ORANGE-CO, INC.
2020 US HIGHWAY 17 SOUTH
P.O. BOX 2158
BARTOW, FLORIDA 33831-2158
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held February 18, 1999
January 22, 1999
TO: The Stockholders
Notice is hereby given that the Annual Meeting of Stockholders
of Orange-co, Inc., a Florida corporation (the "Company"), will
be held at the Citrus and Chemical Bank, 600 North Broadway,
Bartow, Florida on February 18, 1999 at 10:00 a.m. local time,
for the following purposes:
I. To elect nine (9) Directors to hold office until the 2000
Annual Meeting of Stockholders or until the election and
qualification of their successors.
II. Approval of the 1998 Incentive Equity Plan.
III. To transact such other business as may properly come before
the Annual Meeting or any adjournment thereof.
Only Stockholders of record at the close of business on
January 4, 1999 will be entitled to vote at the Annual Meeting or
any adjournment thereof.
By Order of the Board of Directors
/s/ Dale A. Bruwelheide
-----------------------
Dale A. Bruwelheide
Secretary
YOUR VOTE IS IMPORTANT. PLEASE EXECUTE AND RETURN THE ENCLOSED
PROXY PROMPTLY, IN THE ENCLOSED ENVELOPE, WHETHER OR NOT YOU
INTEND TO BE PRESENT AT THE MEETING. IN THE EVENT YOU WISH TO
ATTEND THE MEETING, YOU MAY, IF DESIRED, REVOKE YOUR PROXY AND
VOTE YOUR SHARES IN PERSON.
ORANGE-CO, INC.
2020 US HIGHWAY 17 SOUTH
P.O. BOX 2158
BARTOW, FLORIDA 33831-2158
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held February 18, 1999
PROXY STATEMENT
SOLICITATION
The Board of Directors of Orange-co, Inc. ("the Company")
hereby solicits proxies to be used at the Annual Meeting of
Stockholders of the Company to be held at the Citrus and Chemical
Bank, 600 North Broadway, Bartow, Florida on February 18, 1999 at
10:00 a.m. local time and at any and all adjournments thereof,
and this proxy statement is furnished in connection therewith. A
proxy may be revoked at any time prior to the exercise thereof by
giving written notice of revocation to the Secretary of the
Company at or before the Annual Meeting, by duly executing a
subsequent proxy relating to the same number of shares or by
attending the Annual Meeting and voting in person. In addition
to the use of the mails, Directors, Officers, and regular
employees may, without additional compensation, solicit proxies
in person or by telephone, personal interview, mail, or
telegraph. Arrangements will also be made with brokerage houses
and other custodians, nominees, and fiduciaries which are record
holders of the Company's common stock to forward proxy soliciting
material to the beneficial owners of such shares and the Company
will reimburse such record holders for their reasonable expenses
incurred in connection therewith. The cost of solicitation of
proxies will be borne by the Company.
It is anticipated that this Proxy Statement and accompanying
Notice, Proxy Card and the Company's Annual Report will first be
sent to the stockholders of the Company on or about January 22,
1999.
VOTING SECURITIES
The Company has only one class of voting securities
outstanding, its Common Stock, $.50 par value per share, of which
10,309,975 shares were outstanding as of January 4, 1999. Each
share entitles the holder thereof to one vote. Only stockholders
of record at the close of business on January 4, 1999, will be
entitled to vote at the meeting or any and all adjournments
thereof.
-1-
Securities Ownership of Certain Beneficial Owners
<TABLE>
<CAPTION>
The following table sets forth information as of January 4,
1999, regarding the ownership of the Company's Common Stock by
each person known to the Company to be the beneficial owner of
more than five percent (5%) of the Company's Common Stock.
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership Percent of Class
<S> <C> <C>
Ben Hill Griffin, III 5,405,160(1) 52.4%
700 S. Alternate Hwy. 27
Frostproof, Florida 33843
</TABLE>
<F1>
(1) Includes 5,105,160 shares beneficially owned by Ben Hill
Griffin, Inc. through its wholly owned subsidiary Ben Hill
Griffin Investments, Inc., and 300,000 shares beneficially
owned by Ben Hill Griffin, III. Mr. Ben Hill Griffin, III,
Chairman and Chief Executive Officer of the Company,
beneficial owner of the majority of the voting stock of Ben
Hill Griffin, Inc., may be considered to be the indirect
beneficial owner of the Company's Common Stock owned by Ben
Hill Griffin, Inc.
I. ELECTION OF DIRECTORS
At the Annual Meeting nine Directors will be elected to hold
office for the ensuing year or until their respective successors
are duly elected and qualified. Unless authority is withheld on
the attached form of proxy card, such proxy will be voted FOR the
election of the nominees set forth below to serve as such
Directors. Each of the nine nominees is presently a member of
the Board of Directors, has consented to being named in this
proxy statement and has notified management that they intend to
serve, if elected. If any of the nominees should be unable to
serve as a Director, the persons designated by proxies reserve
full discretion to cast their votes for another person in his
place. A plurality of votes will elect each Director.
The Board of Directors recommends that Stockholders vote FOR
the proposal to elect the nine nominees listed on pages 3 and 4
as Directors of the Company.
-2-
Nominees for Election of Directors:
<TABLE>
<CAPTION>
The information set forth below as to age, shareholdings, and
business experience for the past five years, including principal
occupation or employment, has been furnished by each nominee, all
of which currently serve as directors:
Shares
Position, Principal Beneficially
Occupations and Other Owned as of Percent
Name and Age Directorships January 4, 1999 of Class
<S> <C> <C> <C>
Ben Hill Griffin,III, 56(1) Director, Chairman of the 5,405,160 52.4
Board and Chief Executive
Officer of the Company since
May 28, 1992. For over five
years, Chairman of the
Board, President and Chief
Executive Officer of Ben
Hill Griffin, Inc., (citrus
production, harvesting
and packing, fertilizer
manufacturing and ranching).
