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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000812128-01-000016.txt : 20010123
<SEC-HEADER>0000812128-01-000016.hdr.sgml : 20010123
ACCESSION NUMBER: 0000812128-01-000016
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 7
CONFORMED PERIOD OF REPORT: 20001031
FILED AS OF DATE: 20010122
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SANDERSON FARMS INC
CENTRAL INDEX KEY: 0000812128
STANDARD INDUSTRIAL CLASSIFICATION: POULTRY SLAUGHTERING AND PROCESSING [2015]
IRS NUMBER: 640615843
STATE OF INCORPORATION: MS
FISCAL YEAR END: 1031
FILING VALUES:
FORM TYPE: 10-K
SEC ACT:
SEC FILE NUMBER: 001-14977
FILM NUMBER: 1512524
BUSINESS ADDRESS:
STREET 1: 225 N 13TH AVE
STREET 2: PO BOX 988
CITY: LAUREL
STATE: MS
ZIP: 39441
BUSINESS PHONE: 6016494030
MAIL ADDRESS:
STREET 1: 225 N 13TH AVENUE
STREET 2: PO BOX 988
CITY: LAUREL
STATE: MS
ZIP: 39441
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>0001.txt
<DESCRIPTION>SANDERSON FARMS, INC. FORM 10-K
<TEXT>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
/X / Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended October 31, 2000
/ / Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from to
Commission file number : 0-16567
SANDERSON FARMS, INC.
(Exact name of registrant as specified in its charter)
Mississippi 64-0615843
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
225 North 13th Avenue
Laurel, Mississippi 39440
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (601) 649-4030 Securities
registered pursuant to Section 12(b) of the Act: None Securities registered
pursuant to section 12(g) of the Act:
Common Stock, $1.00 per share par value
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
X Yes No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ ].
Aggregate market value (based on the closing sales price in the NASDAQ
National Market System) of the voting stock held by non-affiliates of the
Registrant as of December 31, 2000: approximately $36,757,718.
Number of Shares outstanding of the Registrant's common stock as of
December 31, 2000: 13,632,955 shares of common stock, $1.00 per share par value.
Portions of the Registrant's definitive proxy statement filed or to be
filed in connection with its 2000 Annual Meeting of Stockholders are
incorporated by reference into Part III.
<PAGE>
INTRODUCTORY
Definitions. Except where the context indicates otherwise, the following
terms have the following respective meanings when used in this Annual Report.
"Registrant" and "Company" mean Sanderson Farms, Inc. and its subsidiaries and
predecessor organizations. "Fiscal year" means the fiscal year ended October 31,
2000, which is the year for which this Annual Report is filed.
Presentation and Dates of Information. Except for Item 4A herein, the Item
numbers and letters appearing in this Annual Report correspond with those used
in Securities and Exchange Commission Form 10-K (and, to the extent that it is
incorporated into Form 10-K, the letters used in the Commission's Regulation
S-K) as effective on the date hereof, which specifies the information required
to be included in Annual Reports to the Commission. Item 4A ("Executive Officers
of the Registrant") has been included by the Registrant in accordance with
General Instruction G(3) of Form 10-K and Instruction 3 of Item 401(b) of
Regulation S-K. The information contained in this Annual Report is, unless
indicated to be given as of a specified date or for the specified period, given
as of the date of this Report, which is January 25, 2001.
PART I
Item 1. Business
--------
(a) GENERAL DEVELOPMENT OF THE REGISTRANT'S BUSINESS
The Registrant was incorporated in Mississippi in 1955, and is a
fully-integrated poultry processing company engaged in the production,
processing, marketing and distribution of fresh and frozen chicken products. In
addition, through its wholly-owned subsidiary, Sanderson Farms, Inc. (Foods
Division), the Registrant is engaged in the processing, marketing and
distribution of processed and prepared food items.
The Registrant sells ice pack, chill pack and frozen chicken, in whole,
cut-up and boneless form, primarily under the Sanderson Farms(R) brand name to
retailers, distributors, and fast food operators principally in the
southeastern, southwestern and western United States. During its fiscal year
ended October 31, 2000 the Registrant processed 247.7 million chickens, or
approximately 1.1 billion dressed pounds. According to 2000 industry statistics,
the Registrant was the 7th largest processor of dressed chickens in the United
States based on estimated average weekly processing.
The Registrant's chicken operations presently encompass five hatcheries,
four feed mills, six processing plants and one by-products plant. The Registrant
has contracts with operators of approximately 495 grow-out farms that provide it
with sufficient housing capacity for its current operations. The Registrant also
has contracts with operators of 152 breeder farms.
The Registrant sells over 200 processed and prepared food items nationally
and regionally, primarily to distributors, national food service accounts,
retailers and club stores. These food items include frozen entrees, such as
chicken and dumplings, lasagna, seafood gumbo, and shrimp creole and specialty
products, such as corn dogs. The Registrant also sells a retail entree line of
six different two-pound frozen entrees including chicken primavera, lasagna with
meat, seafood gumbo and Mexican casserole with beef. This product line is
designed as a convenient, quality product for the family.
<PAGE>
Since the Registrant completed the initial public offering of its common
stock through the sale of 1,150,000 shares to an underwriting syndicate managed
by Smith Barney, Harris Upham & Co. Incorporated and Morgan Keegan & Co. Inc. in
May 1987, the Registrant has significantly expanded its operations to increase
production capacity, product lines and marketing flexibility. Through 1995, this
expansion included the expansion of the Registrant's Hammond, Louisiana
processing facility, the construction of new waste water facilities at the
Hammond, Louisiana and Collins and Hazlehurst, Mississippi processing
facilities, the addition of second shifts at the Hammond, Louisiana, Laurel,
Mississippi, Hazlehurst, Mississippi, and Collins, Mississippi processing
facilities, expansion of freezer and production capacity at its prepared foods
facility in Jackson, Mississippi, the expansion of freezer capacity at its
Laurel, Mississippi, Hammond, Louisiana and Collins, Mississippi processing
facilities, the addition of deboning capabilities at all of the Registrant's
poultry processing facilities, and the construction and start-up of its Pike
County, Mississippi, production and processing facilities, including a hatchery,
a feed mill, a processing plant, a waste water treatment facility and a water
treatment facility. During 1997, the Registrant completed the construction and
start-up of its Brazos County, Texas production and processing facilities,
including a hatchery, a feed mill located in Robertson County, Texas, a
processing plant, a waste water treatment facility and a water treatment
facility. In addition, since 1987, the Registrant completed the expansion and
renovation of the hatchery at its Hazlehurst, Mississippi production facilities,
and completed the renovation and expansion of its Collins, Mississippi
by-products facility, allowing for the elimination of a smaller by-products
facility at the Laurel, Mississippi plant.
Capital expenditures for fiscal 2000 were funded by working capital and
borrowings under a revolving credit agreement. Effective July 29, 1999, the
Registrant amended its revolving credit agreement to, among other things,
decrease the revolving credit available to the Registrant thereunder from $130.0
million to $100.0 million. On June 15, 1999, the Registrant entered into a Note
Purchase Agreement with the Lincoln National Life Insurance Company pursuant to
which the Company issued $20 million, 6.65% senior notes due July 7, 2007. The
proceed of such notes were used to pay a portion of the debt outstanding under
the revolving credit agreement. The Registrant anticipates that capital
expenditures for fiscal 2001 will be funded by internally generated working
capital and borrowings under the revolving credit agreement.
During fiscal 1997, the Registrant completed the start-up of its Brazos
County, Texas processing facility. During October 1998, the Registrant began
operating one line of its Brazos County, Texas processing facility on a double
shift basis, and during fiscal 2000 completed the double shifting of the plant,
which is now operating at full capacity. The Registrant currently has additional
processing capacity available to it through the double shifting of the second
line at its Collins, Mississippi processing facility. In addition, the
Registrant continually evaluates internal and external expansion opportunities
to continue its growth in poultry and/or related food products.
(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
Not applicable.
<PAGE>
(c) NARRATIVE DESCRIPTION OF BUSINESS
REGISTRANT'S BUSINESS
General
The Registrant is engaged in the production, processing, marketing and
distribution of fresh and frozen chicken and the preparation, processing,
marketing and distribution of processed and prepared food items.
The Registrant sells chill pack, ice pack and frozen chicken, both whole
and cut-up, primarily under the Sanderson Farms(R) brand name to retailers,
distributors and fast food operators principally in the southeastern,
southwestern and western United States. During its fiscal year ended October 31,
2000, the Registrant processed approximately 247.7 million chickens, or
approximately 1.1 billion dressed pounds. In addition, the Registrant purchased
and further processed 17.4 million pounds of poultry products during fiscal
2000. According to 2000 industry statistics, the Registrant was the 7th largest
processor of dressed chicken in the United States based on estimated average
weekly processing.
The Registrant conducts its chicken operations through Sanderson Farms,
Inc. (Production Division) and Sanderson Farms, Inc. (Processing Division), both
of which are wholly-owned subsidiaries of Sanderson Farms, Inc. The production
subsidiary, Sanderson Farms, Inc. (Production Division), which has facilities in
Laurel, Collins, Hazlehurst and Pike County, Mississippi, and Bryan, Texas, is
engaged in the production of chickens to the broiler stage. Sanderson Farms,
Inc. (Processing Division), which has facilities in Laurel, Collins, Hazlehurst
and Pike County, Mississippi, Hammond, Louisiana, and Bryan, Texas, is engaged
in the processing, sale and distribution of chickens.
The Registrant conducts its processed and prepared foods business through
its wholly-owned subsidiary, Sanderson Farms, Inc. (Foods Division), which has a
facility in Jackson, Mississippi. The Foods Division is engaged in the
processing, marketing and distribution of over 200 processed and prepared food
items, which it sells nationally and regionally, principally to distributors,
national food service accounts, retailers and club stores.
Products
The Registrant has the ability to produce a wide range of processed chicken
products and processed and prepared food items thereby allowing it to take
advantage of marketing opportunities as they arise.
Processed chicken is first saleable as an ice packed whole chicken. The
Registrant adds value to its ice packed whole chickens by removing the giblets,
weighing, packaging and labeling the product to specific customer requirements
and cutting the product based on customer specifications. The additional
processing steps of giblet removal, close tolerance weighing and cutting
increase the value of the product to the customer over whole chickens by
reducing customer handling and cutting labor and capital costs, reducing the
shrinkage associated with cutting, and ensuring consistently sized portions.
With respect to chill pack products, additional value can be achieved by
deep chilling and packaging whole chickens in bags or combinations of fresh
chicken parts in various sized individual trays under the Registrant's brand
name, which then may be weighed and prepriced, based on each customer's needs.
The chill pack process increases the value of the product by extending shelf
life, reducing customer weighing and packaging labor, and providing the customer
with a wide variety of products with uniform, well designed packaging, all of
which enhance the customer's ability to merchandise chicken products.
To satisfy some customers' merchandising needs, the Registrant quick
freezes the chicken product, which adds value by meeting the customers'
handling, storage, distribution and marketing needs and by permitting shipment
of product overseas where transportation time may be as long as 25 days.
Value added products usually generate higher sale prices per pound, exhibit
less finished price volatility and generally result in higher and more
consistent profit margins over the long-term than non-value added product forms.
Selling fresh chickens as a prepackaged brand name product has been a
significant step in the development of the value added, higher margin consumer
business. The Registrant evaluates daily the potential profitability of all
product lines and attempts to maximize its profits on a short-term basis by
making strategic changes in its product mix to meet customer demand.
The following table sets forth, for the periods indicated, the contribution, as
a percentage of sales of chicken products, of value added and non-value added
chicken products.
Fiscal Year Ended October 31,
-----------------------------
1996 1997 1998 1999 2000
----- ----- ------ ----- -----
Value added .............. 98.2% 98.1% 98.6% 99.2 % 99.5%
Non-value added .......... 1.8% 1.9% 1.4% .8 % .5%
----- ----- ----- ----- -----
Total Registrant
chicken sales ............ 100.0% 100.0% 100.0% 100.0% 100.0%
----- ----- ----- ----- -----
The following table sets forth, for the years indicated, the contribution, as a
percentage of net sales, of each of the Registrant's major product lines.
<TABLE>
Fiscal Year Ended October 31,
-----------------------------
<CAPTION>
1996 1997 1998 1999 2000
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Registrant processed
chicken:
Value added:
Chill pack ............... 18.6% 20.8% 24.4% 33.2% 36.4%
Fresh bulk pack .......... 49.9 45.9 46.6 46.5 43.3
Frozen ................... 17.0 15.7 11.6 8.0 7.5
----- ----- ----- ----- -----
Subtotal .................. 85.5 82.4 82.6 87.7 87.2
----- ----- ----- ----- -----
Non-value added:
Ice pack ................. 0.9 0.9 0.7 .5 .3
Frozen ................... 0.7 0.7 0.5 .2 .1
----- ----- ----- ----- -----
Subtotal .................. 1.6 1.6 1.2 .7 .4
----- ----- ----- ----- -----
Total Company
processed chicken ....... 87.1 84.0 83.8 88.4 87.6
Processed and
prepared foods ............ 12. 9 16.0 16.2 11.6 12.4
--- - ---- ---- ---- ----
Total ............. 100.0% 100.0% 100.0% 100.0% 100.0%
===== ===== ===== ===== =====
</TABLE>
Sales and Marketing
The Registrant's chicken products are sold primarily to retailers
(including national and regional supermarket chains and local supermarkets),
distributors and fast food operators located principally in the southeastern,
southwestern and western United States. The Registrant also sells its chicken
products to governmental agencies and to customers who resell the products
outside of the continental United States. This wide range of customers, together
with the Registrant's broad product mix, provides the Registrant with
flexibility in responding to changing market conditions in its effort to
maximize profits. This flexibility also assists the Registrant in its efforts to
reduce its exposure to market volatility.
Sales and distribution of the Registrant's chicken products are conducted
primarily by sales personnel at the Registrant's general corporate offices in
Laurel, Mississippi and by customer service representatives at each of its six
processing complexes and through independent food brokers. Each complex has
individual on-site distribution centers and uses the Registrant's truck fleet,
as well as contract carriers, for distribution of its products.
Generally, the Registrant prices much of its chicken products based upon
weekly market prices reported by the United States Department of Agriculture.
Consistent with the industry, the Registrant's profitability is impacted by such
market prices, which may fluctuate substantially and exhibit cyclical
characteristics. The Registrant adds a markup to base prices, which depends upon
value added, volume, product mix and other factors. While base prices may change
weekly, the Registrant's markup is generally negotiated from time to time with
the Registrant's customers. The Registrant's sales are generally made on an
as-ordered basis, and the Registrant maintains few long-term sales contracts
with its customers.
The Registrant uses television, radio and newspaper advertising, coupon
promotion, point of purchase material and other marketing techniques to develop
consumer awareness of and brand recognition for its Sanderson Farms(R) products.
The Registrant has achieved a high level of public awareness and acceptance of
its products through television advertising featuring a celebrity as the
Registrant's spokesperson. Brand awareness is an important element of the
Registrant's marketing philosophy, and it intends to continue brand name
merchandising of its products.
The Registrant's processed and prepared food items are sold nationally and
regionally, primarily to distributors, national food service accounts, retailers
and club stores. Sales of such products are handled by independent food brokers
located throughout the United States, primarily in the southeast and southwest
United States, and by sales personnel of the Registrant. Processed and prepared
food items are distributed from the Registrant's plant in Jackson, Mississippi,
through arrangements with contract carriers.
<PAGE>
Production and Facilities
General. The Registrant is a vertically-integrated producer of fresh and
frozen chicken products, controlling the production of hatching eggs, hatching,
feed manufacturing, growing, processing and packaging of its product lines.
Breeding and Hatching. The Registrant maintains its own breeder flocks for
the production of hatching eggs. The Registrant's breeder flocks are acquired as
one-day old chicks (known as pullets or cockerels) from primary breeding
companies that specialize in the production of genetically designed breeder
stock. As of October 31, 2000, the Registrant maintained contracts with 31
pullet farm operators for the grow-out of pullets (growing the pullet to the
point at which it is capable of egg production, which takes approximately six
months). Thereafter, the mature breeder flocks are transported by Registrant
vehicles to breeder farms that are maintained, as of October 31, 2000, by 121
independent contractors under the Registrant's supervision. Eggs produced by
independent contract breeders are transported to Registrant's hatcheries in
Registrant's vehicles.
The Registrant owns and operates five hatcheries located in Mississippi and
Texas where eggs are incubated and hatched in a process requiring 21 days. Once
hatched, the day-old chicks are vaccinated against common poultry diseases and
are transported by Registrant vehicles to independent contract grow-out farms.
As of October 31, 2000, the Registrant's hatcheries were capable of producing an
aggregate of approximately 5.6 million chicks per week.
Grow-out. The Registrant places its chicks on 495 grow-out farms, as of
October 31, 2000, located in Mississippi, Louisiana and Texas where broilers are
grown to an age of approximately six to seven weeks. The farms provide the
Registrant with sufficient housing capacity for its operations, and are
typically family-owned farms operated under contract with the Registrant. The
farm owners provide facilities, utilities and labor; the Registrant supplies the
day-old chicks, feed and veterinary and technical services. The farm owner is
compensated pursuant to an incentive formula designed to promote production cost
efficiency.
Historically, the Registrant has been able to accommodate expansion in
grow-out facilities through additional contract arrangements with independent
growers.
Feed Mills. An important factor in the grow-out of chickens is the rate at
which chickens convert feed into body weight. The Registrant purchases on the
open market the primary feed ingredients, including corn and soybean meal, which
historically have been the largest cost components of the Registrant's total
feed costs. The quality and composition of the feed are critical to the
conversion rate, and accordingly, the Registrant formulates and produces its own
feed. As of October 31, 2000, the Registrant operated four feed mills, three of
which are located in Mississippi and one in Texas. The Registrant's annual feed
requirements for fiscal 2000 were approximately 1,480,000 tons, and it has the
capacity to produce approximately 1,685,000 tons of finished feed annually under
current configurations.
Feed grains are commodities subject to volatile price changes caused by
weather, size of harvest, transportation and storage costs and the agricultural
policies of the United States and foreign governments. On October 31, 2000, the
Registrant had approximately 439,000 bushels of corn storage capacity at its
feed mills, which was sufficient to store all of its weekly requirements for
corn. Generally, the Registrant purchases its corn and other feed supplies at
current prices from suppliers and, to a limited extent, direct from farmers.
Feed grains are available from an adequate number of sources. Although the
Registrant has not experienced and does not anticipate problems in securing
adequate supplies of feed grains, price fluctuations of feed grains can be
expected to have a direct and material effect upon the Registrant's
profitability. Although the Registrant sometimes purchases grains in forward
markets, it cannot eliminate the potentially adverse effect of grain price
increases. During the fall of 1998, market prices for corn and soy meal reached
levels that prompted the Company to buy a significant portion of its 1999
requirements on a forward basis. As a result of these purchases, the Company
substantially reduced its exposure to the risk of material increases in feed
grain prices during its fiscal year ending October 31, 1999.
Processing. Once the chicks reach processing weight, they are transported
to the Registrant's processing plants. These plants use modern, highly automated
equipment to process and package the chickens. The Registrant's Pike County,
Mississippi processing plant, which currently operates two processing lines on a
double shift basis, is currently processing approximately 1,150,000 chickens per
week. The Registrant's Collins, Mississippi processing plant, which is currently
operating one of its two lines on a double shift basis and one line on a single
shift basis, is currently processing approximately 900,000 chickens per week.
The Registrant's Brazos County, Texas processing plant, which is currently
operating one line on a single shift basis and one line on a double shift basis,
is currently processing approximately 1,150,000 chickens per week. The
Registrant's Laurel and Hazlehurst, Mississippi and Hammond, Louisiana
processing plants currently operate on a double shift basis, are currently
processing approximately 1,800,000 chickens per week. The Registrant also has
the capabilities to produce deboned product at six processing facilities. At
October 31, 2000, these deboning facilities were operating on a double shifted
basis resulting in a combined capacity to process approximately 8.5 million
pounds of product per week.
Sanderson Farms, Inc. (Foods Division). The facilities of Sanderson Farms,
Inc. (Foods Division) are located in Jackson, Mississippi in a plant with
approximately 75,000 square feet of refrigerated manufacturing and storage
space. The plant uses highly automated equipment to prepare, process and freeze
food items. The Registrant could increase significantly its production of
processed and prepared food items without incurring significant capital
expenditures or delays.
Executive Offices; Other Facilities. The Registrant's corporate offices are
located in Laurel, Mississippi. As of October 31, 2000, the Registrant operated
one by-products plant, and six automotive maintenance shops which service
approximately 486 Registrant over-the-road and farm vehicles. In addition, the
Registrant has one child care facility located near its Collins, Mississippi,
processing plant currently serving over 220 children.
Quality Control
The Registrant believes that quality control is important to its business
and conducts quality control activities throughout all aspects of its
operations. The Registrant believes these activities are beneficial to efficient
production and in assuring its customers wholesome, high quality products.
From the corporate offices, the Director of Technical Services supervises
the operation of a modern, well-equipped laboratory which, among other things,
monitors sanitation at the hatcheries, quality and purity of the Registrant's
feed ingredients and feed, the health of the Registrant's breeder flocks and
broilers, and conducts microbiological tests of live chickens, facilities and
finished products. The Registrant conducts on-site quality control activities at
each of the five processing plants and the processed and prepared food plant.
<PAGE>
Regulation
The Registrant's facilities and operations are subject to regulation by
various federal and state agencies, including, but not limited to, the federal
Food and Drug Administration ("F.D.A."), the United States Department of
Agriculture ("U.S.D.A."), the Environmental Protection Agency, the Occupational
Safety and Health Administration and corresponding state agencies. The
Registrant's chicken processing plants are subject to continuous on-site
inspection by the U.S.D.A. The Sanderson Farms, Inc. (Foods Division) processing
plant operates under the U.S.D.A.'s Total Quality Control Program which is a
strict self-inspection plan written in cooperation with and monitored by the
U.S.D.A. The F.D.A. inspects the production of the Registrant's feed mills.
Compliance with existing regulations has not had a material adverse effect
upon the Registrant's earnings or competitive position in the past and is not
anticipated to have a materially adverse effect in the future. Management
believes that the Registrant is in substantial compliance with existing laws and
regulations relating to the operation of its facilities and does not know of any
major capital expenditures necessary to comply with such statutes and
regulations.
The Registrant takes extensive precautions to ensure that its flocks are
healthy and that its processing plants and other facilities operate in a healthy
and environmentally sound manner. Events beyond the control of the Registrant,
however, such as an outbreak of disease in its flocks or the adoption by
governmental agencies of more stringent regulations, could materially and
adversely affect its operations.
Competition
The Registrant is subject to significant competition from regional and
national firms in all markets in which it competes. Some of the Registrant's
competitors have greater financial and marketing resources than the Registrant.
The primary methods of competition are price, product quality, number of
products offered, brand awareness and customer service. The Registrant has
emphasized product quality and brand awareness through its advertising strategy.
See "Business - Sales and Marketing". Although poultry is relatively inexpensive
in comparison with other meats, the Registrant competes indirectly with the
producers of other meats and fish, since changes in the relative prices of these
foods may alter consumer buying patterns.
Sources of Supply
During fiscal 2000, the Registrant purchased its pullets and its cockerels
from six (6) major breeders. The Registrant has found the genetic cross of the
breeds supplied by these companies to produce chickens most suitable to the
Registrant's purposes. The Registrant has no written contracts with these
breeders for the supply of breeder stock. Other sources of breeder stock are
available, and the Registrant continually evaluates these sources of supply.
Should breeder stock from its present suppliers not be available for any reason,
the Registrant believes that it could obtain adequate breeder stock from other
suppliers.
Other major raw materials used by the Registrant include feed grains,
cooking ingredients and packaging materials. The Registrant purchases these
materials from a number of different vendors and believes that its sources of
supply are adequate for its present needs. The Registrant does not anticipate
any difficulty in obtaining these materials in the future.
Seasonality
The demand for the Registrant's chicken products generally is greatest
during the spring and summer months and lowest during the winter months.
Trademarks
The Registrant has registered with the United States Patent and Trademark
Office the trademark Sanderson Farms(R) which it uses in connection with the
distribution of its premium grade chill pack products. The Registrant considers
the protection of this trademark to be important to its marketing efforts due to
consumer awareness of and loyalty to the Sanderson Farms(R) label. The
Registrant also has registered with the United States Patent and Trademark
Office seven other trademarks which are used in connection with the distribution
of chicken and other products and for other competitive purposes.
The Registrant has registered with the United States Patent and Trademark
Office the trademark Sanderson Farms(R) which it uses in connection with the
distribution of its prepared foods and two pound frozen entree products, as well
as in connection with the distribution of its premium grade chill pack chicken
products.
The Registrant, over the years, has developed important non-public
proprietary information regarding product related matters. While the Registrant
has internal safeguards and procedures to protect the confidentiality of such
information, it does not generally seek patent protection for its technology.
Employees and Labor Relations
As of October 31, 2000, the Registrant had 7,863 employees, including 767
salaried and 7,096 hourly employees. A collective bargaining agreement with the
United Food and Commercial Workers International Union covering 582 hourly
employees who work at the Registrant's processing plant in Hammond, Louisiana
expired on November 30, 1998. That contract was renegotiated and executed on
November 1, 1998, and has been extended to November 30, 2001.The collective
bargaining agreement has a grievance procedure and no strike-no lockout clauses
that should assist in maintaining stable labor relations at the Hammond plant.
A collective bargaining agreement with the Laborers' International Union of
North America, Professional Employees Local Union #693, AFL-CIO, covering 468
hourly employees who work at the Registrant's processing plant in Hazlehurst,
Mississippi was negotiated and signed by the union and the Registrant effective
July 15, 1995. This Agreement expired on June 30, 1999, and was renegotiated and
executed on July 26, 1999, and has a new expiration date of December 31, 2002.
This collective bargaining agreement has a grievance procedure and no strike-no
lockout clauses that should assist in maintaining stable labor relations at the
Hazlehurst plant.
A collective bargaining agreement with the Laborers' International Union of
North America, Professional Employees Local Union #693, AFL-CIO, covering 1,115
hourly employees who work at the Registrant's processing plant in Collins,
Mississippi was negotiated and signed by the union and the Registrant effective
September 9, 1995, and expired on December 30, 1999. Negotiations were completed
and a new agreement was reached on January 13, 2000. The new agreement has a
termination date of December 31, 2003.
On June 9, 1999, the production, maintenance and clean-up employees at the
Company's Brazos County, Texas poultry processing facility voted to be
represented by the United Food and Commercial Workers Union Local #408, AFL-CIO.
A collective bargaining agreement was negotiated and signed on October 7, 1999,
and will expire on December 31, 2002. This collective bargaining agreement has a
grievance procedure and no strike - no lockout clauses that should assist in
maintaining stable labor relations at the Brazos County, Texas processing
facility.
On May 28, 1999, truck drivers at the Company's Brazos County, Texas
processing and production facilities voted to be represented in collective
bargaining by the Teamsters International Local #968. Negotiations with this
union were completed in December 1999, and a collective bargaining agreement
effective January 1, 2000 was signed, which agreement will expire on December
31, 2002. Although this agreement includes a provision allowing re-opening of
bargaining during January 2000 on certain economic issues, no changes have been
made to the Agreement, with the last meeting on this matter being held August
21, 2000. No further meetings have been scheduled in this matter.
(d) FINANCIAL INFORMATION ABOUT FOREIGN AND
DOMESTIC OPERATIONS AND EXPORT SALES
The Registrant engages in no material foreign operations, and no material
portion of its revenues was derived from customers in foreign countries.
<PAGE>
Item 2. Properties.
----------
The Registrant's principal properties are as follows:
Use Location (City, State)
--- ----------------------
Poultry complex, including Laurel, Mississippi
poultry processing plant,
hatchery and feedmill
Poultry complex, including Pike County, Mississippi
poultry processing plant,
hatchery and feedmill
Poultry complex, including Hazlehurst, Mississippi
poultry processing plant,
hatchery and feedmill
Poultry complex, including Brazos and Robertson Counties,
poultry processing plant, Texas
hatchery and feedmill
Poultry processing plant Hammond, Louisiana
Poultry processing plant, Collins, Mississippi
hatchery and by-products
plant
Prepared food plant Jackson, Mississippi
Corporate general offices Laurel, Mississippi
The Registrant owns substantially all of its major operating facilities
with the following exceptions: one processing plant and feed mill complex is
leased on an annual renewal basis through 2063 with an option to purchase at a
nominal amount, at the end of the lease term. One processing plant complex is
leased under four leases, which are renewable annually through 2061, 2063, 2075
and 2073, respectively. Certain infrastructure improvements associated with a
processing plant are leased under a lease which expires in 2012 and is
thereafter renewable annually through 2091. All of the foregoing leases are
capital leases.
There are no material encumbrances on the major operating facilities owned
by the Registrant, except that the plant of Sanderson Farms, Inc. (Foods
Division) is encumbered by a mortgage which collateralizes a note with an
outstanding principal balance of $1.1 million on December 31, 2000, which bears
interest at the rate of 5% per annum and is payable in equal annual installments
through 2009. In addition, under the terms of the revolving credit agreement
effective July 29, 1996, as amended, and under the $20 million long-term fixed
rate loan agreements effective in February 1993 and June 1999, the Registrant
may not pledge any additional assets as collateral other than fixed assets up to
15% of its tangible assets.
Management believes that the Company's facilities are suitable for its
current purposes, and believes that current renovations and expansions will
enhance present operations and allow for future internal growth.
Item 3. Legal Proceedings.
-----------------
There are no material pending legal proceedings, other than those described
in Note 8 of the consolidated financial statements and routine litigation
incidental to the Registrant's business, to which the Registrant is a party or
of which its property is the subject, and no such proceedings are known by the
Registrant to be contemplated by governmental authorities.
Item 4. Submission of Matters to
a Vote of Security Holders.
--------------------------
No matters were submitted to a vote of the Registrant's security holders,
through the solicitation of proxies or otherwise, during the fourth quarter of
the Fiscal Year.
Item 4A. Executive Officers of the Registrant.
Executive
Name Age Office Officer Since
---- ---- ------ -------------
Joe F. Sanderson, Jr ............ 54 Chairman of the Board, 1984 (1)
President and
Chief Executive
Officer
D. Michael Cockrell ............. 43 Treasurer and Chief 1993 (2)
Financial Officer,
Board Member
James A. Grimes ................. 52 Secretary and 1993 (3)
Chief Accounting Officer
Lampkin Butts ................... 49 Vice President - Sales, 1996 (4)
Board Member
(1) Joe F. Sanderson, Jr. has served as President and Chief Executive
Officer of the Registrant since November 1, 1989, and as Chairman of the
Board since January 8, 1998. From January 1984, to November 1989, Mr.
Sanderson served as Vice-President, Processing and Marketing of the
Registrant.
(2) D. Michael Cockrell became Treasurer and Chief Financial Officer of the
Registrant effective November 1, 1993, and was elected to the Board of
Directors on February 19, 1998. Prior to that time, for more than five
years, Mr. Cockrell was a member and shareholder of the Jackson,
Mississippi law firm of Wise Carter Child & Caraway, Professional
Association.
(3) James A. Grimes became Secretary of the Registrant effective November
1, 1993. Mr. Grimes also serves as Chief Accounting Officer, which position
he has held since 1985.
(4) Lampkin Butts became Vice President - Sales of the Registrant effective
November 1, 1996, and was elected to the Board of Directors on February 19,
1998. Prior to that time, Mr. Butts served the Registrant in various
capacities since 1973. Executive officers of the Company serve at the
pleasure of the Board of Directors. There are no understandings or
agreements relating to any person's service or prospective service as an
executive officer of the Registrant.
PART II
Item 5. Market for the Registrant's Common
Equity and Related Stockholder Matters.
The Company's common stock is traded on the NASDAQ National Market System
under the symbol SAFM. The number of stockholders as of December 31, 2000, was
1,856.
The following table shows quarterly cash dividends and quarterly high and
low prices for the common stock for the past two fiscal years. National Market
System quotations are based on actual sales prices.
