<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Seminis, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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<PAGE> 2
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS OF SEMINIS, INC.
TO BE HELD MARCH 14, 2000
The Annual Meeting of Stockholders of Seminis, Inc. ("Seminis") will be
held at the Westin Bonaventure Hotel, 404 South Figueroa, Los Angeles, CA on
Tuesday, March 14, 2000 at 10:00 a.m., Pacific Standard Time, for the following
purposes:
1. to elect a class of four (4) directors to the Board of Seminis with
terms expiring at the annual meeting in 2003;
2. to approve the appointment of independent accountants for fiscal year
2000; and
3. to transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
The Board of Directors of Seminis has fixed the close of business on
January 31, 2000 as the record date for the determination of stockholders
entitled to receive notice of and to vote at the meeting. A list of the
stockholders entitled to vote will be available for examination by stockholders
at Seminis, Inc., 1905 Lirio Avenue, Saticoy, California during ordinary
business hours from March 3, 2000 to the date of the meeting.
Whether or not you plan to attend the meeting in person, please vote your
Proxy as soon as possible in order that you may be represented at the meeting.
If you attend the meeting and wish to vote in person, your Proxy will not be
used.
Admittance Cards are required for attendance at the meeting. If you plan to
attend the meeting, please mark the box provided on the proxy card, and an
Admittance Card will be sent to you. If you do not wish to send the proxy card,
you may enclose your own request in the envelope provided and receive an
Admittance Card.
Seminis has approximately 3,000 holders of common stock. To ensure proper
representation at the meeting, it is important, however small your holdings,
that you vote. You can vote over the Internet, as well as by telephone or by
mailing back the proxy card. Voting over the Internet, by telephone or by
written proxy will ensure your representation at the Annual Meeting if you do
not attend in person. Please review the instructions on the proxy card regarding
each of these options.
By order of the Board of Directors
/s/ HOWARD S. KELBERG
Howard S. Kelberg
Secretary
February 11, 2000
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Voting Rights and Solicitation.............................. 1
Proposal No. 1 -- Election of Directors..................... 2
Proposal No. 2 -- Ratification of Independent Accountants... 4
Security Ownership of Seminis, Inc.......................... 5
Executive Summary Compensation Table and Related
Information............................................... 7
Stock Performance Graph..................................... 12
Stockholder Proposals for Fiscal Year 2000 Proxy
Statement................................................. 13
Other Information........................................... 13
</TABLE>
i
<PAGE> 4
SEMINIS, INC.
------------------------
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Seminis, Inc. (the "Company") of Proxies to be voted
at the Annual Meeting of Stockholders to be held on Tuesday, March 14, 2000, and
any adjournment or adjournments thereof, for the purposes set forth in the
accompanying Notice of Meeting. The mailing of this Proxy Statement and
accompanying form of Proxy to stockholders will commence on or about February
11, 2000.
VOTING RIGHTS AND SOLICITATION
Shares represented by properly executed Proxies received on behalf of
Seminis will be voted at the meeting in the manner specified therein. If no
instructions are specified in a Proxy returned to Seminis, the shares
represented thereby will be voted in favor of the election of the directors
listed in the enclosed Proxy, and in favor of the appointment of
PricewaterhouseCoopers LLP as independent accountants for fiscal year 2000. Any
Proxy may be revoked by the person giving it at any time prior to being voted.
The Board of Directors does not know of any business to be presented at the
meeting other than the matters referred to above and in the accompanying Notice
of Meeting. If any other matters are presented at the meeting, the persons named
in the enclosed Proxy have discretionary authority to vote and will vote all
proxies with respect to such matters in accordance with their judgment.
Only holders of record of Seminis' Class A Common Stock and Class B Common
Stock at the close of business on January 31, 2000 are entitled to vote at the
meeting. At the close of business on that day, 13,750,000 shares of Class A
Common Stock and 46,074,386 shares of Class B Common Stock were issued and
outstanding. As provided in our Certificate of Incorporation, each share of
Class A Common Stock is entitled to one (1) vote and each share of Class B
Common Stock is entitled to three (3) votes. Holders of Class A Common Stock and
Class B Common Stock will vote together as one class on all the matters
presented at the meeting. Savia, S.A. de C.V. ("Savia") owns approximately 67.9%
of Seminis' outstanding common stock and controls 80.2% of the vote the
Company's common stock. Savia has informed the Company that it intends to vote
in favor of both proposals.
The presence, in person or by proxy, of a majority of the total outstanding
shares of common stock entitled to vote is necessary to constitute a quorum for
the transaction of business at the meeting. A quorum being present, the
affirmative vote of a plurality of the votes cast is necessary to elect the
nominees as Seminis' Directors and the affirmative vote of a majority of the
votes cast is necessary to approve all other actions. For each matter, we will
include only those votes cast for or withheld from a nominee for director or
those cast for or against the matter to be voted on. Abstentions and broker
non-votes are counted only for purposes of determining whether a quorum is
present.