Director, Chairman of the
Board and Chief Executive
Officer of Alico, Inc., (a
publicly-owned agribusiness
company). Director of
SunTrust Bank, Central
Florida, N.A.
Richard A. Coonrod, 67 Director of the Company 1,000 *
since 1989. For over five
years, President and Chief
Executive Officer of Coonrod
Agriproduction Corporation
(food and agribusiness).
General Partner of The Food
Fund (investment partnership).
Paul E. Coury, M.D., 74 Director of the Company 1,000 *
since December 15, 1992.
Physician, from May 1955 to
January 1996, and Managing
Partner of Doctors Miller,
Coury & Nobo, P.A. (general
medicine and surgery
practice).
George W. Harris, Jr., 64(1) Director of the Company 1,000 *
since December 15, 1992.
For over five years,
Chairman of the Board and
Chief Executive Officer of
Citrus and Chemical Bank.
W. Bernard Lester, 59 Director of the Company 3,100 *
since May 28, 1992.
Director, President and
Chief Operating Officer of
Alico, Inc. From 1988 to
1997, Director, Executive
Vice President and Chief
Operating Officer of Alico,
Inc.(3)
-3-
Shares
Position, Principal Beneficially
Name and Age Occupations and Other Owned as of Percent
Directorships January 4, 1999 of Class
Bobby F. McKown, 62 Director of the Company since 1,000 *
November 1998. Trade
Consultant for Florida Citrus
Mutual since September 1998.
From January 1980 to September
1998 Executive VP and CEO of
Florida Citrus Mutual.
Director of SunTrust Bank,
Mid Florida.
Gene Mooney, 55 Director of the Company 2,206 *
since October 14, 1993.
President and Chief
Operating Officer of the
Company since November 13,
1992. From November 1989 to
April 1992, Vice President
of Operations & Sales of
Silver Springs Citrus
Cooperative, Inc. From
April 1992 to November 1992,
General Manager of Winter
Garden Citrus Products
Cooperative.
C.B. Myers, Jr., 77(4) Director of the Company 6,500 *
since May 28, 1992. For
over five years, practicing
attorney and President of
Peterson and Myers, P.A.
Thomas H. Taylor, Sr., 63 Director of the Company 1,000 *
since May 28, 1992. For
over five years, Chairman of
the Board and Chief
Executive Officer of Taylor
Ranch, Inc. (agribusiness).
* Less than one percent.
</TABLE>
<F1>
(1) Messrs., Griffin and Harris are brothers-in-law.
<F2>
(2) Includes 5,105,160 shares beneficially owned by Ben Hill
Griffin, Inc. over which Mr. Griffin has the power to direct
its voting and disposition by reason of his position as
Chairman of the Board and Chief Executive Officer.
<F3>
(3) 50.32% of the common stock of Alico, Inc. is beneficially
owned by Ben Hill Griffin, Inc. through its wholly owned
subsidiary Ben Hill Griffin Investments, Inc.
<F4>
(4) Mr. Myers and other members of Peterson and Myers, P.A.
provided legal services to the Company during fiscal 1998 and
continue to provide such services as of the date of this proxy.
Director's Compensation
Directors of the Company are paid $1,000 for each Board meeting
and separately scheduled committee meeting attended except for
Executive Committee meetings for which no fees are paid. Out-of-
pocket expenses related to the attendance of Directors at such
meetings are reimbursed by the Company.
-4-
Further Information Concerning the Board of Directors
The Board of Directors conducts its business through meetings
of the Board and through its standing committees. In accordance
with the By-Laws of the Company, the Board of Directors currently
has an Executive, an Audit, and a Compensation Committee
established as standing committees of the Board. The Board of
Directors held 5 meetings during fiscal 1998. Each Director
attended at least 75 percent of the total number of meetings of
the Board of Directors and the Committees on which they serve.
The Executive Committee, which exercises, to the extent
permitted by Florida Law, all the powers of the Board of
Directors during intervals between Board meetings, consists of
Ben Hill Griffin, III, W. Bernard Lester, and Gene Mooney. The
Executive Committee met 24 times during fiscal 1998.
The Audit Committee, which is composed of C. B. Myers, Jr.,
Thomas H. Taylor, Sr. and Richard A. Coonrod, has authority to
recommend to the Board of Directors the independent public
accountants to serve as auditors, reviews with the independent
auditors the annual audit plan, the financial statements, the
auditor's report and their evaluation and recommendations
concerning the Company's internal controls and approves the
types of professional services for which the Company may retain
the independent auditors. The Audit Committee met once during
fiscal 1998.
The Compensation Committee reviews the compensation of the
executive offices of the Company and makes recommendations to the
Board of Directors regarding such compensation. It also
administers the Company stock option plans described herein in
accordance with their terms. The members of the Compensation
Committee are C. B. Myers, Jr., Thomas H. Taylor, Sr. and Paul E.
Coury. The Compensation Committee met once during fiscal 1998.
EXECUTIVE OFFICERS
The Executive Officers shown below currently serve in the
capacities indicated. Executive Officers are normally appointed
by the Board of Directors and serve at the pleasure of the Board.
<TABLE>
<CAPTION>
Name and Age Position, Principal Occupations and
Other Directorships
<S> <C>
Ben Hill Griffin, III, 56 Chairman of the Board and Chief Executive
Officer and a Director of the Company since
May 1992. Since 1990, Mr. Griffin has served
as Chairman of the Board, President and Chief
Executive Officer of Ben Hill Griffin, Inc.
