<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
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 Rule 14a-11(c) or Rule 14a-12
MISSISSIPPI CHEMICAL CORPORATION
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
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):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] 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
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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[Mississippi Chemical Corp. Logo]
P.O. BOX 388
YAZOO CITY, MISSISSIPPI 39194
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 9, 1999
As a shareholder of Mississippi Chemical Corporation, a Mississippi
corporation, you are hereby given notice of, and invited to attend in person or
by proxy, the Annual Meeting of Shareholders to be held at the Owen Cooper
Administration Building, Highway 49 East, Yazoo City, Mississippi 39194, on
Tuesday, November 9, 1999, at 9:00 a.m. local time, for the following purposes:
1. To elect four members to the Board of Directors to serve until the 2002
Annual Meeting of Shareholders.
2. To consider and vote upon approval of the Amended and Restated
Mississippi Chemical Corporation 1994 Stock Incentive Plan.
3. To transact such other business as may properly come before the meeting
and any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on September 1,
1999, as the record date for the determination of shareholders entitled to
notice of, and to vote at, such meeting and any adjournments or postponements
thereof.
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. HOWEVER, WHETHER OR NOT
YOU EXPECT TO ATTEND THE MEETING, TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT
THE MEETING, PLEASE DATE, EXECUTE, AND MAIL PROMPTLY THE ENCLOSED PROXY CARD IN
THE ENCLOSED, STAMPED ENVELOPE FOR WHICH NO ADDITIONAL POSTAGE IS REQUIRED IF
MAILED IN THE UNITED STATES.
By Order of the Board of Directors,
/s/ ROSALYN B. GLASCOE
ROSALYN B. GLASCOE
Corporate Secretary
Yazoo City, Mississippi
September 27, 1999
YOUR VOTE IS IMPORTANT. PLEASE DATE, EXECUTE, AND RETURN PROMPTLY THE
ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE
"FOR" EACH OF THE NOMINEES FOR DIRECTOR AND "FOR" THE APPROVAL OF THE AMENDED
AND RESTATED MISSISSIPPI CHEMICAL CORPORATION 1994 STOCK INCENTIVE PLAN.
<PAGE> 3
MISSISSIPPI CHEMICAL CORPORATION
1999 PROXY STATEMENT
VOTING INFORMATION
PURPOSE
This Proxy Statement and the accompanying proxy card are being mailed to
the Company's shareholders beginning September 27, 1999. The Board of Directors
(the "Board") is soliciting proxies to be used at the 1999 Annual Meeting of
Shareholders which will be held on November 9, 1999, at the time and place
stated in the Notice of Annual Meeting accompanying this Proxy Statement
("Annual Meeting"). Proxies are solicited to give all shareholders of record an
opportunity to vote on matters presented at the Annual Meeting.
RECORD DATE
Only holders of record on September 1, 1999, are entitled to notice of, and
to vote at, the Annual Meeting and any adjournments or postponements thereof.
SHARES OUTSTANDING
On September 1, 1999, 26,139,634 shares of the Company's common stock were
issued and outstanding.
VOTING OF THE SHARES
Each holder of the Company's common stock will be entitled to one vote, in
person or by proxy, for each share standing in such holder's name on the
Company's books on September 1, 1999, on any matter submitted to a vote of
shareholders. The presence, in person or by proxy, of holders of record of a
majority of the shares entitled to vote constitutes a quorum for action at the
Annual Meeting. Abstentions and broker nonvotes are counted for purposes of
determining the presence or absence of a quorum for transaction of business. All
shares represented by a properly executed proxy will be voted in accordance with
the directions on such proxy. If no directions are given to the contrary on such
proxy, the shares of the Company's common stock represented by such proxy will
be voted FOR approval of all proposals addressed at the meeting. It is not
anticipated that any matters will be presented at the Annual Meeting other than
as set forth in the Notice of Annual Meeting. If, however, other matters are
properly presented at the Annual Meeting, the proxy will be voted in accordance
with the best judgment of the person or persons voting the proxy.
VOTE REQUIRED
Director nominees are required to receive a plurality of votes present and
voting at the Annual Meeting in order to be elected. Receipt of a majority of
the votes present and voting at the Annual Meeting is required for approval of
the Amended and Restated 1994 Stock Incentive Plan.
REVOCABILITY OF PROXIES
A proxy for use at the Annual Meeting is enclosed with this Proxy
Statement. A shareholder executing and returning a proxy may revoke it at any
time prior to the voting thereof either by revoking the proxy in person at the
Annual Meeting or by delivering a signed written notice of revocation to the
office of our Corporate Secretary (P.O. Box 388, Yazoo City, Mississippi 39194)
before the Annual Meeting begins.
SOLICITATION OF PROXIES
The expense of soliciting proxies for the Annual Meeting, including the
cost of preparing, assembling, and mailing the notice, proxy card, and Proxy
Statement and the reasonable costs of brokers, nominees, and fiduciaries in
supplying proxies to beneficial owners, will be paid by the Company. The
solicitation will be made by the use of the mails. We have engaged Morrow & Co.,
a firm specializing in solicitation of proxies, to
<PAGE> 4
assist in the current solicitation for an estimated fee of $5,000 plus
reimbursement for their out-of-pocket expenses.
PLAIN ENGLISH INITIATIVE
We are participating in the Securities and Exchange Commission's "plain
English" initiative by offering proxy information to our shareholders in
language that is easier to read and understand. The terms "Company," "we," "us,"
and "our" refer to Mississippi Chemical Corporation and its wholly owned
subsidiaries.
