lancy
|
|
|
25
|
|
|
$
|
561,579
|
|
|
$
|
—
|
|
(1)
|
The
assumed discount rate used was 3.65% to compute the present value of the accumulated benefit. The SOA RP-2014 Mortality Total
Dataset with MP-2015 scaling was used and an expected return on assets of 7.00% was assumed.
|
Supplemental
Executive Retirement Plan (SERP)
Payment
of Retirement Benefit
: All retirement, disability and death benefits shall be paid in monthly installments beginning on the
commencement date following the participant’s retirement, disability or death and shall continue for a period of fifteen
years.
Normal
Retirement
: Benefits commence upon reaching the “Normal Retirement Date”, which means the date on which the participant
has both attained age 65 and completed at least ten years of participation. SERP benefit payments begin at the normal retirement
date.
Early
Retirement
: A participant may choose to retire up to ten years before the normal retirement date if the participant has completed
at least five years of participation. If a participant retires early, the SERP benefit will be determined based on the vested
percentage attained as the time of retirement.
Death
Benefits
: If a participant dies prior to having commenced receipt of benefits and is eligible for benefits hereunder, the
participant’s beneficiary shall be entitled to receive an annual death benefit equal to the Normal Retirement Benefit determined
as if the participant attained Normal Retirement Age on the date of his death, or, if after the Participant’s Normal Retirement
Date, equal to the Late Retirement Benefit. If a participant dies after having commenced receipt of benefits, benefits shall continue
to be paid but to the Participant’s Beneficiary at the same time and in the same form as the benefits would have been payable
to the participant. No benefit will be payable to a participant’s beneficiary if the participant terminates employment with
the Company before he is eligible for a retirement benefit and thereafter dies.
Disability
Benefits
: A disability benefit is the vested percentage of SERP benefit credited to a participant as of the date of disability.
The
present value of accumulated plan benefits and payments made during the fiscal year were as follows:
For
the Fiscal Year ended November 2, 2018:
Name
|
|
Present Value
of Accumulated
Benefit (1)
|
|
|
Payments During
Last Fiscal Year
|
|
Allan L. Bridgford
|
|
$
|
—
|
|
|
$
|
—
|
|
Hugh Wm. Bridgford
|
|
$
|
—
|
|
|
$
|
—
|
|
William L. Bridgford
|
|
$
|
2,228,146
|
|
|
$
|
—
|
|
John V. Simmons
|
|
$
|
—
|
|
|
$
|
—
|
|
Raymond F. Lancy
|
|
$
|
2,228,146
|
|
|
$
|
—
|
|
(1)
|
A
4.30% discount rate was used to compute the present values.
|
For
the Fiscal Year ended November 3, 2017:
Name
|
|
Present Value
of Accumulated
Benefit (1)
|
|
|
Payments During
Last Fiscal Year
|
|
Allan L. Bridgford
|
|
$
|
—
|
|
|
$
|
—
|
|
Hugh Wm. Bridgford
|
|
$
|
—
|
|
|
$
|
—
|
|
William L. Bridgford
|
|
$
|
2,326,963
|
|
|
$
|
—
|
|
John V. Simmons
|
|
$
|
—
|
|
|
$
|
—
|
|
Raymond F. Lancy
|
|
$
|
2,326,963
|
|
|
$
|
—
|
|
(1)
|
A
3.65% discount rate was used to compute the present values.
|
The
following table estimates the present value of SERP benefits under different employment termination scenarios as of November 2,
2018:
Name
|
|
Present Value
of Benefit
Upon Voluntary
Termination
of Employment
(1)
|
|
|
Present Value
of Benefit
if Disabled
(1)
|
|
|
Present Value
of Benefit
Upon Death (1)
|
|
|
Present Value
of Benefit
Upon Involuntary
Termination of
Employment due to Sale/Merger/
Acquisition
(1)
|
|
Allan L. Bridgford
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Hugh Wm. Bridgford
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
William L. Bridgford (2)
|
|
$
|
2,228,146
|
|
|
$
|
2,228,146
|
|
|
$
|
2,228,146
|
|
|
$
|
2,228,146
|
|
John V. Simmons
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Raymond F. Lancy (2)
|
|
$
|
2,228,146
|
|
|
$
|
2,228,146
|
|
|
$
|
2,228,146
|
|
|
$
|
2,228,146
|
|
(1)
|
In
each scenario above, the benefit amount shown is calculated at November 2, 2018. A 4.30% discount rate was used to compute
the present values. In the case of a voluntary termination, the participant shall be entitled to the vested portion of any
such early retirement benefit but shall not commence receipt of such early retirement benefit until the commencement date
following the date the participant would have attained the early retirement date had the participant remained employed by
the Company. Upon a finding that the participant (or, after the participant’s death, a beneficiary) has suffered an
unforeseeable emergency, the Committee may at the request of the participant or beneficiary, and subject to compliance with
Internal Revenue Code Section 409A, accelerate distribution of benefits under the SERP in the amount reasonably necessary
to alleviate such unforeseeable emergency.