("BHGI"), a privately held agribusiness
involved in the production, harvesting,
packaging and marketing of citrus products.
Prior to 1990, Mr. Griffin served for several
years as Vice Chairman and Senior Vice
President of BHGI. Also, since 1990, Mr.
Griffin has served as Chairman of the Board
and Chief Executive Officer of Alico, Inc.
("Alico"), a publicly-owned agribusiness
company.
-5-
Name and Age Position, Principal Occupations and
Other Directorships
Gene Mooney, 55 President and Chief Operating Officer of the
Company since November 1992; Director of the
Company since October 1993. Mr. Mooney
previously served as General Manager (in
transition) of Winter Garden Citrus Products
Cooperative from April 1992 to November 1992.
Mr. Mooney served as Vice President of
Operations and Sales for Silver Springs
Citrus Cooperative, Inc. from November 1989
to April 1992.
Dale A. Bruwelheide, 49 Vice President, Chief Financial Officer,
Treasurer since December 1991, and Secretary
of the Company since December 1998. Mr.
Bruwelheide previously served as Vice
President and Controller of the Company from
May 1991 to December 1991. Mr. Bruwelheide
also served as Assistant Secretary and
Controller of the Company from January 1991
to May 1991. Mr. Bruwelheide previously held
the position of Vice President of Finance
with Ewell Industries, Inc. for over five
years.
</TABLE>
Stock ownership of additional Executive Officers not previously
named and of all Executive Officers and Directors as a group, is
as follows:
<TABLE>
<CAPTION>
Position, Principal Shares Beneficially Percent
Name and Age Occupation and Other Owned as of 1/4/99 of Class
Directorships
<S> <C> <C> <C>
Dale A. Bruwelheide, 49 Vice President and 5,100(1) *
Chief Financial
Officer
All Directors and 5,427,066(2) 52.6
Executive Officers as
a Group (10 Persons)
*Less than one percent
</TABLE>
<F1>
(1) Consists of options to purchase 5,000 shares which are
currently exercisable and 100 shares owned directly by
Mr. Bruwelheide.
<F2>
(2) Includes the beneficial interest which Mr. Griffin, III may
have in shares of the Company's Common Stock beneficially
owned by Ben Hill Griffin, Inc., through its wholly owned
subsidiary Ben Hill Griffin Investments, Inc., which total
5,105,160 shares; also includes options to purchase shares of
the Company's Common Stock which are held by Executive
Officers and are exercisable within 90 days.
-6-
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors (the
"Committee") is composed entirely of outside Directors and is
responsible for developing and making recommendations to the
Board with respect to the Company's executive compensation
policies. The Committee has available to it an outside
compensation consultant and access to independent compensation
data. The Committee thus has access to industry and area
compensation information on executives in similar companies, both
larger and smaller than the Company.
The Company's executive compensation program provides an
overall level of compensation that is competitive within the
Florida citrus industry. Actual compensation levels may be
greater or less than average competitive levels in surveyed
companies based on annual long-term Company performance as well
as individual performance. The Compensation Committee uses
discretion to set executive compensation, including compensation
for the Chief Executive Officer, where in its judgment external,
internal or individual circumstances warrant, but considering the
level of profits achieved, the relative relationship of each
Executive's contribution to the Company's success and each
Executive's performance of his assigned responsibilities. The
Chief Executive Officer's salary for fiscal 1998 was comparable
to that of the previous year, with a bonus award reflecting the
Board of Directors' recognition of the Chief Executive Officer's
performance under the business circumstances.
The Company's executive compensation program is comprised of
base salary, annual cash incentive compensation and various
benefits, including medical and pension plans generally available
to employees of the Company. In the Committee's opinion, the
Company's executives are properly compensated at the present time
when compared with others in similar positions in companies of
the same size in the Florida citrus industry.
No member of the Committee is a former or current officer or
employee of the Company or any of its subsidiaries.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDERS PARTICIPATION
The Compensation Committee is composed of C. B. Myers, Jr.,
Chairman; Thomas H. Taylor, Sr. and Paul E. Coury, M.D. There
were no interlocks of executive officers or Board Members of the
Compensation or equivalent committee or another entity which has
any executive officers serving on the Compensation Committee of
the Company. No executive officer of the Company serves as a
director of another entity, one of whose executive officers
served on the Compensation Committee of the Company. No
executive officer of the Company served as a member of the
Compensation Committee of another entity, one of whose executive
officers served as a director of the Company. No executive
officer of the Company served as a member of the Compensation
Committee of another entity, one of whose executive officers
served on the Compensation Committee of the Company.
C.B. Myers, Jr., Chairman
Thomas H. Taylor, Sr.
Paul E. Coury, M.D.
-7-
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation All Other
Name and Principal Position Year Salary Bonus Compensation(1)
<S> <C> <C> <C> <C>
Chairman of the Board
and Chief Executive
Officer
Ben Hill Griffin, III 1998 180,200 110,000 8,200
1997 170,337 58,000 9,000
1996 150,083 142,000 15,755
Executive Officers
Gene Mooney 1998 158,200 90,000 63,188
President and Chief 1997 157,242 70,000 60,070
Operating Officer 1996 150,191 80,000 46,757
John R. Alexander 1998 97,132 - 104,196(2)
Senior Vice President 1997 96,446 17,000 51,482
Secretary 1996 95,538 40,000 56,859
Dale A. Bruwelheide 1998 97,100 21,000 15,058
Vice President, Chief 1997 95,096 21,000 14,612
Financial Officer and 1998 91,936 40,000 17,991
Secretary(3)
</TABLE>
<F1>
(1) Includes: (a) Company contributions to the Company's
Management Security Plan of $54,988, $49,225 and $12,818 for
Messrs. Mooney, Alexander and Bruwelheide respectively; (b)
Company contributions to the Company's Profit Sharing Plan of
$3,200, $3,200, $2,721 and $2,240 for Messrs. Griffin, Mooney,
Alexander and Bruwelheide respectively; and (c) Directors Fees
in the amount of $5,000 for each of Messrs. Griffin, Mooney
and Alexander.