PROPOSAL -- ELECTION OF DIRECTORS
(PROXY ITEM #1)
The Company's Articles of Incorporation provide that the Board shall
consist of not fewer than nine nor more than 15 directors, with the exact number
of directors to be fixed by the Board, and that the Board shall be divided into
three classes, with one class being elected each year for a three-year term. The
number of directors is currently fixed at 12. Four directors are to be elected
at the Annual Meeting to serve until the 2002 Annual Meeting of Shareholders.
The persons named as proxies in the accompanying proxy card have indicated that
they intend to vote for the election of the four nominees set forth hereinafter.
See "Nominees for Election to Serve Until 2002."
In the event that any of the nominees for election as director are not
available to serve as a director at the time of election at the Annual Meeting,
proxy cards may be voted for a substitute nominee as well as for the remaining
nominees named herein. However, the Company's management has no reason to
anticipate that any nominees will be unavailable.
THE BOARD RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS VOTE "FOR" EACH OF THE
NOMINEES FOR DIRECTOR SET FORTH HEREIN.
NOMINEES FOR ELECTION TO SERVE UNTIL 2002
Haley Barbour, Age 51
Director of the Company since January 1997. For more than the past five
years, Mr. Barbour has been a partner and attorney in the law firm Barbour,
Griffith & Rogers in Washington, D.C. From 1993-1997, Mr. Barbour served as
Chairman of the Republican National Committee. He is a director of SkyTel
Communications, Inc., and Blount International, Inc.
Wayne Thames, Age 63
Director of the Company since 1973. For more than the past five years, Mr.
Thames has been a cattleman in Evergreen, Alabama.
W. R. Dyess, Age 60
Director of the Company since 1991. For more than the past five years, Mr.
Dyess has served as President of Dyess Farm Center, Inc., in Bardwell, Texas,
and ABC Ag Center, Inc., in Corsicana, Texas.
David M. Ratcliffe, Age 50
Director of the Company since 1994. Mr. Ratcliffe became the President and
Chief Executive Officer of Georgia Power, an electric utility, in 1999. From
1998 until becoming President, Mr. Ratcliffe was Georgia Power's Executive Vice
President and Chief Financial Officer. From 1995 to 1998, he served as Senior
Vice President of External Affairs of the Southern Company, a utility holding
company based in Atlanta, Georgia. From 1991 to 1995, Mr. Ratcliffe served as
President and Chief Executive Officer of Mississippi Power Company, an electric
utility.
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DIRECTORS CONTINUING TO SERVE UNTIL 2001
John W. Anderson, Age 64
Director of the Company since 1989. Mr. Anderson is the former President
and Chief Executive Officer of Alabama Farmers Cooperative, Inc. He served in
that capacity from 1989 to 1995 when he retired.
Frank R. Burnside, Jr., Age 50
Director of the Company since 1985. For more than the past five years, Mr.
Burnside has been a farm supply dealer and Vice President and Manager of
Newellton Elevator Company, Inc., Newellton, Louisiana.
Charles O. Dunn, Age 51
Director of the Company since 1992. Mr. Dunn has been employed by the
Company since 1978 and was elected President and Chief Executive Officer in
April 1993. Prior to becoming President and Chief Executive Officer, he served
in various positions within the Company, including Executive Vice President.
George Penick, Age 51
Director of the Company since July 1994. Mr. Penick is President of the
Foundation for the Mid-South, a private philanthropic foundation, and has served
in that position since 1990.
DIRECTORS CONTINUING TO SERVE UNTIL 2000
Coley L. Bailey, Age 48
Director of the Company since 1978 and Chairman of the Board since 1988.
For more than the past five years, Mr. Bailey has been engaged in farming
activities in Yalobusha County, Mississippi.
Woods E. Eastland, Age 54
Director of the Company since July 1994. Since 1986, Mr. Eastland has been
President and Chief Executive Officer of Staplcotn & Stapldiscount, a cotton
marketing and financing cooperative located in Greenwood, Mississippi.
John Sharp Howie, Age 59
Director of the Company since 1966 and Vice Chairman of the Board since
1988. For more than the past five years, Mr. Howie has been engaged in farming
activities in Yazoo County, Mississippi.
W. A. Percy II, Age 59
Director of the Company since 1997. Previously served as director of the
Company from 1988-1994. For more than the past five years, Mr. Percy has been
engaged in farming activities in Washington County, Mississippi, and other
agribusiness enterprises. He is a director of ChemFirst Inc.
BOARD OF DIRECTORS AND COMMITTEES
The Board manages the business affairs of the Company in accordance with
the Mississippi Business Corporation Act, as implemented by the Company's
Articles of Incorporation and Bylaws. All of the Company's directors are
independent, nonemployee directors except Mr. Dunn, who is President and Chief
Executive Officer. Mr. Dunn does not participate in any action of the Board that
relates to executive compensation. The Board met four times in fiscal 1999. Each
director spends considerable time in preparing for and attending Board and
committee meetings. During fiscal 1999, each director attended at least 81% of
the meetings of the Board and of all committees on which such director served.
An international consulting firm, IEP Advisors, in which Mr. Barbour is an
equity owner, received $119,997 in fees for consulting services
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provided to the Company in fiscal 1999. This relationship has ended and no fees
are expected to be paid to IEP Advisors in fiscal 2000.