|
|
|
(2)
|
Death
benefits for William L. Bridgford and Raymond F. Lancy are paid in the form of a monthly annuity. The actual payment amount
for William L. Bridgford and Raymond F. Lancy would be determined using a discount rate similar to the rate required for qualified
plans. The rate assumed for these estimates is 4.30%.
|
The
following table estimates future SERP payments under different termination scenarios as of November 2, 2018:
Name
|
|
Payment
Upon
Voluntary
Termination
of
Employment
|
|
Payment
if
Disabled
(1)
|
|
Death
Benefit
from
Plan (2)
|
|
Involuntary
Termination
of
Employment
Due
to
Sale/Merger/
Acquisition
|
Allan
L. Bridgford
|
|
—
|
|
—
|
|
—
|
|
—
|
Hugh
Wm. Bridgford
|
|
—
|
|
—
|
|
—
|
|
—
|
William
L. Bridgford
|
|
$16,666.67
per month for 180 months beginning on 11/02/18
|
|
$16,666.67
per month for 180 months commencing after disability
|
|
$16,666.67
per month for 180 months beginning just after death
|
|
Lump
Sum payment due at termination of $2,228,146
|
John
V. Simmons
|
|
—
|
|
—
|
|
—
|
|
—
|
Raymond
F. Lancy
|
|
$16,666.67
per month for 180 months beginning on 11/02/18
|
|
$16,666.67
per month for 180 months commencing after disability
|
|
$16,666.67
per month for 180 months beginning just after death
|
|
Lump
Sum payment due at termination of $2,228,146
|
(1)
|
Disability
amount is decreased by any Company paid disability insurance policies, Social Security disability benefits, or other Federal
or State disability programs. In the case of a voluntary termination, the participant shall be entitled to the vested portion
of any such early retirement benefit but shall not commence receipt of such early retirement benefit until the commencement
date following the date the participant would have attained the early retirement date had the participant remained employed
by the Company. Upon a finding that the participant (or, after the participant’s death, a beneficiary) has suffered
an unforeseeable emergency, the Committee may at the request of the participant or beneficiary, and subject to compliance
with Internal Revenue Code Section 409A, accelerate distribution of benefits under the SERP in the amount reasonably necessary
to alleviate such unforeseeable emergency.
|
(2)
|
Assumes
death on November 2, 2018. The discount rate used to calculate the lump sum amount is 4.30%.
|
See
“Compensation Discussion and Analysis – Total Compensation for Executive Officers — Pension and Retirement Benefits”
for further discussion of the pension benefits contained in the tables above.
Non-Qualified
Deferred Compensation
The
table below provides information concerning deferred compensation plan benefits for each NEO during the fiscal year ended
November
2, 2018.
Name
|
|
|
Executive
Contributions in
Fiscal Year
|
|
|
|
Company
Contributions in
Fiscal Year
|
|
|
|
Aggregate
Earnings in
Fiscal Year
|
|
|
|
Aggregate
Withdrawals/
Distributions
|
|
|
|
Aggregate
Balance at
Fiscal Year End
|
|
Allan L. Bridgford
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Hugh Wm. Bridgford
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
William L. Bridgford
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
John V. Simmons
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Raymond F. Lancy
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
The
table below provides information concerning deferred compensation plan benefits for each NEO during the fiscal year ended
November
3, 2017.
Name
|
|
|
Executive
Contributions in
Fiscal Year
|
|
|
|
Company
Contributions in
Fiscal Year
|
|
|
|
Aggregate
Earnings in
Fiscal Year
|
|
|
|
Aggregate
Withdrawals/
Distributions
|
|
|
|
Aggregate
Balance at
Fiscal Year End
|
|
Allan L. Bridgford
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Hugh Wm. Bridgford
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
William L. Bridgford
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
John V. Simmons
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Raymond F. Lancy
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
The
following table estimates the present value of non-qualified deferred compensation benefits under different employment termination
scenarios as of November 2, 2018:
Name
|
|
|
Present Value
of Benefit at
Termination of
Employment
|
|
|
|
Present Value
of Benefit if Disabled
|
|
|
|
Present Value
of Benefit
Upon Death
|
|
|
|
Present Value
of Benefit Upon
Involuntary
Termination of
Employment Due to Sale/Merger/
Acquisition
|
|
Allan L. Bridgford
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Hugh Wm. Bridgford
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
William L. Bridgford
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
John V. Simmons
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Raymond F. Lancy
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
The
deferred compensation amounts are calculated using a crediting rate equal to Moody’s Average Seasoned Bond Rate, plus 2%.