<F2>
(2) Includes $47,250 severance paid in connection with the
termination of Mr. Alexander's employment.
<F3>
(3) Secretary since December 14, 1998.
-8-
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISED IN FISCAL 1998
AND FY-END 1998 OPTION/SAR VALUES(1)
Number of Dollar Value of
Unexercised Unexercised in
Shares Options(2) the Money Options
Acquired on Value at Fiscal Fiscal Year End
Name Exercise(#) Realized($) Year End End 1998 ($)
1998(#)
<S> <C> <C> <C> <C>
Ben Hill Griffin, III - 0 - - 0 - - 0 - - 0 -
Gene Mooney - 0 - - 0 - - 0 - - 0 -
Dale A. Bruwelheide - 0 - - 0 - 5,000 $1,875
</TABLE>
<F1>
(1) The Company does not have a stock appreciation rights plan.
<F2>
(2) All options listed were exercisable as of September 30, 1998.
There were no options held by the named persons which were not
exercisable as of September 30, 1998.
Contingent Compensation
The Company maintains several compensation plans under which
the Executive Officers and key employees of the Company and its
participating subsidiaries and affiliates are eligible for
benefits, each of which is described as follows:
Company Stock Option Plan. The Company's 1987 Employee Stock
Option Plan (the "1987 Plan"), which expired during fiscal 1997,
is administered by the Company's Compensation Committee (the
"Committee"), which is composed entirely of persons who were not
eligible to participate in the 1987 Plan. The 1987 Plan
authorized the grant of incentive stock options within the
meaning of Section 422A of the Internal Revenue Code of 1986, as
amended (the "Code"), as well as non-qualified options that did
not meet the requirements of incentive stock options. A total of
750,000 shares of the Company's Common Stock were reserved for
issuance under the 1987 Plan. All outstanding options granted
under the 1987 Plan became immediately exercisable pursuant to
their terms when Ben Hill Griffin, Inc. and an affiliate acquired
beneficial ownership of more than 50% of the Company's then
outstanding voting securities on May 28, 1992. The maximum term
of each option granted under the 1987 Plan varied depending on
the type of option in question. In the case of incentive stock
options, the maximum term is 5 years if the option holder owns
more than 10% of the voting power of the Company, its parent or
subsidiaries. In the case of non-qualified stock options, the
maximum term is 10 years and 1 day.
There are currently options on 18,825 shares issued and
outstanding. Since the 1987 Plan expired during fiscal 1997, no
further options can be granted. Payment for shares to be
acquired on exercise of options granted under the Company's 1987
Plan may be made in cash or, at the discretion of the Committee,
by surrender of previously-owned shares of Common Stock, which
will be valued for such purposes at the average of the highest
and lowest selling price on the New York Stock Exchange on the
date of exercise. During fiscal 1998, none of the current
Executive Officers exercised any options.
-9-
<TABLE>
<CAPTION>
The following table contains information regarding the shares
of Common Stock reserved under the Company's stock option plan,
the year the stock option plan terminates and the maximum term of
options granted thereunder.
Shares Reserved Plan Maximum
Plan for Issuance Termination Date Term of Option
<S> <C> <C> <C>
1987 Plan 750,000 1997 10 Years(1)(2)
</TABLE>
<F1>
(1) 5 years for incentive stock options if the option holder owns
more than 10% of the voting power of the Company, its parent
or subsidiaries.
<F2>
(2) 10 years and 1 day for non-qualified stock options.
401(k) Plan. The Company has a Salary Deferral Plan which
meets the qualifications of Section 401(k) of the Code (the
"401(k) Plan"). Employees may elect to participate beginning on
the first calendar quarter following date of employment or the
first of any subsequent calendar quarter and are eligible to make
tax-deferred contributions of up to the lesser of 15% of annual
compensation or that which is allowed under the Code (indexed
annually). The Company will match, in accordance with rates to
be established annually by the Board of Directors, those
contributions made by participants who are employed by the
Company on the last day of the Plan Year. Under certain
circumstances, if the 401(k) Plan is considered "top-heavy" under
applicable provisions of the Code, the Company may be required to
make a contribution to "non-key" employees and the amount of
compensation taken into account for key employees may be
limited. Contributions by the Company vest immediately.
Withdrawals from tax-deferred and employer contribution accounts
can generally be made only after reaching certain qualifications
allowed under the Code. No amounts were accrued for the benefit
of the Company's Executive Officers during Fiscal 1998. The
401(k) Plan previously contained a profit sharing provision.
Effective January 1, 1993, the 401(k) Plan was amended to provide
that no further employer discretionary contribution would be made
to the 401(k) Plan and a separate Profit Sharing Plan was
adopted.
Profit Sharing Plan. Effective January 1, 1993, the Company
established a Profit Sharing Retirement Plan which meets the
qualifications of Section 401(c) of the Code (Profit Sharing
Plan). All employees begin participation on the later of January
1, 1993 or date of employment. Vesting is governed by a seven
year graduated vesting schedule, including credit for continuous
service with the Company prior to the effective date.
Participants' accounts will fully vest upon death, disability or
attainment of retirement age. Withdrawals may be made upon the
occurrence of the earlier of death, total disability or retiring
at age 65. The Company's discretionary contribution is
determined annually by the Board of Directors and is allocated
among eligible participants' accounts in the proportion that each
participant's compensation bears to the total compensation of all
eligible employees during the year. Amounts accrued for the
benefit of the Company's Executive Officers during fiscal 1998
are reflected in the "Summary Compensation Table" under "All
Other Compensation".