BOARD COMMITTEES
The Board has established four standing committees: the Audit Committee,
the Compensation Committee, the Corporate Governance Committee, and the
Executive Committee. The members of the committees as of June 30, 1999, were as
follows:
<TABLE>
<CAPTION>
AUDIT COMPENSATION CORPORATE GOVERNANCE EXECUTIVE
----- ------------ -------------------- ---------
<S> <C> <C> <C>
John W. Anderson, Chairman John Sharp Howie, Chairman W. R. Dyess, Chairman Coley L. Bailey, Chairman
Haley Barbour Frank R. Burnside, Jr. George Penick John W. Anderson
Woods E. Eastland W. A. Percy II W. A. Percy II Charles O. Dunn
Wayne Thames David M. Ratcliffe Woods E. Eastland
John Sharp Howie
</TABLE>
AUDIT COMMITTEE
The Audit Committee met four times in fiscal 1999. The primary duties and
responsibilities of the Audit Committee, which are set forth in a written
Charter approved by the Board, include recommending the appointment of
independent auditors and monitoring the accounting and audit functions of the
Company. Each member of the Audit Committee is an independent, nonemployee
director.
COMPENSATION COMMITTEE
The Compensation Committee met three times in fiscal 1999. Except when an
applicable statute, regulation, or plan provision requires action by the full
Board, the Compensation Committee establishes any general changes in wages,
salaries, perquisites and profit sharing of nonexempt and exempt employees;
amends and monitors all of our qualified and nonqualified benefit plans;
establishes executive officers' salaries, bonuses, perquisites, stock and other
plans; and recommends to the full Board compensation for directors' service to
the Company. Each member of the Compensation Committee is an independent,
nonemployee director.
CORPORATE GOVERNANCE COMMITTEE
The Corporate Governance Committee met four times in fiscal 1999. Its
duties and responsibilities include acting as a nominating committee for the
slate of directors and officers, periodically reviewing the performance of the
Board and establishing the criteria by which Board members are to be selected
and evaluated. Shareholder recommendations for director nominees may be
considered, but there are no established procedures for the submission of such
recommendations to the Corporate Governance Committee. Each member of the
Corporate Governance Committee is an independent, nonemployee director.
EXECUTIVE COMMITTEE
The Executive Committee met three times in fiscal 1999. To the extent
permitted by law and the Company's Bylaws, the Executive Committee has the
authority to take all actions that the Board as a whole can take.
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DIRECTORS' COMPENSATION
FEES AND EXPENSES
During fiscal 1999, all nonemployee directors except Mr. Bailey and Mr.
Howie received or, absent the effect of the Deferred Compensation Plan described
below and any irrevocable deferral election pursuant thereto, would have been
entitled to receive, an annual retainer of $20,000. In addition, each
nonemployee director except Mr. Bailey received a $1,000 attendance fee for, and
was reimbursed expenses related to, each Board and Committee meeting.
Mr. Bailey, as Chairman of the Board, received or, absent the effect of the
Deferred Compensation Plan described below and any irrevocable deferral election
pursuant thereto, would have been entitled to receive, a $50,000 annual
retainer. Mr. Howie, as Vice Chairman of the Board, received or, absent the
effect of the Deferred Compensation Plan described below and any irrevocable
deferral election pursuant thereto, would have been entitled to receive, an
annual retainer of $30,000. Mr. Dunn, as President and Chief Executive Officer,
received no remuneration for serving as a director.
NONEMPLOYEE DIRECTORS' STOCK OPTIONS
Pursuant to the Company's 1995 Stock Option Plan for Nonemployee Directors
("Directors' Stock Plan"), each nonemployee director received in fiscal 1999 an
annual grant of nonqualified stock options to purchase 2,000 shares of the
Company's common stock except Mr. Bailey, Mr. Howie, and Mr. Percy. Mr. Bailey,
as Chairman of the Board, received options to purchase 4,000 shares, and Mr.
Howie, as Vice Chairman of the Board, received options to purchase 3,000 shares.
Mr. Percy received options to purchase 5,000 shares, the number of shares
prescribed by the Directors' Stock Plan for an initial grant. These options
become exercisable in 20% increments over a six-year period of time after the
grant date. The exercise price for each option granted pursuant to the
Directors' Stock Plan is the market price for the Company's common stock on the
date of the grant, determined in accordance with the Directors' Stock Plan.
NONEMPLOYEE DIRECTORS' DEFERRED COMPENSATION PLAN
The Nonemployee Directors' Deferred Compensation Plan more closely aligns
nonemployee directors' interests with those of the shareholders by requiring
that they place at least one-half of their annual retainer at risk in exchange
for receipt of deferred compensation based on future growth in the value of the
Company's common stock. In addition, each nonemployee director has the option to
place the other half of his annual retainer at risk for receipt of deferred
compensation based on future growth in the value of the Company's common stock.
We have opened a "deferred stock account" in each nonemployee director's name on
our books. This account reflects a number of shares of "deferred stock" in the
Company equal to 150% of the number of shares that could have been purchased at
the lesser of the market price on the first day of the retainer period (January
1) or the market price as of the July 1 immediately prior to the retainer
period. Deferred stock credited to a director's account provides no voting
rights or other incidents of ownership of stock and constitutes merely a
bookkeeping entry reflecting an unsecured debt owed by the Company to the
nonemployee director. Each nonemployee director's account will be credited with
dividends (expressed as a number of deferred shares) and adjusted to reflect
stock splits, exchanges of stock in connection with a merger, and the like. All
nonemployee directors irrevocably elected to defer 100% of their 1999 annual
retainer with the exception of Mr. Penick who deferred 50%.
