Sprouts Farmers Markets has informed federal securities regulators that a member of its board of directors, Shon Boney, should not be identified as an independent director in accordance with Nasdaq regulations.
In a Schedule 14A filing with the Securities and Exchange Commission, Sprouts said it reassessed its initial determination of Boney's independent status after the company purchased an airplane from Boney late last year at a price that was below an independent appraisal.
Boney, a former CEO, chairman and co-founder of Phoenix-based Sprouts, owned the aircraft for personal use, Sprouts said. "Due to the structure and price of the transaction, the company has now concluded that Mr. Boney cannot be deemed independent for purposes of Nasdaq Listing Rule 5605(a)(2)," Sprouts said in the filing. "The company’s Board of Directors believes that Mr. Boney will continue to exercise independent judgment and serve as a valuable member of the Board."
Boney, a veteran of Sprouts' family-owned predecessor Henry's Farmers Market, served as Sprouts' CEO until succeeded by Doug Sanders in August of 2012.
Sprouts said the change means that Boney will no longer serve on the board's nominating and corporate governance committee. The committee, which Boney joined in February subsequent to its approval of director nominees for its 2016 annual meeting, has not met or taken any action during Boney’s tenure, and will now be comprised soley of two independent directors, Spouts said.
Sprouts said it would continue to maintain majority independent board requirements of Nasdaq, with four independent directors on its seven-member board.
Sprouts' annual meeting will be held in Phoenix May 3.
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