Deferred Compensation Plan. Because the Company's Executive
Officers are effectively precluded from meaningful participation
in the Company's 401(k) Plan, the Company established a non-
qualified, unfunded plan to permit Executive Officers to defer
receipt of a percentage of pre-tax annual compensation. The
Deferred Compensation Plan is administered by the Compensation
Committee, which selects, from senior management, top executive
and highly compensated employees, those employees who will
participate in the Deferred Compensation Plan. Participants are
guaranteed a rate of return no less than the Moody's Seasoned
Long Term Bond Index. The Company matches, in accordance with
rates established annually by the Board
-10-
of Directors, those contributions made by participants who are
employed by the Company on the last day of the Plan Year. In the
event of the death of an employee, a participant's beneficiary is
entitled to the greater of five times the amount deferred in the
participant's initial year or the total amount credited to the
participant's account. Benefits are paid in ten consecutive
annual installments, or can be paid in a single lump sum with
Committee approval. Amounts accrued for the benefit of the
Company's Executive Officers during fiscal 1998 are reflected in
the "Summary Compensation Table" under "All Other Compensation".
Bonus Plan. The Board of Directors has a Bonus Plan to reward
all executive, management and supervisory personnel for
contributions to the operations and profits of the Company. The
Plan is discretionary and all bonuses will be awarded only at the
discretion of the Board of Directors.
Group Long-Term Disability Plan. The Company's non-
participating group long-term disability insurance plan (the
"LTDP") provides reimbursement to disabled employees equal to 60%
of their basic monthly earnings, subject to a maximum monthly
benefit of $9,000. No payments were made to the Company's
Executive Officers under the LTDP during fiscal 1998.
Management Security Plan. The Company has a non-qualified
deferred benefit retirement plan covering certain management and
key personnel of the Company. The Plan is designed to provide a
set monthly benefit after the participant reaches age 65. The
participants are required to pay a portion of the cost of the
Plan and the Company pays the remaining amount. The expense and
monthly benefit amount is based on the participant's annual
salary and age. Amounts accrued for the benefit of the
Company's Executive Officers during fiscal 1998 are reflected in
the "Summary Compensation Table" under "All Other Compensation".
II. APPROVAL OF THE 1998 INCENTIVE EQUITY PLAN
General. On December 3, 1998, the Board of Directors adopted
the Orange-co, Inc., 1998 Incentive Equity Plan (the "Incentive
Plan") subject to stockholder approval. The Incentive Plan is
intended to provide participants with an opportunity to increase
their stock ownership in the Company and to give them an
additional incentive to achieve the Company's objectives.
Officers, Board members and other key employees of the Company
and its subsidiaries and affiliates who are responsible for the
management, growth and/or profitability of the business of the
Company and/or its subsidiaries and affiliates are eligible to
receive stock option grants, stock appreciation rights ("SARs")
and/or restricted stock awards under the Incentive Plan. 750,000
shares of the Company's Common Stock are reserved for awards
under the Incentive Plan. No grants have been made to date under
the Incentive Plan.
Administration. The Incentive Plan will be administered by the
Board of Directors of the Company. The Board has full power to
select, from among the officers, Board members and other key
employees eligible for awards, the individuals to whom awards
will be granted, to make any combination of awards to any
participants and to determine the specific terms of each award,
subject to the provisions of the plan. The Board of Directors
has the right at any time to terminate or amend the Incentive
Plan, but no such action may terminate awards already granted or
otherwise affect the rights of any participant under an
outstanding award without the participant's consent. Without
stockholder approval, the Board may not amend the Incentive Plan
to (i) increase the total number of shares of stock subject to
the plan, or (ii) change or modify the class of eligible
participants. The Board is authorized to make appropriate
adjustments in connection with outstanding awards under the
Incentive Plan to reflect stock dividends, stock splits,
recapitalizations and similar events. In the event of a merger,
liquidation or similar event, the Board in its discretion may
provide for substitution of or an adjustment in, or may
accelerate or adjust, such awards.
-11-
Stock Options. The Incentive Plan provides that options may be
granted only to those individuals, Board members and employees
whose participation the Board determines is in the best interests
of the Company. The Company receives no consideration upon the
granting of an option. The options may be granted either as
incentive stock options (which qualify for certain favorable tax
consequences for the offering, as discussed below), or as non-
qualified stock options, but no options may be granted after
December 3, 2008.
The Board also determines the number of shares, the exercise
price, the term, any conditions on exercise, the consequences of
any termination of employment, and other terms of each option.
In the case of an option intended to be an incentive stock
option, the term of the option may not exceed ten years from the
date of grant and the option price may not be less than 100% of
the fair market value per share of the Common Stock on the date
of grant. With respect to non-qualified stock options, there is
no limit on the term of the option, and the option price may be
as low as 50% of fair market value per share on the date of
grant. The option price is payable in full upon exercise, and
payment may be made in cash, by delivery of shares of Common
Stock (valued at their fair market value at the time of
exercise), or by a combination of cash and stock.
At the discretion of the Board, options under the Incentive
Plan may include a "reload option." A reload option, if included
in the original option, would be triggered when an optionee pays
the exercise price of all or a portion of the original option by
delivering shares of Common Stock. In that event, the optionee
would automatically be granted an additional option to acquire
the same number of shares as had been delivered to pay such
exercise price. The reload option would be subject to all of the
terms and conditions of the original option, except that the
option price per share would be equal to the fair market value of
the Common Stock on the date the original option was exercised,
and except that the Board could specify additional conditions or
contingencies, such as continued employment by the Company or
holding of the shares acquired upon exercise of the original
option for a specified period of time.