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BENEFICIAL OWNERSHIP OF THE COMPANY'S STOCK
The following table shows the number of shares of the Company's common
stock which was beneficially owned by (i) Pioneer Investment Management, Inc.,
and Wellington Management Company, L.L.P., and (ii) each director and Named
Executive Officer (as defined on page 8 under the heading "Base Salary") as of
June 30, 1999, together with the aggregate of shares owned beneficially by all
directors and executive officers as a group. As of June 30, 1999, the beneficial
holdings of Pioneer Investment Management, Inc., and Wellington Management
Company, L.L.P., represented approximately 8.3% and 6.6%, respectively, of the
shares outstanding. No director or executive officer listed in the table
beneficially owned more than 1% of the shares outstanding as of June 30, 1999.
The sum of the beneficial holdings of the directors and executive officers as a
group represents approximately 3.4% of the shares outstanding if the options and
deferred stock units among those shares had all been outstanding on June 30,
1999.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME BENEFICIAL OWNERSHIP(1)
- ---- -----------------------
<S> <C>
John W. Anderson(2)..................................... 16,441
Coley L. Bailey(3)...................................... 29,102
Haley Barbour(4)........................................ 7,004
Frank R. Burnside, Jr.(5)............................... 43,103
W. R. Dyess(6).......................................... 28,535
Woods E. Eastland(7).................................... 14,931
John Sharp Howie(8)..................................... 21,715
George Penick(9)........................................ 9,727
W. A. Percy II(10)...................................... 9,141
David M. Ratcliffe(11).................................. 10,007
Wayne Thames(12)........................................ 18,711
Charles O. Dunn(13)..................................... 221,612
C. E. McCraw(14)........................................ 107,431
Robert E. Jones(15)..................................... 103,918
Timothy A. Dawson(16)................................... 67,171
David W. Arnold(17)..................................... 73,600
All Directors and Executive Officers as a Group(18)..... 941,733
Pioneer Investment Management, Inc.(19)................. 2,180,000
Wellington Management Company, L.L.P.(20)............... 1,726,000
</TABLE>
- ---------------
(1) Beneficial ownership is the ownership of stock, either direct or indirect,
which includes power to vote or power to dispose of the stock. Stock which
an individual may acquire by exercising options or by distribution from an
employee benefits plan is beneficially owned under certain circumstances
even if such an exercise or distribution has not taken place.
The figures in the table include shares of stock that the named individuals
and entities own directly. In addition, these figures include shares that
certain named individuals own, or are presumed to own, indirectly as a
result of their relationship with another person or entity.
The table reflects deferred stock units credited to individual directors
under the Nonemployee Directors' Deferred Compensation Plan and to
individual executive officers under the Executive Deferred Compensation
Plan. The figures in the table assume that deferred stock units could be
converted into common stock and distributed to the named individuals within
60 days of August 1, 1999, even though many of the units referenced in the
table will not be eligible for conversion and distribution within that time
frame.
The table also reflects shares subject to nonqualified stock options issued
to the named individuals pursuant to the Directors' Stock Plan or the Stock
Incentive Plan which could have been exercised by the named individuals on
August 1, 1999, or that will become exercisable within 60 days after August
1, 1999. If exercised on August 1, 1999, the stock options listed in the
above table would have no value
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since the price of the Company's common stock on that date was less than
the exercise price on all the options which could have been exercised
through that date.
For each named individual, a footnote indicates the number of deferred
stock units, options, and other indirectly held shares included in the
total number. The footnote also identifies the extent to which each of the
named individuals shares voting power and/or the power to dispose of any of
the beneficially owned shares.
(2) Includes 3,960 deferred stock units under the Nonemployee Directors'
Deferred Compensation Plan; also includes options to purchase 5,100 shares
which are currently exercisable or will become exercisable within 60 days;
and 1,000 shares which are owned by his wife, Evelyn Anderson. Mr. Anderson
disclaims beneficial ownership of the 1,000 shares owned by his wife.
(3) Includes 7,845 deferred stock units under the Nonemployee Directors'
Deferred Compensation Plan; also includes options to purchase 10,200 shares
which are currently exercisable or will become exercisable within 60 days.
(4) Includes 3,960 deferred stock units under the Nonemployee Directors'
Deferred Compensation Plan; also includes options to purchase 2,400 shares
which are currently exercisable or will become exercisable within 60 days;
and 250 shares which are owned by the Barbour, Griffith & Rogers Profit
Sharing Trust.
(5) Includes 3,960 deferred stock units under the Nonemployee Directors'
Deferred Compensation Plan; also includes options to purchase 5,100 shares
which are currently exercisable or will become exercisable within 60 days;
28,736 shares which are owned by Newellton Elevator Company, Inc., which is
an affiliate of Mr. Burnside's; and 200 shares which are owned by Mr.
Burnside's minor children. Mr. Burnside shares the power to vote and
dispose of the shares owned by Newellton Elevator Company, Inc.