1
<PAGE> 5
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Bylaws of Seminis provide that the Board of Directors shall consist of
three classes of Directors with overlapping three-year terms. One class of
Directors is to be elected each year with terms extending to the third
succeeding annual meeting after such election. The Bylaws provide that the Board
shall maintain the three classes so as to be as nearly equal in number as the
then total number of Directors permits.
Pursuant to the provisions of the Bylaws described above, there are four
Directors of Seminis whose terms expire at the annual meeting in 2000. The four
Directors whose terms are expiring in 2000 are described in the section
immediately below. It is the Board's intention that these four persons will be
nominated for new terms extending to the annual meeting in 2003 and until their
successors are duly elected. Proxies received in response to this solicitation
will be voted, unless such authority is withheld, in favor of the election of
these four nominees. In the election of members of the Board of Directors, the
four candidates receiving the most votes will be elected. While there is no
reason to believe that any of the nominees will, prior to the date of the
meeting, refuse or be unable to accept the nomination, should any nominee or
nominees so refuse or become unable to accept, it is the intention of the
persons named in the Proxy to vote for such other person or persons as the
Directors may recommend.
Directors whose terms expire at the annual meetings in 2001 and 2002 are
described in separate sections below.
NOMINEES FOR ELECTION AS DIRECTORS WITH TERMS EXPIRING IN 2003
Bernardo Jimenez Barrera Director of Seminis since October 1995. Chief
Executive Officer and Chairman of the Board of Bionova Holding Corporation
("Bionova"), a processor company and a majority owned subsidiary of Savia and an
affiliate of Seminis, since October 1996; Chief Financial Officer of Savia from
October 1995 to October 1996; head of the Industrial Banking Division of the
Vector Group, a financial services company in Mexico which is affiliated with
Savia, from March 1993 to October 1995; director of Savia; age 46.
Dr. Peter Davis Director of Seminis since October 1995. President of the
Family Business Group Inc., a consulting firm specializing in strategic issues
for closely-held companies since May 1986; member of the executive committee of
Pulsar Internacional, S.A. de C.V. ("Pulsar"), an affiliate of Savia; director
of Bionova; member of the faculty of the Wharton School of the University of
Pennsylvania from 1975 to 1994; age 55.
Francisco Gonzalez Sebastia Director of Seminis since October 1995.
Advisor to Savia since February 1997; Chief Executive Officer of Seminis from
October 1995 to February 1997; Chief Executive Officer for the Agrobiotechnology
Division of Savia from January 1994 to October 1995; director of Savia and
Bionova; age 67.
Dr. Eli Shlifer Director of Seminis since January 1997. Self employed;
consultant for Pulsar for more than five years; director of Bionova; age 69.
DIRECTORS WITH TERMS EXPIRING IN 2001
G. Carl Ball Director of Seminis since October 1995. Chairman of the Board
of Geo. J. Ball, Inc. from 1962 until its merger with Seminis in October 1995;
father of George C. Ball, Jr.; age 77.
George C. Ball, Jr. Director of Seminis since October 1995. President of
Burpee Holding Company, a flower seed company, since 1993; director of Geo J.
Ball, Inc. from 1989 until its merger with Seminis in October 1995; son of G.
Carl Ball; age 47.
Frank J. Pipp Director of Seminis since December 1995. Consultant to Xerox
Corporation since 1988; Corporate Officer, Group Vice President of Xerox
responsible for worldwide product development and
2
<PAGE> 6
manufacturing, from 1980 to 1988; director of Advanced Hi-Tech, Inc., AAVID
Thermal Technologies Inc. and Nypro, Inc.; age 73.
Christopher J. Steffen Director of Seminis since January 1997. Business
consultant since December 1996; Vice Chairman and a director of Citicorp, N.A.,
predecessor to CitiGroup, N.A. and its principal subsidiary, Citibank, N.A.,
from May 1993 to December 1996; age 57.
DIRECTORS WITH TERMS EXPIRING IN 2002
Alfonso Romo Garza Chairman of the Board of Directors of Seminis since
October 1995; Chief Executive Officer of Seminis since November 1999. Chief
Executive Officer of Pulsar, since 1984; Chairman of the Board and Chief
Executive Officer of Savia since 1988; Chairman of the Board and Chief Executive
Officer of Seguros Comercial America, S.A. de C.V., a majority owned subsidiary
of Savia, since 1989; Chairman of the Board of Empaques Ponderosa, S.A. de C.V.,
a majority owned subsidiary of Savia, since 1995; director of Cementos
Mexicanos, S.A. de C.V., age 49.
Timothy M. George Director of Seminis since May 1999. Managing Director of
Greenhill & Co., LLC since February 1997; Managing Director of Morgan Stanley
Dean Witter, Inc. from August 1984 to February 1997; age 46.