Options granted under the Incentive Plan may not be transferred
by an optionee other than by will or by the laws of descent and
distribution.
Stock Appreciation Rights. The Board may also grant non-
transferable SARs in conjunction with options, entitling the
holder upon exercise to receive an amount in cash and/or Common
Stock (as determined by the Board) equal in value to the increase
since the date of grant in the fair market value of the Common
Stock covered by such right. Each SAR will terminate upon the
termination or exercise of the related option.
Restricted Stock. The Board may also award restricted stock
subject to certain conditions set forth in the Incentive Plan and
such other conditions and restrictions as the Board may determine
which may include the attainment of performance goals and the
payment of a purchase price which may be equal to or less than
par value (and may be zero).
Prior to the lapse of restrictions on shares of restricted
stock, the participant will have all rights of a stockholder with
respect to such shares, including voting and dividend rights,
subject to the conditions and restrictions generally applicable
to restricted stock (and the dividends on such shares) or
specifically set forth in the participant's restricted stock
award agreement.
A recipient of restricted stock must enter into a restricted
stock award agreement with the Company, setting forth the
restrictions to which such shares are subject and the date or
dates on which the restrictions will lapse. The Board may permit
such restrictions to lapse in installments within the restricted
period or may accelerate or waive such restrictions at any time.
Shares of restricted stock are non-transferable and the Board
will have the right to provide, in the event that a participant
who holds shares of restricted stock terminates employment for
any reason (including death) prior to the lapse or waiver of the
restrictions, for the forfeiture of such restricted stock in
exchange for the amount, if any, which the participant paid for
them.
-12-
Certain Federal Income Tax Consequences
The following discussion is intended only as a brief summary of
the federal income tax rules relevant to options or shares issued
under the Incentive Plan, as based upon the Internal Revenue Code
of 1986, as amended (the "Code"), as currently in effect. These
rules are highly technical and subject to change in the future.
Because federal income tax consequences will vary as a result of
individual circumstances, grantees should consult their personal
tax advisors with respect to the tax consequences associated with
stock options. Moreover, the following summary relates only to
grantees' federal income tax treatment, and the state, local and
foreign tax consequences may be substantially different.
Non-Qualified Options. A grantee does not recognize any
taxable income, and the Company is not entitled to a deduction,
upon the grant of a non-qualified option. Upon the exercise of a
non-qualified option, the grantee recognizes ordinary income
(subject to wage and employment tax withholding) equal to the
excess of the fair market value of the Common Stock acquired over
the option exercise price. However, in the case of a person
subject to the short swing trading restrictions of Section 16(b)
of the Securities Exchange Act of 1934, as amended, whose grant
is exempted from matching thereunder pursuant to the six-month
holding provision of Rule 16b-3(d)(3) (a "16b-3(d)(3) Person"),
income is recognized, and such excess is determined by using the
fair market value on the later of the date of exercise and the
date six months after the option grant date unless such grantee
elects to be taxed based on the fair market value of the Common
Stock on the date of exercise by filing an election with the
Internal Revenue Service within 30 days after the exercise date
to recognize income on the exercise date (a "Section 83(b)
Election"). A grantee's basis in the stock received is equal to
such stock's fair market value on the date of exercise (or on the
date six months after the option grant date, if later, in the
case of a grantee who is a 16b-3(d)(3) Person and who makes no
such Section 83(b) Election). The Company is entitled to a
deduction equal to the compensation taxable to the grantee.
If a grantee sells Common Stock acquired pursuant to the
exercise of a non-qualified option, such grantee will recognize
capital gain or loss equal to the difference between the selling
price of the stock and the grantee's basis in the stock. Capital
gains are currently taxed at a maximum rate of 20% in the case of
stock held for more than 12 months, and 39.6% in the case of
stock held for not more than 12 months. The capital gains
holding period will begin on the exercise date (in the case of a
grantee who is a 16b-3(d)(3) Person and who does not make a
Section 83(b) Election, or the later of the exercise date or the
date six months after the option grant date). The Company is not
entitled to any deduction with respect to any capital gain
recognized by the grantee.
Capital losses on the sale of such stock may be used to offset
capital gains. If capital losses exceed capital gains, then up to
$3,000 of the excess losses may be deducted from ordinary income.
Remaining capital losses may be carried forward to future tax
years.
Incentive Options. An optionee does not recognize taxable
income on the grant or exercise of an incentive option. However,
the excess of the stock's fair market value on the exercise date
(the fair market value on the exercise date or six months after
the option grant date, whichever is later, is likely to govern in
the case of a 16b-3(d)(3) Person) over the option exercise price
will be included in the grantee's alternative minimum taxable
income and thereby may subject the grantee to an alternative
minimum tax. Such alternative minimum tax may be payable even
though the grantee receives no cash upon the exercise of his or
her incentive option with which to pay such tax. Upon the
disposition of shares of Common Stock acquired pursuant to the
exercise of an incentive option (i) more than one year after the
date of exercise, and (ii) more
-13-
than two years after the grant date (the "Required Holding
Periods"), the grantee recognizes capital gain or loss, as the
case may be, measured by the difference between the stock's
selling price and the exercise price. The Company is not
entitled to any tax deduction by reason of the grant or exercise
of an incentive option, or a disposition of stock received upon
the exercise of an incentive option after the Required Holding
Periods have been satisfied.