(6) Includes 3,960 deferred stock units under the Nonemployee Directors'
Deferred Compensation Plan; also includes options to purchase 5,100 shares
which are currently exercisable or will become exercisable within 60 days;
16,100 shares which are owned by Dyess Farm Center, Inc.; and 2,704 shares
which are owned by ABC Ag Center, Inc. Dyess Farm Center, Inc., and ABC AG
Center, Inc., are affiliates of Mr. Dyess's.
(7) Includes 3,960 deferred stock units under the Nonemployee Directors'
Deferred Compensation Plan; also includes options to purchase 5,100 shares
which are currently exercisable or will become exercisable within 60 days.
(8) Includes 5,936 deferred stock units under the Nonemployee Directors'
Deferred Compensation Plan; also includes options to purchase 7,200 shares
which are currently exercisable or will become exercisable within 60 days;
and 1,903 shares which are owned by Pauline W. Howie and John Sharp Howie
DBA Cedar Grove Plantation.
(9) Includes 2,835 deferred stock units under the Nonemployee Directors'
Deferred Compensation Plan; also includes options to purchase 5,100 shares
which are currently exercisable or will become exercisable within 60 days.
(10) Includes 3,960 deferred stock units under the Nonemployee Directors'
Deferred Compensation Plan; also includes options to purchase 1,000 shares
which are currently exercisable or will become exercisable within 60 days.
(11) Includes 3,960 deferred stock units under the Nonemployee Directors'
Deferred Compensation Plan; also includes options to purchase 5,100 shares
which are currently exercisable or will become exercisable within 60 days.
(12) Includes 3,960 deferred stock units under the Nonemployee Directors'
Deferred Compensation Plan; also includes options to purchase 5,100 shares
which are currently exercisable or will become exercisable within 60 days.
(13) Includes 2,057 deferred stock units under the Executive Deferred
Compensation Plan; also includes options to purchase 196,288 shares which
are currently exercisable or will become exercisable within 60 days.
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<PAGE> 10
(14) Includes 1,171 deferred stock units under the Executive Deferred
Compensation Plan; also includes options to purchase 99,210 shares which
are currently exercisable or will become exercisable within 60 days.
(15) Includes 1,131 deferred stock units under the Executive Deferred
Compensation Plan; also includes options to purchase 93,750 shares which
are currently exercisable or will become exercisable within 60 days.
(16) Includes 946 deferred stock units under the Executive Deferred Compensation
Plan; also includes options to purchase 58,225 shares which are currently
exercisable or will become exercisable within 60 days.
(17) Includes options to purchase 72,600 shares which are currently exercisable
or will become exercisable within 60 days.
(18) Includes 19,674 shares owned outright by officers not named in the table;
1,415 deferred stock units credited to such officers under the Executive
Deferred Compensation Plan; and options to purchase 138,495 shares granted
to such officers which are currently exercisable or will become exercisable
within 60 days.
(19) Pioneer's business address is 60 State Street, Boston, Massachusetts 02109.
(20) Wellington's business address is 75 State Street, Boston, Massachusetts
02109.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERVIEW
The Board has established a four-member Compensation Committee. Each member
of the Committee is an independent, nonemployee director.
Our Executive Compensation Program is designed to attract and retain
qualified executives by providing a total compensation package that is
competitive with compensation packages provided by comparable organizations. In
addition, the Executive Compensation Program seeks to align the interests of
management with the interests of our shareholders and to promote the enhancement
of shareholder value by encouraging our executive officers to maintain a certain
level of stock ownership and providing stock-based performance compensation
arrangements. Through its bonus programs, the Executive Compensation Program
also motivates management to attain preset commercial goals for the Company. The
1999 fiscal year Program and a specific discussion as to the compensation of Mr.
Dunn, the President and Chief Executive Officer, are set forth below.
STOCK OWNERSHIP GUIDELINES
In order to advance its belief that shareholder value will be enhanced by
tying the interests of the Company's executive officers to those of the
Company's shareholders, the Compensation Committee established stock ownership
guidelines for the executive officers which encourage or, in some circumstances,
require each executive officer to own and maintain a certain amount of the
Company's common stock at his own expense. The specific guideline amount
applicable to each individual is dependent on his position with the Company.
BASE SALARY
The Compensation Committee approved the individual salary levels set forth
on the Summary Compensation Table for the five highest compensated executive
officers (collectively, the "Named Executive Officers") after (i) reviewing
factors such as position and compensation levels for comparable positions in
similar organizations (including companies represented in the Custom Composite
Index now shown in the Performance Graph), (ii) conducting subjective individual
performance evaluations that focused upon key financial criteria, such as
earnings per share, return on equity and growth in shareholder value and
nonfinancial performance measures, such as employee, customer and supplier
relationships, environmental compliance,
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employee safety, productivity enhancements and management development, and (iii)
considering the recommendations of Mr. Dunn regarding individual pay treatment
for the Named Executive Officers other than himself. The Committee's evaluation
of Mr. Dunn was based on the same criteria plus the following additional
subjective criteria: his representation of the Company to investors and
financial analysts, his participation in industry and community affairs, and his
relationship with the Board and customers, as well as with our employees.