Alejandro Rodriguez Graue Director of Seminis since May 1998. President of
Seminis since February 1999; President and Chief Operating Officer of Seminis
Vegetable Seeds, Inc., a subsidiary of Seminis, since February 1997; General
Director (Chief Operating Officer) of Agro Industrias Moderna, S.A. de C.V., a
subsidiary of Savia, from 1992 to 1997; director of Savia; age 49.
Eugenio Najera Solorzano Director of Seminis since May 1998. In charge of
new business development at Savia since August 1997; Chief Operating Officer of
Cigarrera La Moderna, S.A. de C.V. from November 1992 to September 1997;
director of Savia and Bionova; age 51.
COMMITTEES OF THE BOARD
Seminis has an Audit Committee and a Compensation Committee of the Board of
Directors.
The members of the Audit Committee are Mr. Timothy M. George (Chairman),
Mr. Frank J. Pipp and Mr. Christopher J. Steffen. This Committee, which met one
time during fiscal year 1999, recommends to the Board of Directors an accounting
firm to serve as Seminis' independent certified public accountants, reviews the
results of Seminis' annual audit report, reviews with Seminis' independent
certified public accountants Seminis' internal controls and financial management
policies, reviews audit and any non-audit fees paid to Seminis' independent
certified public accountants, and reports its findings to the Board of Directors
on such policies.
The members of the Compensation Committee are Mr. Timothy M. George
(Chairman), Mr. Frank J. Pipp and Mr. Christopher J. Steffen. This Committee,
which met one time during fiscal year 1999, monitors Seminis' compensation
policies and employee incentive plans, reviews officers' salaries and bonuses,
approves significant changes in salaried employee benefits and recommends to the
Board of Directors such other forms of remuneration as it deems appropriate.
The Seminis Board of Directors met five times during fiscal year 1999. Each
director of Seminis attended at least 75% of the total meetings of the Board of
Directors and the Committees of the Board on which the individual served during
fiscal year 1999, except for George C. Ball, Jr.
DIRECTORS' COMPENSATION
Seminis' outside directors receive an annual board membership fee of
$25,000, a fee of $2,500 for each meeting of the Board of Directors attended and
a fee of $1,000 for each committee meeting attended. Committee chairmen receive
an additional annual fee of $2,000 and an additional fee of $250 for each
committee meeting attended. Directors are eligible to receive options under the
Seminis stock option plan.
3
<PAGE> 7
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends a vote FOR the nominees listed herein.
PROPOSAL NO. 2
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The firm of PricewaterhouseCoopers LLP has audited the consolidated
financial statements of Seminis for 5 years. The Audit Committee has
recommended, and the Board of Directors has approved, the appointment of this
firm to continue such services. Accordingly, the Board of Directors recommends
that the appointment of PricewaterhouseCoopers LLP to audit the consolidated
financial statements of Seminis and its subsidiaries for fiscal year 2000 be
approved.
Representatives of PricewaterhouseCoopers LLP will be present at the
meeting and will be available to make a statement if they so desire and to
respond to appropriate questions.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends that the shareholders vote FOR the
ratification of the selection of PricewaterhouseCoopers LLP to serve as the
Company's independent certified public accountants for the fiscal year ending
September 30, 2000.
4
<PAGE> 8
SECURITY OWNERSHIP OF SEMINIS, INC.
The following table sets forth information regarding the beneficial
ownership of common stock, as of January 28, 2000, by each of Seminis'
directors, the President and Chief Operating Officer and the other named
executive officers, each person known to Seminis to own beneficially more than
5% of the outstanding shares of common stock, and all directors and executive
officers of Seminis as a group.
The persons named in the table have sole voting and investment power with
respect to all shares of common stock shown as those beneficially owned by them.
<TABLE>
<CAPTION>
CLASS A CLASS B TOTAL
COMMON STOCK COMMON STOCK COMMON STOCK
---------------------- ----------------------- -----------------------
NAME AND ADDRESS OF BENEFICIAL OWNERS NUMBER PERCENT(1) NUMBER(2) PERCENT(3) NUMBER PERCENT(4)
------------------------------------- --------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
DIRECTORS AND NOMINEES
Alfonso Romo Garza........................ -- --% 42,823,515(5) 92.9% 42,823,515(5) 71.6%
Chairman of the Board and Director
c/o Pulsar International, S.A. de C.V.