If a grantee disposes of the shares of Common Stock acquired
pursuant to the exercise of an incentive option before the
expiration of the Required Holding Periods (a "Disqualifying
Disposition"), the difference between the exercise price of such
shares and the lesser of (i) the fair market value of such shares
upon the date of exercise (the fair market value on the exercise
date or six months after the option grant date, whichever is
later, is likely to govern in the case of a 16b-3(d)(3) Person)
or (ii) the selling price, will constitute compensation taxable
to the grantee as ordinary income. The Company is allowed a
corresponding tax deduction equal to the amount of compensation
taxable to the grantee. If the selling price of the stock
exceeds the fair market value on the exercise date (or six months
after the option grant date, if later, in the case of a 16b-
3(d)(3) Person), the excess will be taxable to the grantee as
capital gain. The Company is not allowed a deduction with
respect to any such capital gain recognized by the grantee.
Use of Shares to Pay Option Price. If a grantee delivers
previously acquired shares of Common Stock, however acquired, in
payment of all or any part of the exercise price of a non-
qualified option, the grantee will not, as a result of such
delivery, be required to recognize as taxable income or loss any
appreciation or depreciation in the value of the previously
acquired shares after their acquisition date. The grantee's tax
basis in, and holding period for, the previously acquired shares
surrendered carries over to an equal number of the option shares
received on a share-for-share basis. The fair market value of
the shares received in excess of the shares surrendered
constitutes compensation taxable to the grantee as ordinary
income (reduced by any portion of the option price paid other
than by delivering previously acquired shares). Such income is
recognized and such fair market value is determined on the date
of exercise, except in the case of 16b-3(d)(3) Persons as
discussed above. The tax basis for such shares is equal to their
fair market value as so determined, and such shares' holding
period begins on the date on which the fair market value of such
shares is determined. The Company is entitled to a tax deduction
equal to the compensation recognized by the grantee.
If a grantee delivers previously acquired Common Stock (other
than stock acquired upon exercise of an incentive option and not
held for the Required Holding Periods) in payment of all or part
of the option price of an incentive option, the grantee will not
be required to recognize as taxable income or loss any
appreciation or depreciation in the value of the previously
acquired Common Stock after its acquisition date. The grantee's
tax basis in, and holding period (for capital gain, but not
Disqualifying Disposition, purposes) for the previously acquired
stock surrendered carries over to an equal number of the option
shares received on a share-for-share basis. Shares received in
excess of the shares surrendered have a tax basis equal to the
amount paid (if any) in excess of the previously acquired shares
used to pay the exercise price, and such shares' holding period
will begin on the date of exercise (with the possible exception
of 16b-3(d)(3) Persons). Proposed regulations provide that when
an incentive option is exercised using previously acquired stock,
a later Disqualifying Disposition of the shares received will be
deemed to have been a disposition of the shares having the lowest
basis first.
If a grantee pays the exercise price of an incentive option in
whole or in part with previously acquired Common Stock that was
acquired upon the exercise of an incentive option and that has
not been held for the Required Holding Periods, the grantee will
recognize ordinary income (but not capital gain) under the rules
applicable to Disqualifying Dispositions. The Company will be
entitled to a corresponding deduction. The grantee's basis in
the shares received in exchange for the shares surrendered will
be increased by the amount of ordinary income the grantee
recognizes.
-14-
One Million Dollar Compensation Limit. If an employee's total
compensation from the Company (including compensation related to
options) exceeds $1 million in any given year, such compensation
in excess of $1 million may not be tax deductible by the Company
under Section 162(m) of the Code. Affected employees are
generally the Company's Chief Executive Officer and the four
other most highly compensated executive officers at the end of
the Company's taxable year. Excluded from the calculation of
total compensation for this purpose is compensation that is
"performance-based" within the meaning of Section 162(m) of the
Code. The Company intends that compensation realized upon the
exercise of an option, SAR or other award granted under (i) the
Incentive Plan, (ii) the Omnibus Equity Plan, (iii) the Directors
Stock Option Plan and (iv) the Designated Executive Plan be
regarded as "performance-based" under Section 162(m) of the Code
and that such compensation be deductible without regard to the
limits of Section 162(m) of the Code.
Approval Required
The affirmative vote of a majority of the votes cast by the
holders of shares of Common Stock represented in person or by
proxy at the meeting is required for approval of the Incentive
Plan. Approval of the Incentive Plan is required for shares of
Common Stock issued pursuant thereto to be listed for trading on
the New York Stock Exchange and for grants of options and SARs
made pursuant thereto to qualify as performance-based
compensation deductible by the Company without limitation under
Section 162(m) of the Code.
Your board of directors recommends a vote "FOR" the approval of
the 1998 Incentive Equity Plan.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on the Company records and other information, the Company
believes that its Directors and Officers have complied with all
SEC filing requirements with respect to the Company's fiscal year
ended September 30, 1998, except that one report on Form 4 was
filed late by each of Mr. Lester and Mr. Mooney.
-15-
STOCK PERFORMANCE GRAPH
As part of the executive compensation information presented in
this Proxy Statement, the Securities and Exchange Commission
requires a five-year comparison of stock performance of the
Company with stock performance of a broad equity index such as
the S&P 500 Stock Index and either a published industry index or
a Company-constructed peer group index.
The graph below compares the cumulative total stockholder
return on the Common Stock of the Company for the last five
fiscal years, with the cumulative total return on the S&P 500
Index and the S&P Food Stock Index of the same period. (Assuming
the investment of $100 in the Company's Common Stock, the S&P 500
Index and the S&P Food Stock Index on September 30, 1993.)
There can be no assurance that the Company's stock performance
will continue into the future with the same or similar trends
depicted in the graph below. The Company will not make nor
endorse any predictions as to future stock performance.
<TABLE>
<CAPTION>
YEAR S & P FOOD S & P 500 ORANGE-CO, INC.
<S> <C> <C> <C>
1993 100 100 100
1994 104 111 118
1995 135 138 150
1996 162 170 165
1997 227 226 240
1998 248 240 125
</TABLE>
Total return calculations for the S&P 500 Index were performed
by Standard & Poor's Compustat Services, Inc.