ANNUAL BONUSES
The Officer and Key Employee Incentive Plan permits annual bonuses to
participants selected by the Compensation Committee based on an "economic value
added" concept. No bonuses are paid under the Officer and Key Employee Incentive
Plan unless our "Consolidated Performance" equals our "Weighted Average Cost of
Capital," all as defined in the Officer and Key Employee Incentive Plan as
"Threshold Performance." We achieve Superior Performance and Extraordinary
Performance when our Consolidated Performance exceeds our Weighted Average Cost
of Capital by 8% and 20%, respectively. When our Consolidated Performance equals
Threshold, Superior or Extraordinary Performance, each participant receives a
bonus equal to his "Threshold Bonus," "Superior Bonus," or "Extraordinary Bonus"
as established by the Compensation Committee. When our Consolidated Performance
exceeds our Threshold Performance but is less than our Superior Performance, or
exceeds our Superior Performance but is less than our Extraordinary Performance,
each participant receives a bonus adjusted to reflect the extent to which our
Performance exceeds Threshold or Superior Performance, as the case may be. The
Compensation Committee has the discretion to reduce any Bonus down to the
Threshold Bonus. The President and Chief Executive Officer's Threshold Bonus is
30% of his base salary, his Superior Bonus is 60% of his base salary and his
Extraordinary Bonus is 90% of his base salary. The four other Named Executive
Officers are also included in the Incentive Plan. Their Threshold Bonuses are
15%; their Superior Bonuses are 30%; and their Extraordinary bonuses are 45%. No
bonuses were paid under the Incentive Plan during fiscal year 1999 because we
did not reach Threshold Performance.
The Named Executive Officers, along with all of our other nitrogen
employees, were also eligible for a profit sharing payment of up to 10% of their
base annual salaries, based solely on our nitrogen operating results during
fiscal 1999. The Named Executive Officers did not receive a profit sharing
payment for services rendered in fiscal 1999.
EXECUTIVE DEFERRED COMPENSATION PLAN
The Executive Deferred Compensation Plan more closely aligns the interests
of the Company's executive officers and certain key employees selected by the
Compensation Committee with those of the shareholders by allowing the
participants to risk certain payments otherwise payable to them for deferred
compensation based on future growth in the value of the Company's common stock.
Participants may irrevocably elect, prior to the beginning of a calendar year,
to defer some or all of any profit sharing or bonus payment they would otherwise
receive in such calendar year for a minimum period of 18 months from the date of
the election. The Company has opened a "deferred stock account" in each
participant's name on the Company's books. This account reflects a number of
shares of "deferred stock" in the Company equal to 150% of the number of shares
that could be purchased at the lesser of the market price as of the July 1
immediately prior to the calendar year in which the payment in question would
otherwise have occurred or the market price on the date the deferred amount
would otherwise have been paid. Deferred stock provides no voting rights or
other incidents of ownership of stock and constitutes merely a bookkeeping entry
reflecting an unsecured debt from the Company to the participant. Each
participant's account will be credited with dividends (expressed as a number of
deferred shares) and adjusted to reflect stock splits, exchanges of stock in
connection with a merger, and the like. Payment, when made, will be in the form
of actual Company common stock, and the number of shares received will equal the
number of deferred shares then credited to a participant's deferral account. The
deferred payment will not be included in a participant's income until
distribution of the stock is made from the stock deferral account. The amount
taken into income will be the then market value of the Company's common stock.
Although all Named Executive Officers except Dr. Arnold elected to defer 100%
9
<PAGE> 12
of any profit sharing and bonus they were entitled to receive as a result of
services rendered in fiscal 1999, no credits were posted to their deferred stock
accounts due to the fact that no bonus or profit sharing payments were made to
these individuals in fiscal 1999.
STOCK INCENTIVE PLAN
The Compensation Committee also administers the Stock Incentive Plan. The
Committee evaluated the contribution of executive officers and key employees,
including the Named Executive Officers, and based on its evaluation, options to
purchase an aggregate of 184,000 shares of the Company's common stock were
awarded during the fiscal year ended June 30, 1999. The specific grants made to
the Named Executive Officers are set forth in the Stock Option Grants Table.
Individual grants are based primarily on the grantee's level of responsibility
and potential impact on the Company's consolidated performance. The exercise or
purchase price applicable to all options to purchase shares granted pursuant to
the Stock Incentive Plan is equal to the fair market value of such stock on the
date of option grant.
INTERNAL REVENUE CODE SECTION 162(M) IMPLICATIONS FOR EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code generally limits the Company's
federal income tax deduction for compensation paid to each of the Named
Executive Officers to $1,000,000 per year. The Internal Revenue Code provides an
exemption from the deduction limit for certain types of "performance-based
compensation." The Compensation Committee's general philosophy has been to
qualify incentive compensation arrangements for the Named Executive Officers for
the "performance-based compensation" exemption, so as to preserve our federal
income tax deduction for such arrangements to the extent practicable should
compensation for the Named Executive Officers ever approach $1,000,000 in any
given year. Specifically, the Stock Incentive Plan, the Officer and Key Employee
Incentive Plan and the Executive Deferred Compensation Plan are generally
intended to provide benefits that qualify as "performance-based compensation"
that is exempt from the $1,000,000 deduction limit. However, the Compensation
Committee has not adopted a blanket policy limiting executive compensation to
fully tax-deductible amounts in every case, and nondeductible payments could
occur, for example, in the event of a change of control.
None of the Named Executive Officers exceeded the $1,000,000 limit for
fiscal year 1999. It is not anticipated that any of the Named Executive Officers
will exceed the limit for fiscal year 2000.