Stock Price
Fiscal Year 2000 High Low Dividends
-----------------------------------------------------------------------
First Quarter $11.25 $ 7.44 $.05
Second Quarter $ 8.94 $ 6.56 $.05
Third Quarter $ 9.06 $ 6.00 $.05
Fourth Quarter $ 8.12 $ 5.94 $.05
Stock Price
Fiscal Year 1999 High Low Dividends
-----------------------------------------------------------------------
First Quarter $17.00 $14.00 $.05
Second Quarter $16.00 $12.00 $.05
Third Quarter $15.00 $12.13 $.05
Fourth Quarter $13.06 $ 9.38 $.05
On December 29, 2000 the closing sales price for the common stock was $7.50 per
share.
Item 6. Selected Financial Data.
<TABLE>
Year Ended October 31
<CAPTION>
2000 1999 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
(In thousands, except per share data)
Net sales .................................. $ 605,911 $ 559,031 $ 521,394 $ 481,789 $ 455,100
Operating income (loss) .................... (588) 23,008 31,822 7,467
1,189
Income (loss) before
extraordinary gain and cumulative
effect of accounting change ............... (5,337) 10,546 15,256 558
(2,443)
Net income (loss) .......................... (5,571) 10,546 15,256 1,234 (2,443)
Basic and diluted earnings (loss)
per share before extraordinary gain
and cumulative effect of accounting
change ................................... (.39) .75 1.06 .04
(.18)
Basic and diluted earnings (loss)
per share) .......................... (.41) .75 1.06 .09 (.18)
Working capital ............................ 71,334 67,272 59,665 66,751 60,826
Total assets ............................... 281,856 283,510 265,671 264,893 237,226
Long-term debt, less
current maturities ....................... 107,491 104,651 95,695 118,782 90,102
Stockholders' equity ....................... 120,015 130,844 129,482 116,771 118,250
Cash dividends declared
per share ................................ $ .20 $ .20 $ .20 $ .20 $ .20
</TABLE>
QUARTERLY FINANCIAL DATA
<TABLE>
Fiscal Year 2000
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
(In thousands, except per share data)
(Unaudited)
<S> <C> <C> <C> <C>
Net sales .................................. $ 137,008 $ 139,781 $ 158,422 $ 170,700
Operating income (loss) .................... (345) (5,172) (6,558) 11,487
Net income (loss) .......................... (1,416) (4,497) (5,628) 5,970
Basic and diluted earnings (loss)
per share .............................. $ (.10) $ (.33) $ (.41) $ .44
</TABLE>
<TABLE>
Fiscal Year 1999
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
(In thousands, except per share data)
(Unaudited)
<S> <C> <C> <C> <C>
Net sales .................................. $ 126,229 $ 134,586 $ 148,842 $ 149,374
Operating income ........................... 7,022 5,474 7,350 3,162
Net income ................................. 3,444 2,438 3,689 975
Basic and diluted
earnings per share ....................... $ .24 $ .17 $ .26 $ .08
</TABLE>
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
CAUTIONARY STATEMENT REGARDING RISKS AND UNCERTAINTIES THAT MAY AFFECT
FUTURE PERFORMANCE
This Annual Report contains certain forward-looking statements about the
business, financial condition and prospects of the Company. The actual
performance of the Company could differ materially from that indicated by the
forward-looking statements because of various risks and uncertainties,
including, without limitation, changes in the market price for the Company's
finished products and for feed grains, both of which may fluctuate substantially
and exhibit cyclical characteristics typically associated with commodity
markets, as described below; changes in competition and economic conditions;
various inventory risks due to changes in market conditions; changes in
governmental rules and regulations applicable to the Company and the poultry
industry; and other risks described below. These risks and uncertainties can not
be controlled by the Company. When used in this Annual Report, the words
"believes," "estimates," "plans," "expects," "should," "outlook," and
"anticipates," and similar expressions as they relate to the Company or its
management are intended to identify forward-looking statements.
GENERAL
The Company's poultry operations are integrated through its control of all
functions relative to the production of its chicken products, including hatching
egg production, hatching, feed manufacturing, raising chickens to marketable age
("grow-out"), processing and marketing. Consistent with the poultry industry,
the Company's profitability is substantially impacted by the market price for
its finished products and feed grains, both of which may fluctuate substantially
and exhibit cyclical characteristics typically associated with commodity
markets. Other costs, excluding feed grains, related to the profitability of the
Company's poultry operations, including hatching egg production, hatching,
growing, and processing cost, are responsive to efficient cost containment
programs and management practices. Over the past three fiscal years, these other
production costs have averaged approximately 64.2 % of the Company's total
production costs.
The Company believes that value-added products are subject to less price
volatility and generate higher, more consistent profit margin than whole
chickens ice packed and shipped in bulk form. To reduce its exposure to market
cyclicality that has historically characterized commodity chicken market prices,
the Company has increasingly concentrated on the production and marketing of
value-added product lines with emphasis on product quality, customer service,
and brand recognition. The Company adds value to its poultry products by
performing one or more processing steps beyond the stage where the whole chicken
is first saleable as a finished product, such as cutting, deep chilling,
packaging and labeling the product. The Company believes that one of its major
strengths is its ability to change its product mix to meet customer demands.
The Company's processed and prepared foods product line includes approximately
200 institutional and consumer packaged food items that it sells nationally,
primarily to distributors, food service establishments and retailers. A majority
of the prepared food items are made to the specifications of food service users.
Poultry prices per pound, as measured by the Georgia dock price, fluctuated
during the three years ended October 31, 2000 as follows:
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter
Fiscal 2000
High .................... $.5850 $.5800 $.5975 $.6200*
Low ..................... $.5800 $.5725* $.5725 $.6000
Fiscal 1999
High .................... $.6825* $.6275 $.6150 $.6150
Low ..................... $.6275 $.5750* $.5825 $.5850
Fiscal 1998
High .................... $.5850 $.5775 $.6825 $.7150*
Low ..................... $.5550* $.5550 $.5775 $.6875
*Year High/Low
For the year ended October 31, 1999 as compared to the year ended October 31,
1998, lower prices for poultry products more than offset an advantage in the
cost of feed grains. The decrease in net income for the fourth quarter of fiscal
1999 from the fourth quarter of fiscal 1998 resulted primarily from lower prices
for poultry products and slightly higher grain prices. During fiscal 2000
compared to fiscal 1999, the average market prices for whole chickens and
boneless breast meat decreased approximately 4.0% and 15.0% respectively. In
addition, slightly higher average feed grain costs and bad debt expense of $1.2
million during fiscal 2000 from the bankruptcy filing by AmeriServe Food
Distribution, Inc. ("AmeriServe") reduced the Company's operating margin.
RESULTS OF OPERATIONS
Fiscal 2000 Compared to Fiscal 1999
The Company's net sales for fiscal 2000 were $605.9 million compared to $559.0
million during fiscal 1999, an increase of $46.9 million. A majority of the
increase in net sales was derived from an increase in pounds of poultry products
sold of 10.0%. The additional pounds of poultry products sold resulted primarily
from an increase in the average live weight of chickens processed. However, the
effect of the increase in pounds of poultry products sold on net sales was
partially offset by a decrease in the average sales price per pound of poultry
products of 2.3%. During fiscal 2000 as compared to fiscal 1999, a simple
average of the Georgia dock whole bird prices reflected a decrease of 4.0%. In
addition to the price decrease for whole birds, average boneless breast meat
prices were approximately 15.0% lower during fiscal 2000 as compared to fiscal
1999. Net sales of prepared food products during fiscal 2000 increased $10.0
million or 14.7% as compared to net sales during fiscal 1999. This increase
resulted from an increase in the pounds of prepared food products sold of 8.8%
and an increase in the average sales price of prepared food products of 5.4%.
<PAGE>
Cost of sales for fiscal 2000 as compared to fiscal 1999 increased $66.0 million
or 12.8%. Cost of sales of poultry products increased $58.3 million or 12.8%.
This increase in the cost of sales of poultry products was the result of an
increase in the pounds of poultry products sold of 10.0%, an increase in the
processing cost of poultry products related to the Company's increased presence
in the chill pack market and higher cost of soybean meal. Corn and soybean meal
cash market prices reflected a decrease of 3.1% and an increase of 17.9%,
respectively. Cost of sales of prepared food products during fiscal 2000 as
compared to fiscal 1999 increased $7.7 million or 13.2% due primarily to the
increase in the pounds of prepared food products sold.
Selling, general and administrative expenses for the year ended October 31, 2000
increased $4.5 million as compared to the year ended October 31, 1999. This
increase reflects the additional advertising and marketing costs related to the
Company's change of certain of its production from the fast food market to the
chill pack market. In addition, the Company recorded additional bad debt expense
of $1.2 million during the second quarter of fiscal 2000 resulting from the
bankruptcy filing by AmeriServe on February 1, 2000.
The Company's operating loss for fiscal 2000 was $588,000 as compared to
operating income during fiscal 1999 of $23.0 million. The Company's operating
margin during fiscal 2000 as compared to fiscal 1999 was adversely affected by
lower prices for poultry products and the additional bad debt expense from the
bankruptcy filing by AmeriServe. The Company expects the current weakness in the
poultry market to continue through the first quarter of fiscal 2001.
Interest expense for the year ended October 31, 2000 was $8.2 million as
compared to the year ended October 31, 1999 of $6.4 million, an increase of $1.8
million.
The Company adopted the AICPA Statement of Position 98-5, "Reporting the Costs
of Start-up Activities" in the first quarter of fiscal 2000. The effect of
adopting SOP 98-5 was to record a charge for the cumulative effect of an
accounting change of $234,000 (net of income taxes of $140,000).
The effective tax rate for the years ended October 31, 2000 and October 31, 1999
were 37.2% and 37.8%, respectively.
Fiscal 1999 Compared to Fiscal 1998
The Company's net sales for fiscal 1999 were $559.0 million, an increase of
$37.6 million or 7.2% over fiscal 1998. The increase in the Company's net sales
resulted from a 24.0% increase in the pounds of poultry products sold which was
partially offset by decreases in the average sale price of poultry products and
prepared food products of 8.1% and 4.4%, respectively, and a decrease in the
pounds of prepared food products sold of 21.1%. The additional pounds of poultry
products sold resulted primarily from an increase in the average live weight of
chickens processed as the Company shifted certain of its chicken production from
the fast food market to the chill pack and big bird deboning markets. During
fiscal 1999 as compared to fiscal 1998, the poultry industry experienced lower
average sale prices for poultry products due to an over supply of chicken and
other meats in the market place. A decrease in the sales of prepared food
products for fiscal 1999 as compared to fiscal 1998 was the result of decreases
in the pounds of prepared food products sold of 21.1% and the decrease in the
average sale price of prepared food products of 4.4%. During fiscal 1999
management reduced or eliminated sales of certain less profitable prepared food
items resulting in fewer pounds of prepared food products sold.
<PAGE>
The Company's cost of sales for fiscal 1999 as compared to fiscal 1998 increased
$44.7 million to $514.2 million. Cost of sales of poultry products increased
$70.2 million or 18.2% during fiscal 1999. The increase in pounds of poultry
products sold of 24.0% and decreases in the cash market prices for corn and
soybean meal of 13.0% and 17.7%, respectively, were the primary factors
resulting in the net increase in cost of sales of poultry products during fiscal
1999 as compared to fiscal 1998. Cost of sales of prepared food products sold
decreased approximately $25.5 million or 30.5% during fiscal 1999 as compared to
fiscal 1998. This decrease is primarily from the planned decrease in the pounds
of prepared food products sold and lower prices of chicken products which are a
major ingredient in many of the products sold by the prepared foods division.
Selling, general and administrative expenses for fiscal 1999 increased $1.7
million, or 8.5%, as compared to fiscal 1998. This increase reflects the
additional advertising and marketing costs incurred during fiscal 1999 as the
Company shifted poultry production from the fast food market segments to the
chill pack and big bird debone market segments. In addition, the increase
reflects certain of the Company's cost of modifications to its information
technology systems that were expensed during fiscal 1999.
The Company's operating income during fiscal 1999 decreased $8.8 million as
compared to fiscal 1998. The weakness in the poultry market during the second
half of fiscal 1999 as compared to the same period during fiscal 1998 more than
offset the advantage of the lower cost of feed grains.
Interest expense decreased $1.3 million as a result of lower outstanding debt
during fiscal 1999 as compared to fiscal 1998.
The effective tax rate during fiscal 1999 was approximately 37.8% as compared to
37.4% during fiscal 1998.
Liquidity and Capital Resources
As of October 31, 2000, the Company's working capital was $71.3 million and its
current ratio was 2.9 to 1, as compared to working capital of $67.3 million and
a current ratio of 3.1 to 1 at October 31, 1999. During the year ended October
31, 2000, the Company spent approximately $16.6 million on planned capital
projects and $2.5 million to purchase 299,500 shares of its Common Stock under
its existing stock repurchase plan.
The Company's capital budget for fiscal 2001 is approximately $11.7 million.
Included in the fiscal 2001 budget are items that include cost of renovations,
changes and additions to existing processing facilities to allow better product
flows and product mix for more product flexibility. The Company's capital
expenditures for fiscal 2001 are expected to be funded from working capital and
cash flows from operations; however, if needed the Company has $28.0 million
available under its revolving credit facility as of October 31, 2000.
Item 7A. Quantitative and Qualitative Disclosure About Market Risk.
Market Risk
The Company's interest expense is sensitive to changes in the general level of
U.S. interest rates. The Company maintains certain of its debt as fixed rate in
nature to mitigate the impact of fluctuations in interest rates. The fair value
of the Company's fixed rate debt approximates the carrying amount at October 31,
2000. Management believes the potential effects of near-term changes in interest
rates on the Company's fixed rate debt is not material.
The Company is a party to no other market risk sensitive instruments requiring
disclosure.
<PAGE>
Item 8. Financial Statements and Supplementary Data.
<TABLE>
Sanderson Farms, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
<CAPTION>
October 31
2000 1999
- -----------------------------------------------------------------------------------------------
(In thousands)
<S> <C> <C>
Assets
Current assets:
Cash and temporary cash investments ............................$ 8,643 $ 7,052
Accounts receivable, less allowance of $460,000 in
2000 and $249,000 in 1999 .................................... 37,038 36,577
Inventories .................................................... 50,262 47,634
Refundable income taxes ....................................... 3,783 426
Prepaid expenses .............................................. 8,308 7,503
--------- ---------
Total current assets ................................................ 108,034 99,192
Property, plant and equipment:
Land and buildings ............................................. 128,738 125,337
Machinery and equipment ....................................... 240,106 230,939
--------- ---------
368,844 356,276
Accumulated depreciation ....................................... (195,689) (173,204)
- ------------------------------------------------------------------------------ ---------
173,155 183,072
Other assets ........................................................ 667 1,246
---------
Total assets ........................................................$ 281,856 $ 283,510
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable ...............................................$ 17,507 $ 12,505
Accrued expenses ............................................... 15,135 15,372
Current maturities of long-term debt ........................... 4,058 4,043
--------- ---------
Total current liabilities ........................................... 36,700 31,920
Long-term debt, less current maturities ............................. 107,491 104,651
Claims payable ...................................................... 1,800 1,100
Deferred income taxes ............................................... 15,850 14,995
Stockholders' equity:
Preferred Stock:
Series A Junior Participating Preferred Stock, $100
par value: authorized shares-500,000; none issued
Par value to be determined by the Board of Directors:
authorized shares-4,500,000; none issued
Common Stock, $1 par value: authorized shares-100,000,000;
issued and outstanding shares-13,632,955 in 2000 and
13,932,455 in 1999 ...................................... 13,633 13,932
Paid-in capital ................................................ 3,616 5,835
Retained earnings .............................................. 102,766 111,077
---------
Total stockholders' equity .......................................... 120,015 130,844
--------- ---------
Total liabilities and stockholders' equity ..........................$ 281,856 $ 283,510
========= =========
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
Sanderson Farms, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
Years Ended October 31
2000 1999 1998
(In thousands, except per share data)
<S> <C> <C> <C>
Net sales .....................................................$ 605,911 $ 559,031 $ 521,394
Cost and expenses:
Cost of sales ............................................... 580,136 514,162 469,429
Selling, general and administrative ......................... 26,363 21,861 20,143
------ ------ ------
606,499 536,023 489,572
------- ------- -------
Operating income (loss) ....................................... (588) 23,008 31,822
Other income (expense):
Interest income ............................................. 213 266 341
Interest expense ............................................ (8,195) (6,384) (7,721)
Other ....................................................... 69 56 (86)
-- -- ---
(7,913) (6,062) (7,466)
------ ------ ------
Income (loss) before income taxes and cumulative effect
of accounting change ........................................ (8,501) 16,946 24,356
Income tax expense (benefit) .................................. (3,164) 6,400 9,100
------ ----- -----
Income (loss) before cumulative effect of accounting change ... (5,337) 10,546 15,256
Cumulative effect of accounting change (net of income
taxes of $140,000) .......................................... (234) 0 0
-------- ---- - -
Net income (loss) .............................................$ (5,571) $ 10,546 $ 15,256
========= ========= ========
Basic and diluted net income (loss) per share:
Income (loss) before cumulative
effect of accounting change ...............................$ (.39) $ .75 $ 1.06
Cumulative effect of accounting change ...................... (.02) 0 0
---- - -
Net income (loss) per share .................................$ (.41) $ .75 $ 1.06
========= ========= =========
Weighted average shares outstanding:
Basic ....................................................... 13,726 14,068 14,369
====== ====== ======
Diluted ..................................................... 13,726 14,121 14,426
====== ====== ======
</TABLE>
See accompanying notes.
<PAGE>
Sanderson Farms, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
Total
Common Stock Paid-in Retained Stockholders'
Shares Amount Capital Earnings Equity
<CAPTION>
------------------------------------------------------------------------------
(In thousands, except shares and per share amounts)
<S> <C> <C> <C> <C> <C>
Balance at November 1, 1997 14,367,580 $14,368 $11,447 $ 90,956 $116,771
Net income for year 15,256 15,256
Cash dividends ($.20 per share) (2,874) (2,874)
Issuance of common stock 6,000 6 58 64
Principal payments received on note
receivable from ESOP 265 265
--------------------------------------------------------------------------------
Balance at October 31, 1998 14,373,580 14,374 11,770 103,338 129,482
Net income for year 10,546 10,546
Cash dividends ($.20 per share) (2,807) (2,807)
Issuance of common stock 36,875 36 378 414
Purchase and retirement of
common stock (478,000) (478) (6,438) (6,916)
Principal payments received on note
receivable from ESOP 125 125
--------------------------------------------------------------------------------
Balance at October 31, 1999 13,932,455 13,932 5,835 111,077 130,844
Net loss for year (5,571) (5,571)
Cash dividends ($20 per share) (2,740) (2,740)
Purchase and retirement of
common stock (299,500) (299) (2,219) (2,518)
---------------------------------------------------------------------------------
Balance at October 31, 2000 $13,632,955 $13,633 $ 3,616 $102,766 $120,015
=================================================================================
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
SANDERSON FARMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Years Ended October 31
2000 1999 1998
(In thousands)
<S> <C> <C> <C>
Operating activities
Net income (loss) $ (5,571) $ 10,546 $ 15,256
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Cumulative effect of accounting change 374 0 0
Depreciation and amortization 26,432 24,736 23,241
Provision for losses on accounts receivable 1,413 124 240
Deferred income taxes 340 600 2,710
Change in assets and liabilities:
Increase in accounts receivable (1,874) (5,678) (329)
(Increase) decrease in inventories (2,628) (4,755) 1,331
(Increase) decrease in prepaid expenses (3,647) 263 63
(Increase) decrease in other assets 30 (422) 329
Increase in accounts payable 5,002 6,612 281
Increase (decrease) in accrued expenses and claims payable 463 (234) 7,161
--- ---- -----
Total adjustments 25,905 21,246 35,027
------ ------ ------
Net cash provided by operating activities 20,334 31,792 50,283
Investing activities
Capital expenditures (16,557) (28,627) (23,673)
Net proceeds from sale of property and equipment 217 474 202
--- --- ---
Net cash used in investing activities (16,340) (28,153) (23,471)
Financing activities
Long-term borrowings 0 20,000 0
Net change in revolving credit 6,000 (7,000) (19,000)
Principal payments on long-term debt (2,950) (3,844) (2,998)
Principal payments on capital lease (195) (185) (174)
Principal payments received on note
receivable from ESOP 0 125 265
Dividends paid (2,740) (2,807) (2,874)
Purchase and retirement of common stock (2,518) (6,916) 0
Net proceeds from common stock issued 0 414 64
- --- --
Net cash used in financing activities (2,403) (213) (24,717)
------ ---- -------
Net increase in cash and temporary cash investments 1,591 3,426 2,095
Cash and temporary cash investments
at beginning of year 7,052 3,626 1,531
----- ----- -----
Cash and temporary cash investments
at end of year $ 8,643 $ 7,052 $ 3,626
======== ======== ========
Supplemental disclosure of cash flow information:
Income taxes paid $ 397 $ 10,459 $ 2,834
======== ======== ========
Income taxes refunded $ 464 $ 0 $ 2,474
======== ======== ========
Interest paid $ 8,728 $ 5,844 $ 7,880
======== ======== ========
</TABLE>
See accompanying notes.
<PAGE>
Sanderson Farms, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Significant Accounting Policies
Principles of Consolidation: The consolidated financial statements include
the accounts of Sanderson Farms, Inc.(the "Company") and its wholly-owned
subsidiaries. All significant intercompany transactions and accounts have been
eliminated in consolidation.
Business: The Company is engaged in the production, processing, marketing and
distribution of fresh and frozen chicken and other prepared food items. The
Company's net sales and cost of sales are significantly affected by market price
fluctuations of its principal products sold and of its principal ingredients,
corn and other grains.
The Company sells to retailers, distributors and fast food operators primarily
in the southern and western United States. Revenue is recognized when product is
shipped to customers. Revenue on certain international sales is recognized upon
transfer of title, which may occur after shipment. Management periodically
performs credit evaluations of its customers' financial condition and generally
does not require collateral. Shipping and handling costs are included as a
component of cost of sales.
Use of Estimates: The preparation of the consolidated financial statements in
conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the amounts
reported in the consolidated financial statements and accompanying notes. Actual
results could differ from those estimates.
Temporary Cash Investments: Temporary cash investments include investment
agreements for securities purchased under agreements to resell with a maturity
of one day.
Inventories: Processed food and poultry inventories and inventories of feed,
eggs, medication and packaging supplies are stated at the lower of cost
(first-in, first-out method) or market.
Live poultry inventories of broilers are stated at the lower of cost or market
and breeders at cost less accumulated amortization. The costs associated with
breeders, including breeder chicks, feed, medicine and grower pay, are
accumulated up to the production stage and amortized over nine months using the
straight-line method.
Property, Plant and Equipment: Property, plant and equipment is stated at cost.
Depreciation of property, plant and equipment is provided by the straight-line
and units of production methods over the estimated useful lives of 19 to 39
years for buildings and 3 to 7 years for machinery and equipment.
Impairment of Long-Lived Assets: The Company continually reevaluates the
carrying value of its long-lived assets for events or changes in circumstances
which indicate that the carrying value may not be recoverable. As part of this
reevaluation, the Company estimates the future cash flows expected to result
from the use of the asset and its eventual disposal. If the sum of the expected
future cash flows (undiscounted and without interest charges) is less than the
carrying amount of the asset, an impairment loss is recognized through a charge
to operations.
Income Taxes: Deferred income taxes are accounted for using the liability method
and relate principally to cash basis temporary differences and depreciation
expense accounted for differently for financial and income tax purposes.
Effective November 1, 1988, the Company changed from the cash to the accrual
basis of accounting for its farming subsidiary. The Taxpayer Relief Act of 1997
(the "Act") provides that the taxes on the cash basis temporary differences as
of that date are payable over 20 years beginning in fiscal 1998 or in full in
the first fiscal year in which the Company fails to qualify as a "Family Farming
Corporation." The Company will continue to qualify as a "Family Farming
Corporation" provided there are no changes in ownership control, which
management does not anticipate during fiscal 2001.
Stock Based Compensation: The Company accounts for stock option grants in
accordance with APB Opinion No. 25, "Accounting for Stock Issued to Employees."
Earnings Per Share: Basic earnings per share is based upon the weighted average
number of common shares outstanding during the year. Diluted earnings per share
includes any dilutive effects of options, warrants, and convertible securities.
Fair Value of Financial Instruments: The carrying amounts for cash and temporary
cash investments approximate their fair values. The carrying amounts of the
Company's borrowings under its credit facilities and long-term debt also
approximate the fair values based on current rates for similar debt.
Impact of Recently Issued Accounting Standards: Effective in fiscal 2001, FASB
No. 133, "Accounting for Derivative Instruments and Hedging Activities",
requires all derivatives to be recorded on the balance sheet at fair value. The
effect of adopting this statement on the consolidated earnings and financial
position of the Company will be immaterial.
In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-5, "Reporting the Costs of Start-Up Activities," which
requires that costs related to start-up activities be expensed as incurred.
Prior to October 31, 1999, the Company capitalized its start-up costs. The
Company adopted the provisions of the SOP in its consolidated financial
statements in the first quarter of fiscal 2000. The effect of adoption of SOP
98-5 was to record a charge for the cumulative effect of an accounting change of
$234,000 (net of income taxes of $140,000) or $.02 per basic and diluted
earnings per share.
<PAGE>
2. Inventories
Inventories consisted of the following:
October 31
2000 1999
---- ----
(In thousands)
Live poultry-broilers and breeders $30,004 $29,323
Feed, eggs and other 6,651 6,494
Processed poultry 5,924 3,037
Processed food 3,785 4,900
Packaging materials 3,898 3,880
-------- -------
$50,262 $47,634
====== ======
3. Long-term Credit Facilities and Debt
Long-term debt consisted of the following:
October 31
2000 1999
---- ----
(In thousands)
Revolving credit agreement with banks
(weighted average rate of 7.6% at
October 31, 2000) $72,000 $66,000
Term loan with an insurance company,
accruing interest at 7.49%; due in
annual principal installments of $2,850,000 8,600 11,450
Term loan with an insurance company,
accruing interest at 6.65%; due in annual
principal installments of $2,857,000,
beginning in July 2004 20,000 20,000
Note payable, accruing interest at 5%;
due in annual installments of $161,400,
including interest, maturing in 2009 1,169 1,269
6% Mississippi Business Investment Act
bond-capital lease obligation 3,480 3,675
Robertson County, Texas, Industrial
Revenue Bonds accruing interest
at a variable rate, 3.6% at October
31, 2000; due in annual principal
installments of $900,000 6,300 6,300
-------- ----- -----
111,549 108,694
Less current maturities of long-term debt 4,058 4,043
----- -----
$107,491 $104,651
======== ========
The Company has a $100.0 million ($28.0 million available at October 31, 2000)
revolving credit agreement with five banks. The revolver extends to fiscal 2004,
when the outstanding borrowings may be converted to a term loan payable in equal
semi-annual installments over four years. Borrowings are at prime or below and
may be prepaid without penalty. A commitment fee of .20% is payable quarterly on
the unused portion of the revolver. Covenants related to the revolving credit
and the term loan agreements include requirements for maintenance of minimum
consolidated net working capital, tangible net worth, debt to total
capitalization and current ratio. The agreements also establish limits on
dividends, assets that can be pledged and capital expenditures.
Property, plant and equipment with a carrying value of approximately $3.1
million is pledged as collateral to a note payable and the capital lease
obligation.
The aggregate annual maturities of long-term debt at October 31, 2000 are as
follows (in thousands):
Fiscal Year Amount
2001 $ 4,058
2002 4,078
2003 4,144
2004 24,264
2005 24,285
Thereafter 50,720
--------
$111,549
========
4. Income Taxes
Income tax expense (benefit) consisted of the following:
Years Ended October 31
2000 1999 1998
------------------------------
(In thousands)
Current:
Federal $(3,600) $ 5,200 $ 5,900
State (44) 600 490
-----------------------------
(3,644) 5,800 6,390
Deferred:
Federal 325 486 2,197
State 15 114 513
-----------------------------
340 600 2,710
-----------------------------
(3,304) 6,400 9,100
Less income tax expense applicable
to cumulative effect of accounting
change 140 0 0
-----------------------------
Income tax expense (benefit) applicable
to income (loss) before cumulative
effect of accounting change $(3,164) $ 6,400 $ 9,100
=============================
<PAGE>
Significant components of the Company's deferred tax assets and liabilities were
as follows:
October 31,
2000 1999
-------------------
(In thousands)
Deferred tax liabilities:
Cash basis temporary differences $ 3,309 $ 3,503
Property, plant and equipment 13,694 12,371
Prepaid and other assets 143 250
-------------------
Total deferred tax liabilities 17,146 16,124
Deferred tax assets:
Accrued expenses and accounts receivable 2,921 2,017
State net operating loss and credit carryforwards 275 497
-------------------
Total deferred tax assets 3,196 2,514
-------------------
Net deferred tax liabilities $13,950 $13,610
===================
Current deferred tax assets
(included in prepaid expenses) $ 1,900 $ 1,385
-------------------
Long-term deferred tax liabilities 15,850 14,995
-------------------
Net deferred tax liabilities $13,950 $13,610
===================
The differences between the consolidated effective income tax rate and the
federal statutory rate are as follows:
Years Ended October 31
2000 1999 1998
---------------------------
(In thousands)
Income taxes (benefit) at statutory rate $(3,018) $ 5,762 $ 8,525
State income taxes (benefit) (19) 731 1,041
State income tax credit 0 (260) (389)
Other, net (267) 167 (77)
------------------------------
Income tax expense (benefit) $(3,304) $ 6,400 $ 9,100
==============================
5. Employee Benefit Plans
The Company has an Employee Stock Ownership Plan ("ESOP") covering substantially
all employees. Contributions to the ESOP are determined at the discretion of the
Company's Board of Directors. Total contributions to the ESOP were $840,000 and
$1,100,000 in fiscal 1999 and 1998, respectively. The Company did not make a
contribution to the ESOP in fiscal 2000.
The Company has a 401(k) plan which covers substantially all employees after six
months of service. Participants in the plan may contribute up to the maximum
allowed by IRS regulations. Effective July 1, 2000, the Company matches 100% of
employee contributions to the 401(k) plan up to 3% of each employee's
compensation and 50% of employee contributions between 3% and 5% of each
employee's compensation. The Company's contributions to the 401(k) plan totaled
$457,000 in fiscal 2000.
<PAGE>
6. Stock Option Plan
The Company has elected to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" and related interpretations in
accounting for its employee stock options because the alternative fair value
accounting provided for under FASB Statement No. 123, "Accounting for
Stock-Based Compensation," requires use of option valuation models that were not
developed for use in valuing employee stock options.
Under the Company's Stock Option Plan, 750,000 shares of Common Stock have been
reserved for grant to key management personnel. Options granted in fiscal 2000
and 1998 have ten-year terms and vest over four years beginning one year after
the date of grant. No options were granted in fiscal 1999.
Pro forma information regarding net income (loss) and earnings (loss) per share
is required by Statement 123, and has been determined as if the Company had
accounted for its employee stock options under the fair value method of that
Statement. The fair value for these options was estimated at the date of grant
using a Black-Scholes option pricing model with the following weighted average
assumptions: risk-free interest rate of 6.6% in fiscal 2000 and 4.4% in fiscal
1998; dividend yields of 2.7% for fiscal 2000 and 1.5% for fiscal 1998;
volatility factors of the expected market price of the Company's Common Stock of
.302 for fiscal 2000 and .260 for fiscal 1998; and a weighted-average expected
life of the options of four years.
The weighted-average fair value of options granted was $1.94 in fiscal 2000 and
$3.14 in fiscal 1998. The pro forma effect of the estimated fair value of the
options granted was insignificant to the Company's net income (loss) and net
income (loss) per share in fiscal 2000, 1999 and 1998.
A summary of the Company's stock option activity and related information is as
follows:
<TABLE>
<CAPTION>
Weighted-Average
Shares Exercise Price
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Outstanding at November 1, 1997 538,000 $12.51
Granted 194,000 13.00
Exercised (7,000) 10.77
Forfeited (29,000) 12.87
Outstanding at November 1, 1998 696,000 12.64
Exercised (69,375) 10.82
Forfeited (44,625) 12.92
------
Outstanding at October 31, 1999 582,000 12.90
Granted 141,000 7.47
Forfeited (84,000) 11.60
Outstanding at October 31, 2000 639,000 11.83
</TABLE>
The exercise price of the options outstanding as of October 31, 2000 ranged from
$7.47 to $15.00 per share. At October 31, 2000, the weighted average remaining
contractual life of the options outstanding was 5 years and 371,500 options were
exercisable.