Ave. Roble No. 300
Torre Alta
Col. Valle del Campestre
66265 Garza Garcia, N.L.
Mexico
Savia, S.A. de C.V. ...................... -- -- 40,615,619 88.2 40,615,619 67.9
Av. Batallon de San Patricio
No. 111-40 Piso
Colonia Valle Oriente
66269 San Pedro, Garza Garcia, N.L
Mexico
G. Carl Ball.............................. -- -- 1,042,362 2.3 1,042,362 1.7
George C. Ball, Jr........................ -- -- 180,131 * 180,131 *
Francisco Gonzalez Sebastia............... -- -- -- -- -- *
Bernardo Jimenez Barrera.................. 8,000 * -- -- 8,000 *
Dr. Peter Davis........................... 3,000 * -- -- 3,000 *
Timothy M. George......................... 5,000 * -- -- 5,000 *
Frank J. Pipp............................. 8,000 * -- -- 8,000 *
Dr. Eli Shlifer........................... 6,900 * -- -- 6,900 *
Eugenio Najera Solorzano.................. -- -- -- -- -- --
Christopher J. Steffen.................... 5,000 * -- -- 5,000 *
Alejandro Rodriguez Graue................. 2,800 * -- -- 2,800 *
NAMED EXECUTIVE OFFICERS
Octavio Hernandez......................... 1,500 * -- -- 1,500 *
Dr. Allen Stevens......................... -- -- -- -- -- --
James H. Hulbert.......................... 200 * -- -- 200 *
Jordi Majo................................ -- -- -- -- -- --
All directors and executive officers of
Seminis as a group (16 persons)......... 40,400 * 44,046,008 95.6 44,086,408 73.7
BENEFICIAL OWNERS OF MORE THAN 5%
Montgomery Asset Management LLC........... 760,000(6) 5.5 -- -- 760,000(6) 1.3
101 California Street
San Francisco, CA 94111
Capital Group International, Inc. ........ 1,391,000(7) 10.1 -- -- 1,391,000(7) 2.3
11100 Santa Monica Boulevard
Los Angeles, CA 90025
Goldman, Sachs & Co. and The Goldman Sachs
Group, Inc. ............................ 2,023,219(8) 14.7 -- -- 2,023,219(8) 3.4
85 Broad Street
New York, NY 10004
American Express Financial Corp........... 1,330,000 9.7 -- -- 1,330,000 2.2
IDS Tower 10
Minneapolis, MN 55440
</TABLE>
5
<PAGE> 9
<TABLE>
<CAPTION>
CLASS A CLASS B TOTAL
COMMON STOCK COMMON STOCK COMMON STOCK
---------------------- ----------------------- -----------------------
NAME AND ADDRESS OF BENEFICIAL OWNERS NUMBER PERCENT(1) NUMBER(2) PERCENT(3) NUMBER PERCENT(4)
------------------------------------- --------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Credit Suisse Asset Management............ 1,392,400 10.1 -- -- 1,392,400 2.3
153 East 53rd Street
New York, NY 10022
</TABLE>
- ---------------
* Less than 1%
(1) The calculation of percentage beneficial ownership of Class A Common Stock
is based on 13,750,000 shares of Class A Common Stock outstanding.
(2) Class B Common Stock is convertible into shares of Class A Common Stock at
anytime. The number of shares of Class B Common Stock for each person in the
table assumes such persons do not convert any Class B Common Stock into
Class A Common Stock.
(3) The calculation of percentage beneficial ownership of Class B Common Stock
is based on 46,074,386 shares of Class B Common Stock outstanding.
(4) The calculation of percentage beneficial ownership of Class A Common Stock
and Class B Common Stock, together, is based on 59,824,386 of Class A Common
Stock and Class B Common Stock, in aggregate.
(5) The number of shares of Class B Common Stock beneficially owned by Alfonso
Romo Garza includes shares beneficially owned by Savia and other entities
controlled by Mr. Romo as well as shares directly owned by Mr. Romo. The
number of shares beneficially owned by Savia includes shares beneficially
owned by entities controlled by Savia as well as shares directly owned by
Savia.
(6) As reported on Schedule 13G filed with the Securities and Exchange
Commission, as of September 30, 1999, Montgomery Asset Management LLC had
sole power to vote 712,000 shares and dispose of 760,000 shares of Class A
Common Stock.
(7) As reported on Schedule 13G filed with the Securities and Exchange
Commission, as of September 30, 1999, Capital Group International, Inc. had
sole power to vote 1,103,500 shares and dispose of 1,391,000 shares of Class
A Common Stock.
(8) As reported on Schedule 13G filed with the Securities and Exchange
Commission, as of September 30, 1999, Goldman, Sachs & Co. and The Goldman
Sachs Group, Inc. had shared power to vote and dispose of 2,023,219 shares
of Class A Common Stock.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Seminis'
officers and directors and persons who own more than ten percent of a registered
class of Seminis' equity securities to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Seminis believes that
during fiscal year 1999 its officers and directors complied with all applicable
Section 16(a) filing requirements, except that Christopher J. Steffen, Dr. Peter
Davis, Timothy M. George, and Frank Pipp, all directors of Seminis, each
inadvertently filed a Form 4 after the tenth day after the end of the month in
which a change in beneficial ownership occurred. On August 30, 1999, Mr. Steffen
filed a Form 4 to report 5,000 shares of Class A Common Stock acquired on June
29, 1999. On September 2, 1999, Mr. Pipp filed a Form 4 to report 2,000 shares
of Class A Common Stock acquired on June 29, 1999. On September 14, 1999, Dr.