This rate is subject to fluctuation. Upon death, the deferred compensation benefits are paid in a lump sum equal to the individual’s
remaining account balance.
See
“Compensation Discussion and Analysis – Total Compensation for Executive Officers – Non-Qualified Deferred Compensation”
for further discussion of the non-qualified deferred compensation benefits contained in the tables above.
Director
Compensation
The
table on the next page summarizes the total compensation paid by the Company to directors who were not employees during fiscal
year 2018. Directors who were employees did not receive any additional compensation for their services as directors.
Name
|
|
Fees Earned
or Paid in Cash
|
|
|
Stock
Awards
|
|
|
Option
Awards
|
|
|
Non-Equity
Incentive Plan
Compensation
|
|
|
Non-Qualified
Deferred
Compensation
Earnings
|
|
|
All Other
Compensation
|
|
|
Total
|
|
Todd C. Andrews
|
|
$
|
20,750
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,750
|
|
Allan L. Bridgford, Jr.
|
|
$
|
22,600
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
639,700
|
(1)
|
|
$
|
662,300
|
|
Keith A. Ross
|
|
$
|
22,600
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
51,285
|
(2)
|
|
$
|
73,885
|
|
D. Gregory Scott
|
|
$
|
20,900
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,900
|
|
Paul R. Zippwald
|
|
$
|
25,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25,500
|
|
|
(1)
|
Consists
of (i) $219,000 paid and (ii) $420,700 to be paid over 3 years in equal annual installments to Allan L. Bridgford, Jr. for
consulting services rendered to the Company. See “CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS” for further
details.
|
|
|
|
|
(2)
|
Consists
of $51,285 paid to Keith A. Ross for consulting services rendered to the Company. See “CERTAIN RELATIONSHIPS AND RELATED
PARTY TRANSACTIONS” for further details.
|
The
Company uses cash compensation to attract and retain qualified candidates to serve on its Board of Directors. In setting director
compensation, the Compensation Committee considers the demands that have been placed and will continue to be placed on the directors
and the skill-level required by its directors. In addition, as with the Company’s executive officers, compensation decisions
for directors are made in the context of the Company’s focus on controlling costs and increasing profitability.
The
directors are not paid an annual retainer for their service on the Board. Instead, each non-employee director was paid $2,100
for each of the first two Board meetings attended during fiscal year 2018 and $2,300 for each subsequent Board meeting attended
in fiscal year 2018. Members of the Audit Committee were paid $350 to $550 for each Audit Committee meeting attended in fiscal
year 2018 depending on the length of the meeting. The members of the Compensation Committee were not paid any additional compensation
for their service. In addition, the directors were not paid any additional compensation for their service on the Nominating Committee.
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The
Company’s general legal counsel is the son of Allan L. Bridgford. For his legal counsel, he currently is paid a fee of $2,300
for each Board of Directors meeting attended. Total fees paid for attending Board of Directors meetings were $22,600 in fiscal
year 2018 and $22,900 in fiscal year 2017. In addition, legal services are performed on behalf of the Company and billed by a
firm in which he is a partner. Total fees billed for legal services under this arrangement for each of fiscal years 2018 and 2017
were approximately $173,000 and $131,000, respectively.
Director
Allan L. Bridgford, Jr., son of the former senior chairman of the Board of Directors, is providing business consulting services
to the Company. The arrangement currently provides for business consulting services at $1,200 per day. Total fees billed under
this arrangement were approximately $219,000 in fiscal year 2018 and $250,000 in fiscal year 2017. In addition, under a separate
consulting arrangement for 2018, we accrued approximately $420,700 of profit sharing based on fiscal year 2018 profitability to
be paid out in equal installments over the next three years.
Director
Keith A. Ross provides real-estate consulting services to the Company. The arrangement currently provides for consulting services
at $250 per hour. Total fees paid as a consultant were $51,285 during fiscal year 2018.
Other
than the relationships noted above, the Company is not aware of any related party transactions that would require disclosure as
a related party transaction under SEC rules.
The
Company’s executive officers, directors, nominees for directors and principal shareholders, including their immediate family
members and affiliates, are prohibited from entering into related party transactions with the Company that would be reportable
under Item 404 of Regulation S-K without the prior approval of its Audit Committee (or other independent committee of the Board
of Directors in cases where it is inappropriate for the Audit Committee to review such transaction due to a conflict of interest).