In fiscal 2000, the Company granted 141,000 "phantom shares" to certain key
management personnel. Upon exercise of a phantom share, the holder will receive
a cash payment or an equivalent number of shares of the Company's Common Stock,
at the Company's option, equal to the excess of the fair market value of the
Company's Common Stock over the phantom share award value of $7.47 per share.
The phantom shares have a ten-year term and vest over four years beginning one
year after the date of grant. No compensation expense was recognized applicable
to the phantom shares in fiscal 2000 because the award value exceeded the fair
market value of the Company's Common Stock.
7. Shareholder Rights Agreement
On April 22, 1999, the Company adopted a shareholder rights agreement (the
"Agreement") with similar terms as the previous one. Under the terms of the
Agreement a one share purchase ("right") was declared as a dividend for each
share of the Company's Common Stock outstanding on May 4, 1999. The rights do
not become exercisable and certificates for the rights will not be issued until
ten business days after a person or group acquires or announces a tender offer
for the beneficial ownership of 20% or more of the Company's Common Stock.
Special rules set forth in the Agreement apply to determine beneficial ownership
for members of the Sanderson family. Under these rules, such a member will not
be considered to beneficially own certain shares of Common Stock, the economic
benefit of which is received by any member of the Sanderson family, and certain
shares of Common Stock acquired pursuant to employee benefit plans of the
Company.
The exercise price of a right has been established at $75. Once exercisable,
each right would entitle the holder to purchase one one-hundredth of a share of
Series A Junior Participating Preferred Stock, par value $100 per share. The
rights may be redeemed by the Board of Directors at $.01 per right prior to an
acquisition, through open market purchases, a tender offer or otherwise, of the
beneficial ownership of 20% or more of the Company's Common Stock, or by
two-thirds of the Directors who are not the acquirer, or an affiliate of the
acquirer prior to the acquisition of 50% or more of the Company's Common Stock
by such acquirer. The rights expire on May 4, 2009.
8. Other Matters
The Company self-insures for losses related to workers' compensation claims with
excess coverage by underwriters on a per claim and aggregate basis. Claims
payable are based upon estimates of the ultimate cost of reported claims by the
Company's claims administrator and totaled $5,193,000 and $4,227,000 at October
31, 2000 and 1999, respectively. Claims payable of $3,393,000 and $3,127,000 at
October 31, 2000 and 1999, respectively, are included in accrued expenses in the
accompanying consolidated balance sheets because the amounts are expected to be
paid within one year from the respective balance sheet dates. The ultimate cost
for outstanding claims may vary significantly from current estimates.
No customer accounted for more than 10% of consolidated sales for the years
ended October 31, 2000, 1999 and 1998. Export sales were less than 10% of
consolidated sales in each year presented.
On June 15, 2000, the Company delivered to two banks a guaranty of $3.2 million
on a $13.5 million loan (the "Loan") under a credit agreement from those banks
to the Estate of Joe Frank Sanderson, a co-founder and former member of the
Company's Board of Directors. The Estate collateralized the Loan with 3,229,672
shares of Common Stock of the company and agreed to indemnify the Company
against any loss from such guaranty.
On April 5, 2000, thirteen individuals claiming to be former hourly employees of
the Company filed a lawsuit in the United States District Court for the Southern
District of Texas claiming that the Company violated requirements of the Fair
Labor Standards Act. The Plaintiffs' lawsuit also purported to represent
similarly situated workers who have filed or will file consents to join the
suit. At filing, 109 individuals had consented to join the lawsuit.
The lawsuit alleges that the Company (1) failed to pay its hourly employees "for
time spent donning and doffing sanitary and safety equipment, obtaining and
sharpening knives and scissors, working in the plant and elsewhere before and
after the scheduled end of the shift, cleaning safety equipment and sanitary
equipment, and walktime," and (2) altered employee time records by using an
automated time keeping system. Plaintiffs further claim that the Company
concealed the alteration of time records and seek on that account an equitable
tolling of the statute of limitations beyond the three-year limitation period
back to the date the automated time-keeping system was allegedly implemented.
Plaintiffs seek an unspecified amount of unpaid hourly and overtime wages plus
an equal amount as liquidated damages, for present and former hourly employees
who file consents to join the lawsuit. There were 7,267 hourly workers employed
at the Company's processing plants as of October 31, 2000.
On May 15, 2000, an employee of the Company filed suit against the Company in
the United States District Court for the Southern District of Texas on behalf of
live-haul drivers to recover an unspecified amount of overtime compensation and
liquidated damages. Approximately 18 employees have filed consents to this
lawsuit.
Previously, the United States Department of Labor ("DOL") filed suit against the
Company in the United States District Court for the Southern District of
Mississippi, Hattiesburg Division. The lawsuit was brought under the Fair Labor
Standards Act and seeks recovery of overtime compensation, together with an
equal amount as liquidated damages, for thirty-two live-haul employees (i.e.,
live-haul drivers, chicken catchers, and loader-operators) employed by the
Company. The lawsuit asserted that additional overtime compensation and
liquidated damages may be owed to certain employees. The lawsuit also seeks an
injunction to prevent the withholding of overtime compensation to live-haul
employees in the future.
The Company is vigorously defending both suits, and has denied any and all
liability. Numerous affirmative defenses have been asserted against the
plaintiff(s) in these matters, including the Company's reliance upon, and
compliance with, the DOL's longstanding policy and practice of treating
live-haul workers as exempt under the Fair Labor Standards Act. Both cases are
in the early stages of discovery. Docket call concerning trial of the employees'
suit has been set for July 27, 2001, while no trial date has been set for the
DOL suit.
Substantially similar lawsuits have been filed against other integrated poultry
companies. In addition, organizing activity conducted by the representatives or
affiliates of the United Food and Commercial Workers Union against the poultry
industry has encouraged worker participation in this and the other lawsuits. The
Company believes it has substantial defenses and is vigorously defending these
lawsuits.
On September 26, 2000, three current and former contract growers filed suit
against the Company in the Chancery Court of Lawrence County, Mississippi. The
plaintiffs filed suit on behalf of "all Mississippi residents to whom, between,
on or about November 1981 and the present, the Company induced into growing
chickens for it and paid compensation under the so called `ranking system'."
Plaintiffs allege that the Company "has defrauded plaintiffs by unilaterally
imposing and utilizing the so called `ranking system' which wrongfully places
each grower into a competitive posture against other growers and arbitrarily
penalizes each less successful grower based upon criteria which were never
revealed, explained or discussed with plaintiffs." Plaintiffs further allege
that they are required to accept chicks which are genetically different and with
varying degrees of healthiness, and feed of dissimilar quantity and quality.
Finally, plaintiffs allege that they are ranked against each other although they
possess dissimilar facilities, equipment and technology. Plaintiffs seek an
unspecified amount in compensatory and punitive damages, as well as varying
forms of equitable relief.
The Company is vigorously defending this action, and has removed the case to the
United States District Court for the Southern District of Mississippi. The
plaintiffs have filed a motion to remand, which is currently pending before the
Court. The Company has invoked the arbitration provision present in the
contracts signed by each of the plaintiffs.
The Company is also involved in various claims and litigation incidental to its
business. Although the outcome of such matters cannot be determined with
certainty, management, upon the advice of counsel, is of the opinion that the
final outcome should not have a material effect on the Company's consolidated
results of operation or financial position.
<PAGE>
Item 9. Changes in and Disagreements With Accountants
on Accounting and Financial Disclosure.
Not applicable.
PART III
Item 10. Directors and Executive
Officers of the Registrant.
As permitted by General Instruction G(3) to Form 10-K,
reference is made to the information concerning the Directors of the
Registrant and the nominees for election as Directors appearing in the
Registrant's definitive proxy statement filed or to be filed with the
Commission pursuant to Rule 14a-6(b). Such information is incorporated herein
by reference to the definitive proxy statement.
Information concerning the executive officers of the Registrant is set forth in
Item 4A of Part I of this Annual Report.
Item 11. Executive Compensation.
As permitted by General Instruction G(3) to Form 10-K,
reference is made to the information concerning remuneration of Directors and
executive officers of the Registrant appearing in the Registrant's definitive
proxy statement filed or to be filed with the Commission pursuant to Rule
14a-6(b). Such information is incorporated herein by reference to the definitive
proxy statement.
Item 12. Security Ownership of Certain
Beneficial Owners and Management.
As permitted by General Instruction G(3) to Form 10-K,
reference is made to the information concerning beneficial ownership of the
Registrant's Common Stock, which is the only class of the Registrant's voting
securities, appearing in the Registrant's definitive proxy statement filed or to
be filed with the Commission pursuant to Rule 14a-6(b). Such information is
incorporated herein by reference to the definitive proxy statement.
Item 13. Certain Relationships and Related Transactions.
As permitted by General Instruction G(3) to Form 10-K,
information, if any, required to be reported by Item 13 of Form 10-K, with
respect to transactions with management and others, certain business
relationships, indebtedness of management, and transactions with promoters, is
set forth in the Registrant's definitive proxy statement filed or to be filed
with the Commission pursuant to Rule 14a-6(b). Such information, if any, is
incorporated herein by references to the definitive proxy statement.
PART IV
Item 14. Exhibits, Financial Statement
Schedules, and Reports on Form 8-K.
<PAGE>
(a)1. FINANCIAL STATEMENTS:
The following consolidated financial statements of the
Registrant are included in Item 8:
Consolidated Balance Sheets - October 31, 2000 and 1999
Consolidated Statements of Income - Years ended October 31, 2000, 1999 and 1998
Consolidated Statements of Stockholders' Equity - Years ended October 31,
2000, 1999 and 1998
Consolidated Statements of Cash Flows - Years ended October 31, 2000, 1999
and 1998
Notes to Consolidated Financial Statements - October 31, 2000
(a)2. FINANCIAL STATEMENT SCHEDULES:
The following consolidated financial statement schedules of the
Registrant are included in Item 8:
Schedule II - Valuation and Qualifying Accounts
All other schedules are omitted as they are not applicable or
the required information is set forth in the Financial Statements or notes
thereto.
(a)3. EXHIBITS:
The following exhibits are filed with this Annual Report or are
incorporated herein by reference:
<TABLE>
Exhibit Brief
Number Description
<CAPTION>
<S> <C> <C> <C>
(1) 3-A - Copy of Articles of Incorporation of the Registrant, as amended.
3-B - Copy of Restated By-Laws of the Registrant as of January 8, 1998.
3-B-1 - Copy of Restated By-Laws of the Registrant as of October 23, 2000.
(1) 4 - Copy of Certificate of Designations of Series A Junior Participating Preferred
Stock of the Registrant
(2) 10-A - Copy of Agreement of Purchase and Sale of Assets dated March 10, 1986 among the
Registrant, National Prepared Foods, Inc., Trend Line Corporation, Business
Advisors and Investor, Inc., W. T. Hogg, Jr., W. T. Hogg, Jr. Trust for
Grandchildren, Noreen Mary Hogg Case Trust Under Agreement December 20, 1972
and Sherrie Ann Hogg Ford Trust Under Agreement December 20, 1972.
(2) 10-B - Copy of Contract dated July 31, 1964 between the Registrant and the City of
Laurel, Mississippi.
(2) 10-B-1 - Copy of Contract Amendment dated December 1, 1970 between the Registrant and the City of
Laurel, Mississippi.
(2) 10-B-2 - Copy of Contract Amendment dated June 11, 1985 between the Registrant and the City of
Laurel, Mississippi.
(2) 10-B-3 - Copy of Contract Amendment dated October 7, 1986 between the Registrant and the City of
Laurel, Mississippi.
(8) 10-B-4 - Copy of Contract Amendment dated August 16, 1994 between the Registrant and the City of
Laurel, Mississippi.
(2) 10-C - Copy of Lease Agreement dated May 19, 1964 among the Town of Collins, Covington
County, Mississippi and Mississippi Federated Cooperatives ALL.
(2) 10-C-1 - Copy of Assignment of Lease and Leasehold Estate, and Conveyance of Leaseholder
Improvements and Other Properties, Reserving a Purchase Money Security
Interest, dated December 21, 1981 between M.C. Services (ALL) and Sanderson
Farms, Inc. (Processing Division).
(2) 10-D - Copy of Lease Agreement dated November 28, 1962 between the Board of
Supervisors of Covington County, Mississippi acting for and on behalf of
Supervisors Districts 1, 2, 3 and 5 of Covington County, Mississippi and
Mississippi Federated Cooperatives, ALL.
(2) 10-D-1 - Copy of Contract dated October 2, 1972 between the Board of Supervisors of Covington
County, Mississippi, acting for and on behalf of Covington County, Mississippi
and M.C. Services (ALL).
(2) 10-D-2 - Copy of Lease Agreement dated May 1, 1976 between Supervisors Districts One, Two, Three and
Five of Covington County, Mississippi and M.C. Services (ALL).
(2) 10-D-3 - Copy of Assignment of Leases and Leasehold Estate, and Conveyance of Leasehold Improvements
and Other Properties, Reserving a Purchase Money Security Interest, dated
December 21, 1981 between M.C. Services (ALL) and Sanderson Farms, Inc.
(Processing Division).
(2) 10-E - Copy of Agreement dated December 1, 1986, between Sanderson Farms, Inc.
(Hammond Processing Division) and United Food and Commercial Workers Local
Union 210 affiliated with the United Food and Commercial Workers International
Union.
(5) 10-E-1 - Copy of Agreement dated February 14, 1990 between Sanderson Farms, Inc. (Hammond Processing
Division) and United Food and Commercial Workers Local Union 210, affiliated
with the United Food and Commercial Workers International Union.
(8) 10-E-2 - Copy of Agreement effective November 6, 1994 between Sanderson Farms, Inc.
(Hammond Processing Division) and United Food and Commercial Workers Local
Union 210, affiliated with the United Food and Commercial Workers
International Union.
(9) 10-E-3 - Copy of Agreement effective July 15, 1995 between Sanderson Farms, Inc. (Hazlehurst
Processing Division) and Laborers' International Union of North America,
Professional Employees Local Union #697, AFL-CIO.
(9) 10-E-4 - Copy of Agreement effective September 9, 1995 between Sanderson Farms, Inc. (Collins
Processing Division) and Laborers' International Union of North America,
Professional Employees Local Union #697, AFL-CIO.
10-E-5 - Copy of Agreement effective November 1, 1998 between Sanderson Farms, Inc.
(Hammond Processing Division) and United Food and Commercial Workers Local
Union #210 affiliated with the United Food and Commercial Workers
International Union.
10-E-6 - Copy of Agreement effective July 26, 1999 between Sanderson Farms, Inc.
(Hazlehurst Processing Division) and Laborers' International Union of North
America, Professional Employees Local Union #697, AFL-CIO.
10-E-7 - Copy of Agreement effective January 13, 2000 between Sanderson Farms, Inc.
(Collins Processing Division) and Laborers' International Union of North
America, Professional Employees Local Union #697, AFL-CIO.
10-E-8 - Copy of Agreement effective October 7, 1999 between Sanderson Farms, Inc.
(Brazos Processing Division) and the United Food and Commercial Workers
Local Union #408, AFL-CIO.
10-E-9 - Copy of Agreement effective January 1, 2001 between Sanderson Farms,
Inc. (Brazos Production Division) and the Teamsters International
Local #968.
(2) 10-F - Copy of Employee Stock Ownership Plan and Trust Agreement of Sanderson Farms,
Inc. and Affiliates.
(2) 10-F-1 - Copy of Amendment One to the Employee Stock Ownership Plan and Trust
Agreement of Sanderson Farms, Inc. and Affiliates.
(3) 10-F-2 - Copy of Amendment Two to the Employee Stock Ownership Plan and Trust
Agreement of Sanderson Farms, Inc. and Affiliates.
(2) 10-G - Copy of General Employee's Profit Sharing-Retirement Trust Agreement of
Sanderson Farms, Inc. and Affiliates.
(6) 10-H - Copy of Sanderson Farms, Inc. Performance Incentive Program effective January
1, 1991.
(6) 10-H-1 - Copy of Sanderson Farms, Inc. Performance Incentive Program for Sanderson
Farms, Inc. (Foods Division) effective November 1, 1990.
(6) 10-H-2 - Copy of Sanderson Farms, Inc. Performance Incentive Program for Sanderson
Farms, Inc.(Foods Division) Retail Entree effective November 1, 1990.
(8) 10-H-3 - Copy of Sanderson Farms, Inc. Bonus Award Program effective November 1, 1993.
(10) 10-I - Copy of Sanderson Farms, Inc. and Affiliates Stock Option Plan.
(5) 10-J - Copy of Memorandum of Agreement dated as of June 13, 1989, between Pike
County, Mississippi and the Registrant.
(6) 10-K - Copy of Wastewater Treatment Agreement between the City of Magnolia,
Mississippi and the Registrant dated August 19, 1991.
(6) 10-L - Copy of Memorandum of Agreement and Purchase Option between Pike County,
Mississippi and the Registrant dated May, 1991.
(7) 10-M - Copy of Lease Agreement between Pike County, Mississippi and the Registrant
dated as of November 1, 1992.
21 - List of subsidiaries of the Registrant.
23 - Consent of Independent Auditors
27 - Copy of Financial Data Schedule
(2) 28-A - Copy of Certificate of Registration of Trademark "Miss Goldy".
(2) 28-B - Copy of Certificate of Registration of Trademark "Wise Choice".
(2) 28-C - Copy of Certificate of Registration of Trademark "Buttercup Farms".
(2) 28-D - Copy of Certificate of Registration of Trademark "Collinswood".
(2) 28-E - Copy of Certificate of Registration of Trademark "Covington Farms".
(2) 28-F - Copy of Certificate of Registration of Trademark "Smart Cuts".
(4) 28-G - Copy of Certificate of Registration of Trademark "Kettle Classics".
(5) 28-H - Copy of Certificate of Registration of Trademark "Sanderson Farms".
</TABLE>
(1) Filed as an exhibit to the Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1989, and incorporated herein by reference.
(2) Filed as an exhibit to the Registrant's Registration Statement on Form S-1
(Commission File No. 33-13141) and incorporated herein by reference.
(3) Filed as an exhibit to the Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1987, and incorporated herein by reference.
(4) Filed as an exhibit to the Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1988, and incorporated herein by reference.
(5) Filed as an exhibit to the Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1990, and incorporated herein by reference.
(6) Filed as an exhibit to the Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1991, and incorporated herein by reference.
(7) Filed as an exhibit to the Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1992, and incorporated herein by reference.
(8) Filed as an exhibit to the Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1994 and incorporated herein by reference.
(9) Filed as an exhibit to the Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1995 and incorporated herein by reference.
(b) REPORTS ON FORM 8-K:
No reports on From 8-K were filed during the fourth quarter of the Fiscal Year
ended October 31, 1999.
(c) Agreements Available Upon Request by the Commission.
---------------------------------------------------
The Registrant is a party to various agreements defining the rights of holders
of long-term debt of the Registrant, but no single agreement authorizes
securities in an amount which exceeds 10% of the total assets of the Company.
Upon request of the Commission, the Registrant will furnish a copy of any such
agreement to the Commission. Accordingly, such agreements are omitted as
exhibits as permitted by Item 601(b)(4)(iii) of Regulation S-K.
<PAGE>
QUALIFICATION BY REFERENCE
Information contained in this Annual Report as to the contents of any contract
or other document referred to or evidencing a transaction referred to is
necessarily not complete, and in each document filed as an exhibit to this
Annual Report or incorporated herein by reference, all such information being
qualified in its entirety by such reference.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Sanderson Farms, Inc.
We have audited the accompanying consolidated balance sheets of Sanderson Farms,
Inc. and subsidiaries as of October 31, 2000 and 1999 and the related
consolidated statements of income, stockholders' equity, and cash flows for each
of the three years in the period ended October 31, 2000. Our audit also included
the financial statement schedule listed in the index under item 14(a).These
financial statements and schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes accessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Sanderson Farms,
Inc. and subsidiaries at October 31, 2000 and 1999, and the consolidated results
of their operations and their cash flows for each of the three years in the
period ended October 31, 2000, in conformity with accounting principles
generally accepted in the United States. Also in our opinion the related
financial statement schedule when considered in relation to the basic financial
statements as a whole, presents fairly in all material respects the information
set forth therein.
/s/Ernst & Young LLP
Jackson, Mississippi
December 7, 2000
<PAGE>
Sanderson Farms, Inc. and Subsidiaries
Valuation and Qualifying Accounts
Schedule II
<TABLE>
COL. A COL. B COL. C COL. D COL. E COL. F
- -----------------------------------------------------------------------------------------------
Balance at Charged to Charged to Balance at
Beginning Costs and Other Deductions End of
Classification of Period Expenses Accounts Describe(1) Period
- -----------------------------------------------------------------------------------------------
(In Thousands)
<CAPTION>
<S> <C> <C> <C> <C>
Year ended October 31, 2000
Deducted from accounts
receivable:
Allowance for doubtful
accounts
Totals $ 249 $1,413 $1,242 $ 420
Year ended October 31, 1999
Deducted from accounts
receivable:
Allowance for doubtful
accounts
Totals $ 249 $ 124 $ 124 $ 249
Year ended October 31, 1998
Deducted from accounts
receivable:
Allowance for doubtful
accounts $ 233 $ 240 $ 224 $ 249
Totals
</TABLE>
(1) Uncollectible accounts written off, net of recoveries
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
SANDERSON FARMS, INC.
Date: January 25, 2001 /s/Joe F. Sanderson, Jr.
Joe F. Sanderson, Jr.
Chairman of the Board
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities as of the dates indicated.
/s/ Joe F. Sanderson, Jr. 1/25/01 /s/ John H. Baker, III 1/25/01
- -------------------------------------- -----------------------------------
Joe F. Sanderson, Jr., John H. Baker, III,
Chairman of the Board, President Director
and Chief Executive Officer
/s/ William R. Sanderson 1/25/01 /s/ Charles W. Ritter, Jr. 1/25/01
- ------------------------------------- -----------------------------------
William R. Sanderson, Director, Charles W. Ritter, Jr.,
Director of Marketing Director
/s/Hugh V. Sanderson 1/25/01 /s/ Rowan H. Taylor 1/25/01
- ------------------------------------- -----------------------------------
Hugh V. Sanderson, Director, Rowan H. Taylor,
Manager of Customer Relations Director
/s/ Donald W. Zacharias 1/25/01 /s/ Robert Buck Sanderson 1/25/01
- ------------------------------------ ------------------------------------
Donald W. Zacharias, Robert Buck Sanderson, Director,
Director Corporate Live Production Assistant
/s/ Phil K. Livingston 1/25/01 /s/ Lampkin Butts 1/25/01
- ----------------------------------------- ------------------------------------
Phil K. Livingston, Lampkin Butts, Director,
Director Vice President - Sales
/s/ D. Michael Cockrell 1/25/01 /s/James A. Grimes 1/25/01
- --------------------------------------- ------------------------------------
D. Michael Cockrell, James A. Grimes, Secretary
Director, Treasurer and Chief and Chief Accounting Officer
Financial Officer
<PAGE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>CONSENT OF INDEPENDENCE AUDITORS
<TEXT>
Exhibit 23
Consent of Independent Auditors
We consent to the incorporation by reference in Post Effective Amendment No. 1
to Registration Statement (Form S-8 No. 33-67474) pertaining to the Sanderson
Farms, Inc. and Affiliates Stock Option Plan of our report dated December 7,
2000 with respect to the consolidated financial statements and schedule of
Sanderson Farms, Inc. included in the Annual Report (Form 10-K) for the year
ended October 31, 2000.
/s/Ernst & Young LLP
Jackson, Mississippi
January 22, 2001
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>HAMMOND PROCESSING UNION AGREEMENT
<TEXT>
A G R E E M E N T
BETWEEN
SANDERSON FARMS, INC.
(HAMMOND PROCESSING DIVISION)
AND
UNITED FOOD AND COMMERCIAL WORKERS
LOCAL UNION 210
affiliated with the
UNITED FOOD AND COMMERCIAL WORKERS
INTERNATIONAL UNION
November 1, 1998 - November 30, 2001
<PAGE>
TABLE OF CONTENTS
ARTICLE PAGE
- ------- ----
I. AGREEMENT 1
II. RECOGNITION 1
III. MANAGEMENT PREROGATIVES 2
IV. SHOP STEWARDS 2
V. GRIEVANCE PROCEDURE 3
STEP 1 3
STEP 2 4
STEP 3 4
VI. ARBITRATION 5
VII. NO STRIKE - NO LOCK OUT 7
VIII. UNION BULLETIN BOARD 7
IX. HOURS OF WORK 8
X. SENIORITY 10
XI. LEAVES OF ABSENCE 12
XII. SENIORITY LIST 14
XIII. MISCELLANEOUS 15
XIV. VACATIONS 16
XV. INSURANCE 17
XVI. HOLIDAYS 17
XVII. WAGES 19
XVIII. NO DISCRIMINATION 20
XIX. AUTHORIZATION FOR REPRESENTATION AND CHECK-OFF 21
XX. UNION SECURITY 21
XXI. PROFIT SHARING -- RETIREMENT 22
XXII. DURATION OF AGREEMENT 22
SIGNATURES 23
APPENDIX A 24
APPENDIX B 26
<PAGE>
288522
ARTICLE I
AGREEMENT
Section 1. This Agreement made and entered into this 1st day of November, 1998,
by and between Sanderson Farms, Inc. (Hammond Processing Division) of Hammond,
Louisiana, hereinafter referred to as the Company or Employer, and United Food
and Commercial Workers Local Union 210, affiliated with the United Food and
Commercial Workers International Union, hereinafter referred to as the Union.
Section 2. The general purpose of this Agreement is to establish just and
equitable terms and conditions of employment and to provide methods for fair and
peaceful adjustment of differences which may arise. It is recognized by the
Agreement to be the respective duty of the Company, the Union and the Employees
to cooperate fully, individually and collectively toward the accomplishment of
said aims.
ARTICLE II
RECOGNITION
Section 1. The Company recognizes the Union as the exclusive bargaining agent
for all production and maintenance employees, including truck drivers, at the
Employer's poultry processing and rendering plant in Hammond, Louisiana, and
excluding office clerical employees, guards and/or watchmen, salesmen,
professional employees, and supervisors as defined in the Act.
<PAGE>
ARTICLE III
MANAGEMENT PREROGATIVES
Section 1. Nothing in this Agreement shall be deemed to limit the Employer in
any way in the exercise of the customary functions of management which are
recognized as the Employer's exclusive responsibility, including, but not
limited to, the right to plan, direct, and control operations, to utilize the
services of contractors, to determine the number, size and location of its
establishments, to close an establishment or departments thereof, to hire, to
promote, to demote, and for proper cause to discipline, suspend or discharge, to
assign and schedule work and transfer employees from one job or department to
another, and to make and enforce reasonable rules and regulations relative to
any and all of these matters or to the management of its operation, provided
that the reasonableness of rules may be tested in the grievance procedure. The
Employer shall be the exclusive judge of all matters pertaining to its
operations and their scheduling and the methods, processes, equipment, means of
operation and size of workforce.
Section 2. The Employer retains all prerogatives and rights of management and
all privileges and responsibilities not specifically limited by this Agreement.
ARTICLE IV
SHOP STEWARDS
Section 1. The Employer recognizes the right of the Union to designate shop
stewards, not to exceed eight (8) in number, who shall be assigned to serve
specific areas of the plant to handle such Union business as may arise. The shop
stewards shall be employees of the Company. The Union shall notify the Company
in writing as to the names of the stewards and of any changes in designation of
stewards.
Section 2. A representative of the Union shall be permitted to enter the plant
at reasonable times, upon Employer's premises and plant, provided such
representative shall in no way interfere with the operations of Employer's
business and shall make arrangements with the Employer's manager.
ARTICLE V
GRIEVANCE PROCEDURE
Section 1. Grievances arising under this contract are herein defined as a claim
by a party to this Agreement or an employee covered by this Agreement that the
Company or the Union has violated a provision of this Agreement.
STEP I
The employee shall discuss the grievance or complaint with the immediate
supervisor within five (5) working days after the event giving rise thereto
occurs, or within five (5) working days following the date on which the grievant
had or reasonably would have had knowledge thereof. In the event the employee so
requests, the appropriate steward shall be present at this step. The supervisor
shall give an answer within five (5) working days after the grievance is
received.
STEP 2
If there is no settlement in Step 1, the grievance may be presented by the
employee and/or shop steward within five (5) working days from the date on which
the supervisor's answer was given in Step 1. The grievance must be presented in
writing to the department superintendent and must state the following
information:
(a) name or names of employee or employees involved; (b) the department or
departments involved; (c) the date and time of the occurrence or discovery
of the grievance; (d) the facts of the incident on which the claim is
based; (e) the specific provision of this Agreement alleged to have been
violated;
(f) the remedy requested.
The department superintendent shall give the Company's answer in writing within
five (5) working days after the grievance is received by the superintendent.
STEP 3
In the event the grievance is not settled in Step 2, then the grievance
may be appealed in writing to the division manager or a designated
representative by the Union to Step 3 within five (5) working days from the
Company's answer in Step 2. The division manager or a designated representative
shall give an answer in writing within five (5) working days from the date of
the appeal. In the event the grievance is not settled then the aggrieved party
or parties shall have the right to request arbitration.
In the event a grievance arises on behalf of the Employer, the matter
shall be presented to the Union Business Agent in writing, who shall have seven
(7) days from the date of submission within which to endeavor to reconcile the
grievance presented and shall give an answer in writing within that time. If not
settled within that time, the aggrieved party or parties shall have the right to
request arbitration.
Section 2. Discharge grievances shall be processed initially under Step 3 of the
grievance procedure. The written grievance shall be filed with the division
manager within five (5) working days following the date of discharge.
Section 3. A failure to observe the time limit specified herein for original
presentation of a grievance or presentation in any subsequent step of the
grievance procedure on the part of either the grievant or the Union shall be
conclusive evidence that the grievance has been settled and abandoned.
Failure on the part of the Company to comply with the time limits for
delivering its answer in any step of the grievance procedure shall automatically
advance the grievance to the next step of the grievance procedure.
The time limits of the grievance procedure may be extended by mutual
consent of the Union and the Company.
ARTICLE VI
ARBITRATION
Section 1. If a party to this Agreement desires to take a grievance to
arbitration, it shall within fifteen (15) calendar days after the denial of the
grievance, give written notice of his intention to the other party, together
with a written statement of the specific provision or provisions of this
Agreement at issue.
Section 2. The parties shall attempt to select an impartial arbitrator. If they
are unable to agree upon a choice within seven (7) calendar days after the
receipt of Notice of Intent to Arbitrate, either party may request the Federal
Mediation and Conciliation Service to submit a list of five (5) arbitrators,
from which the arbitrator will be selected. Selection shall be made by the
parties alternately striking any name from the list (the first to strike shall
be the party requesting arbitration) until only one (1) name remains. The final
name remaining shall be the arbitrator of the grievance. Section 3. The
jurisdiction and the decision of the arbitrator of the grievance shall be
confined to a determination of the acts and the interpretation or application of
the specific provision or provisions of this Agreement at issue. The Arbitrator
shall be bound by terms and provisions of this Agreement and shall have the
authority to consider only grievances representing solely an arbitration issue
under this Agreement. The arbitrator shall have no authority to add to, alter,
amend, or modify any provision of this Agreement. The decision of the arbitrator
in writing on any issue properly before the arbitrator in accordance with the
provisions of this Agreement, shall be final and binding on the aggrieved
employee or employees, the Union, and the Employer.
Section 4. Multiple grievances shall not be heard before one arbitrator at the
same hearing except by mutual agreement of the parties. Section 5. The Union and
the Employer shall each bear its own costs in these arbitration proceedings,
except that they shall share equally the fee and other expenses of the
arbitrator in connection with the grievance.
ARTICLE VII
NO STRIKE - NO LOCK OUT
Section 1. For the duration of this Agreement, there shall be no strike,
stoppages, slowdowns, picketing, or other interruption of or interference with
the operations of the plant.
Section 2. The Company shall not lock out employees for the duration of this
Agreement. Section 3. Neither the violation of any provisions of the Agreement,
nor the commission of any act constituting an unfair labor practice, or
otherwise made unlawful, shall excuse the employees, the Union, or the Company
from their obligations under the provisions of this Article. Section 4. An
employee discharged or otherwise disciplined for violation of this Article, may
seek review of such discipline through the grievance and arbitration procedures
provided herein. In this event, the only question to be reviewed shall be
whether or not the employee participated in the prohibited conduct.