Davis filed a Form 4 to report 3,000 shares of Class A Common Stock acquired on
June 29, 1999. On October 6, 1999, Mr. George filed a Form 4 to report 5,000
shares of Class A Common Stock acquired on June 29, 1999.
6
<PAGE> 10
EXECUTIVE SUMMARY COMPENSATION TABLE AND RELATED INFORMATION
COMPENSATION COMMITTEE REPORT
The Compensation Committee (the "Committee") of the Board of Directors sets
the compensation of the Chief Executive Officer and Chief Operating Officer,
reviews the design, administration and effectiveness of compensation programs
for other key executives, and approves stock option grants. The Committee,
serving under a charter adopted by the Board of Directors, is composed entirely
of outside directors who have never served as officers of the Company.
COMPENSATION PHILOSOPHY AND OBJECTIVES
The Company operates in an extremely competitive and rapidly changing
business environment. The Committee believes that the compensation programs for
the executive officers should be designed to attract, motivate and retain
talented executives responsible for the success of the Company and should be
determined within a competitive framework and based on the achievement of
designated financial targets, individual contribution, product quality, and
customer satisfaction. Within this overall philosophy, the Committee's
objectives are to:
- Offer a total compensation program that takes into consideration the
compensation practices of a group of selected companies with which the
Company competes for executive talent and insures equitable remuneration.
- Provide annual variable incentive awards that take into account the
Company's overall financial performance in terms of designated corporate
objectives as well as individual contributions.
- Align the financial interests of executive officers with those of
shareholders by providing significant equity-based, long-term incentives.
COMPENSATION COMPONENTS AND PROCESS
The three major components of the Company's executive officer compensation
are: (i) base salary, (ii) variable incentive awards, and (iii) long-term,
equity-based incentive awards.
The Committee determines the compensation levels for the executive officers
with the assistance of the Company's human resources department, which works
with independent consulting firms that furnish the Committee with executive
compensation data drawn from nationally recognized surveys of similarly sized
companies.
The positions of the Company's COO and executive officers were compared
with those of their counterparts, and the market compensation levels for
comparable positions were examined to determine base salary, target incentives
and total cash compensation.
Base Salary. The base salary for each executive officer is determined at
levels considered appropriate for comparable positions at the peer companies.
Consideration is also given to compensation of comparable positions in other
Pulsar operating companies.
Variable Incentive Awards. To reinforce the attainment of Company goals,
the Committee believes that a substantial portion of the annual compensation of
each executive officer should be in the form of variable incentive pay. Variable
incentive pay awards are the result of the cumulative achievement of company,
team, and personal goals. Goals are established at the beginning of each fiscal
period. Goals are set from top down within the organization in such a manner
that the personal and team goals for subordinate organizational levels support
the attainment of goals for the higher level, thereby assuring a commonality of
purpose among functional operations. The incentive plan sets a threshold level
of Company performance that must be attained before any incentive awards are
made. Once the fiscal year's threshold is reached, specific formulas are in
place to calculate the actual incentive payment for each officer. The plan does
allow for pro-rata incentive payment based upon Company goal performance over
the threshold but less than or greater than 100% of target. A target is set for
each executive officer based on targets for comparable positions at comparison
7
<PAGE> 11
companies, as well as related Pulsar organizations, and is stated in terms of a
percentage of the officer's base salary for the year. No incentive bonuses were
paid to any of the named employees listed in the Executive Summary Compensation
Table included herein, except the special research and development bonus which
was paid to Dr. Stevens.
Long-Term, Equity-Based Incentive Awards. The goal of the Company's
long-term, equity-based incentive awards is to align the interests of executive
officers with shareholders and to provide each executive officer with a
significant incentive to manage the Company from the perspective of an owner
with an equity stake in the business. The Committee determines the size of
long-term, equity-based incentives according to each executive's position within
the Company and sets a level it considers appropriate to create a meaningful
opportunity for stock ownership. In addition, the Committee takes into account
an individual's recent performance, his or her potential for future
responsibility and promotion, and the number of unvested options held by each
individual at the time of the new grant. The relative weight given to each of
these factors varies among individuals at the Committee's discretion.
Equity-based incentive awards are made in conformance with the Seminis Stock
Option Plan of 1998.
COO COMPENSATION. The annual base salary of Mr. Rodriguez was established
by the Committee on August 19, 1999, for the period July 1, 1999 through January
1, 2001. The Committee's decision was based on both Mr. Rodriguez' personal
performance of his duties and the salary levels paid to chief operating officers
of similarly sized companies as well as other Pulsar operating companies.