Any request for the Company to enter into a transaction with an executive officer, director, or nominee for director, principal
shareholder or any of such persons’ immediate family members or affiliates that would be reportable under Item 404 of Regulation
S-K must first be presented to the Audit Committee for review, consideration and approval. In approving or rejecting the proposed
agreement, the Audit Committee will consider the relevant facts and circumstances available and deemed relevant, including but
not limited to, the risks, costs, and benefits to the Company, the terms of the transactions, the availability of other sources
for comparable services or products, and, if applicable, the impact on director independence. The Audit Committee shall only approve
those agreements that, in light of known circumstances, are in or are not inconsistent with the Company’s best interests,
as determined in good faith by the Audit Committee (or other independent committee, as applicable). The requirement for the Audit
Committee to review related-party transactions (defined as those transactions required to be disclosed under Item 404 of Regulation
S-K) is set forth in the Amended and Restated Audit Committee Charter, which was approved on November 8, 2010.
PROPOSAL
2
RATIFICATION
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
The
Audit Committee of the Board of Directors has, subject to ratification by the shareholders, appointed Squar Milner LLP as the
Company’s independent registered public accounting firm for the fiscal year ending November 1, 2019.
The
affirmative vote of a majority of the shares present or represented by proxy at the Annual Meeting and entitled to vote on the
matter is required to ratify the appointment of Squar Milner LLP. Abstentions will have the same effect as votes “AGAINST”
this proposal. Brokers have discretion to vote uninstructed shares with respect to this proposal. Accordingly, broker non-votes
will not occur with respect to this proposal.
Proxies
received in response to this solicitation will be voted “FOR” the approval of Squar Milner LLP unless otherwise specified
in the proxy. In the event of a negative vote on such ratification, the Audit Committee of the Board of Directors will reconsider
its selection. Representatives of Squar Milner LLP will be present at the meeting and available to respond to questions. They
will have the opportunity to make a statement if they so desire.
THE
BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF SQUAR MILNER LLP AS THE COMPANY’S
INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDING NOVEMBER 1, 2019.
Principal
Accountant Fees and Services
Audit
Fees
Fees
charged by Squar Milner LLP for the audit of the Company’s annual financial statements and the review of the financial statements
included in the Company’s quarterly reports on Form 10-Q for fiscal year 2018 were approximately $160,000. Fees charged
by Squar Milner LLP for the audit of the Company’s annual financial statements and the review of the financial statements
included in the Company’s quarterly reports on Form 10-Q for fiscal year 2017 were approximately $155,000.
Audit-Related
Fees
Audit-related
fees typically consist of fees billed for assurance and related services that are reasonably related to the performance of the
audit or review of the Company’s consolidated financial statements and are not reported under “Audit Fees.”
These services may include consultations related to the Sarbanes-Oxley Act and consultations concerning financial accounting and
reporting standards. There were no audit-related fees billed by Squar Milner LLP for fiscal year 2018 or fiscal year 2017.
Tax
Fees
Tax
fees are comprised of services that include assistance related to state tax compliance services and consultations regarding federal
and state research and development tax credits. No fees were billed by Squar Milner LLP for tax consulting during fiscal 2018
and approximately $11,000 were billed by Squar Milner LLP for fiscal year 2017.
All
Other Fees
All
other fees are comprised of fees for initial planning for certification of internal controls over financial reporting. No such
fees were billed by Squar Milner LLP for fiscal year 2018 or fiscal year 2017.
Policy
on Audit Committee Pre-Approval of Audit Services and Permissible Non-Audit Services of Independent Accountants
The
Audit Committee’s policy is to pre-approve all audit and permissible non-audit services performed by the independent registered
public accountants. These services may include audit services, audit-related services, tax services and other services. During
fiscal years 2018 and 2017, the Audit Committee approved all such services rendered by its independent registered public accountants.
For audit services, the independent registered public accountants provide the Audit Committee with an audit plan including proposed
fees in advance of the annual audit. The Audit Committee approves the plan and fees for the audit.
For
non-audit services, the Company’s senior management will submit from time to time to the Audit Committee for approval non-audit
services that it recommends the Audit Committee engage the independent registered public accountants to provide during the fiscal
year. The Company’s senior management and the independent registered public accountants will each confirm to the Audit Committee
that each non-audit service is permissible under all applicable legal requirements. A budget, estimating non-audit service spending
for the fiscal year, will be provided to the Audit Committee along with the request. The Audit Committee must approve both permissible
non-audit services and the budget for such services.
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