ARTICLE VIII
UNION BULLETIN BOARD
The Employer will provide a bulletin board in the plant for posting of Union
notices. All matters to be posted shall be submitted to the Division Manager or
a designated representative for approval prior to posting, and management's
decision shall be final.
ARTICLE IX
HOURS OF WORK
Section 1. The regular work week shall consist of five (5) days or forty (40)
hours. This shall not be construed as a guarantee of any amount of hours or
work. The basic work week shall be the seven (7) day period from 12:01 a.m.
Sunday until midnight the following Saturday. Employees will be given at least
one (1) calendar week's notice of any change by the Company of the payroll week.
Section 2. An employee who works more than forty (40) hours in any one week
shall be paid at time and one-half the regular rate of pay for all hours in
excess of forty (40).
Section 3. When employees are called to work a shift outside their regularly
scheduled shift and report for work, or when they report to work at their
regularly scheduled time, they shall be given the opportunity to work a minimum
of three (3) hours or receive pay for same at the applicable hourly rate, except
that no such pay shall be made when the plant cannot operate for reasons beyond
the control of the Employer, such as, but not limited to, strikes, utility
failure, fire, flood, storms or other acts of God interfering with work, or a
breakdown of machinery or equipment when the Company notifies the employees not
to report to work at least four (4) hours prior to the scheduled time to work.
Section 4. Employees will be paid at their regular rate for all waiting time of
thirty (30) minutes or less, so long as they do any job they are assigned.
Employees will not be paid for waiting time which exceeds thirty (30) minutes if
(1) they are relieved of all duties, (2) are free to leave the plant, and (3)
are told the time they must return to work. Employees will not be relieved
without pay more than once in any workday except for a lunch break of not more
than one (1) hour.
Section 5. The Company will provide one (1) unpaid break of not less than thirty
(30) minutes for lunch during each shift, and shall provide one (1) twelve (12)
minute paid rest period prior to lunch each day. In addition, all employees will
be allowed one (1) twelve (12) minute paid rest period after the lunch break
provided the work time is expected to be not less than two and one-half (2 1/2)
hours. No unpaid break shall be provided for maintenance employees and truck
drivers.
The Company shall have the right to provide a twenty-four (24) minute paid
lunch break to Clean-Up Line Operators on restricted hours in lieu of all breaks
provided in this Section.
Section 6. A Clean-Up Line Operator who has completed the probationary period
and is permanently assigned to restricted hours in the clean up department shall
receive an hourly adjustment of ninety (90) cents for each hour worked in that
assignment.
Section 7. Employees who have completed the probationary period and are
temporarily assigned for one or more consecutive hours to perform the duties of
an absent employee in a higher paid classification shall receive the rate of
that classification while performing the duties of the classification. Employees
who work at more than one pay rate during a week in which they earn overtime
shall receive overtime pay based upon an average of the rates earned during that
week.
ARTICLE X
SENIORITY
Section 1. Seniority is defined as the length of an employee's continuous
employment in the bargaining unit at the Company's Hammond, Louisiana, poultry
processing plant since the last permanent date of employment. For purposes of
layoff, recall, promotion, and vacation only, this shall include continuous
service which began prior to the acquisition of the plant by the Company.
Section 2. All newly hired or rehired employees shall be considered as
probationary employees for a period of ninety (90) days during which period they
shall not acquire seniority, and during which they may be discharged without
recourse to the grievance and arbitration procedures provided herein. If
retained as a regular employee upon satisfactory completion of the probationary
period, seniority shall be retroactive to the first day of employment.
Section 3. In matters of layoff, recall, and promotion, consideration will be
given to an employee's skill, ability, attendance, versatility, training,
physical fitness, and seniority; and when, in the opinion of the Company, the
factors other than seniority are relatively equal, seniority will be the
deciding factor.
Section 4. An employee's seniority shall be lost and employment considered
terminated by:
(a) discharge for just cause;
(b) failure to return from layoff within five (5) working days after
written notice by certified mail is sent by the Company to the
employee's last known address on the Company's books. Actual notice
to the employee of recall by any other means shall satisfy the terms
of this provision;
(c) voluntary termination of employment;
(d) failure to report after termination of a leave of absence approved
by the Company in writing on the first scheduled day following the
expiration of such leave of absence;
(e) engaging in a gainful occupation while on leave of absence; (f)
absence from work for three (3) consecutive working days without
notice to the Company, which shall be considered as a voluntary
quit, unless notice was prevented by a cause beyond the control of
the employee;
(g) separation from the Company's active payroll for any reason,
exclusive of leaves of absence approved by the Company, for a period
exceeding an employee's length of service in the Hammond plant, or
three (3) months, whichever is less.
Section 5. For the purposes of this Agreement, layoffs shall be classified as
(a) "short term" and (b) "long term". A short term layoff is a layoff which will
not exceed ten (10) workdays in length. Short term layoffs may be made without
regard to seniority. A long term layoff is a layoff which will exceed ten (10)
workdays in length. Long term layoffs shall be made subject to Section 3 of this
Article.
Section 6. All permanent job vacancies in premium rated classifications shall be
posted for twenty-four (24) hours on the plant bulletin board. Employees in
lower rated classifications desiring promotion to such jobs shall sign a bid
sheet posted on the bulletin board. An employee who does not sign such bid sheet
shall have no right to consideration for the vacancy. However, the fact that an
employee did not sign the bid sheet will not preclude that employee's selection
for the job by the Company if none of the signers is determined to be qualified.
If no qualified employee bids on the posted position, the Company may fill the
position in its discretion. If, after a reasonable period not to exceed thirty
(30) days, the employee selected for the posted position achieves an acceptable
level of performance, the employee shall receive the rate of the new position.
If the employee fails to perform in an acceptable manner, such employee shall
return to a job in their former classification and the premium job shall be
posted again. An employee who self-disqualifies shall return to the extra board
at the line operator's rate of pay and shall not be eligible for bidding on a
premium job for a period of six (6) months.
Section 7. Assignments involving employees on the extra board shall be in order
of seniority. Within a department, no extra board employee shall be retained
over a permanently assigned employee.
ARTICLE XI
LEAVES OF ABSENCE
Section 1. An employee who has completed the probationary period may be granted,
at the Company's discretion, a leave of absence without pay for a reasonable
period of time, not to exceed one (1) month, for the following reasons:
(a) emergency personal business;
(b) serious illness in the immediate family (spouse,
children or parents), supported by a doctor's certificate; and
(c) Union business, upon written request by the Union's
Business Manager, provided that no more than three (3) employees
shall be on such leave simultaneously.
Section 2. Employees who have completed their probationary period are eligible
for up to thirteen (13) weeks per year of unpaid family and medical treatment
leave for the following reasons:
(a) Employee's serious health condition -- a medical certification will be
required which states that the employee is unable to perform the functions of
the employee's position.
(b) Family serious health condition -- spouse, parent, or child. A medical
certification will be required stating the employee is "needed to care for the
individual."
(c) New child leave -- the birth, adoption or foster care placement by a
state agency of a child, and, the need to care for the child; such leave may be
prior to the actual birth or placement.
The provisions of this Section shall be administered in accordance with
the Family and Medical Leave Act of 1993 (FMLA). Section 3. Employees who have
completed their probationary period who lose actual work time in order to attend
the funeral of a family member shall receive a paid funeral leave for time
necessarily lost during the employee's regularly scheduled shift, provided the
employee would have been scheduled and at work during that day. Said leave shall
be up to three (3) days with pay for a deceased parent, spouse, child, brother,
or sister and one (1) day for a deceased father-in-law, mother-in-law,
grandparent, brother-in-law, or sister-in-law. In order to receive pay under
this Section, an employee must be actively working, must make application for
such paid leave, and must attend the funeral. The Company may require
satisfactory evidence of attendance at the funeral and the relationship of the
deceased. Section 4. If the Company has knowledge that an employee, in a
premium-rated classification, will be on family and medical leave, military
leave, or an industrial injury leave for more than thirty (30) calendar days,
the job will be posted and filled on a temporary basis. The successful bidder
will receive the rate of the premium classification for the period its duties
are performed. When employees on leave under this Section return, they shall be
immediately assigned to their old job; employees temporarily filling the job
shall return to their regular classification and pay rate. Section 5. The
Company shall pay each active employee who reports for jury duty the difference
between pay up to eight times the hourly rate for time actually lost and the
juror's daily fee for each day the employee is required to serve on a jury. The
employee must report to work during those days of his regularly scheduled shift
during which the employee is not required to report for jury duty or be
available at court for jury service. The employee must present proof of jury
service and the amount of compensation received from the court.
ARTICLE XII
SENIORITY LIST
Section 1. Upon request at any reasonable time, the Company shall furnish to the
Union a current seniority list.
ARTICLE XIII
MISCELLANEOUS
Section 1. The Company shall maintain safe, sanitary, and healthy working
conditions at all times, and employees will be required to cooperate in
maintaining such conditions. Any complaints regarding safety or health shall be
processed through the grievance and arbitration provisions of this Agreement.
Section 2. The Company will provide any uniforms required of employees who have
completed their probationary period.
The Company will furnish required safety equipment, gloves, aprons, hair
nets, freezer gloves, cotton gloves, and smocks at no cost to the employee.
Needed replacements, through normal use, will be made at no cost provided the
worn out article is returned to the Company. If an item is lost or destroyed
through employee negligence, the employee will be charged for its replacement.
Section 3. The Employer may require any employee to take a physical examination
at any time at the Employer's expense. Section 4. It shall be the responsibility
of all employees to keep the Employer apprised of their current address,
telephone number, marital status and number of dependents.
Section 5. It is the intent of the parties hereto that no provisions of this
Agreement shall require either party to perform any act which shall be unlawful
under any Louisiana or Federal statute.
ARTICLE XIV
VACATIONS
Section 1. Regular full-time employees shall be eligible for one (1) week's
vacation after the first anniversary date of continuous employment, and after
the anniversary date of each succeeding year.
Employees shall be eligible for a second week of vacation after the second
anniversary date of continuous employment, and after the anniversary date of
each succeeding year of continuous employment.
Employees shall be eligible for a third week of vacation after the tenth
anniversary date of continuous employment, and after the anniversary date of
each succeeding year of continuous employment.
Employees shall be eligible for a fourth week of vacation after the
twentieth anniversary date of continuous employment and after the anniversary
date of each succeeding year of continuous employment.
Section 2. To be eligible for a vacation, an employee must have worked sixteen
hundred (1,600) hours during the preceding twelve (12) months or eighty (80)
percent of available hours for that period, whichever is less. Vacations and
holidays not worked shall be considered time worked for purposes of this
Section.
Section 3. Vacation pay shall be computed at forty (40) times the Employee's
regular straight time hourly rate. Section 4. Due consideration will be given
employees' choice of vacation time, but all vacations scheduled are subject to
the final approval of the Company in keeping with the Company's scheduling
needs. In the event that two or more employees cannot be released at the same
time, the employee with the longest service with the Company will be given
preference. An employee who notifies the Company of a vacation choice thirty
(30) days in advance shall not lose that vacation choice to another employee.
Vacations may not be scheduled for periods of less than a week, and all
vacations must be taken within an anniversary year.
Section 5. The Company reserves the right to schedule a plant shutdown for one
.(l) week in any year, which shall be treated as a vacation week for those
employees entitled to vacation.
ARTICLE XV
INSURANCE
The Company will provide a group insurance program for employees covered
by this Agreement. The Company will continue to make monthly contributions
toward group insurance premiums in the same proportion as is currently in
effect. Employees will bear the remaining costs of the insurance.
ARTICLE XVI
HOLIDAYS
Section 1. The following shall be considered holidays:
New Year's Day Labor Day
Martin Luther King's Birthday Thanksgiving Day
Memorial Day Christmas Day
July Fourth Birthday Holiday
The birthday holiday shall be taken on the employee's birthday. If the birthday
falls on a Saturday or Sunday, the holiday shall be taken on a day agreed upon
by the Company and the employee within one (1) week of the birthday.
Section 2. All regular full-time employees who have completed their probationary
period shall be paid for eight (8) hours at their regular straight time rate for
each holiday enumerated above, provided they report for work and work all
scheduled hours on the workday preceding and the workday next following the
holiday, unless the employee was necessarily absent due to personal illness,
supported by a doctor's certificate, or because of an emergency occurring to the
employee or the employee's immediate family (meaning only spouse, children, or
parents). No employee shall lose holiday pay because of missing no more than
thirty (30) minutes on the workday before or the workday following the holiday.
In any event, an employee must work at least one (1) day during the
calendar week in which a holiday falls in order to be eligible for holiday pay,
except the employee who is on vacation.
Section 3. Employees required to work on a holiday shall be paid the amount
provided above, in addition to their regular earnings for that day. Hours not
worked on a holiday shall not be considered as work time in computing any
additional compensation due under the overtime provisions of this contract.
Section 4. If an employee is required to work and fails to report or fails to
work scheduled hours on a holiday, the employee shall forfeit holiday pay for
that day.
Section 5. Employees on vacation during the week in which a holiday falls shall
receive holiday pay.
ARTICLE XVII
WAGES
Section 1. Wages shall be paid as provided in Appendix A attached hereto and
made a part of this Agreement. Section 2. Whenever a new job classification is
created by the Company, or there is a change or merger of job classifications or
the job content of job classifications, the Company will discuss the appropriate
wage rate with the Union. If a mutually satisfactory rate cannot be agreed upon,
the Company will set the rate. The Union may file a grievance on the rate, and
the dispute shall be settled in accordance with the grievance and arbitration
procedures of this contract.
Section 3. Any employees who, upon the effective date of the wage rate set forth
in Appendix A, are earning in excess of the applicable rate, shall, during the
term of this Agreement, continue to receive their current rate until the
contract rate equals or exceeds that rate. This section shall not apply to any
employee in a classification which has been paid on a salary basis under any
past contract.
Section 4. If, during the term of this Agreement, Congress enacts new minimum
wage legislation which requires the payment of a minimum wage greater than the
rate provided in Appendix A for newly-hired employees, the rate for newly-hired
employees shall be raised to the federal minimum rate, and the spread between
the rates provided in this Agreement shall be maintained. Any such change shall
be effective upon the effective date of the new federal minimum rate.
Section 5. In addition to the wage rates as provided in Appendix A, production
employees who have been continuously employed for five (5) or more years shall
receive seniority pay of twenty (20) cents per hour. Maintenance employees and
distribution drivers who have been continuously employed for five (5) or more
years will receive seniority pay of fifty (50) cents per hour.
Section 6. Employees who have been continuously employed for one (1) or more
years shall receive a night shift differential of twenty-five (25) cents per
hour for work performed on a shift starting during the hours beginning 12:00
noon through 1:00 a.m. The starting time of a shift determines if it is subject
to the shift differential. Employees performing work on a night shift which is
not their regular shift will receive shift differential for such work if it
lasts three (3) or more hours. Distribution drivers shall not receive shift
differential regardless of the time they begin work.
ARTICLE XVIII
NO DISCRIMINATION
Section 1. The Company and the Union agree that they will not discriminate
against any person with regard to employment or Union membership because of
race, creed, color, sex, religion, age, national origin, or disability (as
defined in the Americans With Disabilities Act).
Section 2. Whenever masculine gender is used in this Agreement, it shall apply
to the feminine gender.
ARTICLE XIX
AUTHORIZATION FOR REPRESENTATION AND CHECK-OFF
Section 1. During the term of this Agreement, the Company will deduct initiation
fees, assessments, and Union dues from the wages of employees who individually
authorize the Company on a form in compliance with Appendix B to this Agreement.
Section 2. The Union shall save the Company harmless against and from all
claims, demands, suits or other forms of liability that arise out of or by
reason of action taken or not taken by the Company in reliance upon or
compliance with any provisions of this Article.
Section 3. It is agreed that by reason of institution of the above check-off
system, collections by any other method on the Company's premises are
prohibited, except with the permission of the Company.
ARTICLE XX
UNION SECURITY
Section 1. It shall be a condition of employment that all employees of the
Employer covered by this Agreement become members of the Union in good standing
not later than thirty-one (31) days after the effective date of this Agreement,
and remain members in good standing of the Union. It shall also be a condition
of employment that all employees covered by this Agreement and hired on or after
its effective date shall on the thirty-first (31st) day following the beginning
of such employment become and remain members in good standing in the Union.
The Union shall save the Company harmless against and from all claims,
demands, suits, or other forms of liability that arise out of or by reason of
action taken or not taken by the Company in reliance upon or compliance with any
provisions of this Article.
It is understood and agreed that the provisions of this Article shall be
effective only to the extent permitted by applicable law.
ARTICLE XXI
PROFIT SHARING -- RETIREMENT
Section 1. Since November 1, 1989 employees covered by this Agreement have been
covered by the General Employees Profit Sharing - Retirement Trust Agreement of
Sanderson Farms, Inc. and Affiliates. Approval has been sought from the Internal
Revenue Service (IRS) to merge said Plan into the Employee Stock Ownership Plan
of Sanderson Farms, Inc. and Affiliates, effective as of November 1, 1993. When
the merger is approved, participation and benefits in the newly merged plan
shall be in accordance with the provisions of that plan beginning with the
effective date of the merger. In the event the IRS does not approve the merger,
employees covered by this Agreement shall continue to be governed by the
preexisting Plan and its provisions.
ARTICLE XXII
DURATION OF AGREEMENT
Section 1. This Agreement shall remain in full force and effect from the 1st day
of November, 1998 until the 30th day of November, 2001, and shall continue
thereafter from year to year until either party to this Agreement desires to
terminate this Agreement by giving written notice at least sixty (60) days prior
to November 30, 2001, or at least sixty (60) days' written notice prior to any
anniversary date thereafter. The parties to this Agreement shall endeavor to
satisfactorily negotiate any contemplated change or execute a new Agreement
during the sixty (60) day period, after proper notice in writing has been given
as provided herein above. Notice, as specified in this Article, shall be mailed
via United States Certified Mail.
IN WITNESS WHEREOF, the parties have hereunto signed their names this
______ day of November, 1998.
SANDERSON FARMS, INC. UNITED FOOD AND COMMERCIAL
(Hammond Processing Division) WORKERS LOCAL UNION 210,
Affiliated with the United
Food and Commercial Workers
/s/Brian C. Williams International Union
- ------------------------------
/s/Stephen C. Blessey /s/Oneal W. Scott
- ------------------------------ ------------------------------------
/s/Eva Mae Adams
------------------------------------
/s/Annie Landry
------------------------------------
/s/Lucille Bickham
------------------------------------
/s/Hattie Lloyd
------------------------------------
/s/Raymond L. Carver
------------------------------------
<PAGE>
<TABLE>
APPENDIX "A"
WAGE SCHEDULE
<CAPTION>
EFFECTIVE EFFECTIVE EFFECTIVE
11/1/98 1/2/2000 1/7/2001
<S> <C> <C> <C>
PROCESSING
Receiving
Forklift Operator .................... 8.00 8.25 8.45
Hanging Dock ......................... 7.85 8.10 8.30
Picking
Killer ............................... 8.10 8.35 8.55
Floorworker .......................... 7.75 8.00 8.20
Line Operator ........................ 7.60 7.85 8.05
Eviscerating
Floorworker .......................... 7.75 8.00 8.20
Bird Chiller Operator ................ 7.75 8.00 8.20
Line Operator ........................ 7.60 7.85 8.05
By-Products Department
By-Products Operator ................. 7.85 8.10 8.30
CUSTOMER SERVICE
Saws
Floorworker .......................... 7.75 8.00 8.20
Line Operator ........................ 7.60 7.85 8.05
Packing
Scale Operator ....................... 7.85 8.10 8.30
Floorworker .......................... 7.75 8.00 8.20
Giblet Chiller Operator .............. 7.75 8.00 8.20
Grader ............................... 7.70 7.95 8.15
Line Operator ........................ 7.60 7.85 8.05
Specialty
Forklift Operator .................... 8.05 8.30 8.50
Scale Operator ....................... 7.85 8.10 8.30
Floorworker .......................... 7.75 8.00 8.20
Stackoff ............................. 7.70 7.95 8.15
Line Operator ........................ 7.60 7.85 8.05
Marination
Scale Operator ....................... 7.85 8.10 8.30
Formulating Mixer .................... 7.75 8.00 8.20
Floorworker .......................... 7.75 8.00 8.20
Stack Off ............................ 7.70 7.95 8.15
Line Operator ........................ 7.60 7.85 8.05
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EFFECTIVE EFFECTIVE EFFECTIVE
11/1/98 1/2/2000 1/7/2001
<S> <C> <C> <C>
SHIPPING
Forklift Operator ................... 8.05 8.30 8.50
Cooler & Shipping Dock .............. 7.70 7.95 8.15
Distribution Driver ................. 10.15 10.40 10.60
DEBONE DEPARTMENT
Deboning
Forklift Operator ................... 8.00 8.25 8.45
Scale Operator ...................... 7.85 8.10 8.30
Floorworker ......................... 7.75 8.00 8.20
Front Half Puller ................... 7.70 7.95 8.15
Combo Packer ........................ 7.70 7.95 8.15
Stack Off ........................... 7.70 7.95 8.15
Line Operator ....................... 7.60 7.85 8.05
Quality Control Technician ................ 7.85 8.10 8.30
MAINTENANCE DEPARTMENT
Master Skilled Operator I ........... 12.40 12.65 12.85
Master Skilled Operator II .......... 10.90 11.15 11.35
Skilled Maintenance Men ............. 10.00 10.25 10.45
Mechanic ............................ 9.40 9.65 9.85
Mechanic Helper ..................... 7.90 8.15 8.35
Clean-Up Line Operators ............. 7.60 7.85 8.05
</TABLE>
Probationary employees shall receive a training rate of $6.05 per hour for the
first ninety (90) days of their employment, which shall be $6.15 effective
January 2, 2000 and $6.25 effective January 7, 2001. Upon the expiration of the
ninety (90) day period, the rate shall be $6.75 per hour, which shall be $6.85
effective January 2, 2000 and $6.95 effective January 7, 2001. After one year of
employment, an employee's rate shall be as shown hereinabove. Newly hired
employees in premium classifications above shall receive the rate of that
classification upon the expiration of a forty-five (45) day period.
<PAGE>
APPENDIX "B"
CHECK-OFF AUTHORIZATION
To: Any Employer under contract with United Food and Commercial
Workers Union, Local 210, AFL-CIO
You are hereby authorized and directed to deduct from my wages, commencing
with the next payroll period, an amount equivalent to dues and initiation
fees as shall be certified by the Secretary-Treasurer of Local 210, of the
United Food and Commercial Workers International Union, AFL-CIO, and remit
same to said Secretary-Treasurer.
This authorization and assignment is voluntary, made in consideration for
the cost of representation and collective bargaining and is not contingent
upon my present or future membership in the Union. This authorization and
assignment shall be irrevocable for a period of one (1) year from the date
of execution or until the termination date of the Agreement between the
Employer and Local 210, whichever occurs sooner, and from year to year
thereafter, unless not less than thirty (30) days and not more than
forty-five (45) days prior to the end of any subsequent yearly period, I
give the Employer and Union written notice of revocation bearing my
signature thereto. The Secretary-Treasurer of Local 210 is authorized to
deposit this authorization with any Employer under contract with Local 210
and is further authorized to transfer this authorization to any other
Employer under contract with Local 210 in the event that I should change
employment.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>0004.txt
<DESCRIPTION>HAZLEHURST PROCESSING UNION AGREEMENT
<TEXT>
A G R E E M E N T
BETWEEN
SANDERSON FARMS, INC.
(HAZLEHURST PROCESSING DIVISION)
AND
LABORERS' INTERNATIONAL UNION OF NORTH AMERICA,
PROFESSIONAL EMPLOYEES LOCAL UNION #693, AFL-CIO
JULY 26, 1999 - DECEMBER 31, 2002
<PAGE>
TABLE OF CONTENTS
ARTICLE PAGE
- ------- ----
<PAGE>
1. AGREEMENT 1
2. RECOGNITION 1
3. MANAGEMENT PREROGATIVES 2
4. SHOP STEWARDS 2
5. UNION BULLETIN BOARD 3
6. NO STRIKE - NO LOCK OUT 3
7. GRIEVANCE PROCEDURE 3
STEP 1 4
STEP 2 4
STEP 3 4
8. ARBITRATION 5
9. SENIORITY 6
10. SENIORITY LIST 8
11. HOURS OF WORK 8
12. LEAVES OF ABSENCE 9
13. VACATIONS 11
14. HOLIDAYS 12
15. INSURANCE 13
16. WAGES 13
17. MISCELLANEOUS 14
18. EMPLOYEE STOCK OWNERSHIP PLAN 15
19. NO DISCRIMINATION 15
20. AUTHORIZATION FOR REPRESENTATION AND CHECK-OFF 15
21. UNION SECURITY 16
22. DURATION OF AGREEMENT 16
SIGNATURES 17
APPENDIX A - WAGE RATES *
APPENDIX B - CHECK-OFF *
<PAGE>
ARTICLE 1
AGREEMENT
Section 1. This Agreement made and entered into this 26th day of July, 1999, by
and between Sanderson Farms, Inc. (Hazlehurst Processing Division) at its
Hazlehurst, Mississippi, location (hereinafter referred to as the "Company"),
and Laborers' International Union of North America, Professional Employees Local
Union #693, AFL-CIO (hereinafter referred to as the "Union".
WITNESSETH
Section 1.2. WHEREAS, the Company and the Union are desirous of entering into a
contractual relationship covering rates of pay, hours of work and other terms
and conditions of employment of employees employed within the unit of
representation as hereinafter described; and Section 1.3. WHEREAS, the parties
have conferred, negotiated and agreed upon the terms and conditions of
employment to be applicable to the employees covered by this Agreement for the
contract period as herein specified. Section 1.4. NOW, THEREFORE, in
consideration of the mutual covenants and agreements herein contained, the
parties do hereby agree as follows:
ARTICLE 2
RECOGNITION
Section 2.1. The Employer recognizes the Union as the sole exclusive bargaining
agency for all production and maintenance employees employed by its Hazlehurst,
Mississippi Poultry Processing Plan, excluding office clerical employees,
guards, professional employees, and supervisors, as defined in the Act,
certified on March 15, 1995, by the National Labor Relations Board through an
NLRB election, Case No. 15-RC-7876.
The following jobs are excluded from coverage:
(1) Office Clerical Employees (2) Cost Counting Records Clerks
(3) Processing Accounting Clerks (4) Sales Clerks
(5) Live Haul Drivers (6) Cage Repair Employees
(7) Professional Employees (8) Guards and Supervisors
(9) Quality Control Technicians 10) Maintenance Parts Buyers
Section 2.2. No employee shall be required to make any written or verbal
agreement that will conflict with this Agreement. No employee shall be
reclassified so as to defeat the purpose of this Agreement.
ARTICLE 3
MANAGEMENT PREROGATIVES
Section 3.1. Nothing in this Agreement shall be deemed to limit the Employer in
any way in the exercise of the customary functions of management which are
recognized as the Employer's exclusive responsibility, including, but not
limited to, the right to plan, direct, and control operations, to utilize the
services of contractors, to determine the number, size and location of its
establishments, to close an establishment or departments thereof, to hire, to
promote, to demote, and for proper cause to discipline, suspend or discharge, to
assign and schedule work and transfer employees from one job or department to
another, and to make and enforce reasonable rules and regulations relative to
any and all of these matters or to the management of its operation, provided
that the reasonableness of rules may be tested in the grievance procedure. The
Employer shall be the exclusive judge of all matters pertaining to its
operations and their scheduling and the methods, processes, equipment, means of
operation and size of workforce. Section 3.2. The Employer retains all
prerogatives and rights of management and all privileges and responsibilities
not specifically limited by this Agreement.
ARTICLE 4
SHOP STEWARDS
Section 4.1. The Employer recognizes the right of the Union to designate shop
stewards, not to exceed eight (8) in number, who shall be assigned to serve
specific areas of the plant to handle such Union business as may arise. The shop
stewards shall be employees of the Company. The Union shall notify the Company
in writing as to the names of the stewards and of any changes in designation of
stewards.
Section 4.2. A representative of the Union shall be permitted to enter the plant
at reasonable times, upon Employer's premises and plant, provided such
representative shall in no way interfere with the operations of Employer's
business and shall make arrangements with the Employer's manager.
ARTICLE 5
UNION BULLETIN BOARD
Section 5.1. The Employer will provide a bulletin board in the plant for posting
of Union notices. All matters to be posted shall be submitted to the Division
Manager or a designated representative for approval prior to posting, and
management's decision shall be final.
ARTICLE 6
NO STRIKE - NO LOCK OUT
Section 6.1. For the duration of this Agreement, there shall be no strike,
stoppages, slowdowns, picketing, or other interruption of or interference with
the operations of the plant.
Section 6.2. The Company shall not lock out employees for the duration of this
Agreement. Section 6.3. Neither the violation of any provisions of the
Agreement, nor the commission of any act constituting an unfair labor practice,
or otherwise made unlawful, shall excuse the employees, the Union, or the
Company from their obligations under the provisions of this Article. Section
6.4. An employee discharged or otherwise disciplined for violation of this
Article, may seek review of such discipline through the grievance and
arbitration procedures provided herein. In this event, the only question to be
reviewed shall be whether or not the employee participated in the prohibited
conduct.
ARTICLE 7
GRIEVANCE PROCEDURE
Section 7.1. Grievances arising under this contract are herein defined as a
claim by a party to this Agreement or an employee covered by this Agreement that
the Company or the Union has violated a provision of this Agreement.
STEP I
The employee shall discuss the grievance or complaint with the immediate
supervisor within five (5) working days after the event giving rise thereto
occurs, or within five (5) working days following the date on which the grievant
had or reasonably would have had knowledge thereof. In the event the employee so
requests, the appropriate steward shall be present at this step. The supervisor
shall give an answer within five (5) working days after the grievance is
received.
STEP 2
If there is no settlement in Step 1, the grievance may be presented by the
employee and/or shop steward within five (5) working days from the date on which
the supervisor's answer was given in Step 1. The grievance must be presented in
writing to the department superintendent and must state the following
information:
(a) name or names of employee or employees involved; (b) the department or
departments involved; (c) the date and time of the occurrence or discovery
of the grievance; (d) the facts of the incident on which the claim is
based; (e) the specific provision of this Agreement alleged to have been
violated;
(f) the remedy requested.
The department superintendent shall give the Company's answer in writing within
five (5) working days after the grievance is received by the superintendent.
STEP 3
In the event the grievance is not settled in Step 2, then the grievance
may be appealed in writing to the division manager or a designated
representative by the Union to Step 3 within five (5) working days from the
Company's answer in Step 2. The division manager or a designated representative
shall give an answer in writing within five (5) working days from the date of
the appeal. In the event the grievance is not settled then the aggrieved party
or parties shall have the right to request arbitration.
In the event a grievance arises on behalf of the Employer, the matter
shall be presented to the Union Business Agent in writing, who shall have seven
(7) days from the date of submission within which to endeavor to reconcile the
grievance presented and shall give an answer in writing within that time. If not
settled within that time, the aggrieved party or parties shall have the right to
request arbitration.
Section 7.2. Discharge grievances shall be processed initially under Step 3 of
the grievance procedure. The written grievance shall be filed with the division
manager within five (5) working days following the date of discharge.
Section 7.3. A failure to observe the time limit specified herein for original
presentation of a grievance or presentation in any subsequent step of the
grievance procedure on the part of either the grievant or the Union shall be
conclusive evidence that the grievance has been settled and abandoned.
Failure on the part of the Company to comply with the time limits for
delivering its answer in any step of the grievance procedure shall automatically
advance the grievance to the next step of the grievance procedure.
The time limits of the grievance procedure may be extended by mutual
consent of the Union and the Company.
ARTICLE 8
ARBITRATION
Section 8.1. If a party to this Agreement desires to take a grievance to
arbitration, it shall within fifteen (15) calendar days after the denial of the
grievance, give written notice of his intention to the other party, together
with a written statement of the specific provision or provisions of this
Agreement at issue.
Section 8.2. The parties shall attempt to select an impartial arbitrator. If
they are unable to agree upon a choice within seven (7) calendar days after the
receipt of Notice of Intent to Arbitrate, either party may request the Federal
Mediation and Conciliation Service to submit a list of five (5) arbitrators,
from which the arbitrator will be selected. Selection shall be made by the
parties alternately striking any name from the list (the first to strike shall
be the party requesting arbitration) until only one (1) name remains. The final
name remaining shall be the arbitrator of the grievance.
