IMKTA - INGLES MARKETS INC

What This Filing Is

This is a preliminary proxy statement (PREC14A) filed by Summer Road LLC, an activist shareholder group, seeking to elect one of its nominees — Rory A. Held — to the Board of Directors of Ingles Markets, Incorporated (IMKTA) at the company's 2026 Annual Meeting of Shareholders.

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Background

Ingles Markets is a North Carolina-based grocery company with a dual-class share structure. Chairman Robert P. Ingle, II controls approximately 72.5% of total voting power through super-voting Class B Common Stock, despite owning approximately 23% of the combined share capital. The Board currently has eight directors: two elected by Class A shareholders and six elected by Class B shareholders. Summer Road began engaging with the company in July 2022, alleging that management repeatedly declined to answer financial questions, refused investor calls, and failed to hold earnings calls since 2017. After years of attempted engagement — including attending two annual meetings, submitting a Board expansion proposal in 2025 (which failed), and exchanging correspondence with company representatives — Summer Road formally nominated Rory A. Held for election as a Class A Director in December 2025.

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What the Filer Is Demanding

• Election of Rory A. Held as a Class A Director to serve until the 2027 Annual Meeting
• Vote against the company's say-on-pay proposal (Proposal 2) regarding named executive officer compensation
• Support for one of the company's Class A nominees (referred to as the "Unopposed Company Nominee," identified as either Dwight Jacobs or Rebekah Lowe, pending final determination) while recommending shareholders withhold from the other company Class A nominee
• If elected, Held intends to advocate for the following internal initiatives:
  • A rigorous capital allocation audit
  • Evaluation of an "OpCo/PropCo" separation of grocery operations and real estate
  • Operational and digital modernization
  • Leadership assessment and succession planning
  • Reinstatement of quarterly earnings calls and improved investor relations
  • Implementation of a pay-for-performance executive compensation framework tied to TSR and ROIC

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Key Arguments Made

Corporate Governance Concerns:

• Chairman Ingle controls ~72.5% of total voting power via Class B shares while holding only ~23% of combined economic ownership
• The company has no independent Nominating Committee; instead, an Executive Committee — comprising the Chairman, CEO, and CFO — exercises board-level powers between meetings
• When Class A Director John Lowden resigned in late 2025, the Board appointed L. Keith Collins, a former Milkco (company subsidiary) president and former Class B Director, as his replacement, which Summer Road argues calls into question the independence of the Class A seats
• The company's two new Class A nominees (Dwight Jacobs and Rebekah Lowe) both currently serve on the board of HomeTrust Bancshares (NYSE: HTB), a fact Summer Road alleges was disclosed inconsistently in company materials
• The company failed to disclose who recommended each nominee candidate, as required by Item 407(c)(2)(vii) of Regulation S-K, according to Summer Road

Shareholder Returns:

• 1-year TSR: +7.5% vs. S&P 500 +17.9% (underperformance of -10.4%)
• 3-year TSR: -27.0% vs. S&P 500 +86.0% (underperformance of -113.0%)
• 5-year TSR: +68.3% vs. S&P 500 +96.0% (underperformance of -27.7%)
• 10-year TSR: +78.8% vs. S&P 500 +297.8% (underperformance of -219.0%)
• Grocery peer group 10-year TSR: +116.4% vs. Ingles +78.8%

Capital Allocation:

• The company deployed approximately $1.5 billion in capital expenditures over 2016–2025
• Operating income was $129.8 million in Fiscal 2016 and approximately $133.0 million for the trailing twelve months ending December 31, 2025 — described as a near-zero incremental return on invested capital (~0.2%)
• Summer Road alleges significant capital has been allocated to non-income-producing real estate

Related-Party Transactions:

• Chairman Ingle has allegedly traded real estate parcels to and from the company and holds interests in LLCs that collect rent from the company

Executive Compensation:

• Total executive compensation has increased materially while financial performance has declined
• Chairman Ingle's compensation has grown disproportionately; Summer Road characterizes the increases as effectively an additional distribution to Class B shareholders
• Total distributions to Class B shareholders (including Ingle's compensation) have more than doubled since Fiscal 2021, while Class A dividends have remained roughly flat

Lack of Transparency:

• The company discontinued earnings calls in Q2 2016 and has not held one since 2017
• Management repeatedly declined to answer financial questions from Summer Road and, per Summer Road, from other significant shareholders
• At the 2025 Annual Meeting (virtual format), Summer Road's representative's line was allegedly never unmuted to present the Board Expansion Proposal, and no questions were addressed despite advance submissions
• In April 2024, the CFO stated in writing that the company "will not provide further information to shareholders" beyond legally required disclosures

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Meeting Date

April 30, 2026, at 10:00 a.m. Eastern Time, held as a fully virtual meeting at www.virtualshareholdermeeting.com/IMKTA2026.

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Activist Identity

Summer Road LLC, a West Palm Beach, Florida-based family office, together with affiliated entities Cap 1 LLC, East River Partners Ltd, East River Partners II Ltd, Unch Corp., and individuals Rory A. Held and Frank S. Vellucci.

Stated aggregate ownership: 432,558 shares of Class A Common Stock, representing approximately 3.0% of outstanding Class A shares.

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Status

This is a preliminary proxy statement filed on March 17, 2026. No definitive proxy has been filed yet. The filing is subject to completion and SEC review. The contest is at an early stage; the Annual Meeting is scheduled for April 30, 2026.