Total return calculations for the S&P Food Index (consisting of
approximately 15 companies) is maintained by Standard & Poor and
reported in "Stocks in the S&P 500". Total return calculations
for the S&P Food Index were performed by Standard & Poor's
Compustat Services, Inc.
-16-
TRANSACTIONS WITH MANAGEMENT AND OTHERS
The Company handled 1,511,399 boxes of fruit under a marketing
contract during fiscal 1998 for Ben Hill Griffin, Inc., a company
controlled by Ben Hill Griffin, III, the Company's Chairman of
the Board and Chief Executive Officer. The marketing contract is
equivalent to contracts with other growers. Under the contract
terms, Ben Hill Griffin, Inc.'s fruit is processed and marketed
along with fruit from the Company and from other growers.
Proceeds from sales of finished products and all by-products,
less costs of processing and service fees, are paid to growers on
the basis of fruit delivered to the Company. The Company makes
advances on marketing contracts which are recovered from the
final fruit returns. The net amount paid to Ben Hill Griffin,
Inc. under the terms of this contract during the year ended
September 30, 1998 was $2,426,880, with an additional accrued
balance of approximately $3,574,000 to be paid by March 1, 1999.
Additionally, during fiscal 1998, the Company paid Ben Hill
Griffin, Inc. $165,329 for fruit purchased under a spot fruit
contract. Also, the Company paid Ben Hill Griffin, Inc.
$2,716,031 for other goods and services, principally the purchase
of fertilizer and citrus trees at competitive market prices
during fiscal 1998.
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP was engaged to audit the financial
statements of the Company and its subsidiaries for the 1998
fiscal year and is expected to act in such capacity for the 1999
fiscal year. A representative of KPMG Peat Marwick LLP is
expected to be present at the Annual Meeting, will be afforded an
opportunity to make a statement at the Meeting if desired, and
will be available to respond to appropriate questions. The Board
of Directors' selection of KPMG Peat Marwick LLP as auditors will
not be placed before the shareholders for ratification.
OTHER BUSINESS WHICH MAY PROPERLY COME BEFORE THE MEETING
The Company's management knows of no business which may come
before the Annual Meeting except that indicated above. However,
if other business is brought before the Annual Meeting, the
persons acting under the enclosed form of proxy may vote
thereunder in accordance with their best judgment.
PROPOSALS FOR 2000 ANNUAL MEETING
Shareholders' proposals intended to be presented at the 2000
Annual Meeting should be sent certified mail, return receipt
requested, and must be received by the Company at its principal
executive offices (Attention: Corporate Secretary) by August 22,
1999, for inclusion in the proxy statement and the form of proxy
for that meeting. Such proposals may be made only by persons who
are shareholders, beneficially or of record on the date the
proposals are submitted and who continue in such capacity through
the 2000 Annual Meeting date, of at least 1% or $1,000 in market
value of securities entitled to be voted at the meeting, and have
held such securities for at least one year.
By Order of the Board of Directors
/s/ Dale A. Bruwelheide
-----------------------
Dale A. Bruwelheide
Secretary
-17-
PROXY ORANGE-CO, INC.
This Proxy is Solicited on Behalf of the Board of Directors of
Orange-co, Inc.
The undersigned hereby constitutes and appoints Ben Hill
Griffin, III and Gene Mooney, or either of them, attorneys,
agents and proxies with power of substitution to vote all of the
shares of Common Stock of Orange-co, Inc. (the "Company") that
the undersigned is entitled to vote at the Annual Meeting of
Shareholders of the Company to be held at the Citrus & Chemical
Bank, 600 North Broadway, Bartow, Florida, February 18, 1999 at
10:00 A.M. local time, and any adjournment thereof.
The Proxy when properly executed will be voted in the manner
directed. If no direction is made with respect to election of
directors, this Proxy will be voted FOR the nominees. In their
discretion the proxies are also authorized to vote upon such
other matters as may properly come before the meeting, including
the election of any person to the Board of Directors where a
nominee named in the Proxy Statement is unable to serve or, for
good cause, will not serve.
I. Nominees for election of Directors:
Ben Hill Griffin, III; Richard A. Coonrod; Paul E. Coury;
George W. Harris, Jr.; W. Bernard Lester; Bobby McKown;
Gene Mooney; C.B. Myers, Jr.; Thomas H. Taylor, Sr.
Unless authority is withheld, this Proxy will be voted for
the election of all nominees.
II. To approve the proposed 1998 Incentive Equity Plan.
You are encouraged to specify your choices by marking the
appropriate boxes. SEE REVERSE SIDE, but you need not mark any
boxes if you wish to vote in accordance with the Board of
Directors' recommendations. Your shares cannot be voted unless
you sign and return this card.
(Continued and to be dated and signed on reverse side)
REVERSE SIDE OF PROXY CARD
I. ELECTION OF DIRECTORS
(see reverse)
____ FOR ____ WITHHELD
For, except vote withheld from the following Nominees:
_________________________________________________________________
II. APPROVE 1998 INCENTIVE EQUITY PLAN
____ FOR ____ AGAINST ____ABSTAIN
The undersigned acknowledges receipt of the Notice of Annual
Meeting of Shareholders and the Proxy Statement dated January 22,
1999 and ratifies all that the proxies or either of them or their
substitutes may lawfully do or cause to be done by virtue hereof
and revokes all former proxies.
Dated: ________________________, 1999
______________________________________
______________________________________
Signature(s)
NOTE: Please sign exactly as name
appears hereon. Joint owners should
each sign. Where signing as Attorney,
executor, administrator, trustee or
guardian, please give full title as
such.