Section 8.3. The jurisdiction and the decision of the arbitrator of the
grievance shall be confined to a determination of the acts and the
interpretation or application of the specific provision or provisions of this
Agreement at issue. The Arbitrator shall be bound by terms and provisions of
this Agreement and shall have the authority to consider only grievances
representing solely an arbitration issue under this Agreement. The arbitrator
shall have no authority to add to, alter, amend, or modify any provision of this
Agreement. The decision of the arbitrator in writing on any issue properly
before the arbitrator in accordance with the provisions of this Agreement, shall
be final and binding on the aggrieved employee or employees, the Union, and the
Employer.
Section 8.4. Multiple grievances shall not be heard before one arbitrator at the
same hearing except by mutual agreement of the parties. Section 8.5. The Union
and the Employer shall each bear its own costs in these arbitration proceedings,
except that they shall share equally the fee and other expenses of the
arbitrator in connection with the grievance.
ARTICLE 9
SENIORITY
Section 9.1. Seniority is defined as the length of an employee's continuous
employment in the bargaining unit at the Company's Hazlehurst, Mississippi,
poultry processing plant since the last permanent date of employment. For
purposes of layoff, recall, promotion, and vacation only, this shall include
continuous service which began prior to the acquisition of the plant by the
Company.
Section 9.2. All newly hired or rehired employees shall be considered as
probationary employees for a period of ninety (90) days during which period they
shall not acquire seniority, and during which they may be discharged without
recourse to the grievance and arbitration procedures provided herein. If
retained as a regular employee upon satisfactory completion of the probationary
period, seniority shall be retroactive to the first day of employment.
Section 9.3. In matters of layoff, recall, and promotion, consideration will be
given to an employee's skill, ability, attendance, versatility, training,
physical fitness, and seniority; and when, in the opinion of the Company, the
factors other than seniority are relatively equal, seniority will be the
deciding factor.
Section 9.4. An employee's seniority shall be lost and employment
considered terminated by:
(a) discharge for just cause;
(b) failure to return from layoff within five (5) working days after
written notice by certified mail is sent by the Company to the
employee's last known address on the Company's books. Actual notice
to the employee of recall by any other means shall satisfy the terms
of this provision;
(c) voluntary termination of employment;
(d) failure to report after termination of a leave of absence approved
by the Company in writing on the first scheduled day following the
expiration of such leave of absence;
(e) engaging in a gainful occupation while on leave of absence;
(f) absence from work for three (3) consecutive working days without
notice to the Company, which shall be considered as a voluntary
quit, unless notice was prevented by a cause beyond the control of
the employee;
(g) separation from the Company's active payroll for any reason,
exclusive of leaves of absence approved by the Company, for a period
exceeding an employee's length of service in the Hazlehurst plant,
or three (3) months, whichever is less.
Section 9.5. For the purposes of this Agreement, layoffs shall be classified as
(a) "short term" and (b) "long term". A short term layoff is a layoff which will
not exceed ten (10) workdays in length. Short term layoffs may be made without
regard to seniority. A long term layoff is a layoff which will exceed ten (10)
workdays in length. Long term layoffs shall be made subject to Section 3 of this
Article.
Section 9.6. All permanent job vacancies in premium rated classifications shall
be posted for two (2) consecutive working days on the plant bulletin board.
Employees in lower rated classifications desiring promotion to such jobs shall
sign a bid sheet posted on the bulletin board. An employee who does not sign
such bid sheet shall have no right to consideration for the vacancy. However,
the fact that an employee did not sign the bid sheet will not preclude that
employee's selection for the job by the Company if none of the signers is
determined to be qualified. If no qualified employee bids on the posted
position, the Company may fill the position in its discretion. If, after a
reasonable period not to exceed thirty (30) days, the employee selected for the
posted position achieves an acceptable level of performance, the employee shall
receive the rate of the new position. If the employee fails to perform in an
acceptable manner, such employee shall return to a job in their former
classification and the premium job shall be posted again. An employee who
self-disqualifies shall return to the extra board at the line operator's rate of
pay and shall not be eligible for bidding on a premium job for a period of six
(6) months. Section 9.7. Assignments involving employees on the extra board
shall be in order of seniority. Within a department, no extra board employee
shall be retained over a permanently assigned employee.
ARTICLE 10
SENIORITY LIST
Section 10.1. Upon request at any reasonable time, the Company shall furnish to
the Union a current seniority list.
ARTICLE 11
HOURS OF WORK
Section 11.1. The regular work week shall consist of five (5) days or forty (40)
hours. This shall not be construed as a guarantee of any amount of hours or
work. The basic work week shall be the seven (7) day period from 12:01 a.m.
Sunday until midnight the following Saturday. Employees will be given at least
one (1) calendar week's notice of any change by the Company of the payroll week.
Section 11.2. An employee who works more than forty (40) hours in any one week
shall be paid at time and one-half the regular rate of pay for all hours in
excess of forty (40).
Section 11.3. When employees are called to work a shift outside their regularly
scheduled shift and report for work, or when they report to work at their
regularly scheduled time, they shall be given the opportunity to work a minimum
of three (3) hours or receive pay for same at the applicable hourly rate, except
that no such pay shall be made when the plant cannot operate for reasons beyond
the control of the Employer, such as, but not limited to, strikes, utility
failure, fire, flood, storms or other acts of God interfering with work, or a
breakdown of machinery or equipment when the Company notifies the employees not
to report to work at least four (4) hours prior to the scheduled time to work.
Section 11.4. Employees will be paid at their regular rate for all waiting time
of thirty (30) minutes or less, so long as they do any job they are assigned.
Employees will not be paid for waiting time which exceeds thirty (30) minutes if
(1) they are relieved of all duties, (2) are free to leave the plant, and (3)
are told the time they must return to work. Employees will not be relieved
without pay more than once in any workday except for a lunch break of not more
than one (1) hour. Section 11.5. The Company will provide one (1) unpaid break
of not less than thirty (30) minutes for lunch during each shift, and shall
provide one (1) twelve (12) minute paid rest period prior to lunch each day. In
addition, all employees will be allowed one (1) twelve (12) minute paid rest
period after the lunch break provided the work time is expected to be not less
than two and one-half (2 1/2) hours. No unpaid break shall be provided for
maintenance employees and truck drivers.
The Company shall have the right to provide a twenty-four (24) minute paid
lunch break to Clean-Up Line Operators on restricted hours in lieu of all breaks
provided in this Section.
Section 11.6. A Clean-Up Line Operator who has completed the probationary period
and is permanently assigned to restricted hours in the clean up department shall
receive an hourly adjustment of ninety (90) cents for each hour worked in that
assignment.
Section 11.7. Employees who have completed the probationary period and are
temporarily assigned for one or more consecutive hours to perform the duties of
an absent employee in a higher paid classification shall receive the rate of
that classification while performing the duties of the classification. Employees
who work at more than one pay rate during a week in which they earn overtime
shall receive overtime pay based upon an average of the rates earned during that
week.
ARTICLE 12
LEAVES OF ABSENCE
Section 12.1. An employee who has completed the probationary period may be
granted, at the Company's discretion, a leave of absence without pay for a
reasonable period of time, not to exceed one (1) month, for the following
reasons:
(a) emergency personal business;
(b) serious illness in the immediate family (spouse, children or
parents), supported by a doctor's certificate; and
(c) Union business, upon written request by the Union's Business
Manager, provided that no more than three (3) employees shall be on
such leave simultaneously.
Section 12.2. Employees who have completed their probationary period are
eligible for up to thirteen (13) weeks per year of unpaid family and medical
treatment leave for the following reasons:
(a) Employee's serious health condition -- a medical certification will
be required which states that the employee is unable to perform the
functions of the employee's position.
(b) Family serious health condition -- spouse, parent, or child. A
medical certification will be required stating the employee is
"needed to care for the individual."
(c) New child leave -- the birth, adoption or foster care placement by a
state agency of a child, and, the need to care for the child; such
leave may be prior to the actual birth or placement.
The provisions of this Section shall be administered in accordance with
the Family and Medical Leave Act of 1993 (FMLA). Section 12.3. Employees who
have completed their probationary period who lose actual work time in order to
attend the funeral of a family member shall receive a paid funeral leave for
time necessarily lost during the employee's regularly scheduled shift, provided
the employee would have been scheduled and at work during that day. Said leave
shall be up to three (3) days with pay for a deceased parent, spouse, child,
brother, or sister and one (1) day for a deceased father-in-law, mother-in-law,
grandparent, brother-in-law, or sister-in-law. In order to receive pay under
this Section, an employee must be actively working, must make application for
such paid leave, and must attend the funeral. The Company may require
satisfactory evidence of attendance at the funeral and the relationship of the
deceased.
Section 12.4. If the Company has knowledge that an employee, in a premium-rated
classification, will be on family and medical leave, military leave, or an
industrial injury leave for more than thirty (30) calendar days, the job will be
posted and filled on a temporary basis. The successful bidder will receive the
rate of the premium classification for the period its duties are performed. When
employees on leave under this Section return, they shall be immediately assigned
to their old job; employees temporarily filling the job shall return to their
regular classification and pay rate. Section 12.5. The Company shall pay each
active employee who reports for jury duty the difference between pay up to eight
times the hourly rate for time actually lost and the juror's daily fee for each
day the employee is required to serve on a jury. The employee must report to
work during those days of his regularly scheduled shift during which the
employee is not required to report for jury duty or be available at court for
jury service. The employee must present proof of jury service and the amount of
compensation received from the court.
ARTICLE 13
VACATIONS
Section 13.1. Regular full-time employees shall be eligible for one (1) week's
vacation after the first anniversary date of continuous employment, and after
the anniversary date of each succeeding year.
Employees shall be eligible for a second week of vacation after the second
anniversary date of continuous employment, and after the anniversary date of
each succeeding year of continuous employment.
Employees shall be eligible for a third week of vacation after the tenth
anniversary date of continuous employment, and after the anniversary date of
each succeeding year of continuous employment.
Employees shall be eligible for a fourth week of vacation after the
twentieth anniversary date of continuous employment and after the anniversary
date of each succeeding year of continuous employment.
Section 13.2. To be eligible for a vacation, an employee must have worked
sixteen hundred (1,600) hours during the preceding twelve (12) months or eighty
(80) percent of available hours for that period, whichever is less. Vacations
and holidays not worked shall be considered time worked for purposes of this
Section.
Section 13.3. Vacation pay shall be computed at forty (40) times the Employee's
regular straight time hourly rate. Section 13.4. Due consideration will be given
employees' choice of vacation time, but all vacations scheduled are subject to
the final approval of the Company in keeping with the Company's scheduling
needs. In the event that two or more employees cannot be released at the same
time, the employee with the longest service with the Company will be given
preference. An employee who notifies the Company of a vacation choice thirty
(30) days in advance shall not lose that vacation choice to another employee.
Vacations may not be scheduled for periods of less than a week, and all
vacations must be taken within an anniversary year.
Section 13.5. The Company reserves the right to schedule a plant shutdown for
one .(l) week in any year, which shall be treated as a vacation week for those
employees entitled to vacation.
ARTICLE 14
HOLIDAYS
Section 14.1. The following shall be considered holidays:
New Year's Day Labor Day
Martin Luther King's Birthday Thanksgiving Day
Memorial Day Christmas Day
July Fourth Birthday Holiday
The birthday holiday shall be taken on the employee's birthday. If the
birthday falls on a Saturday or Sunday, the holiday shall be taken on a day
agreed upon by the Company and the employee within one week of the birthday.
Section 14.2. All regular full-time employees who have completed their
probationary period shall be paid for eight (8) hours at their regular straight
time rate for each holiday enumerated above, provided they report for work and
work all scheduled hours on the workday preceding and the workday next following
the holiday, unless the employee was necessarily absent due to personal illness,
supported by a doctor's certificate, or because of an emergency occurring to the
employee or the employee's immediate family (meaning only spouse, children, or
parents). No employee shall lose holiday pay because of missing no more than
thirty (30) minutes on the workday before or the workday following the holiday.
In any event, an employee must work at least one (1) day during the
calendar week in which a holiday falls in order to be eligible for holiday pay,
except the employee who is on vacation.
Section 14.3. Employees required to work on a holiday shall be paid the amount
provided above, in addition to their regular earnings for that day. Hours not
worked on a holiday shall not be considered as work time in computing any
additional compensation due under the overtime provisions of this contract.
Section 14.4. If an employee is required to work and fails to report or fails to
work scheduled hours on a holiday, the employee shall forfeit holiday pay for
that day.
Section 14.5. Employees on vacation during the week in which a holiday falls
shall receive holiday pay.
ARTICLE 15
INSURANCE
Section 15.1. The Company will provide a group insurance program for employees
covered by this Agreement. The Company will continue to make monthly
contributions toward group insurance premiums in the same proportion as is
currently in effect. Employees will bear the remaining costs of the insurance.
ARTICLE 16
WAGES
Section 16.1. Wages shall be paid as provided in Appendix A attached hereto and
made a part of this Agreement. Section 16.2. Whenever a new job classification
is created by the Company, or there is a change or merger of job classifications
or the job content of job classifications, the Company will discuss the
appropriate wage rate with the Union. If a mutually satisfactory rate cannot be
agreed upon, the Company will set the rate. The Union may file a grievance on
the rate, and the dispute shall be settled in accordance with the grievance and
arbitration procedures of this contract.
Section 16.3. Any employees who, upon the effective date of the wage rate set
forth in Appendix A, are earning in excess of the applicable rate, shall, during
the term of this Agreement, continue to receive their current rate until the
contract rate equals or exceeds that rate. This section shall not apply to any
employee in a classification which has been paid on a salary basis under any
past contract.
Section 16.4. If, during the term of this Agreement, Congress enacts new minimum
wage legislation which requires the payment of a minimum wage greater than the
rate provided in Appendix A for newly-hired employees, the rate for newly-hired
employees shall be raised to the federal minimum rate, and the spread between
the rates provided in this Agreement shall be maintained. Any such change shall
be effective upon the effective date of the new federal minimum rate.
Section 16.5. In addition to the wage rates as provided in Appendix A,
production employees who have been continuously employed for five (5) or more
years shall receive seniority pay of twenty (20) cents per hour. Maintenance
employees and distribution drivers who have been continuously employed for five
(5) or more years will receive seniority pay of fifty (50) cents per hour.
Section 16.6. Employees who have been continuously employed for one (1) or more
years shall receive a night shift differential of twenty-five (25) cents per
hour for work performed on a shift starting during the hours beginning 12:00
noon through 1:00 a.m. The starting time of a shift determines if it is subject
to the shift differential. Employees performing work on a night shift which is
not their regular shift will receive shift differential for such work if it
lasts three (3) or more hours. Distribution drivers shall not receive shift
differential regardless of the time they begin work.
ARTICLE 17
MISCELLANEOUS
Section 17.1. The Company shall maintain safe, sanitary, and healthy working
conditions at all times, and employees will be required to cooperate in
maintaining such conditions. Any complaints regarding safety or health shall be
processed through the grievance and arbitration provisions of this Agreement.
Section 17.2. The Company will provide any uniforms required of employees who
have completed their probationary period.
The Company will furnish required safety equipment, gloves, aprons, hair
nets, freezer gloves, cotton gloves, and smocks at no cost to the employee.
Needed replacements, through normal use, will be made at no cost provided the
worn out article is returned to the Company. If an item is lost or destroyed
through employee negligence, the employee will be charged for its replacement.
Section 17.3. The Employer may require any employee to take a physical
examination at any time at the Employer's expense. Section 17.4. It shall be the
responsibility of all employees to keep the Employer apprised of their current
address, telephone number, marital status and number of dependents.
Section 17.5. It is the intent of the parties hereto that no provisions of this
Agreement shall require either party to perform any act which shall be unlawful
under any Mississippi or Federal statute.
ARTICLE 18
EMPLOYEE STOCK OWNERSHIP PLAN - RETIREMENT
Section 18.1. Employees covered by this Agreement will continue to be covered by
the Employee Stock Ownership Plan of Sanderson Farms, Inc. and Affiliates.
Participation and benefits in the plan shall be in accordance with the
provisions of that plan.
ARTICLE 19
NO DISCRIMINATION
Section 19.1. The Company and the Union agree that they will not discriminate
against any person with regard to employment or Union membership because of
race, creed, color, sex, religion, age, national origin, or disability (as
defined in the Americans With Disabilities Act). Section 19.2. Whenever
masculine gender is used in this Agreement, it shall apply to the feminine
gender.
ARTICLE 20
AUTHORIZATION FOR REPRESENTATION AND CHECK-OFF
Section 20.1. During the term of this Agreement, the Company will deduct
initiation fees, assessments, and Union dues from the wages of employees who
individually authorize the Company on a form in compliance with Appendix B to
this Agreement.
Section 20.2. The Union shall save the Company harmless against and from all
claims, demands, suits or other forms of liability that arise out of or by
reason of action taken or not taken by the Company in reliance upon or
compliance with any provisions of this Article.
Section 20.3. It is agreed that by reason of institution of the above check-off
system, collections by any other method on the Company's premises are
prohibited, except with the permission of the Company.
<PAGE>
ARTICLE 21
UNION SECURITY
Section 21.1. It shall be a condition of employment that all employees of the
Employer covered by this Agreement become members of the Union in good standing
not later than thirty-one (31) days after the effective date of this Agreement,
and remain members in good standing of the Union. It shall also be a condition
of employment that all employees covered by this Agreement and hired on or after
its effective date shall on the thirty-first (31st) day following the beginning
of such employment become and remain members in good standing in the Union.
The Union shall save the Company harmless against and from all claims,
demands, suits, or other forms of liability that arise out of or by reason of
action taken or not taken by the Company in reliance upon or compliance with any
provisions of this Article.
It is understood and agreed that the provisions of this Article shall be
effective only to the extent permitted by applicable law.
ARTICLE 22
DURATION OF AGREEMENT
Section 22.1. This Agreement shall remain in full force and effect from the 26th
day of July, 1999 until the 31st day of December, 2002, and shall continue
thereafter from year to year until either party to this Agreement desires to
terminate this Agreement by giving written notice at least sixty (60) days prior
to December 31, 2002, or at least sixty (60) days' written notice prior to any
anniversary date thereafter. The parties to this Agreement shall endeavor to
satisfactorily negotiate any contemplated change or execute a new Agreement
during the sixty (60) day period, after proper notice in writing has been given
as provided herein and above. Notice, as specified in this Article, shall be
mailed via United States Certified Mail.
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto signed their names this
______ day of ___________________________, 1999.
SANDERSON FARMS, INC. LABORERS' INTERNATIONAL UNION
(Hazlehurst Processing Division) OF NORTH AMERICA, PROFESSIONAL
EMPLOYEES LOCAL UNION #693
/s/Larry Lampkin AFL-CIO
- -------------------------------- -----------------------------------
/s/Tony Waltman /s/Bobbie Jackson
- -------------------------------- -----------------------------------
/s/Joe W. Brown
- -------------------------------- -----------------------------------
/s/Martha Jackson
-----------------------------------
/s/Priscilla Morris
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
<PAGE>
APPENDIX "A"
WAGE SCHEDULE
EFFECTIVE
7/26/99 1/2/00 1/7/01 1/6/02
PROCESSING
Receiving
Forklift Operator ................ 8.00 8.25 8.45 8.80
Hanging Dock ..................... 7.85 8.10 8.30 8.65
Picking
Killer ........................... 8.10 8.35 8.55 8.90
Floorworker ...................... 7.75 8.00 8.20 8.55
Line Operator .................... 7.60 7.85 8.05 8.40
Eviscerating
Floorworker ...................... 7.75 8.00 8.20 8.55
Bird Chiller Operator ............ 7.75 8.00 8.20 8.55
Line Operator .................... 7.60 7.85 8.05 8.40
By-Products Department
By-Products Operator ............. 7.85 8.10 8.30 8.65
CUSTOMER SERVICE
Saws
Floorworker ...................... 7.75 8.00 8.20 8.55
Line Operator .................... 7.60 7.85 8.05 8.40
Packing
Scale Operator ................... 7.85 8.10 8.30 8.55
Floorworker ...................... 7.75 8.00 8.20 8.55
Giblet Chiller Operator 7.75 ..... 8.00 8.20 8.55
Grader ........................... 7.70 7.95 8.15 8.50
Line Operator .................... 7.60 7.85 8.05 8.40
Specialty
Forklift Operator ................ 8.05 8.30 8.50 8.85
Scale Operator ................... 7.85 8.10 8.30 8.65
Floorworker ...................... 7.75 8.00 8.20 8.55
Stackoff ......................... 7.70 7.95 8.15 8.50
Line Operator .................... 7.60 7.85 8.05 8.40
Marination
Scale Operator ................... 7.85 8.10 8.30 8.65
Formulating Mixer ................ 7.75 8.00 8.20 8.55
Floorworker ...................... 7.75 8.00 8.20 8.55
Stack Off ........................ 7.70 7.95 8.15 8.50
Line Operator .................... 7.60 7.85 8.05 8.40
<PAGE>
EFFEC
7/26/99 0 1/7/01 1/6/02
SHIPPING
Forklift Operator ................ 8.05 8.30 8.50 8.85
Cooler & Shipping Dock ........... 7.70 7.95 8.15 8.60
Distribution Driver .............. 10.15 10.40 10.60 10.95
DEBONE DEPARTMENT
Deboning
Forklift Operator ................ 8.00 8.25 8.45 8.80
Scale Operator ................... 7.85 8.10 8.30 8.65
Floorworker ...................... 7.75 8.00 8.20 8.55
Front Half Puller ................ 7.70 7.95 8.15 8.50
Combo Packer ..................... 7.70 7.95 8.15 8.50
Stack Off ........................ 7.70 7.95 8.15 8.50
Line Operator .................... 7.60 7.85 8.05 8.40
MAINTENANCE DEPARTMENT
Master Skilled Operator I ........ 12.40 12.65 12.85 13.20
Master Skilled Operator II ....... 10.90 11.15 11.35 11.70
Skilled Maintenance Men 10.00 .... 10.25 10.45 10.80
Mechanic ......................... 9.40 9.65 9.85 10.20
Mechanic Helper .................. 7.90 8.15 8.35 8.70
Clean-Up Line Operators .......... 7.60 7.85 8.05 8.40
Probationary employees shall receive a training rate of $6.05 per hour for the
first ninety (90) days of their employment, which shall be $6.15 effective
January 2, 2000, $6.25 effective January 7, 2001, and $6.35 effective January 6,
2002. Upon the expiration of the ninety (90) day period, the rate shall be $6.75
per hour, which shall be $7.05 effective January 2, 2000, $7.15 effective
January 7, 2002 and $7.25 effective January 6, 2002. After one year of
employment, an employee's rate shall be as shown hereinabove. Newly hired
employees in premium classifications above shall receive the rate of that
classification upon the expiration of a forty-five (45) day period.
<PAGE>
APPENDIX "B"
CHECK-OFF AUTHORIZATION AND ASSIGNMENT
TO: ALL EMPLOYERS BY WHOM I AM EMPLOYED
I, _________________________________________________________, do hereby
assign to Local Union No. 693, LIUNA Professional Employees, AFL-CIO, such
amounts from my wages as shall be required to pay the initiation fees,
readmission fees, membership dues and assessments of the Local Union as
may be established from time to time. My Employer is hereby authorized to
deduct amounts from my wages and pay the same to the Local Union and/or
its authorized representative, in accordance with the collective
bargaining agreement in existence between the Local Union and my Employer.
This authorization shall become operative upon the effective date of each
collective bargaining agreement entered into between my Employer and the
Local Union.
This authorization shall be irrevocable for a period of one year, or until
the termination of the collective bargaining agreement in existence
between my Employer and the Local Union, whichever occurs sooner; and I
agree and direct that this authorization shall be automatically renewed
and shall be irrevocable for successive periods of one year each, or for
the period of such succeeding applicable collective bargaining agreement
between my Employer and the Local Union, whichever be shorter, unless I
give written notice to my Employer and the Local Union not more than
twenty days and not less than ten days prior to the expiration of each
period of one year, or of each applicable collective bargaining agreement
between my Employer and the Local Union, whichever occurs sooner.
Dues and fees paid to Local Union No. 693 are not deductible as charitable
contributions for federal income tax purposes. Dues and fees paid to Local
Union 693, however, may qualify as business expenses, and may be
deductible in limited circumstances subject to various restrictions
imposed by the Internal Revenue Service.
This assignment has been executed this _____ day of
______________________________, 19_______
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<FILENAME>0005.txt
<DESCRIPTION>COLLINS PROCESSING UNION AGREEMENT
<TEXT>
A G R E E M E N T
BETWEEN
SANDERSON FARMS, INC.
(COLLINS PROCESSING DIVISION)
AND
LABORERS' INTERNATIONAL UNION OF NORTH AMERICA,
PROFESSIONAL EMPLOYEES LOCAL UNION #693, AFL-CIO
JANUARY 13, 2000 - DECEMBER 31, 2003
<PAGE>
TABLE OF CONTENTS
ARTICLE PAGE
- ------- ----
<PAGE>
1. AGREEMENT 1
2. RECOGNITION 1
3. MANAGEMENT PREROGATIVES 1
4. SHOP STEWARDS 2
5. UNION BULLETIN BOARD 2
6. NO STRIKE - NO LOCK OUT 2
7. GRIEVANCE PROCEDURE 3
STEP 1 3
STEP 2 3
STEP 3 3
8. ARBITRATION 4
9. SENIORITY 5
10. SENIORITY LIST 6
11. HOURS OF WORK 7
12. LEAVES OF ABSENCE 8
13. VACATIONS 9
14. HOLIDAYS 10
15. INSURANCE 11
16. WAGES 11
17. MISCELLANEOUS 12
18. EMPLOYEE STOCK OWNERSHIP PLAN 13
19. NO DISCRIMINATION 13
20. AUTHORIZATION FOR REPRESENTATION AND CHECK-OFF 13
21. UNION SECURITY 13
22. DURATION OF AGREEMENT 14
SIGNATURES 14
APPENDIX A - WAGE RATES *
APPENDIX B - CHECK-OFF *
<PAGE>
ARTICLE 1
AGREEMENT
Section 1. This Agreement made and entered into this 13th day of January, 2000,
by and between Sanderson Farms, Inc. (Collins Processing Division) at its
Collins, Mississippi, location (hereinafter referred to as the "Company"), and
Laborers' International Union of North America, Professional Employees Local
Union #693, AFL-CIO (hereinafter referred to as the "Union".
ARTICLE 2
RECOGNITION
Section 2.1. The Employer recognizes the Union as the sole exclusive bargaining
agency for all production and maintenance employees, including truck drivers and
rendering employees, employed at its Collins, Mississippi facility, excluding
office clerical employees, truck shop employees, guards, professional employees,
and supervisors, as defined in the Act, certified on February 23, 1995, by the
National Labor Relations Board through an NLRB election, Case No. 15-RC-7846.
The following jobs are excluded from coverage:
(1) Office Clerical Employees (2) Cost Counting Records Clerks
(3) Processing Accounting Clerks (4) Sales Clerks
(5) Live Haul Drivers (6) Cage Repair Employees
(7) Professional Employees (8) Guards and Supervisors
(9) Child Care Employees (10) Maintenance Parts Buyers
ARTICLE 3
MANAGEMENT PREROGATIVES
Section 3.1. Nothing in this Agreement shall be deemed to limit the Employer in
any way in the exercise of the customary functions of management which are
recognized as the Employer's exclusive responsibility, including, but not
limited to, the right to plan, direct, and control operations, to utilize the
services of contractors, to determine the number, size and location of its
establishments, to close an establishment or departments thereof, to hire, to
promote, to demote, and for proper cause to discipline, suspend or discharge, to
assign and schedule work and transfer employees from one job or department to
another, and to make and enforce reasonable rules and regulations relative to
any and all of these matters or to the management of its operation, provided
that the reasonableness of rules may be tested in the grievance procedure. The
Employer shall be the exclusive judge of all matters pertaining to its
operations and their scheduling and the methods, processes, equipment, means of
operation and size of workforce.
Section 3.2. The Employer retains all prerogatives and rights of management and
all privileges and responsibilities not specifically limited by this Agreement.
ARTICLE 4
SHOP STEWARDS
Section 4.1. The Employer recognizes the right of the Union to designate shop
stewards, not to exceed eleven (11) in number, who shall be assigned to serve
specific areas of the plant to handle such Union business as may arise. The shop
stewards shall be employees of the Company. The Union shall notify the Company
in writing as to the names of the stewards and of any changes in designation of
stewards.
Section 4.2. A representative of the Union shall be permitted to enter the plant
at reasonable times, upon Employer's premises and plant, provided such
representative shall in no way interfere with the operations of Employer's
business and shall make arrangements with the Employer's manager.
ARTICLE 5
UNION BULLETIN BOARD
Section 5.1. The Employer will provide a bulletin board in the plant for posting
of Union notices. All matters to be posted shall be submitted to the Division
Manager or a designated representative for approval prior to posting, and
management's decision shall be final.
ARTICLE 6
NO STRIKE - NO LOCK OUT
Section 6.1. For the duration of this Agreement, there shall be no strike,
stoppages, slowdowns, picketing, or other interruption of or interference with
the operations of the plant.
Section 6.2. The Company shall not lock out employees for the duration of this
Agreement. Section 6.3. Neither the violation of any provisions of the
Agreement, nor the commission of any act constituting an unfair labor practice,
or otherwise made unlawful, shall excuse the employees, the Union, or the
Company from their obligations under the provisions of this Article.
Section 6.4. An employee discharged or otherwise disciplined for violation of
this Article, may seek review of such discipline through the grievance and
arbitration procedures provided herein. In this event, the only question to be
reviewed shall be whether or not the employee participated in the prohibited
conduct.
<PAGE>
ARTICLE 7
GRIEVANCE PROCEDURE
Section 7.1. Grievances arising under this contract are herein defined as a
claim by a party to this Agreement or an employee covered by this Agreement that
the Company or the Union has violated a provision of this Agreement.
STEP I
The employee shall discuss the grievance or complaint with the immediate
supervisor within five (5) working days after the event giving rise thereto
occurs, or within five (5) working days following the date on which the grievant
had or reasonably would have had knowledge thereof. In the event the employee so
requests, the appropriate steward shall be present at this step. The supervisor
shall give an answer within five (5) working days after the grievance is
received.
STEP 2
If there is no settlement in Step 1, the grievance may be presented by the
employee and/or shop steward within five (5) working days from the date on which
the supervisor's answer was given in Step 1. The grievance must be presented in
writing to the department superintendent and must state the following
information:
(a) name or names of employee or employees involved; (b) the department or
departments involved; (c) the date and time of the occurrence or discovery
of the grievance; (d) the facts of the incident on which the claim is
based;
(e) the specific provision of this Agreement alleged to have been
violated; (f) the remedy requested.
The department superintendent shall give the Company's answer in writing within
five (5) working days after the grievance is received by the superintendent.
STEP 3
In the event the grievance is not settled in Step 2, then the grievance
may be appealed in writing to the division manager or a designated
representative by the Union to Step 3 within five (5) working days from the
Company's answer in Step 2. The division manager or a designated representative
shall give an answer in writing within five (5) working days from the date of
the appeal. In the event the grievance is not settled then the aggrieved party
or parties shall have the right to request arbitration.
In the event a grievance arises on behalf of the Employer, the matter
shall be presented to the Union Business Agent in writing, who shall have seven
(7) days from the date of submission within which to endeavor to reconcile the
grievance presented and shall give an answer in writing within that time. If not
settled within that time, the aggrieved party or parties shall have the right to
request arbitration.
Section 7.2. Discharge grievances shall be processed initially under Step 3 of
the grievance procedure. The written grievance shall be filed with the division
manager within five (5) working days following the date of discharge.
Section 7.3. A failure to observe the time limit specified herein for original
presentation of a grievance or presentation in any subsequent step of the
grievance procedure on the part of either the grievant or the Union shall be
conclusive evidence that the grievance has been settled and abandoned.
Failure on the part of the Company to comply with the time limits for
delivering its answer in any step of the grievance procedure shall automatically
advance the grievance to the next step of the grievance procedure.
The time limits of the grievance procedure may be extended by mutual
consent of the Union and the Company.