COMPENSATION COMMITTEE COMPOSITION
The foregoing report is submitted by the members of the Compensation
Committee as of June 30, 1999: John Sharp Howie, Chairman; Frank R. Burnside,
Jr.; David Ratcliffe; and W. A. Percy II.
10
<PAGE> 13
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND OTHER COMPENSATION
The table below sets forth the compensation paid by the Company to each of
the Named Executive Officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------------------- ------------------
OTHER
ANNUAL SECURITIES
NAME AND PRINCIPAL SALARY(1) BONUS(2) COMPENSATION(3) UNDERLYING OPTIONS
POSITION YEAR ($) ($) ($) (#)
------------------ ---- --------- -------- --------------- ------------------
<S> <C> <C> <C> <C> <C>
Charles O. Dunn 1999 489,456 0 14,071 38,000
President and Chief 1998 424,836 0 12,026 38,000
Executive Officer 1997 362,256 155,770 10,684 37,219
C. E. McCraw 1999 265,416 0 7,779 20,000
Senior Vice President -- 1998 241,851 0 7,396 19,000
Operations 1997 238,188 73,838 7,025 18,630
Robert E. Jones 1999 265,416 0 7,664 20,000
Senior Vice President -- 1998 233,643 0 6,765 18,000
Corporate Development 1997 205,212 63,616 6,052 17,250
Timothy A. Dawson 1999 215,352 0 6,213 15,000
Senior Vice President and 1998 195,204 0 5,826 14,000
Chief Financial Officer 1997 176,544 44,136 5,111 12,500
David W. Arnold 1999 210,216 0 6,207 14,000
Senior Vice President -- 1998 199,980 9,739 6,076 14,000
Technical Group 1997 188,412 47,103 5,557 13,800
</TABLE>
- ---------------
(1) Although each of the Named Executive Officers is normally entitled to a
raise in excess of 2 1/2% under the Company's salary administration program,
raises effective July 1, 1999, for all executive officers were limited to
2 1/2% by the Compensation Committee as a result of the Company's
performance.
(2) None of the Named Executive Officers received a bonus or profit sharing
payment for fiscal 1999. Mr. Dunn, Mr. McCraw, Mr. Jones and Mr. Dawson
elected to defer their 1998 profit sharing payments of $20,690; $11,778;
$11,378 and $9,506, respectively, pursuant to the Executive Deferred
Compensation Plan. These amounts are excluded from the table, and the
amounts of deferred stock units credited to these individuals pursuant to
the Executive Deferred Compensation Plan are reflected in the Beneficial
Ownership of Stock Table.
(3) Amounts represent the Company's matching contributions on the employee's
salary deferral contributions under the 401(k) Plan and Supplemental Benefit
Plan.
STOCK OPTIONS
The following table contains information concerning the grant of stock
options to the Named Executive Officers during fiscal 1999. We used the
Black-Scholes option pricing model to develop the theoretical values set forth
under the "Grant Date Present Value" column. The Black-Scholes option pricing
model includes assumptions which may or may not be realized or realistic. Each
Named Executive Officer realizes value from the stock options only to the extent
that the price of the Company's common stock on the exercise date exceeds the
price of the stock on the grant date. Thus, there is no assurance that the value
realized by the Named Executive Officers will be at or near the value estimated
by the Black-Scholes model. These amounts should not be used to predict
performance of the Company's common stock.
11
<PAGE> 14
STOCK OPTION GRANTS DURING 1999 FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------
NUMBER
OF
SECURITIES % OF TOTAL
UNDERLYING STOCK OPTIONS PURCHASE,
OPTIONS GRANTED TO EXERCISE, OR GRANT DATE
GRANTED EMPLOYEES IN BASE PRICE(2) EXPIRATION PRESENT VALUE(3)
NAME (#) FISCAL YEAR(1) ($/SHARE) DATE ($)
- ---- ---------- -------------- ------------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Charles O. Dunn................ 38,000 20.65 16.24 07/01/08 228,000
C. E. McCraw................... 20,000 10.87 16.24 07/01/08 120,000
Robert E. Jones................ 20,000 10.87 16.24 07/01/08 120,000
Timothy A. Dawson.............. 15,000 8.15 16.24 07/01/08 90,000
David W. Arnold................ 14,000 7.61 16.24 07/01/08 84,000
</TABLE>
- ---------------
(1) Total options to purchase the Company's common stock granted during fiscal
1999 were for 184,000 shares to the Named Executive Officers and all other
employees. All options granted are exercisable within six months of their
July 1, 1998, grant date. No stock appreciation rights ("SARs") were granted
in fiscal 1999. All options vest immediately in the event of a change of
control as defined in the Stock Incentive Plan.
(2) Determined by the average closing price of the Company's common stock on the
20 trading days prior to the grant date.
(3) The model assumptions include (a) an option term of six years, (b) a
risk-free rate of return of 5.80%, (c) a 33% volatility, and (d) an expected
dividend yield of 2.33%. If exercised on August 31, 1999, the stock options
granted in fiscal 1999 would have no value since the market value of the
Company's common stock as of that date was less than the exercise price of
$16.24 per share.