Mr. Rodriguez received no incentive compensation payment as a result of
fiscal year 1999 performance. Mr. Rodriguez did receive an option grant under
the Company's broad-based stock option program subsequent to the Company's
fiscal year end. The option grant made to Mr. Rodriguez was based upon his
performance and leadership with the Company and placed a significant portion of
his total compensation at risk, since the value of the option grant depends upon
the appreciation of the Company's Common Stock over the option term. The option
grant to Mr. Rodriguez has the four (4)-year vesting schedule applicable to all
plan participants.
Also refer to Transactions with Executive Officers, Directors and Others
for additional information regarding anticipated transactions with Mr.
Rodriguez.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M). Section 162(m) of the
Internal Revenue Code disallows a Federal income tax deduction to publicly held
companies for compensation paid to certain of their executive officers, to the
extent that compensation exceeds $1 million per covered officer in any fiscal
year. This limitation applies only to compensation which is not qualified
performance based compensation. The Seminis Stock Option Plan of 1998 has been
structured so that any compensation deemed paid in connection with the exercise
of option grants made under that plan should qualify as performance-based
compensation which should not be subject to the $1 million limitation.
COMPENSATION COMMITTEE
Timothy M. George, Chairman
Frank J. Pipp
Christopher J. Steffen
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee of the Company's Board of
Directors for the 1999 fiscal year are those named above in the Compensation
Committee Report. No member of this Committee was at any time during the 1999
fiscal year or at any other time an officer or employee of the Company.
8
<PAGE> 12
EXECUTIVE SUMMARY COMPENSATION TABLE
The following table provides a summary of compensation earned by the
Company's Chief Operating Officer and the four other highest-paid executives,
for services rendered in all capacities to the Company and its subsidiaries for
each of the last three fiscal years:
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------
------------------------------------ SECURITIES
OTHER UNDERLYING
FISCAL SALARY BONUS COMPENSATION(1) OPTIONS
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) (#)
--------------------------- ------ ------- -------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Alejandro Rodriguez Graue............... 1999 370,789 -- 246,795 --
President & Chief Operating 1998 352,910 628,093 188,913 35,046
Officer 1997 38,077 200,000 162,278 --
Octavio Hernandez....................... 1999 215,410 -- 76,495 --
Vice President & Chief 1998 169,735 289,333 270,709 6,077
Financial Officer 1997 -- -- -- --
Dr. Allen Stevens....................... 1999 262,586 98,868(2) -- --
Vice President -- Research 1998 222,848 107,182 -- 15,251
and Development 1997 208,867 81,855 -- --
James H. Hulbert........................ 1999 217,001 -- -- --
Vice President -- North 1998 187,443 152,303 -- 12,828
America 1997 154,867 68,850 -- --
Jordi Majo.............................. 1999 209,688 -- -- --
Vice President -- Europe, 1998 194,858 99,551 -- 8,095
Middle East and North 1997 133,036 69,386 -- --
Africa, Sales of Seminis
Vegetable Seeds, a subsidiary of
Seminis
</TABLE>
- ---------------
(1) Other Compensation paid to Mr. Rodriguez consisted of: 1) the fair market
value of housing provided by the Company of $73,620 in fiscal year 1999,
$72,000 in fiscal year 1998 and $24,000 in fiscal year 1997; and 2) a
relocation/international living bonus of $173,175 in fiscal year 1999,
$116,913 in fiscal year 1998 and $138,278 in fiscal year 1997. Other
Compensation paid to Mr. Hernandez consisted of: 1) the fair market value of
housing provided by the Company of $44,600 in fiscal year 1999 and $54,000
in fiscal year 1998; and 2) a relocation/international living bonus of
$31,895 in fiscal year 1999 and $216,709 in fiscal year 1998. The fair
market value of the housing allowance as referred to hereunder as to Messrs.
Rodriguez and Hernandez will be replaced with a special bonus to offset the
interest expense on the Company loans referred to under "Transaction with
Executive Officers, etc." Such special bonus shall initially be
approximately $85,000 to Mr. Rodriguez per year, and $18,000 per year for
Mr. Hernandez.
(2) Dr. Allen Stevens' 1999 bonus of $98,868 was a special one-time research and
development bonus payment which was provided to Seminis scientific and
breeder staff members.
9
<PAGE> 13
OPTION GRANTS
There were no stock options granted pursuant to the Seminis, Inc. 1998
Stock Option Plan as amended, for the fiscal year ending September 30, 1999.