ARTICLE 8
ARBITRATION
Section 8.1. If a party to this Agreement desires to take a grievance to
arbitration, it shall within fifteen (15) calendar days after the denial of the
grievance, give written notice of his intention to the other party, together
with a written statement of the specific provision or provisions of this
Agreement at issue.
Section 8.2. The parties shall attempt to select an impartial arbitrator. If
they are unable to agree upon a choice within seven (7) calendar days after the
receipt of Notice of Intent to Arbitrate, either party may request the Federal
Mediation and Conciliation Service to submit a list of five (5) arbitrators,
from which the arbitrator will be selected. Selection shall be made by the
parties alternately striking any name from the list (the first to strike shall
be the party requesting arbitration) until only one (1) name remains. The final
name remaining shall be the arbitrator of the grievance.
Section 8.3. The jurisdiction and the decision of the arbitrator of the
grievance shall be confined to a determination of the acts and the
interpretation or application of the specific provision or provisions of this
Agreement at issue. The Arbitrator shall be bound by terms and provisions of
this Agreement and shall have the authority to consider only grievances
representing solely an arbitration issue under this Agreement. The arbitrator
shall have no authority to add to, alter, amend, or modify any provision of this
Agreement. The decision of the arbitrator in writing on any issue properly
before the arbitrator in accordance with the provisions of this Agreement, shall
be final and binding on the aggrieved employee or employees, the Union, and the
Employer.
Section 8.4. Multiple grievances shall not be heard before one arbitrator at the
same hearing except by mutual agreement of the parties. Section 8.5. The Union
and the Employer shall each bear its own costs in these arbitration proceedings,
except that they shall share equally the fee and other expenses of the
arbitrator in connection with the grievance.
ARTICLE 9
SENIORITY
Section 9.1. Seniority is defined as the length of an employee's continuous
employment in the bargaining unit at the Company's Collins, Mississippi, poultry
processing plant since the last permanent date of employment. For purposes of
layoff, recall, promotion, and vacation only, this shall include continuous
service which began prior to the acquisition of the plant by the Company.
Section 9.2. All newly hired or rehired employees shall be considered as
probationary employees for a period of ninety (90) days during which period they
shall not acquire seniority, and during which they may be discharged without
recourse to the grievance and arbitration procedures provided herein. If
retained as a regular employee upon satisfactory completion of the probationary
period, seniority shall be retroactive to the first day of employment.
Section 9.3. In matters of layoff, recall, and promotion, consideration will be
given to an employee's skill, ability, attendance, versatility, training,
physical fitness, and seniority; and when, in the opinion of the Company, the
factors other than seniority are relatively equal, seniority will be the
deciding factor.
Section 9.4. An employee's seniority shall be lost and employment considered
terminated by:
(a) discharge for just cause;
(b) failure to return from layoff within five (5) working days after
written notice by certified mail is sent by the Company to the
employee's last known address on the Company's books. Actual notice
to the employee of recall by any other means shall satisfy the terms
of this provision;
(c) voluntary termination of employment;
(d) failure to report after termination of a leave of absence approved
by the Company in writing on the first scheduled day following the
expiration of such leave of absence;
(e) engaging in a gainful occupation while on leave of absence;
(f) absence from work for three (3) consecutive working days without
notice to the Company, which shall be considered as a voluntary
quit, unless notice was prevented by a cause beyond the control of
the employee;
(g) separation from the Company's active payroll for any reason,
exclusive of leaves of absence approved by the Company, for a period
exceeding an employee's length of service in the Collins plant, or
three (3) months, whichever is less.
Section 9.5. For the purposes of this Agreement, layoffs shall be classified as
(a) "short term" and (b) "long term". A short term layoff is a layoff which will
not exceed ten (10) workdays in length. Short term layoffs may be made without
regard to seniority. A long term layoff is a layoff which will exceed ten (10)
workdays in length. Long term layoffs shall be made subject to Section 3 of this
Article.
Section 9.6. All permanent job vacancies in premium rated classifications shall
be posted for two (2) consecutive working days on the plant bulletin board.
Employees in lower rated classifications desiring promotion to such jobs shall
sign a bid sheet posted on the bulletin board. An employee who does not sign
such bid sheet shall have no right to consideration for the vacancy. However,
the fact that an employee did not sign the bid sheet will not preclude that
employee's selection for the job by the Company if none of the signers is
determined to be qualified. If no qualified employee bids on the posted
position, the Company may fill the position in its discretion. If, after a
reasonable period not to exceed thirty (30) days, the employee selected for the
posted position achieves an acceptable level of performance, the employee shall
receive the rate of the new position. If the employee fails to perform in an
acceptable manner, such employee shall return to a job in their former
classification and the premium job shall be posted again. An employee who
self-disqualifies shall return to the extra board at the line operator's rate of
pay and shall not be eligible for bidding on a premium job for a period of six
(6) months.
Section 9.7. Assignments involving employees on the extra board shall be in
order of seniority. Within a department, no extra board employee shall be
retained over a permanently assigned employee.
ARTICLE 10
SENIORITY LIST
Section 10.1. Upon request at any reasonable time, the Company shall furnish to
the Union a current seniority list.
ARTICLE 11
HOURS OF WORK
Section 11.1. The regular work week shall consist of five (5) days or forty (40)
hours. This shall not be construed as a guarantee of any amount of hours or
work. The basic work week shall be the seven (7) day period from 12:01 a.m.
Sunday until midnight the following Saturday. Employees will be given at least
one (1) calendar week's notice of any change by the Company of the payroll week.
Section 11.2. An employee who works more than forty (40) hours in any one week
shall be paid at time and one-half the regular rate of pay for all hours in
excess of forty (40). Section 11.3. When employees are called to work a shift
outside their regularly scheduled shift and report for work, or when they report
to work at their regularly scheduled time, they shall be given the opportunity
to work a minimum of three (3) hours or receive pay for same at the applicable
hourly rate, except that no such pay shall be made when the plant cannot operate
for reasons beyond the control of the Employer, such as, but not limited to,
strikes, utility failure, fire, flood, storms or other acts of God interfering
with work, or a breakdown of machinery or equipment when the Company notifies
the employees not to report to work at least four (4) hours prior to the
scheduled time to work.
Section 11.4. Employees will be paid at their regular rate for all waiting time
of thirty (30) minutes or less, so long as they do any job they are assigned.
Employees will not be paid for waiting time which exceeds thirty (30) minutes if
(1) they are relieved of all duties, (2) are free to leave the plant, and (3)
are told the time they must return to work. Employees will not be relieved
without pay more than once in any workday except for a lunch break of not more
than one (1) hour.
Section 11.5. The Company will provide one (1) unpaid break of not less than
thirty (30) minutes for lunch during each shift, and shall provide one (1)
twelve (12) minute paid rest period prior to lunch each day. In addition, all
employees will be allowed one (1) twelve (12) minute paid rest period after the
lunch break provided the work time is expected to be not less than two and
one-half (2 1/2) hours. No unpaid break shall be provided for maintenance
employees and truck drivers.
The Company shall have the right to provide a twenty-four (24) minute paid
lunch break to Clean-Up Line Operators on restricted hours in lieu of all breaks
provided in this Section. Section 11.6. A Clean-Up Line Operator who has
completed the probationary period and is permanently assigned to restricted
hours in the clean up department shall receive an hourly adjustment of ninety
(90) cents for each hour worked in that assignment.
<PAGE>
Section 11.7. Employees who have completed the probationary period and are
temporarily assigned for one or more consecutive hours to perform the duties of
an absent employee in a higher paid classification shall receive the rate of
that classification while performing the duties of the classification. Employees
who work at more than one pay rate during a week in which they earn overtime
shall receive overtime pay based upon an average of the rates earned during that
week.
ARTICLE 12
LEAVES OF ABSENCE
Section 12.1. An employee who has completed the probationary period may be
granted, at the Company's discretion, a leave of absence without pay for a
reasonable period of time, not to exceed one (1) month, for the following
reasons:
(a) emergency personal business;
(b) serious illness in the immediate family (spouse,
children or parents), supported by a doctor's certificate; and
(c) Union business, upon written request by the Union's
Business Manager, provided that no more than three (3) employees
shall be on such leave simultaneously.
Section 12.2. Employees who have completed their probationary period are
eligible for up to thirteen (13) weeks per year of unpaid family and medical
treatment leave for the following reasons:
(a) Employee's serious health condition -- a medical certification will be
required which states that the employee is unable to perform the functions of
the employee's position.
(b) Family serious health condition -- spouse, parent, or child. A medical
certification will be required stating the employee is "needed to care for the
individual." (c) New child leave -- the birth, adoption or foster care placement
by a state agency of a child, and, the need to care for the child; such leave
may be prior to the actual birth or placement.
The provisions of this Section shall be administered in accordance with
the Family and Medical Leave Act of 1993 (FMLA). Section 12.3. Employees who
have completed their probationary period who lose actual work time in order to
attend the funeral of a family member shall receive a paid funeral leave for
time necessarily lost during the employee's regularly scheduled shift, provided
the employee would have been scheduled and at work during that day. Said leave
shall be up to three (3) days with pay for a deceased parent, spouse, child,
brother, or sister and one (1) day for a deceased father-in-law, mother-in-law,
grandparent, brother-in-law, or sister-in-law. In order to receive pay under
this Section, an employee must be actively working, must make application for
such paid leave, and must attend the funeral. The Company may require
satisfactory evidence of attendance at the funeral and the relationship of the
deceased.
Section 12.4. If the Company has knowledge that an employee, in a premium-rated
classification, will be on family and medical leave, military leave, or an
industrial injury leave for more than thirty (30) calendar days, the job will be
posted and filled on a temporary basis. The successful bidder will receive the
rate of the premium classification for the period its duties are performed. When
employees on leave under this Section return, they shall be immediately assigned
to their old job; employees temporarily filling the job shall return to their
regular classification and pay rate.
Section 12.5. The Company shall pay each active employee who reports for jury
duty the difference between pay up to eight times the hourly rate for time
actually lost and the juror's daily fee for each day the employee is required to
serve on a jury. The employee must report to work during those days of his
regularly scheduled shift during which the employee is not required to report
for jury duty or be available at court for jury service. The employee must
present proof of jury service and the amount of compensation received from the
court.
ARTICLE 13
VACATIONS
Section 13.1. Regular full-time employees shall be eligible for one (1) week's
vacation after the first anniversary date of continuous employment, and after
the anniversary date of each succeeding year.
Employees shall be eligible for a second week of vacation after the second
anniversary date of continuous employment, and after the anniversary date of
each succeeding year of continuous employment.
Employees shall be eligible for a third week of vacation after the tenth
anniversary date of continuous employment, and after the anniversary date of
each succeeding year of continuous employment.
Employees shall be eligible for a fourth week of vacation after the
twentieth anniversary date of continuous employment and after the anniversary
date of each succeeding year of continuous employment.
Section 13.2. To be eligible for a vacation, an employee must have worked
sixteen hundred (1,600) hours during the preceding twelve (12) months or eighty
(80) percent of available hours for that period, whichever is less. Vacations
and holidays not worked shall be considered time worked for purposes of this
Section.
Section 13.3. Vacation pay shall be computed at forty (40) times the Employee's
regular straight time hourly rate. Section 13.4. Due consideration will be given
employees' choice of vacation time, but all vacations scheduled are subject to
the final approval of the Company in keeping with the Company's scheduling
needs. In the event that two or more employees cannot be released at the same
time, the employee with the longest service with the Company will be given
preference. An employee who notifies the Company of a vacation choice thirty
(30) days in advance shall not lose that vacation choice to another employee.
Vacations may not be scheduled for periods of less than a week, and all
vacations must be taken within an anniversary year.
Section 13.5. The Company reserves the right to schedule a plant shutdown for
one .(l) week in any year, which shall be treated as a vacation week for those
employees entitled to vacation.
ARTICLE 14
HOLIDAYS
Section 14.1. The following shall be considered holidays:
New Year's Day Labor Day
Martin Luther King's Birthday Thanksgiving Day
Memorial Day Christmas Day
July Fourth Birthday Holiday
The birthday holiday shall be taken on the employee's birthday. If the
birthday falls on a Saturday or Sunday, the holiday shall be taken on a day
agreed upon by the Company and the employee within one week of the birthday.
Section 14.2. All regular full-time employees who have completed their
probationary period shall be paid for eight (8) hours at their regular straight
time rate for each holiday enumerated above, provided they report for work and
work all scheduled hours on the workday preceding and the workday next following
the holiday, unless the employee was necessarily absent due to personal illness,
supported by a doctor's certificate, or because of an emergency occurring to the
employee or the employee's immediate family (meaning only spouse, children, or
parents). No employee shall lose holiday pay because of missing no more than
thirty (30) minutes on the workday before or the workday following the holiday.
In any event, an employee must work at least one (1) day during the
calendar week in which a holiday falls in order to be eligible for holiday pay,
except the employee who is on vacation.
Section 14.3. Employees required to work on a holiday shall be paid the amount
provided above, in addition to their regular earnings for that day. Hours not
worked on a holiday shall not be considered as work time in computing any
additional compensation due under the overtime provisions of this contract.
Section 14.4. If an employee is required to work and fails to report or fails to
work scheduled hours on a holiday, the employee shall forfeit holiday pay for
that day. Section 14.5. Employees on vacation during the week in which a holiday
falls shall receive holiday pay.
ARTICLE 15
INSURANCE
Section 15.1. The Company will provide a group insurance program for employees
covered by this Agreement. The Company will continue to make monthly
contributions toward group insurance premiums in the same proportion as is
currently in effect. Employees will bear the remaining costs of the insurance.
ARTICLE 16
WAGES
Section 16.1. Wages shall be paid as provided in Appendix A attached hereto and
made a part of this Agreement. Section 16.2. Whenever a new job classification
is created by the Company, or there is a change or merger of job classifications
or the job content of job classifications, the Company will discuss the
appropriate wage rate with the Union. If a mutually satisfactory rate cannot be
agreed upon, the Company will set the rate. The Union may file a grievance on
the rate, and the dispute shall be settled in accordance with the grievance and
arbitration procedures of this contract.
Section 16.3. Any employees who, upon the effective date of the wage rate set
forth in Appendix A, are earning in excess of the applicable rate, shall, during
the term of this Agreement, continue to receive their current rate until the
contract rate equals or exceeds that rate. This section shall not apply to any
employee in a classification which has been paid on a salary basis under any
past contract.
Section 16.4. In addition to the wage rates as provided in Appendix A,
production employees who have been continuously employed for five (5) or more
years shall receive seniority pay of twenty (20) cents per hour. Maintenance
employees and distribution drivers who have been continuously employed for five
(5) or more years will receive seniority pay of fifty (50) cents per hour. Long
haul drivers who have been continuously employed for five (5) more years will
receive an additional one (1) cent on the applicable mileage rate.
Section 16.5. Employees who have been continuously employed for one (1) or more
years shall receive a night shift differential of twenty-five (25) cents per
hour for work performed on a shift starting during the hours beginning 12:00
noon through 1:00 a.m. The starting time of a shift determines if it is subject
to the shift differential. Employees performing work on a night shift which is
not their regular shift will receive shift differential for such work if it
lasts three (3) or more hours. Distribution drivers shall not receive shift
differential regardless of the time they begin work.
ARTICLE 17
MISCELLANEOUS
Section 17.1. The Company shall maintain safe, sanitary, and healthy working
conditions at all times, and employees will be required to cooperate in
maintaining such conditions. Any complaints regarding safety or health shall be
processed through the grievance and arbitration provisions of this Agreement.
Section 17.2. The Company will provide any uniforms required of employees who
have completed their probationary period.
The Company will furnish required safety equipment, gloves, aprons, hair
nets, freezer gloves, cotton gloves, and smocks at no cost to the employee.
Needed replacements, through normal use, will be made at no cost provided the
worn out article is returned to the Company. If an item is lost or destroyed
through employee negligence, the employee will be charged for its replacement.
Section 17.3. The Employer may require any employee to take a physical
examination at any time at the Employer's expense. Section 17.4. It shall be the
responsibility of all employees to keep the Employer apprised of their current
address, telephone number, marital status and number of dependents.
Section 17.5. It is the intent of the parties hereto that no provisions of this
Agreement shall require either party to perform any act which shall be unlawful
under any Mississippi or Federal statute.
ARTICLE 18
EMPLOYEE STOCK OWNERSHIP PLAN - RETIREMENT
Section 18.1. Employees covered by this Agreement will continue to be covered by
the Employee Stock Ownership Plan of Sanderson Farms, Inc. and Affiliates.
Participation and benefits in the plan shall be in accordance with the
provisions of that plan.
ARTICLE 19
NO DISCRIMINATION
Section 19.1. The Company and the Union agree that they will not discriminate
against any person with regard to employment or Union membership because of
race, creed, color, sex, religion, age, national origin, or disability (as
defined in the Americans With Disabilities Act).
Section 19.2. Whenever masculine gender is used in this Agreement, it shall
apply to the feminine gender.
ARTICLE 20
AUTHORIZATION FOR REPRESENTATION AND CHECK-OFF
Section 20.1. During the term of this Agreement, the Company will deduct
initiation fees, assessments, and Union dues from the wages of employees who
individually authorize the Company on a form in compliance with Appendix B to
this Agreement. Section 20.2. The Union shall save the Company harmless against
and from all claims, demands, suits or other forms of liability that arise out
of or by reason of action taken or not taken by the Company in reliance upon or
compliance with any provisions of this Article.
Section 20.3. It is agreed that by reason of institution of the above check-off
system, collections by any other method on the Company's premises are
prohibited, except with the permission of the Company.
ARTICLE 21
UNION SECURITY
Section 21.1. It shall be a condition of employment that all employees of the
Employer covered by this Agreement become members of the Union in good standing
not later than thirty-one (31) days after the effective date of this Agreement,
and remain members in good standing of the Union. It shall also be a condition
of employment that all employees covered by this Agreement and hired on or after
its effective date shall on the thirty-first (31st) day following the beginning
of such employment become and remain members in good standing in the Union.
The Union shall save the Company harmless against and from all claims,
demands, suits, or other forms of liability that arise out of or by reason of
action taken or not taken by the Company in reliance upon or compliance with any
provisions of this Article.
It is understood and agreed that the provisions of this Article shall be
effective only to the extent permitted by applicable law.
ARTICLE 22
DURATION OF AGREEMENT
Section 22.1. This Agreement shall remain in full force and effect from the 13th
day of January, 2000 until the 31st day of December, 2003, and shall continue
thereafter from year to year until either party to this Agreement desires to
terminate this Agreement by giving written notice at least sixty (60) days prior
to December 31, 2003, or at least sixty (60) days' written notice prior to any
anniversary date thereafter. The parties to this Agreement shall endeavor to
satisfactorily negotiate any contemplated change or execute a new Agreement
during the sixty (60) day period, after proper notice in writing has been given
as provided herein and above. Notice, as specified in this Article, shall be
mailed via United States Certified Mail.
IN WITNESS WHEREOF, the parties have hereunto signed their names this
______ day of January, 2000.
SANDERSON FARMS, INC. LABORERS' INTERNATIONAL UNION
(Collins Processing Division) OF NORTH AMERICA, PROFESSIONAL
EMPLOYEES LOCAL UNION #693
AFL-CIO
/c/Daniel J. Nicovich /s/Charles Carney
- -------------------------------- -----------------------------------
/s/Jimmie Funelin
- -------------------------------- -----------------------------------
/s/Sheila Richardson
- -------------------------------- -----------------------------------
/s/Jerry Barnes
-----------------------------------
/s/Easter Ducksworth
-----------------------------------
/s/Cassandra Magee
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
<PAGE>
<TABLE>
<CAPTION>
APPENDIX "A"
WAGE SCHEDULE
EFFECTIVE
1/16/00 1/07/01 1/06/02 1/05/03
<S> <C> <C> <C> <C>
PROCESSING
Receiving
Forklift Operator ................ 8.25 8.45 8.80 9.15
Hanging Dock ..................... 8.10 8.30 8.65 9.00
Picking
Killer ........................... 8.35 8.55 8.90 9.25
Floorworker ...................... 8.00 8.20 8.55 8.90
Line Operator .................... 7.85 8.05 8.40 8.75
Eviscerating
Floorworker ...................... 8.00 8.20 8.55 8.90
Bird Chiller Operator ............ 8.00 8.20 8.55 8.90
Line Operator .................... 7.85 8.05 8.40 8.75
PACKING
Drip Line
Forklift Operator ................ 8.30 8.50 8.85 9.20
Scale Operator ................... 8.10 8.30 8.65 9.00
Floorworker ...................... 8.00 8.20 8.55 8.90
Giblet Chiller Operator .......... 8.00 8.20 8.55 8.90
Grader ........................... 7.95 8.15 8.50 8.85
Line Operator .................... 7.85 8.05 8.40 8.75
Specialty
Scale Operator ................... 8.10 8.30 8.65 9.00
Floorworker ...................... 8.00 8.20 8.55 8.90
Line Operator .................... 7.85 8.05 8.40 8.75
Polybag
Scale Operator ................... 8.10 8.30 8.65 9.00
Floorworker ...................... 8.00 8.20 8.55 8.90
Line Operator .................... 7.85 8.05 8.40 8.75
Paw Line
Scale Operator ................... 8.10 8.30 8.65 9.00
Chiller Operator ................. 8.00 8.20 8.55 8.90
Line Operator .................... 7.85 8.05 8.40 8.75
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EFFECTIVE
1/16/00 1/07/01 1/06/02 1/05/03
<S> <C> <C> <C> <C>
CHILLING/PREPRICE/SHIPPING
Chilling
Forklift Operator ................ 8.30 8.50 8.85 9.20
Chilling Room Operator ........... 7.95 8.15 8.50 8.85
Preprice
Data Printer Operator ............ 8.10 8.30 8.65 9.00
Line Operator .................... 7.85 8.05 8.40 8.75
Shipping
Forklift Operator ................ 8.30 8.50 8.85 9.20
Billing Clerk .................... 8.00 8.20 8.55 8.90
Loading Crew ..................... 7.95 8.15 8.50 8.85
Distribution Driver .............. 10.40 10.60 10.95 11.30
DEBONE DEPARTMENT
Deboning
Scale Operator ................... 8.10 8.30 8.65 9.00
Floorworker ...................... 8.00 8.20 8.55 8.90
Knife Sharpener .................. 8.00 8.20 8.55 8.90
Cooler Arranger .................. 7.95 8.15 8.50 8.85
Combo Packer ..................... 7.95 8.15 8.50 8.85
Dumper ........................... 7.95 8.15 8.50 8.85
Stack Off ........................ 7.95 8.15 8.50 8.85
Line Operator .................... 7.85 8.05 8.40 8.75
QUALITY CONTROL
Quality Control Technician ....... 8.10 8.30 8.65 9.00
Purchasing
Supply Clerk ..................... 8.30 8.50 8.85 9.20
Line Operator .................... 7.85 8.05 8.40 8.75
Waste Water
Waste Treatment Operator ......... 7.95 8.15 8.50 8.85
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EFFECTIVE
1/16/00 1/07/01 1/06/02 1/05/03
<S> <C> <C> <C> <C>
MAINTENANCE DEPARTMENT
Master Skilled Operator I ............ 12.65 12.85 13.20 13.55
Master Skilled Operator II ........... 11.15 11.35 11.70 12.05
Skilled Maintenance Men 10.25 ........ 10.45 10.80 11.15
Mechanic ............................. 9.65 9.85 10.20 10.55
Mechanic Helper ...................... 8.15 8.35 8.70 9.05
Clean-Up Floor Worker ................ 8.00 8.20 8.55 8.90
Clean-Up Line Operators .............. 7.85 8.05 8.40 8.75
BY-PRODUCTS (Rendering)
Maintenance
Master Skilled Maint. I .............. 12.65 12.85 13.20 13.55
Master Skilled Maint. II ............. 11.15 11.35 11.70 12.05
Skilled Maintenance .................. 10.25 10.45 10.80 11.15
Mechanic ............................. 9.65 9.85 10.20 10.55
Mechanic Production
Feather Loader ....................... 8.30 8.50 8.85 9.20
Feather Cooker Operator 8.30 ......... 8.50 8.85 9.20
Meat Cooker Operator ................. 8.30 8.50 8.85 9.20
Utility .............................. 8.30 8.50 8.85 9.20
By-Products Crew ..................... 8.30 8.50 8.85 9.20
Bobcat Loader ........................ 8.10 8.30 8.65 9.00
Driver
Raw Material Driver .................. 9.05 9.25 9.60 9.95
Finish Material Driver ............... 9.05 9.25 9.60 9.95
</TABLE>
Probationary employees shall receive a training rate of $6.15
per hour for the first ninety (90) days of their employment, which
shall be $6.25 effective January 7, 2001, $6.35 effective January 6,
2002, and $6.45 effective January 5, 2003. Upon the expiration of
the ninety (90) day period, the rate shall be $7.05 per hour, which
shall be $7.15 effective January 7, 2001, $7.25 effective January 6,
2002, and $7.35 effective January 5, 2003. After one year of
employment, an employee's rate shall be as shown hereinabove. Newly
hired employees in premium classifications above shall receive the
rate of that classification upon the expiration of a forty-five (45)
day period.
Long haul drivers will be paid on a per mile basis as follows:
Trips in excess of 100 miles from Collins:
Less than one year 28 cents per mile
One year to five years 30 cents per mile
Over five years 32 cents per mile
Trips up to 100 miles from Collins:
Less than one year 32 cents per mile
One year to five years 34 cents per mile
Over five years 36 cents per mile
Double team operation:
Less than five years 19 cents per mile
After five years 22 cents per mile
Miscellaneous paid time, including breakdowns, is paid at the
distribution driver hourly rate.
<PAGE>
APPENDIX "B"
CHECK-OFF AUTHORIZATION AND ASSIGNMENT
TO: ALL EMPLOYERS BY WHOM I AM EMPLOYED
I, _________________________________________________________,
do hereby assign to Local Union No. 693, LIUNA Professional
Employees, AFL-CIO, such amounts from my wages as shall be required
to pay the initiation fees, readmission fees, membership dues and
assessments of the Local Union as may be established from time to
time. My Employer is hereby authorized to deduct amounts from my
wages and pay the same to the Local Union and/or its authorized
representative, in accordance with the collective bargaining
agreement in existence between the Local Union and my Employer.
This authorization shall become operative upon the effective
date of each collective bargaining agreement entered into between my
Employer and the Local Union.
This authorization shall be irrevocable for a period of one
year, or until the termination of the collective bargaining
agreement in existence between my Employer and the Local Union,
whichever occurs sooner; and I agree and direct that this
authorization shall be automatically renewed and shall be
irrevocable for successive periods of one year each, or for the
period of such succeeding applicable collective bargaining agreement
between my Employer and the Local Union, whichever be shorter,
unless I give written notice to my Employer and the Local Union not
more than twenty days and not less than ten days prior to the
expiration of each period of one year, or of each applicable
collective bargaining agreement between my Employer and the Local
Union, whichever occurs sooner.
Dues and fees paid to Local Union No. 693 are not deductible
as charitable contributions for federal income tax purposes. Dues
and fees paid to Local Union 693, however, may qualify as business
expenses, and may be deductible in limited circumstances subject to
various restrictions imposed by the Internal Revenue Service.
This assignment has been executed this _____ day of
______________________________, 2000.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>6
<FILENAME>0006.txt
<DESCRIPTION>BRAZOS PROCESSING UNION AGREEMENT
<TEXT>
A G R E E M E N T
BETWEEN
SANDERSON FARMS, INC.
(BRAZOS PROCESSING DIVISION)
AND
UNITED FOOD AND COMMERCIAL WORKERS UNION, LOCAL 408, AFL-CIO
Chartered by the
UNITED FOOD AND COMMERCIAL WORKERS INTERNATIONAL UNION,
AFL-CIO, CLC
OCTOBER 7, 1999 - OCTOBER 6, 2002
<PAGE>
TABLE OF CONTENTS
ARTICLE PAGE
- ------- ----
1. AGREEMENT 4
2. RECOGNITION 4
3. MANAGEMENT PREROGATIVES 5
4. SHOP STEWARDS 6
5. UNION BULLETIN BOARD 7
6. NO STRIKE - NO LOCK OUT 7
7. GRIEVANCE PROCEDURE 7
STEP 1 7
STEP 2 8
STEP 3 8
8. ARBITRATION 9
9. SENIORITY 10
10. SENIORITY LIST 12
11. HOURS OF WORK 12
12. LEAVES OF ABSENCE 14
13. VACATIONS 15
14. HOLIDAYS 16
15. INSURANCE 17
16. EMPLOYEE STOCK OWNERSHIP PLAN 18
17. WAGES 18
18. MISCELLANEOUS 19
19 NO DISCRIMINATION 20
20. COMPLETE AGREEMENT AND SEPARABILITY 20
21. AUTHORIZATION FOR REPRESENTATION AND CHECK-OFF 21
22. DURATION OF AGREEMENT 21
SIGNATURES 22
APPENDIX A - WAGE RATES *
APPENDIX B - CHECK OFF AUTHORIZATION *
<PAGE>
ARTICLE 1
AGREEMENT
Section 1.1. This Agreement made and entered into this _7th day of
October, 1999, by and between Sanderson Farms, Inc. (Brazos Processing
Division) at its Bryan, Texas processing plant (hereinafter referred to as
"Employer" or "Company"), and United Food and Commercial Workers Union, Local
408, AFL-CIO, chartered by the United Food and Commercial Workers International
Union, AFL-CIO, CLC (hereinafter referred to as the "Union".
WITNESSETH
Section 1.2. WHEREAS, the Company and the Union are desirous of entering into a
contractual relationship covering rates of pay, hours of work and other terms
and conditions of employment of employees employed within the unit of
representation as hereinafter described; and Section 1.3. WHEREAS, the parties
have conferred, negotiated and agreed upon the terms and conditions of
employment to be applicable to the employees covered by this Agreement for the
contract period as herein specified. Section 1.4. NOW, THEREFORE, in
consideration of the mutual covenants and agreements herein contained, the
parties do hereby agree as follows:
ARTICLE 2
RECOGNITION
Section 2.1. The Employer recognizes the Union as the certified bargaining
representative (NLRB Case No. 16-RC-10107) for all production and maintenance
employees employed at its Bryan, Texas Poultry Processing Plant, excluding
office clerical employees, guards, professional employees, and supervisors, as
defined in the Act.
Section 2.2. No employee shall be required to make any written or verbal
agreement that will conflict with this Agreement. No employee shall be
reclassified so as to defeat the purpose of this Agreement.
<PAGE>
ARTICLE 3
A. MANAGEMENT RIGHTS
Section 3.1
There shall remain in the Company the exclusive and unilateral right of
management of the Company's plant and facilities and the assignment and
direction of the working forces, not limited to but including the following: to
determine the number, location and type of plants it may operate; to decide the
products to be manufactured, the methods of manufacture, the materials to be
used and the continuance or discontinuance of any product mater or method of
production; to introduce new equipment, machinery or processes and to change or
eliminate existing equipment, machinery or processes; to discontinue,
temporarily or permanently, in whole or in part, conduct of its business or
operations; and to relocate its business or operations in whole or in part; to
decide the nature of materials, supplies, equipment or machinery to be used and
the price to be paid; to decide upon the sales methods and sales price of all
products; to subcontract any work performed by or for the Company; to hire the
workforce in accordance with the requirements set by management; to transfer,
promote or demote employees subject to the seniority provisions of this
Agreement; to lay off employees for economic reasons and to terminate,
discharge, suspend or otherwise relieve employee from duty for just cause; to
direct and control the workforce; to establish and enforce reasonable rules
governing employment, conduct, and working conditions; to determine the size of
the workforce; to determine the number of employee assigned to any particular
operation; to determine the workplace and to set reasonable work performance
levels; to establish, change, combine or abolish job classifications and to
determine the length of the work week; to utilize job rotation as deemed
necessary by the company; to determine work starting and stopping time, the
length of the work day, when overtime shall be worked, to require overtime; and
to determine the qualifications of employees. All other rights of Management are
also expressly retained even though not particularly enumerated above unless
they are clearly limited by the explicit language of some other provisions of
this Agreement.
It is understood that the word "unilateral right" as used herein mean that
the company shall have the unquestioned right to take such action without prior
notification or consultation with the Union, except that any such action, once
taken, may be questioned, to the extent provided in this Article or as
specifically provided elsewhere in this Agreement, through the grievance and
arbitration procedures.
Section 3.2.
