Sanderson Farms, Inc. (NASDAQ: SAFM) today announced that it received a
letter on March 11, 2009, from the staff of the Listing Qualifications
Office of the NASDAQ Stock Market LLC, determining that the Company
failed to comply with Marketplace Rule 4350(c)(3), which provides for
independent director oversight of a listed issuer’s executive
compensation, and the requirement of Marketplace Rule 4350(d)(2) that a
listed issuer’s audit committee be composed of only independent
directors.
In late January 2009, the Company became concerned that John Bierbusse,
a member of the Company’s audit and compensation committees, may not be
independent under NASDAQ’s rules. Specifically, the Company learned that
John Bierbusse’s brother, who is a “Principal” in the business
consulting unit of Ernst & Young LLP (“E&Y”), the Company’s independent
registered public accounting firm, may be considered a partner of E&Y.
Upon making this discovery, the Company promptly made inquiries of E&Y
to determine the nature of Mr. Bierbusse’s brother’s relationship with
E&Y, and learned that E&Y uses the title of “Principal” to designate
non-accounting partners of the firm. It also confirmed that Mr.
Bierbusse’s brother works as a business consultant, is not an
accountant, has no business contact with the auditing practice of E&Y,
and has no involvement with the Company.
The Company immediately contacted the Listing Qualifications Office of
NASDAQ to seek its view of whether Mr. Bierbusse would continue to be
deemed “independent” under NASDAQ rules. On March 6, 2009, the Listing
Qualifications Office orally informed the Company of its view that Mr.
Bierbusse was no longer an independent director pursuant to Marketplace
Rule 4200(a)(15)(F), which provides that a director is not independent
if he has a family member who is a current partner of the issuer’s
outside auditor.
On March 10, 2009, Mr. Bierbusse resigned as a member of the audit and
compensation committees, effective immediately. Mr. Bierbusse will
continue as a member of the Company’s board of directors.
In its letter, the staff observed that upon discovery of this issue, the
Company took immediate action. The staff also noted that, as a result of
Mr. Bierbusse’s resignation from the two committees, the Company has
established a compensation committee and an audit committee in
conformity with Marketplace Rules 4350(c)(3) and 4350(d)(2). The staff
closed the matter upon the issuance of its letter.
This release is issued pursuant to Marketplace Rule 4803(a), which
requires the Company to make a public announcement through the news
media disclosing receipt of the staff’s letter and the NASDAQ rules upon
which it is based.
Sanderson Farms, Inc. is engaged in the production, processing,
marketing and distribution of fresh and frozen chicken and other
prepared food items. Its shares trade on the NASDAQ Global Select Market
under the symbol SAFM.
This press release contains forward-looking statements based on
management's current views and assumptions. Actual results and
events may differ. For a discussion of these matters, please
refer to the "Cautionary Statement Regarding Risks and Uncertainties
That May Affect Future Performance" in Item 7 of the Company's 2008
Annual Report on Form 10-K and please refer to the cautionary statement
found in Management's Discussion and Analysis of Financial Condition and
Results of Operations under the heading "General" in Part I, Item 2 of
the Quarterly Report on Form 10-Q for the Company's first quarter ended
January 31, 2009.
Sanderson Farms, Inc.
Mike Cockrell, 601-649-4030
Treasurer &
Chief Financial Officer