However, in October 1999, options were granted to various individuals for
services rendered during fiscal year 1999, including the named officers as
hereinafter set forth.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------------------------
PERCENT OF POTENTIAL REALIZABLE
TOTAL VALUE AT ASSUMED
NUMBER OF OPTIONS ANNUAL RATES OF STOCK
SECURITIES GRANTED TO EXERCISE OR PRICE FOR APPRECIATION
UNDERLYING EMPLOYEES IN BASE PRICE FOR OPTION TERM(1)
OPTIONS OCTOBER 1999 PER SHARE EXPIRATION -----------------------
NAME (#) GRANT ($/SHARE) DATE 5%($) 10%($)
---- ---------- ------------ ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Alejandro Rodriguez Graue.... 49,500 9.5% 7.63 10/15/09 237,600 601,920
Octavio Hernandez............ 11,000 2.1% 7.63 10/15/09 52,800 133,760
Dr. Allen Stevens............ 15,000 2.9% 7.63 10/15/09 72,000 182,400
James H. Hulbert............. 16,500 3.2% 7.63 10/15/09 79,200 200,640
Jordi Majo................... 11,000 2.1% 7.63 10/15/09 52,800 133,760
</TABLE>
- ---------------
(1) There is no assurance provided to any executive officer or any other holder
of the Company's securities that the actual stock price appreciation over
the ten (10) year option term will be at the assumed 5% or 10% annual rates
of compounded stock price appreciation or at any other defined level. Unless
the market price of the Common Stock appreciates over the option term, no
value will be realized from the option grants made to the executive
officers.
OPTION EXERCISES
No exercises of stock were made during fiscal year 1999 by the (1)
President and Chief Operating Officer and (2) the other four most highly
compensated executive officers of Seminis.
FISCAL 1999 YEAR END OPTION VALUES
The following table sets forth information concerning unexercised options
held by the named executive officers as of September 30, 1999. Based on the
closing price per share of Class A Common Stock on the Nasdaq National Market on
September 30, 1999, none of the unexercised options are in-the-money.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
FISCAL YEAR END(#) FISCAL YEAR END($)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Alejandro Rodriguez Graue.................. 8,762 26,284 -- --
Octavio Hernandez.......................... 1,519 4,558 -- --
Dr. Allen Stevens.......................... 3,813 11,438 -- --
James H. Hulbert........................... 3,207 9,621 -- --
Jordi Majo................................. 2,024 6,071 -- --
</TABLE>
TRANSACTIONS WITH EXECUTIVE OFFICERS, DIRECTORS AND OTHERS
During the past fiscal year, Seminis and its subsidiaries had no
transactions in which any Director, or any member of the immediate family of any
Director, had a material direct or indirect interest reportable under applicable
rules of the Securities and Exchange Commission. In the normal course of
business Seminis had transactions with other corporations where certain
Directors are or were executive officers. None of the aforementioned matters
were material in amount as to Seminis and the other corporations.
During the past fiscal year, Seminis and its subsidiaries had no
transactions in which any executive officer of Seminis, or any member of the
immediate family of any such executive officer, had a material direct or
indirect interest reportable under applicable rules of the Securities and
Exchange Commission.
10
<PAGE> 14
As of September 30, 1999, Seminis owned three Southern California
residential properties that were being provided to certain employees for their
personal use. As of September 30, 1999, each of Mr. Alejandro Rodriguez, Mr.
Octavio Hernandez and Mr. Bruno Ferrari resided in Seminis owned residential
property. Mr. Bruno Ferrari is the Secretary of Seminis Vegetable Seeds, Inc.,
the Company's primary operating entity.(1)
During the second quarter of fiscal year 2000, Seminis intends to complete
separate agreements with Messrs. Rodriguez, Hernandez and Ferrari, whereby the
Company will sell the residential property currently occupied by each employee
to the respective employee, at the fair market value of such property, as
determined by independent appraisal. The Company will also provide each
respective employee with a 10-year, fixed rate note, at 7.75%, for the full
amount of the sale price.
Pursuant to an agreement between Seminis and Bionova, Seminis pays Bionova
a minimum fee of $2.5 million per year for access to the results of Bionova's
biotechnology research. This agreement will terminate pursuant to its terms on
January 1, 2007.
- ---------------
(1) Commencing in fiscal year 2000, Mr. Ferrari will also serve as a consultant
to Seminis, and will be compensated for such consulting services.
11
<PAGE> 15
STOCK PERFORMANCE GRAPH
The graph set forth below compares the monthly percentage change in
Seminis' cumulative total shareholder return on its Class A Common stock to the
cumulative total return of the Standard & Poor's 500 Stock Index (the "S&P 500")
and a peer group comprised of Standard & Poor's Foods Index.
CUMULATIVE TOTAL SHAREHOLDER RETURN
FOR THE THREE MONTH PERIOD ENDING SEPTEMBER 30, 1999*
PERFORMANCE GRAPH
<TABLE>
<CAPTION>
SEMINIS S&P 500 S&P FOODS
------- ------- ---------
<S> <C> <C> <C>
June 30 100 100 100
September 30 58 94 94
</TABLE>
- ---------------
* Assumes that the value of the investment in Seminis' common stock and each
index was $100 on June 30, 1999 and that all dividends were reinvested.