If the sub-contracting of work usually performed by bargaining unit
employees or partial or complete plant relocation will have the foreseeable
effect of causing the layoff of any unit employee, the Company will give notice
to the Union and the parties will negotiate on the effects of the layoff. It is
further understood that none of the provisions of this Article shall have the
effect to reduce or waive any rights of unit employees under the Worker
Adjustment and Retraining Notification Act (WARN). Section 3.3.
Failure of the Company to exercise rights herein reserved to it or
exercising them in a particular way shall not be deemed a waiver of said rights
of the Company's rights to exercise said rights in some other manner not in
conflict with the terms of this Agreement.
ARTICLE 4
SHOP STEWARDS
Section 4.1. The Employer recognizes the right of the Union to designate shop
stewards, not to exceed twenty (20) in number who shall be assigned to serve
specific areas of the plant to handle such Union business as may arise. The shop
stewards shall be employees of the Company. The Union shall notify the Company
in writing as to the names of the stewards and of any changes in designation of
stewards.
Section 4.2. A representative of the Union shall be permitted to enter the plant
at reasonable times, upon Employer's premises and plant, provided such
representative shall in no way interfere with the operations of Employer's
business and shall make arrangements with the Employer's manager.
Section 4.3. Upon reasonable notice from the Union, the Employer shall grant an
unpaid leave of absence to stewards up to one week per year for training
purposes. The Union agrees that it will not seek such leave for more than half
of the stewards at any one time.
<PAGE>
ARTICLE 5
UNION BULLETIN BOARD
Section 5.1. The Employer will provide a bulletin board in the plant for posting
of Union notices. All matters to be posted shall be submitted to the Division
Manager or a designated representative for approval prior to posting, and
management's decision shall be final.
ARTICLE 6
NO STRIKE - NO LOCK OUT
Section 6.1. For the duration of this Agreement, there shall be no strike,
stoppages, slowdowns, picketing, or other interruption of or interference with
the operations of the plant.
Section 6.2. The Company shall not lock out employees for the duration of this
Agreement. Section 6.3. Neither the violation of any provisions of the
Agreement, nor the commission of any act constituting an unfair labor practice,
or otherwise made unlawful, shall excuse the employees, the Union, or the
Company from their obligations under the provisions of this Article. Section
6.4. An employee discharged or otherwise disciplined for violation of this
Article, may seek review of such discipline through the grievance and
arbitration procedures provided herein. In this event, the only question to be
reviewed shall be whether or not the employee participated in the prohibited
conduct.
ARTICLE 7
GRIEVANCE PROCEDURE
Section 7.1. Grievances arising under this contract are herein defined as a
claim by a party to this Agreement or an employee covered by this Agreement that
the Company or the Union has violated a provision of this Agreement.
STEP I
The employee shall discuss the grievance or complaint with the immediate
supervisor within five (5) working days after the event giving rise thereto
occurs, or within five (5) working days following the date on which the grievant
had or reasonably would have had knowledge thereof. In the event the employee so
requests, the appropriate steward shall be present at this step. The supervisor
shall give an answer within five (5) working days after the grievance is
received.
<PAGE>
STEP 2
If there is no settlement in Step 1, the grievance may be presented by the
employee and/or shop steward within five (5) working days from the date on which
the supervisor's answer was given in Step 1. The grievance must be presented in
writing to the department superintendent and must state the following
information:
(a) name or names of employee or employees involved; (b) the department or
departments involved; (c) the date and time of the occurrence or discovery
of the grievance; (d) the facts complained about (e) the specific
provision of this Agreement alleged to have been
violated;
(failure to designate the correct provision will not affect the
merits of the grievance);
(f) the remedy requested.
The superintendent shall give the Company's answer in writing within five (5)
working days after the grievance is received by the superintendent.
STEP 3
In the event the grievance is not settled in Step 2, then the grievance
may be appealed in writing to the division manager or a designated
representative by the Union to Step 3 within five (5) working days from the
Company's answer in Step 2. The division manager or a designated representative
shall give an answer in writing within five (5) working days from the date of
the appeal. In the event the grievance is not settled then the aggrieved party
or parties shall have the right to request arbitration.
In the event a grievance arises on behalf of the Employer, the matter
shall be presented to the Union Business Agent in writing, who shall have seven
(7) days from the date of submission within which to endeavor to reconcile the
grievance presented and shall give an answer in writing within that time. If not
settled within that time, the aggrieved party or parties shall have the right to
request arbitration.
Section 7.2. Discharge grievances shall be processed initially under Step 3 of
the grievance procedure. The written grievance shall be filed with the division
manager within five (5) working days following the date of discharge.
Section 7.3. A failure to observe the time limit specified herein for original
presentation of a grievance or presentation in any subsequent step of the
grievance procedure on the part of either the grievant or the Union shall be
conclusive evidence that the grievance has been settled and abandoned.
Failure on the part of the Company to comply with the time limits
for delivering its answer in any step of the grievance procedure shall
automatically advance the grievance to the next step of the grievance procedure.
The time limits of the grievance procedure may be extended by mutual
consent of the Union and the Company.
ARTICLE 8
ARBITRATION
Section 8.1. If a party to this Agreement desires to take a grievance to
arbitration, it shall within fifteen (15) calendar days after the denial of the
grievance, give written notice of his intention to the other party, together
with a written statement of the specific provision or provisions of this
Agreement at issue.
Section 8.2. The parties shall attempt to select an impartial arbitrator. If
they are unable to agree upon a choice within seven (7) calendar days after the
receipt of Notice of Intent to Arbitrate, either party may request the Federal
Mediation and Conciliation Service to submit a list of five (5) arbitrators,
from which the arbitrator will be selected. Selection shall be made by the
parties alternately striking any name from the list (the first to strike shall
be the party requesting arbitration) until only one (1) name remains. The final
name remaining shall be the arbitrator of the grievance.
Section 8.3. The jurisdiction and the decision of the arbitrator of the
grievance shall be confined to a determination of the acts and the
interpretation or application of the specific provision or provisions of this
Agreement at issue. The Arbitrator shall be bound by terms and provisions of
this Agreement and shall have the authority to consider only grievances
representing solely an arbitration issue under this Agreement. The arbitrator
shall have no authority to add to, alter, amend, or modify any provision of this
Agreement. The decision of the arbitrator in writing on any issue properly
before the arbitrator in accordance with the provisions of this Agreement, shall
be final and binding on the aggrieved employee or employees, the Union, and the
Employer.
Section 8.4. Multiple grievances shall not be heard before one arbitrator at the
same hearing except by mutual agreement of the parties. Section 8.5. The Union
and the Employer shall each bear its own costs in these arbitration proceedings,
except that they shall share equally the fee and other expenses of the
arbitrator in connection with the grievance. Section 8.6. The Grievance
Committee of the Union shall have the sole authority to determine whether or not
the employee's grievance is qualified to be submitted to arbitration by the
Union. The decision of the Grievance Committee shall be made at its first
meeting after the Company's Step 3 answer, and the Union will promptly inform
the Company of its decision.
ARTICLE 9
SENIORITY
Section 9.1. Seniority is defined as the length of an employee's continuous
employment in the bargaining unit at the Company's Bryan, Texas, poultry
processing plant since the last permanent date of employment. For purposes of
layoff, recall, promotion, and vacation only, this shall include continuous
service which began prior to the acquisition of the plant by the Company.
Section 9.2. All newly hired or rehired employees shall be considered as
probationary employees for a period of ninety (90) days during which period they
shall not acquire seniority, and during which they may be discharged without
recourse to the grievance and arbitration procedures provided herein. If
retained as a regular employee upon satisfactory completion of the probationary
period, seniority shall be retroactive to the first day of employment.
Section 9.3 In matters of promotion, consideration will be given to an
employee's skill, ability, attendance, versatility, training, physical fitness,
and seniority; and when, in the opinion of the Company, the factors other than
seniority are relatively equal, seniority will be the deciding factor. In
layoffs and recalls, seniority will prevail, provided the employees involved are
relatively equal in ability and fitness to immediately perform the available
work.
Section 9.4. An employee's seniority shall be lost and employment
- ------------
considered terminated by:
(a) discharge for just cause;
(b) failure to return from layoff within five (5) working days after
written notice by certified mail is sent by the Company to the
employee's last known address on the Company's books. Actual notice
to the employee of recall by any other means shall satisfy the terms
of this provision;
(c) voluntary termination of employment;
(d) failure to report after termination of a leave of absence approved
by the Company in writing on the first scheduled day following the
expiration of such leave of absence;
(e) engaging in a gainful occupation while on leave of absence;
(f) absence from work for three (3) consecutive working days without
notice to the Company, which shall be considered as a voluntary
quit, unless notice was prevented by a cause beyond the control of
the employee;
(g) separation from the Company's active payroll for any reason,
exclusive of leaves of absence approved by the Company, for a period
exceeding an employee's length of service in the Bryan plant, or
three (3) months, whichever is less.
Section 9.5. For the purposes of this Agreement, layoffs shall be classified as
(a) "short term" and (b) "long term". A short term layoff is a layoff which will
not exceed ten (10) workdays in length. Short term layoffs may be made without
regard to seniority. A long term layoff is a layoff which will exceed ten (10)
workdays in length. Long term layoffs shall be made subject to Section 3 of this
Article.
Section 9.6. All permanent job vacancies in premium rated classifications shall
be posted for two (2) consecutive working days on the plant bulletin board.
Employees in lower rated classifications desiring promotion to such jobs shall
sign a bid sheet posted on the bulletin board. An employee who does not sign
such bid sheet shall have no right to consideration for the vacancy. However,
the fact that an employee did not sign the bid sheet will not preclude that
employee's selection for the job by the Company if none of the signers is
determined to be qualified. If no qualified employee bids on the posted
position, the Company may fill the position in its discretion. If, after a
reasonable period not to exceed thirty (30) days, the employee selected for the
posted position achieves an acceptable level of performance, the employee shall
receive the rate of the new position. If the employee fails to perform in an
acceptable manner, such employee shall return to a job in their former
classification and the premium job shall be posted again. An employee who
self-disqualifies shall return to the extra board at the line operator's rate of
pay and shall not be eligible for bidding on a premium job for a period of six
(6) months. Section 9.7. Assignments involving employees on the extra board
shall be in order of seniority. Within a department, no extra board employee
shall be retained over a permanently assigned employee.
ARTICLE 10
SENIORITY LIST
Section 10.1. Upon request at any reasonable time, the Company shall furnish to
the Union a current seniority list. The list shall be alphabetical and shall
include department, social security number, date of hire, and rate of pay.
ARTICLE 11
HOURS OF WORK
Section 11.1. The regular work week shall consist of five (5) days or forty (40)
hours. This shall not be construed as a guarantee of any amount of hours or
work. The basic work week shall be the seven (7) day period from 12:01 a.m.
Sunday until midnight the following Saturday. Employees will be given at least
one (1) calendar week's notice of any change by the Company of the payroll week.
Section 11.2. An employee who works more than forty (40) hours in any one week
shall be paid at time and one-half the regular rate of pay for all hours in
excess of forty (40).
Section 11.3. When employees are called to work a shift outside their regularly
scheduled shift and report for work, or when they report to work at their
regularly scheduled time, they shall be given the opportunity to work a minimum
of three (3) hours or receive pay for same at the applicable hourly rate, except
that no such pay shall be made when the plant cannot operate for reasons beyond
the control of the Employer, such as, but not limited to, strikes, utility
failure, fire, flood, storms or other acts of God interfering with work, or a
breakdown of machinery or equipment when the Company notifies the employees not
to report to work at least four (4) hours prior to the scheduled time to work.
Section 11.4. Employees will be paid at their regular rate for all waiting time
of thirty (30) minutes or less, so long as they do any job they are assigned.
Employees will not be paid for waiting time which exceeds thirty (30) minutes if
(1) they are relieved of all duties, (2) are free to leave the plant, and (3)
are told the time they must return to work. Employees will not be relieved
without pay more than once in any workday except for a lunch break of not more
than one (1) hour. Section 11.5. The Company will provide one (1) unpaid break
of not less than thirty (30) minutes for lunch during each shift, and shall
provide one (1) twelve (12) minute paid rest period prior to lunch each day. In
addition, all employees will be allowed one (1) twelve (12) minute paid rest
period after the lunch break provided the work time is expected to be not less
than two and one-half (2 1/2) hours. No unpaid break shall be provided for
maintenance employees.
The Company shall have the right to provide a twenty-four (24) minute paid
lunch break to Clean-Up Line Operators on restricted hours in lieu of all breaks
provided in this Section.
Section 11.6. A Clean-Up Line Operator who has completed the probationary period
and is permanently assigned to restricted hours in the clean up department shall
receive an hourly adjustment of ninety (90) cents for each hour worked in that
assignment.
Section 11.7. Employees who have completed the probationary period and are
temporarily assigned for one or more consecutive hours to perform the duties of
an absent employee in a higher paid classification shall receive the rate of
that classification while performing the duties of the classification. Employees
who work at more than one pay rate during a week in which they earn overtime
shall receive overtime pay based upon an average of the rates earned during that
week Section 11.8. When daily overtime in excess of fifteen (15) minutes is
required for processing employees, they shall be notified by second break, or as
soon as the Company knows such overtime is required.
ARTICLE 12
LEAVES OF ABSENCE
Section 12.1. An employee who has completed the probationary period may be
granted, at the Company's discretion, a leave of absence without pay for a
reasonable period of time, not to exceed one (1) month, for the following
reasons:
(a) emergency personal business; and
(b) Union business, upon written request by the Union's Business
Manager, provided that no more than three (3) employees shall be on
such leave simultaneously..
Section 12.2. Employees who have completed their probationary period are
eligible for up to thirteen (13) weeks per year of unpaid family and medical
treatment leave for the following reasons:
(a) Employee's serious health condition -- a medical certification
will be required which states that the employee is unable to perform
the functions of the employee's position. (b) Family serious health
condition -- spouse, parent, or child. A medical certification will
be required stating the employee is "needed to care for the
individual." (c) New child leave -- the birth, adoption or foster
care placement by a state agency of a child, and, the need to care
for the child; such leave may be prior to the actual birth or
placement.
The provisions of this Section shall be administered in accordance with
the Family and Medical Leave Act of 1993 (FMLA). Section 12.3. Employees who
have completed their probationary period who lose actual work time in order to
attend the funeral of a family member shall receive a paid funeral leave for
time necessarily lost during the employee's regularly scheduled shift, provided
the employee would have been scheduled and at work during that day. Said leave
shall be up to three (3) days with pay for a deceased parent, spouse, child,
brother, or sister and one (1) day for a deceased father-in-law, mother-in-law,
grandparent, brother-in-law, or sister-in-law. In order to receive pay under
this Section, an employee must be actively working, must make application for
such paid leave, and must attend the funeral. The Company may require
satisfactory evidence of attendance at the funeral and the relationship of the
deceased.
Section 12.4. If the Company has knowledge that an employee, in a premium-rated
classification, will be on family and medical leave, military leave, or an
industrial injury leave for more than thirty (30) calendar days, the job will be
posted and filled on a temporary basis. The successful bidder will receive the
rate of the premium classification for the period its duties are performed. When
employees on leave under this Section return, they shall be immediately assigned
to their old job; employees temporarily filling the job shall return to their
regular classification and pay rate. Section 12.5. The Company shall pay each
active employee who reports for jury duty the difference between pay up to eight
times the hourly rate for time actually lost and the juror's daily fee for each
day the employee is required to serve on a jury. The employee must report to
work during those days of his regularly scheduled shift during which the
employee is not required to report for jury duty or be available at court for
jury service. The employee must present proof of jury service and the amount of
compensation received from the court.
ARTICLE 13
VACATIONS
Section 13.1. Regular full-time employees shall be eligible for one (1) week's
vacation after the first anniversary date of continuous employment, and after
the anniversary date of each succeeding year.
Employees shall be eligible for a second week of vacation after the second
anniversary date of continuous employment, and after the anniversary date of
each succeeding year of continuous employment.
Employees shall be eligible for a third week of vacation after the tenth
anniversary date of continuous employment, and after the anniversary date of
each succeeding year of continuous employment.
Employees shall be eligible for a fourth week of vacation after the
twentieth anniversary date of continuous employment and after the anniversary
date of each succeeding year of continuous employment.
Section 13.2. To be eligible for a vacation, an employee must have worked
sixteen hundred (1,600) hours during the preceding twelve (12) months or eighty
(80) percent of available hours for that period, whichever is less. Vacations
and holidays not worked shall be considered time worked for purposes of this
Section.
Section 13.3. Vacation pay shall be computed at forty (40) times the Employee's
regular straight time hourly rate. Section 13.4. Due consideration will be given
employees' choice of vacation time, but all vacations scheduled are subject to
the final approval of the Company in keeping with the Company's scheduling
needs. In the event that two or more employees cannot be released at the same
time, the employee with the longest service with the Company will be given
preference. An employee who notifies the Company of a vacation choice thirty
(30) days in advance shall not lose that vacation choice to another employee.
Vacations may not be scheduled for periods of less than a week, and all
vacations must be taken within an anniversary year.
Section 13.5. The Company reserves the right to schedule a plant shutdown for
one .(l) week in any year, which shall be treated as a vacation week for those
employees entitled to vacation.
ARTICLE 14
HOLIDAYS
Section 14.1. The following shall be considered holidays:
- -------------
New Year's Day Labor Day
Martin Luther King's Birthday Thanksgiving Day
Memorial Day Christmas Day
July Fourth Birthday Holiday
The birthday holiday shall be taken on the employee's birthday. If the
birthday falls on a Saturday or Sunday, the holiday shall be taken on a day
agreed upon by the Company and the employee within one week of the birthday.
In the event any other holiday falls on a Saturday or Sunday, the Company
will announce whether it will be observed on the Friday preceding or the Monday
following the holiday. Such notice shall be given at least four (4) days in
advance.
Section 14.2. All regular full-time employees who have completed their
probationary period shall be paid for eight (8) hours at their regular straight
time rate for each holiday enumerated above, provided they report for work and
work all scheduled hours on the workday preceding and the workday next following
the holiday, unless the employee was necessarily absent due to personal illness,
supported by a doctor's certificate, or because of an emergency occurring to the
employee or the employee's immediate family (meaning only spouse, children, or
parents). No employee shall lose holiday pay because of missing no more than
thirty (30) minutes on the workday before or the workday following the holiday.
In any event, an employee must work at least one (1) day during the
calendar week in which a holiday falls in order to be eligible for holiday pay,
except the employee who is on vacation.
Section 14.3. Employees required to work on a holiday shall be paid the amount
provided above, in addition to their regular earnings for that day. Hours not
worked on a holiday shall not be considered as work time in computing any
additional compensation due under the overtime provisions of this contract.
Section 14.4. If an employee is required to work and fails to report or fails to
work scheduled hours on a holiday, the employee shall forfeit holiday pay for
that day.
Section 14.5. Employees on vacation during the week in which a holiday falls
shall receive holiday pay.
ARTICLE 15
INSURANCE
Section 15.1. The Company shall provide a group insurance program for employees
covered by this Agreement. The Company will continue to make monthly
contributions toward group insurance premiums in the same proportion as is
currently in effect. Employees will bear the remaining costs of the insurance.
ARTICLE 16
EMPLOYEE STOCK OWNERSHIP PLAN - RETIREMENT
Section 16.1. Employees covered by this Agreement will continue to be covered by
the Employee Stock Ownership Plan of Sanderson Farms, Inc. and Affiliates.
Participation and benefits in the plan shall be in accordance with the
provisions of that plan.
ARTICLE 17
WAGES
Section 17.1. Wages shall be paid as provided in Appendix A attached hereto and
made a part of this Agreement. Section 17.2. Whenever a new job classification
is created by the Company, or there is a change or merger of job classifications
or the job content of job classifications, the Company will discuss the
appropriate wage rate with the Union. If a mutually satisfactory rate cannot be
agreed upon, the Company will set the rate. The Union may file a grievance on
the rate, and the dispute shall be settled in accordance with the grievance and
arbitration procedures of this contract.
Section 17.3. The rates of pay set forth in Appendix A of this Agreement are
minimum straight time hourly wage rates, and nothing contained herein shall be
construed as prohibiting or requiring the Company to grant individual employees,
for length of service, efficiency, productivity, or other reasons, a wage
increase which would result in such employee's regular straight time hourly wage
rate being in excess of the minimum wage rate herein specified for the work
operation he or she performs. The Company will notify the Union of any change
pursuant to this Section in advance. Section 17.4. Any employees who, upon the
effective date of this Agreement, are receiving a wage in excess of the
applicable rate set forth in Appendix A, shall continue to receive their current
rate until the contract rate equals or exceeds that rate.
Section 17.5. In addition to the wage rates as provided in Appendix A,
production employees who have been continuously employed for five (5) or more
years shall receive seniority pay of twenty (20) cents per hour. Maintenance
employees who have been continuously employed for five (5) or more years will
receive seniority pay of fifty (50) cents per hour. Section 17.6. Employees who
have been continuously employed for one (1) or more years shall receive a night
shift differential of twenty-five (25) cents per hour for work performed on a
shift starting during the hours beginning 12:00 noon through 1:00 a.m. The
starting time of a shift determines if it is subject to the shift differential.
Employees performing work on a night shift which is not their regular shift will
receive shift differential for such work if it lasts three (3) or more hours.
ARTICLE 18
MISCELLANEOUS
Section 18.1. The Company shall maintain safe, sanitary, and healthy working
conditions at all times, and employees will be required to cooperate in
maintaining such conditions. Any complaints regarding safety or health shall be
processed through the grievance and arbitration provisions of this Agreement.
Section 18.2. There shall be a Safety Committee consisting of members selected
from the bargaining unit, one-half selected by the Union and one-half selected
by the Company. A management representative shall be designated Chairman of the
committee by the Division Manager. The Safety Committee shall perform whatever
functions are assigned, which shall include periodic meetings; review of safety
related suggestions from any source; and recommending corrective actions to
facilitate safety related changes in work environment and work practices.
Section 18.3. The Company will provide any uniforms required of employees who
have completed their probationary period.
The Company will furnish required safety equipment, gloves, aprons, hair
nets, freezer gloves, cotton gloves, raincoats, and smocks at no cost to the
employee. Needed replacements, through normal use, will be made at no cost
provided the worn out article is returned to the Company. If an item is lost or
destroyed through employee negligence, the employee will be charged for its
replacement.
Section 18.4. The Employer may require any employee to take a physical
examination at any time at the Employer's expense. Section 18.5. It shall be the
responsibility of all employees to keep the Employer apprised of their current
address, telephone number, marital status and number of dependents.
Section 18.6. It is the intent of the parties hereto that no provisions of this
Agreement shall require either party to perform any act which shall be unlawful
under any Texas or Federal statute Section 18.7. Employees will be allowed
reasonable relief from the line to visit the restroom. Employees who abuse this
privilege will be subject to discipline up to and including discharge.
Section 18.8. Verified emergency messages will be relayed to the employee as
soon as possible after receipt of the message. Section 18.9. This Agreement
shall be in both English and Spanish. If there is a discrepancy in translation
regarding contract language or interpretation, the English language contract
shall prevail. The Company shall pay the cost of translation which shall be done
by a qualified translator.
ARTICLE 19
NO DISCRIMINATION
Section 19.1. The Company and the Union agree that they will not discriminate
against any person with regard to employment or Union membership because of
race, creed, color, sex, religion, age, national origin, or disability (as
defined in the Americans With Disabilities Act). Section 19.2. Whenever
masculine gender is used in this Agreement, it shall apply to the feminine
gender.
ARTICLE 20
COMPLETE AGREEMENT AND SEPARABILITY
Section 20.1. Complete Agreement: The parties expressly declare that they have
bargained between themselves on all phases of hours, wages, rate of pay,
conditions of employment and working conditions, and that this contract
represents their full and complete agreement without reservations or unexpressed
understanding. Any aspect of hours, rates of pay, wages, conditions of
employment and working conditions not covered by a particular provision of this
agreement is declared to have been expressly eliminated as a subject for
bargaining and during the life of this Agreement may not be raised for further
bargaining in negotiations without written consent of all parties hereto.
It is further understood and agreed that neither party hereto has been
induced to enter into this Agreement by any representations or promises made by
the other which are not expressly set forth herein, and that this document
correctly sets forth the effect of all preliminary negotiations, understandings,
and agreements, and supersedes any previous agreements, whether written or
verbal. This contract constitutes the entire Agreement and understanding between
the parties and shall not be modified, altered, change, or amended in any
respect except on mutual agreement set forth in writing and signed by both
parties.
Section 20.2. Separability: In the event any of the provisions of this Agreement
are held to be in conflict with or in violation of any state or federal statute
or another applicable law, administrative rule or regulation, such decision
shall not affect the validity of the remaining provisions of the Agreement. The
parties further agree that they will meet within thirty (30) days to
re-negotiate the provisions of the Agreement held to be invalid, provided that
Article 6 shall remain in full force and effect during all such negotiations.
<PAGE>
ARTICLE 21
AUTHORIZATION FOR REPRESENTATION AND CHECK-OFF
Section 21.1. During the term of this Agreement, the Company will deduct
initiation fees, assessments, and Union dues from the wages of employees who
individually authorize the Company on a form in compliance with Appendix B to
this Agreement.
Section 21.2. The Union shall save the company harmless against and from all
claims, demands, suits or other forms of liability that arise out of or by
reason of action taken or not taken by the company in reliance upon or
compliance with any provisions of this Article.
Section 21.3. It is agreed that by reason of institution of the above check-off
system, collections by any other method on the Company's premises are
prohibited, except with the permission of the Company. Section 21.4. Credit
Union: Upon receipt of a signed authorization, the Company shall deduct from
employees' wages and turn over to the proper official of the Credit Union
deductions from the pay of such members of the Credit Union as individually and
voluntarily certify in writing that they authorize such deductions. Employees
and officers of UFCW Local 408 Credit Union may, with five (5) working days
notice to management, be allowed access to break areas to sign up new credit
union members and promote credit union activity only four (4) times a year.
ARTICLE 22
DURATION OF AGREEMENT
Section 22.1. This Agreement shall remain in full force and effect from the 7th
day of October, 1999 until the 6th day of October, 2002, and shall continue
thereafter from year to year until either party to this Agreement desires to
terminate this Agreement by giving written notice at least sixty (60) days prior
to October 6, 2002, or at least sixty (60) days' written notice prior to any
anniversary date thereafter. The parties to this Agreement shall endeavor to
satisfactorily negotiate any contemplated change or execute a new Agreement
during the sixty (60) day period, after proper notice in writing has been given
as provided herein and above. Notice, as specified in this Article, shall be
mailed via United States Certified Mail.
IN WITNESS WHEREOF, the parties have hereunto signed their names this
18th day of November, 1999.
SANDERSON FARMS, INC. UNITED FOOD AND COMMERCIAL
(Brazos Processing Division) WORKERS UNION, LOCAL 408
AFL-CIO
/s/Doug Lee /s/Emilio Gomez
- ------------------------------------- ------------------------------------
/s/Eric Erickson /s/Steve Gault
- ------------------------------------- ------------------------------------
/s/Lionel Garcia
- ------------------------------------- ------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
<PAGE>
<TABLE>
APPENDIX "A"
WAGE SCHEDULE
<CAPTION>
EFFECTIVE
CURRENT 1/2/00 1/7/01 1/6/02
<S> <C> <C> <C> <C>
PROCESSING
RECEIVING
Lift Truck Operator ................ 8.00 8.25 8.45 8.80
Receiving Dock ..................... 7.85 8.10 8.30 8.65
PICKING
Killer ............................. 8.10 8.35 8.55 8.90
Floorworker ........................ 7.75 8.00 8.20 8.55
Line Operator ...................... 7.60 7.85 8.05 8.40
EVISCERATING
Floorworker ........................ 7.75 8.00 8.20 8.55
Bird Chiller Operator .............. 7.75 8.00 8.20 8.55
Line Operator ...................... 7.60 7.85 8.05 8.40
DRIP LINE
Lift Truck Operator ................ 8.05 8.30 8.50 8.85
Scale Operator ..................... 7.85 8.10 8.30 8.65
Floorworker ........................ 7.75 8.00 8.20 8.55
Giblet Chiller Operator ............ 7.75 8.00 8.20 8.55
Grader ............................. 7.70 7.95 8.15 8.50
Line Operator ...................... 7.60 7.85 8.05 8.40
SPECIALTY
Scale Operator ..................... 7.85 8.10 8.30 8.65
Floorworker ........................ 7.75 8.00 8.20 8.55
Line Operator ...................... 7.60 7.85 8.05 8.40
Grader ............................. 7.70 7.95 8.15 8.50
Lift Truck Operator ................ 8.05 8.30 8.50 8.85
OVERWRAP
Line Operator ...................... 7.60 7.85 8.05 8.40
PAWLINE
Chiller Operator ................... 7.75 8.00 8.20 8.55
Line Operator ...................... 7.60 7.85 8.05 8.40
Floorworker ........................ 7.75 8.00 8.20 8.55
BOX WASH
Line Operator ...................... 7.60 7.85 8.05 8.40
Lift Truck Operator ................ 8.05 8.30 8.50 8.85
MARINATION
Line Operator ...................... 7.60 7.85 8.05 8.40
Formulation Mixer .................. 7.75 8.00 8.20 8.55
Floorworker ........................ 7.75 8.00 8.20 8.55
Scale Operator ..................... 7.85 8.10 8.30 8.65
DEBONING
Line Operator ...................... 7.60 7.85 8.05 8.40
Stack Off .......................... 7.70 7.95 8.15 8.50
Front Half Puller .................. 7.70 7.95 8.15 8.50
Floorworker ........................ 7.75 8.00 8.20 8.55
Scale Operator ..................... 7.85 8.10 8.30 8.65
SAW CUT
Line Operator ...................... 7.60 7.85 8.05 8.40
Floorworker ........................ 7.75 8.00 8.20 8.55
Scale Operator ..................... 7.85 8.10 8.30 8.65
POLY BAG
Line Operator ...................... 7.60 7.85 8.05 8.40
Grader ............................. 7.70 7.95 8.15 8.50
Floorworker ........................ 7.75 8.00 8.20 8.55
MDM
Line Operator ...................... 7.60 7.85 8.05 8.40
Machine Operator ................... 7.70 7.95 8.15 8.50
Jack Operator ...................... 7.70 7.95 8.15 8.50
Floorworker ........................ 7.75 8.00 8.20 8.55
Forklift Operator .................. 8.05 8.30 8.50 8.85
CHILLING
Lift Truck Operator ................ 8.05 8.30 8.50 8.85
Chilling Room Operator ............. 7.70 7.95 8.15 8.50
PREPRICE
Data Print Operator ................ 7.85 8.10 8.30 8.65
Line Operator ...................... 7.60 7.85 8.05 8.40
SHIPPING
Lift Truck Operator ................ 8.05 8.30 8.50 8.85
Billing Clerk ...................... 7.75 8.00 8.20 8.55
Loading Crew ....................... 7.70 7.95 8.15 8.50
QUALITY CONTROL
QC Operator ........................ 7.85 8.10 8.30 8.65
QC Lab Tech ........................ 7.85 8.10 8.30 8.65
<PAGE>
PURCHASING ...............................
Supply Clerk ....................... 8.05 8.30 8.50 8.85
Line Operator ...................... 7.60 7.85 8.05 8.40
WASTEWATER
Waste Treatment Operator ........... 7.70 7.95 8.15 8.50
BY-PRODUCTS
By-Products Operator ............... 7.85 8.10 8.30 8.65
MAINTENANCE
Master Skilled Operator I .......... 12.40 12.65 12.85 13.20
Master Skilled Operator II ......... 10.90 11.15 11.35 11.70
Skilled Maintenance Men 10.00 ...... 10.25 10.45 10.80
Mechanic ........................... 9.40 9.65 9.85 10.20
Mechanic Helper .................... 7.90 8.15 8.35 8.70
Clean-Up Floor Worker .............. 7.75 8.00 8.20 8.55
Clean-Up Line Operators 7.60 ....... 7.85 8.05 8.40
</TABLE>
Probationary employees shall receive a training rate of $6.05 per hour for the
first ninety (90) days of their employment, which shall be $6.15 effective
January 2, 2000, $6.25 effective January 7, 2001, and $6.35 effective January 6,
2002. Upon the expiration of the ninety (90) day period, the rate shall be $6.75
per hour, which shall be $7.05 effective January 2, 2000, $7.15 effective
January 7, 2002 and $7.25 effective January 6, 2002. After one year of
employment, an employee's rate shall be as shown hereinabove. Newly hired
employees in premium classifications above shall receive the rate of that
classification upon the expiration of a forty-five (45) day period.
<PAGE>
APPENDIX "B"
CHECK-OFF AUTHORIZATION
To: Any Employer under contract with United Food and Commercial Workers
Union, Local 408, AFL-CIO.
You are hereby authorized and directed to deduct from my wages, commencing
with the next payroll period, an amount equivalent to dues and initiation
fees as shall be certified by the President of Local 408, of the United
Food and Commercial Workers International Union, AFL-CIO, and remit same
to said President.
This authorization and assignment is voluntary, made in consideration for
the cost of representation and collective bargaining and is not contingent
upon my present or future membership in the Union. This authorization and
assignment shall be irrevocable for a period of one (1) year from the date
of execution or until the termination date of the Agreement between the
Employer and Local 408, whichever occurs sooner, and from year to year
thereafter, unless not less than thirty (30) days and not more than
forty-five (45) days prior to the end of any subsequent yearly period, I
give the Employer and Union written notice of revocation bearing my
signature thereto. The President of Local 480 is authorized to deposit
this authorization with any Employer under contract with Local 408and is
further authorized to transfer this authorization to any other Employer
under contract with Local 408 in the event that I should change
employment.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>7
<FILENAME>0007.txt
<DESCRIPTION>TEAMSTERS UNION AGREEMENT - BRAZOS PRODUCTION
<TEXT>
A G R E E M E N T
BETWEEN
SANDERSON FARMS, INC.
(BRAZOS PRODUCTION DIVISION)
AND
SANDERSON FARMS, INC.
(BRAZOS PROCESSING DIVISION)
AND
TEAMSTERS LOCAL UNION NO. 968
Affiliated with
INTERNATIONAL BROTHERHOOD OF TEAMSTERS
DECEMBER 27, 1999 - DECEMBER 26, 2002
<PAGE>
TABLE OF CONTENTS
ARTICLE PAGE
- ------- ----
1. AGREEMENT 4
2. RECOGNITION 4
3. MANAGEMENT RIGHTS 4
4. JOB STEWARDS 5
5. UNION BULLETIN BOARD 6
6. NO STRIKE - NO LOCK OUT 6
7. GRIEVANCE PROCEDURE 6
STEP 1 6
STEP 2 7
STEP 3 7
8. ARBITRATION 8
9. SENIORITY 9
10. SENIORITY LIST 11
11. HOURS OF WORK 11
12. LEAVES OF ABSENCE 12
13. VACATIONS 13
14. HOLIDAYS 14
15. INSURANCE 15
16. EMPLOYEE STOCK OWNERSHIP PLAN 16
17. WAGES 16
18. MISCELLANEOUS 16
19 NO DISCRIMINATION 17
20. COMPLETE AGREEMENT AND SEPARABILITY 17
21. CHECK-OFF 18
22. DURATION OF AGREEMENT 19
SIGNATURES 19
APPENDIX A - WAGE RATES 20
APPENDIX B - CHECK OFF AUTHORIZATION 21
<PAGE>
ARTICLE 1
AGREEMENT
Section 1.1. This Agreement made and entered into this 27TH day of December,
1999, by and between SANDERSON FARMS, INC. (BRAZOS PRODUCTION DIVISION) and
SANDERSON FARMS, INC. (BRAZOS PROCESSING DIVISION) at their Bryan, Texas
facilities (hereinafter referred to as "Employer" or "Company"), and TEAMSTERS
LOCAL No. 968, affiliated with INTERNATIONAL BROTHERHOOD OF TEAMSTERS
(hereinafter referred to as the "Union".
WITNESSETH
Section 1.2. WHEREAS, the Company and the Union are desirous of entering into a
contractual relationship covering rates of pay, hours of work and other terms
and conditions of employment of employees employed within the unit of
representation as hereinafter described; and Section 1.3. WHEREAS, the parties
have conferred, negotiated and agreed upon the terms and conditions of
employment to be applicable to the employees covered by this Agreement for the
contract period as herein specified. Section 1.4. NOW, THEREFORE, in
consideration of the mutual covenants and agreements herein contained, the
parties do hereby agree as follows:
ARTICLE 2
RECOGNITION
Section 2.1. The Employer recognizes the Union as the certified bargaining
representative (NLRB Case No. 16-RC-10102) for all forklift operators,
distribution, feed mill and live haul drivers in and around Bryan, Texas,
excluding all other employees, guards, watchmen, office clerical, and
supervisors as defined in the Act.
ARTICLE 3
MANAGEMENT RIGHTS
Section 3.1. Nothing in this Agreement shall be deemed to limit the Employer in
any way in the exercise of the customary functions of management which are
recognized as the Employer's exclusive responsibility, including, but not
limited to, the right to plan, direct, and control operations, to utilize the
services of contractors, to determine the number, size and location of its
establishments, to close an establishment or departments thereof, to hire, to
promote, to demote, and for proper cause to discipline, suspend or discharge, to
assign and schedule work and transfer employees from one job or department to
another, and to make and enforce reasonable rules and regulations relative to
any and all of these matters or to the management of its operation, provided
that the reasonableness of rules may be tested in the grievance procedure. The
Employer shall be the exclusive judge of all matters pertaining to its
operations and their scheduling and the methods, processes, equipment, means of
operation and size of workforce. Section 3.2. The Employer retains all
prerogatives and rights of management and all privileges and responsibilities
not specifically limited by this Agreement.
Section 3.3. If the sub-contracting of work usually performed by bargaining unit
employees or partial or complete plant relocation will have the foreseeable
effect of causing the layoff of any unit employee, the Company will give notice
to the Union and the parties will negotiate on the effects of the layoff. It is
further understood that none of the provisions of this Article shall have the
effect to reduce or waive any rights of unit employees under the Worker
Adjustment and Retraining Notification Act (WARN).
ARTICLE 4
JOB STEWARDS
Section 4.1. The Employer recognizes the right of the Union to designate job
stewards, not to exceed two (2) in each department. Alternates may be designated
but there shall be only one active steward during each shift at any one time.
The Union shall notify the Company in writing as to the names of the stewards.
Section 4.2. A representative of the Union shall be permitted to enter the
Employer's premises at reasonable times, provided such representative complies
with all safety requirements and does not interfere with the operations of
Employer's business and shall make arrangements with the Employer's manager.
ARTICLE 5
UNION BULLETIN BOARD
Section 5.1. The Employer will provide a bulletin board in each department for
posting union notices. All matters to be posted shall be of union matters such
as meeting notices, information pertaining to union business and must be on
union letterhead signed by a union representative.
ARTICLE 6
NO STRIKE - NO LOCK OUT
Section 6.1. For the duration of this Agreement, there shall be no strike,
stoppages, slowdowns, picketing, or other interruption of or interference with
Employer's operations. Section 6.2. The Company shall not lock out employees for
the duration of this Agreement. Section 6.3. Neither the violation of any
provisions of the Agreement, nor the commission of any act constituting an
unfair labor practice, or otherwise made unlawful, shall excuse the employees,
the Union, or the Company from their obligations under the provisions of this
Article.
Section 6.4. An employee discharged or otherwise disciplined for violation of
this Article, may seek review of such discipline through the grievance and
arbitration procedures provided herein. In this event, the only question to be
reviewed shall be whether or not the employee participated in the prohibited
conduct.
ARTICLE 7
GRIEVANCE PROCEDURE
Section 7.1. Grievances arising under this contract are herein defined as a
claim by a party to this Agreement or an employee covered by this Agreement that
the Company or the Union has violated a provision of this Agreement.
STEP I
The employee shall discuss the grievance or complaint with the
immediate supervisor within five (5) working days after the event giving rise
thereto occurs, or within five (5) working days following the date on which the
grievant had or reasonably would have had knowledge thereof. In the event the
employee so requests, the appropriate steward shall be present at this step. The
supervisor shall give an answer within five (5) working days after the grievance
is received.
STEP 2
If there is no settlement in Step 1, the grievance may be presented by
the employee and/or shop steward within five (5) working days from the date on
which the supervisor's answer was given in Step 1. The grievance must be
presented in writing to the department superintendent and must state the
following information:
(a) name or names of employee or employees involved;
(b) the department or departments involved;
(c) the date and time of the occurrence or discovery of the grievance;
(d) the facts of the incident on which the claim is based;
(e) the specific provision of this Agreement alleged to have been
violated;
(f) the remedy requested.
The superintendent shall give the Company's answer in writing within five (5)
working days after the grievance is received by the superintendent.
STEP 3
In the event the grievance is not settled in Step 2, then the grievance
may be appealed in writing to the division manager or a designated
representative by the Union to Step 3 within five (5) working days from the
Company's answer in Step 2. The division manager or a designated representative
shall give an answer in writing within five (5) working days from the date of
the appeal. In the event the grievance is not settled then the aggrieved party
or parties shall have the right to request arbitration.
In the event a grievance arises on behalf of the Employer, the matter
shall be presented to the Union Business Agent in writing, who shall have seven
(7) days from the date of submission within which to endeavor to reconcile the
grievance presented and shall give an answer in writing within that time. If not
settled within that time, the aggrieved party or parties shall have the right to
request arbitration.
Section 7.2. Discharge grievances shall be processed initially under Step 3 of
the grievance procedure. The written grievance shall be filed with the division
manager within five (5) working days following the date of discharge. Section
7.3. A failure to observe the time limit specified herein for original
presentation of a grievance or presentation in any subsequent step of the
grievance procedure on the part of either the grievant or the Union shall be
conclusive evidence that the grievance has been settled and abandoned.
Failure on the part of the Company to comply with the time limits for
delivering its answer in any step of the grievance procedure shall automatically
advance the grievance to the next step of the grievance procedure.
The time limits of the grievance procedure may be extended by mutual
consent of the Union and the Company.
ARTICLE 8
ARBITRATION
Section 8.1. If a party to this Agreement desires to take a grievance to
arbitration, it shall within fifteen (15) calendar days after the denial of the
grievance, give written notice of his intention to the other party, together
with a written statement of the specific provision or provisions of this
Agreement at issue.
Section 8.2. The parties shall attempt to select an impartial arbitrator. If
they are unable to agree upon a choice within seven (7) calendar days after the
receipt of Notice of Intent to Arbitrate, either party may request the Federal
Mediation and Conciliation Service to submit a list of five (5) arbitrators,
from which the arbitrator will be selected. Selection shall be made by the
parties alternately striking any name from the list (the first to strike shall
be the party requesting arbitration) until only one (1) name remains. The final
name remaining shall be the arbitrator of the grievance.
Section 8.3. The jurisdiction and the decision of the arbitrator of the
grievance shall be confined to a determination of the facts and the
interpretation or application of the specific provision or provisions of this
Agreement at issue. The Arbitrator shall be bound by terms and provisions of the
Agreement and shall have the authority to consider only grievances representing
solely an arbitration issue under this Agreement. The arbitrator shall have no
authority to add to, alter, amend, or modify any provision of this Agreement.
The decision of the arbitrator in writing on any issue properly before the
arbitrator in accordance with the provisions of this Agreement, shall be final
and binding on the aggrieved employee or employees, the Union, and the Employer.
Section 8.4. Multiple grievances shall not be heard before one arbitrator at the
same hearing except by mutual agreement of the parties.
Section 8.5. The Union and the Employer shall each bear its own costs in these
arbitration proceedings, except that they shall share equally the fee and other
expenses of the arbitrator in connection with the grievance.
ARTICLE 9
SENIORITY
Section 9.1. Company seniority is defined as the length of an employee's
continuous employment in the bargaining unit since the last permanent date of
employment. Departmental seniority is defined as the length of an employee's
continuous employment in a department within the bargaining unit. The
departments are (1) Live Haul Driver Department, (2) Feed Mill Driver
Department, and (3) Distribution Driver Department. Eligibility for vacation,
holidays, and other company benefits shall be determined by company seniority.
Section 9.2. All newly hired or re-hired employees shall be considered as
probationary employees for a period of ninety (90) days during which, they shall
not acquire any seniority, and during which they may be discharged without
recourse to the grievance and arbitration procedures provided herein. If
retained as a regular employee upon satisfactory completion of the probationary
period, seniority shall be retroactive to the first day of employment.
Section 9.3. Beginning departmental seniority shall be the date of company
seniority as of the effective date of this agreement. Thereafter, departmental
seniority shall begin on the date of entry into the department. In matters of
layoff, recall, promotion and choice of vacation, departmental seniority will be
the deciding factor, provided employees have the skill and ability immediately
to perform required duties.
Section 9.4. Departmental seniority shall prevail as follows:
- -------------
(a) All starting times in the Live Haul Driver Department shall be filled in
accordance with Section 9.8 of this Article; (b) Shifts in the Field Mill Driver
Department shall be filled in accordance with Section 9.8 of this Article; and
(c) Vacancies in all departments shall be filled in accordance with the
procedures in Section 9.8 and Section 9.9.
Section 9.5. Distribution drivers shall indicate their preference for not more
than two scheduled days off for the following week to their supervisor no later
than the preceding Thursday. In the event two or more employees seek the same
days off, the employee with the most departmental seniority will prevail.
Special requests for days off shall be granted if the request (1) is received
not less than two weeks prior to the week when the days off are needed, (2) the
time has not already been claimed by another employee, and (3) customer needs
can be met. The weekly schedule shall be prepared on the preceding Friday, but
it is understood that it is subject to change based upon employee absences,
customer orders, and availability of experienced drivers.
Section 9.6. An employee's seniority shall be lost and employment considered
terminated by:
(a) discharge for just cause;
(b) failure to return from layoff within five (5) working days after written
notice by certified mail is sent by the Company to the employee's last
known address on the Company's books. Actual notice to the employee
of recall by any other means shall satisfy the terms of this provision;
(c) voluntary termination of employment;
(d) failure to report after termination of a leave of absence approved by
the Company in writing on the first scheduled day
following the expiration of such leave of absence;
(e) engaging in a gainful occupation while on leave of absence;
(f) absence from work for three (3) consecutive days without notice to
the Company, which shall be considered as a voluntary quit, unless
notice was prevented by a cause beyond the control of the employee;
(g) layoff for a period exceeding an employee's length of service in the
bargaining unit, or three months, whichever is less.
Section 9.7. For thepurposes of this Agreement, layoffs shall be classified as
(a) "short term" and (b) "long term". A short term layoff is a layoff which will
not exceed ten (10) workdays in length. Short term layoffs may be made without
regard to seniority. A long term layoff is a layoff which will exceed ten (10)
workdays in length. Long term layoffs shall be made subject to Section 3 of this
Article.
Section 9.8. All permanent job vacancies shall be posted for three (3)
consecutive working days on the bulletin board. Employees in the department
desiring, respectively, the starting time or the shift, as the case may be,
shall sign a bid sheet posted on the bulletin board. An employee who does not
sign such bid sheet shall have no right to consideration for the vacancy. If no
employee within the department bids on the posted position, the company may fill
the position in its discretion. If an employee from another department has
requested transfer into the department with a vacancy, said employee shall have
preference over any new hire. Section 9.9. Employees desiring a transfer to a
different department within the bargaining unit shall indicate their desire by
notifying their immediate supervisor. Any opening in that department shall be
offered to the requesting employee before a new employee is hired. In the event
two or more employees from outside the department have requested transfer, the
vacancy shall be filled by the employee with the greatest company seniority.
Section 9.10. An employee laid off in a reduction in force shall have the right
to bid into an existing vacancy in another department, and his departmental
seniority in that department shall begin on the date of the successful move.
Section 9.11 The Company will continue its practice of permitting live haul
drivers access to available casual overtime, which shall be offered to the
senior available driver.
ARTICLE 10
SENIORITY LIST
Section 10.1. Upon request at any reasonable time, the Company shall furnish to
the Union a current seniority list. The list shall be by departmental seniority
and shall include social security number, date of hire, and rate of pay.
ARTICLE 11
HOURS OF WORK
Section 11.1. The regular work week shall consist of five (5) days or forty (40)
hours. This shall not be construed as a guarantee of any amount of hours or
work. The basic work week shall be the seven (7) day period from 12:01 a.m.
Sunday until midnight the following Saturday. Employees will be given at least
one (1) calendar week's notice of any change by the Company of the payroll week.
Section 11.2. An employee who works more than forty (40) hours in any one week
which includes work in either the Feed Mill or Distribution Departments shall be
paid at time and one-half the regular rate of pay for all hours in excess of
forty (40). If pending litigation finally establishes live haul drivers to be
covered under the Fair Labor Standards Act, they also shall receive overtime
premium.
Section 11.3. When employees are called to work a shift outside their regularly
scheduled shift and report for work, or when they report to work at their
regularly scheduled time, they shall be given the opportunity to work a minimum
of three (3) hours or receive pay for same at the applicable hourly rate, except
that no such pay shall be made when the plant cannot operate for reasons beyond
the control of the Employer, such as, but not limited to, strikes, utility
failure, fire, flood, storms or other acts of God interfering with work, or a
breakdown of machinery or equipment when the Company notifies the employees not
to report to work at least four (4) hours prior to the scheduled time to work.
ARTICLE 12
LEAVES OF ABSENCE
Section 12.1. An employee who has completed the probationary period may be
granted, at the Company's discretion, a leave of absence without pay for a
reasonable period of time, not to exceed one (1) month, for the following
reasons:
(a) emergency personal business; and
(b) Union business, upon written request by the Union's Business
Manager, provided that no more than three (3) employees shall
be on such leave simultaneously.
Section 12.2. Employees who have completed their probationary period are
eligible for up to thirteen (13) weeks per year of unpaid family and medical
treatment leave for the following reasons:
(a) Employee's serious health condition -- a medical
certification will be required which states that the employee
is unable to perform the functions of the employee's position.
(b) Family serious health condition -- spouse, parent, or
child. A medical certification will be required stating the
employee is "needed to care for the individual." (c) New child
leave -- the birth, adoption or foster care placement by a
state agency of a child, and, the need to care for the child;
such leave may be prior to the actual birth or placement.
The provisions of this Section shall be administered in accordance with
the Family and Medical Leave Act of 1993 (FMLA). Section 12.3. Employees who
have completed their probationary period who lose actual work time in order to
attend the funeral of a family member shall receive a paid funeral leave for
time necessarily lost during the employee's regularly scheduled shift, provided
the employee would have been scheduled and at work during that day. Said leave
shall be up to three (3) days with pay for a deceased parent, spouse, child,
brother, or sister and one (1) day for a deceased father-in-law, mother-in-law,
grandparent, brother-in-law, or sister-in-law. In order to receive pay under
this Section, an employee must be actively working, must make application for
such paid leave, and must attend the funeral. The Company may require
satisfactory evidence of attendance at the funeral and the relationship of the
deceased.
Section 12.4. If the Company has knowledge that an employee will be on family
and medical leave, military leave, or an industrial injury leave for more than
thirty (30) calendar days, the job will be posted and filled on a temporary
basis within the department. When employees on leave under this Section return,
they shall be immediately assigned to their old job; employees temporarily
filling the job shall return to their regular jobs Section 12.5. The Company
shall pay each active employee who reports for jury duty the difference between
pay up to eight times the hourly rate for time actually lost and the juror's
daily fee for each day the employee is required to serve on a jury. The employee
must report to work during those days of his regularly scheduled shift during
which the employee is not required to report for jury duty or be available at
court for jury service. The employee must present proof of jury service and the
amount of compensation received from the court.
ARTICLE 13
VACATIONS
Section 13.1. Regular full-time employees shall be eligible for one (1) week's
vacation after the first anniversary date of continuous employment, and after
the anniversary date of each succeeding year.
Employees shall be eligible for a second week of vacation after the
second anniversary date of continuous employment, and after the anniversary date
of each succeeding year of continuous employment.
Employees shall be eligible for a third week of vacation after the
tenth anniversary date of continuous employment, and after the anniversary date
of each succeeding year of continuous employment.
Employees shall be eligible for a fourth week of vacation after the
twentieth anniversary date of continuous employment and after the anniversary
date of each succeeding year of continuous employment. Section 13.2. To be
eligible for a vacation, an employee must have worked sixteen hundred (1,600)
hours during the preceding twelve (12) months or eighty (80) percent of
available hours for that period, whichever is less. Vacations and holidays not
worked shall be considered time worked for purposes of this Section.
Section 13.3. Vacation pay shall be computed at forty (40) times the Employee's
regular straight time hourly rate. Section 13.4. Due consideration will be given
employees' choice of vacation time, but all vacations scheduled are subject to
the final approval of the Company in keeping with the Company's scheduling
needs. In the event that two or more employees cannot be released at the same
time, the employee with the longest service with the Company will be given
preference. An employee who notifies the Company of a vacation choice thirty
(30) days in advance shall not lose that vacation choice to another employee.
Vacations may not be scheduled for periods of less than a week, and all
vacations must be taken within an anniversary year. Section 13.5. The Company
reserves the right to schedule a plant shutdown for one .(l) week in any year,
which shall be treated as a vacation week for those employees entitled to
vacation.
<PAGE>
ARTICLE 14
HOLIDAYS
Section 14.1. The following shall be considered holidays:
- -------------
New Year's Day Labor Day
Martin Luther King's Birthday Thanksgiving Day
Memorial Day Christmas Day
July Fourth Birthday Holiday
The birthday holiday shall be taken on the employee's birthday. If the
birthday falls on a Saturday or Sunday, the holiday shall be taken on a day
agreed upon by the Company and the employee within one week of the birthday.
In the event any other holiday falls on a Saturday or Sunday, the
Company will announce whether it will be observed on the Friday preceding or the
Monday following the holiday. Such notice shall be given at least four (4) days
in advance. Section 14.2. All regular full-time employees who have completed
their probationary period shall be paid for eight (8) hours at their regular
straight time rate for each holiday enumerated above, provided they report for
work and work all scheduled hours on the workday preceding and the workday next
following the holiday, unless the employee was necessarily absent due to
personal illness, supported by a doctor's certificate, or because of an
emergency occurring to the employee or the employee's immediate family (meaning
only spouse, children, or parents). No employee shall lose holiday pay because
of missing no more than thirty (30) minutes on the workday before or the workday
following the holiday.
In any event, an employee must work at least one (1) day during the
calendar week in which a holiday falls in order to be eligible for holiday pay,
except the employee who is on vacation. Section 14.3. Employees required to work
on a holiday shall be paid the amount provided above, in addition to their
regular earnings for that day. Hours not worked on a holiday shall not be
considered as work time in computing any additional compensation due under the
overtime provisions of this contract.
Section 14.4. If an employee is required to work and fails to report or fails to
work scheduled hours on a holiday, the employee shall forfeit holiday pay for
that day. Section 14.5. Employees on vacation during the week in which a holiday
falls shall receive holiday pay.
ARTICLE 15
INSURANCE
Section 15.1. The Company shall provide a group insurance program for employees
covered by this Agreement. The Company will continue to make monthly
contributions toward group insurance premiums in the same proportion as is
currently in effect. Employees will bear the remaining costs of the insurance.
ARTICLE 16
EMPLOYEE STOCK OWNERSHIP PLAN - RETIREMENT
Section 16.1. Employees covered by this Agreement will continue to be covered by
the Employee Stock Ownership Plan of Sanderson Farms, Inc. and Affiliates.
Participation and benefits in the plan shall be in accordance with the
provisions of that plan.
ARTICLE 17
WAGES
Section 17.1. Wages shall be paid as provided in Appendix A attached hereto and
made a part of this Agreement. Section 17.2. Whenever a new job classification
is created by the Company, or there is a change or merger of job classifications
or the job content of job classifications, the Company will discuss the
appropriate wage rate with the Union. If a mutually satisfactory rate cannot be
agreed upon, the Company will set the rate. The Union may file a grievance on
the rate, and the dispute shall be settled in accordance with the grievance and
arbitration procedures of this contract Section 17.3. Loader Operators shall
receive downtime pay for delays exceeding thirty (30) minutes on a farm due to
truck delays, slow startup, excessive distance between farms, and the like,
unless the delay is due to reasons described in Section 11.3 of this Agreement.
Travel time to the first farm and travel time from the last farm are included in
the piece rate. Downtime shall be paid an hourly rate in addition to piece rate
earnings.
Section 17.4. In addition to the wage rates as provided in Appendix A, drivers
who have been continuously employed for five (5) or more years shall receive
seniority pay of fifty (50) cents per hour, effective on their respective
anniversary dates. Section 17.5. It is understood by the parties that the
Company is engaged in a review of payment methods for its drivers which will
possibly result in changes to be effective on or about January 1, 2000.
Beginning on that date the contract will be automatically reopened for the
purpose of considering the adoption of revised payment methods. Only those
portions of the contract affected by such changes will be reopened, as the
remaining provisions shall remain in effect. In the event the parties reach
impasse on the reopener, the parties may exercise their legal rights. It is
specifically agreed that Article 6 shall be suspended until agreement is
reached.
ARTICLE 18
MISCELLANEOUS
Section 18.1. The Company shall maintain safe, sanitary, and healthy working
conditions at all times, and employees will be required to cooperate in
maintaining such conditions. Any complaints regarding safety or health shall be
processed through the grievance and arbitration provisions of this Agreement.
Section 18.2. The Company will provide any uniforms required of employees who
have completed their probationary period. The Company will furnish
required safety equipment, gloves, aprons, hair nets, freezer gloves,
cotton gloves, and smocks at
no cost to the employee. Needed replacements, through normal use, will be made
at no cost provided the worn out article is returned to the Company. If an item
is lost or destroyed through employee negligence, the employee will be charged
for its replacement. Section 18.3. The Employer may require an employee, upon
return from on the job injury, to take a physical examination at the Employer's
expense.
Section 18.4. It shall be the responsibility of all employees to keep the
Employer apprised of their current address, telephone number, marital status and
number of dependents. Section 18.5. The Company will continue its current
practice to reimburse employees for hotel/motel and meal expenses required for
overnight travel. The meal allowance shall not exceed $17.00 within a
twenty-four hour period. Section 18.6. It is the intent of the parties hereto
that no provisions of this Agreement shall require either party to perform any
act which shall be unlawful under any Texas or Federal statute
ARTICLE 19
NO DISCRIMINATION
Section 19.1. The Company and the Union agree that they will not discriminate
against any person with regard to employment or Union membership because of
race, creed, color, sex, religion, age, national origin, or disability (as
defined in the Americans With Disabilities Act).
Section 19.2. Whenever masculine gender is used in this Agreement, it shall
apply to the feminine gender.
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ARTICLE 20
COMPLETE AGREEMENT AND SEPARABILITY
Section 20.1. Complete Agreement: The parties expressly declare that they have
bargained between themselves on all phases of hours, wages, rate of pay,
conditions of employment and working conditions, and that this contract
represents their full and complete agreement without reservations or unexpressed
understanding. Any aspect of hours, rates of pay, wages, conditions of
employment and working conditions not covered by a particular provision of this
agreement is declared to have been expressly eliminated as a subject for
bargaining and during the life of this Agreement may not be raised for further
bargaining in negotiations without written consent of all parties hereto.
It is further understood and agreed that neither party hereto has been
induced to enter into this Agreement by any representations or promises made by
the other which are not expressly set forth herein, and that this document
correctly sets forth the effect of all preliminary negotiations, understandings,
and agreements, and supersedes any previous agreements, whether written or
verbal. This contract constitutes the entire Agreement and understanding between
the parties and shall not be modified, altered, change, or amended in any
respect except on mutual agreement set forth in writing and signed by both
parties.
Section 20.2. Separability: In the event any of the provisions of this Agreement
are held to be in conflict with or in violation of any state or federal statute
or other applicable law, administrative rule or regulation, such decision shall
not affect the validity of the remaining provisions of the Agreement. The
parties further agree that they will meet within thirty (30) days to
re-negotiate the provisions of the Agreement held to be invalid, provided that
Article 6 shall remain in full force and effect during all such negotiations.
ARTICLE 21
CHECK-OFF
Section 21.1 The Employer agrees that it will deduct the initiation fee and all
current monthly Union dues on a monthly basis from the wages of the employees
who have made application for membership in the Union and who are covered by
this Agreement, provided the Employer receives from each employee on whose
account such deductions are made, a written assignment individually signed
authorizing the Employer to make such deductions in the form as shown on
Appendix "B". Dues shall be deducted from the payroll each month no later than
the fifteenth day of each month and forwarded to the Union within ten (10) days.
Section 21.2 Deductions are made for the convenience of the Union and the Union
shall indemnify and save the Employer harmless against any claims, demands,
suits or other forms of liability that shall arise out of or by reason of action
taken or not taken by the Employer for the purpose of complying with any of the
provisions of this Article.
Section 21.3 The Company agrees to make Credit Union deductions from the wages
of employees who duly authorize same. Deductions will be made on a weekly basis
as requested by the employee with the following restrictions: An employee during
any calendar year may authorize a regular weekly deduction and/or a single
one-time deduction. An employee may further authorize an increase in deductions
to establish a loan payment. Except for those instances outlined above, no
employee may increase, decrease or withdraw from the program more than one time
in any calendar year. Said deductions shall be forwarded to the Credit Union
(Charger No. 20147) on a monthly basis. The Union will indemnify and hold the
Company harmless from any and all claims of nature, whatsoever, arising or
resulting from the operation of this provision and the making of deductions
pursuant thereto.
ARTICLE 22
DURATION OF AGREEMENT
Section 22.1. This Agreement shall remain in full force and effect from the 27th
day of December, 1999 until the 26th day of December, 2002, and shall continue
thereafter from year to year until either party to this Agreement desires to
terminate this Agreement by giving written notice at least sixty (60) days prior
to December 26, 2002, or at least sixty (60) days' written notice prior to any
anniversary date thereafter. The parties to this Agreement shall endeavor to
satisfactorily negotiate any contemplated change or execute a new Agreement
during the sixty (60) day period, after proper notice in writing has been given
as provided herein and above. Notice, as specified in this Article, shall be
mailed via United States Certified Mail.
IN WITNESS WHEREOF, the parties have hereunto signed there names this 28th
day of December, 1999.
SANDERSON FARMS, INC. TEAMSTERS LOCAL UNION NO. 968
(Brazos Production Division)
/s/Kevin Crook /s/Leo Correa
- ------------------------------------- ------------------------------------
- ------------------------------------- ------------------------------------
- ------------------------------------- ------------------------------------
SANDERSON FARMS, INC.
(Brazos Procession Division)
/s/Eric Erickson
- -------------------------------------
- -------------------------------------
- -------------------------------------
<PAGE>
APPENDIX "A"
WAGE SCHEDULE
EFFECTIVE:
Current 1/2/00 1/7/01 1/6/02
Distribution 10.15 10.40 10.60 10.95
Feed Mill 8.95 9.20 9.40 9.75
Live Haul 9.80 10.05 10.25 10.60
Loader Operators 8.65 8.90 9.10 9.45
(Downtime)
(Piece Rate)
Per thousand head:
(4.00 lb. bird)
Night 2.05 2.10 2.14 2.21
Day 2.15 2.20 2.24 2.31
(5.25 lb. bird)
Night 2.25 2.31 2.36 2.44
Day 2.35 2.41 2.46 2.54
(6.25 lb. bird)
Night 2.95 3.02 3.08 3.14
Day 3.05 3.12 3.18 3.24
<PAGE>
APPENDIX "B"
CHECK-OFF AUTHORIZATION AND ASSIGNMENT
I, ________________________________________________, hereby authorize
(Print Name)
my employer to deduct from my wages each and every month an amount equal to the
monthly dues, initiation fees and uniform assessments of Local Union 968, and
direct such amounts so deducted to be turned over each month to the
Secretary-Treasurer of such Local Union for and on my behalf.
This authorization is voluntary and is not conditioned on my present or
future membership in the Union.
This authorization and assignment shall be irrevocable for the term of
the applicable contract between the union and the employer or for one year,
whichever is the lesser, and shall automatically renew itself for successive
yearly or applicable contract periods thereafter, whichever is lesser, unless I
give written notice to the company and the union at least sixty (60) days, but
not more than seventy-five (75) days before any periodic renewal date of this
authorization and assignment of my desire to revoke same.
Signature: _____________________________________________________________________
Social Security Number: ___________________________________ Date: _____________
Address: ______________________________________________________________________
City: _________________________________ State: _____________ Zip Code: _________
Employer: ____________________________________________________________________
Original to Employer Copy to Local Union Union dues are not deductible as
charitable contributions for Federal Tax purposes.
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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