12
<PAGE> 16
STOCKHOLDER PROPOSALS FOR FISCAL YEAR 2000 PROXY STATEMENT
If a stockholder intends to present a proposal at Seminis' 2000 Annual
Meeting of Stockholders and seeks to have the proposal included in Seminis'
Proxy Statement relating to that meeting, pursuant to Rule 14a-8 of the
Securities Exchange Act of 1934, as amended, the proposal must be received by
Seminis no later than the close of business on November 1, 2000. If a
stockholder wishes to present a matter at the 2000 Annual Meeting of
Stockholders that is outside of the processes of Rule 14a-8, Seminis' Bylaws
state that notice must be given to Seminis by November 1, 2000. After that date,
the proposal will be considered untimely and Seminis' proxies will have
discretionary voting authority with respect to such matter. Any proposals, as
well as any related questions, should be directed to the Secretary of Seminis.
OTHER INFORMATION
The cost of the solicitation of Proxies by the Board of Directors will be
borne by Seminis. Solicitation of proxies will be made by mail, and, in
addition, may be made by officers, and employees of Seminis, personally or by
telephone. Forms of Proxies and proxy materials may also be distributed, through
brokers, custodians and other like parties to the beneficial owners of Seminis'
common stock.
13
<PAGE> 17
SEMINIS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH 14, 2000
The undersigned hereby constitutes and appoints Alfonso Romo Garza
and Alejandro Rodriquez Graue, either jointly or individually, to represent the
undersigned at the Annual Meeting of Stockholders of Seminis, Inc. ("Seminis")
to be held at the Westin Bonaventure Hotel, 404 S. Figueroa Street, Los
Angeles, California 90071, on Tuesday, March 14, 2000 at 10:00 a.m., Pacific
Standard Time, for the following purposes:
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE.)
<PAGE> 18
ANNUAL MEETING OF STOCKHOLDERS OF
SEMINIS, INC.
Tuesday, March 14, 2000
--------------------------
PROXY INSTRUCTIONS
--------------------------
TO VOTE BY MAIL
- ---------------
Please date, sign and mail your proxy card in the envelope provided as soon as
possible.
TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY)
- ---------------------------------------
Please call toll-free 1-800-PROXIES and follow the instructions. Have your
control number and the proxy card available when you call.
TO VOTE BY INTERNET
- -------------------
Please access the web page at "www.voteproxy.com" and follow the on-screen
instructions. Have your control number available when you access the web page.
-------------------------
YOUR CONTROL NUMBER IS (ARROW)
-------------------------
(DOWN ARROW) Please Detach and Mail in the Envelope Provided (DOWN ARROW)
Please mark your
A [X] votes as in this
example.
<TABLE>
<CAPTION>
FOR
all nominees WITHHOLD
listed at AUTHORITY
right (except to vote for
as marked to the all nominees
contrary below) listed at right FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C>
1. To elect a class Nominees: 2. To approve the
of four(4) [ ] [ ] Bernardo Jimenez Barrera appointment of [ ] [ ] [ ]
directors to the Dr. Peter Davis independent
Board of Seminis, with terms expiring at the Francisco Gonzales Sebastian accountants for
annual meeting in 2003; Dr. Eli Shlifer fiscal 2000; and
INSTRUCTION: To withhold authority to vote for any
individual nominees, write that person's name here: 3. To transact such other business and may
properly come before the meeting or
any adjournment or adjournments thereof
- --------------------------------------------------
Specify desired action by marking your
vote in the appropriate spaces. This
Proxy will be voted as directed. If no
specific direction is made, the Proxy will
be voted FOR the nominees named in the
Item 1 and FOR Item 2. The persons named
as proxies have discretionary authority
that they intend to exercise in favor of
the proposals referred to and according to
their best judgment as to other matters
that properly come before the meeting or
any adjournments thereof.
PLEASE COMPLETE, SIGN, DATE AND RETURN
THIS PROXY IN THE ENCLOSED ENVELOPE
AS SOON AS POSSIBLE.
"I wish to attend the annual meeting of
Seminis, Inc., scheduled for Tuesday,
March 14, 2000 at 10:00 A.M. [ ]
in Los Angeles, California. Please provide
me an admittance card."
DATED:
- --------------------------------------------------------------------------------------- ----------------------------------
PLEASE SIGN HERE
NOTE: The signature on this Proxy should correspond exactly with the Stockholder's name as printed above. In the case of joint
tenancies, co-executor, or co-trustees, both should sign. Persons signing as Attorney, Executor, Administrator, Trustee or
Guardian should give their full title.
</TABLE>