OPTIONS EXERCISES AND HOLDINGS
The following table sets forth information relating to the exercise of
options during fiscal 1999 by the Named Executive Officers and unexercised
options held by the Named Executive Officers as of June 30, 1999:
AGGREGATED OPTION EXERCISES IN 1999 FISCAL YEAR AND
FISCAL YEAR ENDED JUNE 30, 1999, VALUE TABLE
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED STOCK
UNDERLYING UNEXERCISED OPTIONS AT
SHARES OPTIONS AT FY-END 06/30/99 FY-END 06/30/99
ACQUIRED ON VALUE (#) ($)
EXERCISE REALIZED ------------------------------ ---------------------------
NAME (#) ($) EXERCISABLE(1) UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- -------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Charles O. Dunn............. 0 0 196,288 0 0 0
C. E. McCraw................ 0 0 99,210 0 0 0
Robert E. Jones............. 0 0 93,750 0 0 0
David W. Arnold............. 0 0 72,600 0 0 0
Timothy A. Dawson........... 0 0 58,225 0 0 0
</TABLE>
- ---------------
(1) Exercisable numbers are the number of options that could have been exercised
as of June 30, 1999.
12
<PAGE> 15
PENSION AND OTHER RETIREMENT BENEFITS
The following table sets forth the estimated single-life annual pension
annuity benefit provided to eligible participants at age 65 under the Company's
Retirement Plan and Supplemental Benefit Plan combined, based on the specified
levels of pay and years of credited service. The Supplemental Benefit Plan
provides benefits that are available to all participants in the Company's
qualified defined benefit ("Retirement Plan") and defined contribution ("401(k)
Plan") plans but would otherwise be denied participants in the Supplemental
Benefit Plan by reason of certain Internal Revenue Code limitations. Listed
benefits are not subject to deductions for social security or other offset
amounts.
PENSION PLAN TABLE
(IN DOLLARS)
<TABLE>
<CAPTION>
YEARS OF SERVICE
-----------------------------------------------
REMUNERATION 15 20 25 30 35
- ------------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
25,000............................ 4,688 6,250 7,813 9,375 10,938
50,000............................ 9,375 12,500 15,625 18,750 21,875
100,000............................ 23,520 30,640 37,513 44,610 52,045
150,000............................ 38,520 50,640 62,513 74,610 87,045
200,000............................ 53,520 70,640 87,513 104,610 122,045
250,000............................ 68,520 90,640 112,513 134,610 157,045
300,000............................ 83,520 110,640 137,513 164,610 192,045
350,000............................ 98,520 130,640 162,513 194,610 227,045
400,000............................ 113,520 150,640 187,513 224,610 262,045
450,000............................ 128,520 170,640 212,513 254,610 297,045
500,000............................ 143,520 190,640 237,513 284,610 332,045
</TABLE>
Pension benefits are based on the average earnings over the five-year
period of time preceding retirement and do not include bonus, overtime or shift
differentials. The table below shows the average earnings of the Named Executive
Officers for the last five fiscal years. In addition, the table includes the
number of years of credited service obtained by the Named Executive Officers as
of the end of fiscal 1999.
<TABLE>
<CAPTION>
NAME AVERAGE EARNINGS YEARS OF SERVICE
- ---- ---------------- ----------------
<S> <C> <C>
Charles O. Dunn.................................. $386,111 20
C. E. McCraw..................................... $238,855 25
Robert E. Jones.................................. $215,549 24
David W. Arnold.................................. $191,306 32
Timothy A. Dawson................................ $170,806 17
</TABLE>
SEVERANCE AGREEMENTS
The Compensation Committee has approved the entering of severance
agreements between the Company and each of the Named Executive Officers. Each of
the agreements with the Named Executive Officers provides certain additional
compensation in the event of termination of the executive's employment in
connection with a change of control (as defined in the agreements) of the
Company. Payments are triggered under each agreement if the executive is
terminated within three years following a change of control "without cause" (as
defined in the agreements); if the executive terminates employment for "good
reason" (as defined in the agreements) within three years following a change of
control; or if the executive terminates employment for any reason within 90 days
of a change of control. The benefits paid generally include an amount equal to
the executive's annual base salary; a pro rata portion of the executive's target
bonus ("Superior Bonus" as defined in the Officer and Key Employee Incentive
Plan) for the current fiscal year; a cash payment equal to 36 or more months of
medical plan premiums; and continuation of, and payment of premiums for, certain
welfare benefits. If the executive executes a liability release in the Company's
favor, he will be entitled to benefits equal to another two times his base
salary. Total benefits contingent on termination of employment in connection
with a change of control (including special change of control benefits under the
Supplemental
13
<PAGE> 16
Benefit Plan and Stock Incentive Plan) are generally limited so that the Company
will not pay any "excess parachute payment" within the meaning of Section 280G
of the Internal Revenue Code unless the amounts that would be reduced to avoid
any such excess parachute payment are more than the additional taxes (including
the excise tax under Internal Revenue Code Section 4999) that would be due if
such amounts were paid to the executive.
PERFORMANCE GRAPH
CUMULATIVE TOTAL RETURN
BASED UPON AN INITIAL INVESTMENT OF $100 ON AUGUST 31, 1994
WITH DIVIDENDS REINVESTED
<TABLE>
<CAPTION>
MISSISSIPPI CHEMICAL S&P 600 CUSTOM COMPOSIT INDEX
-------------------- ------- ---------------------
<S> <C> <C> <C>
Aug-94 100.00 100.00 100.00
Jun-95 126.00 111.00 120.00
Jun-96 129.00 140.00 146.00
Jun-97 136.00 171.00 153.00
Jun-98 110.00 204.00 133.00
Jun-99 68.00 199.00 105.00
</TABLE>
THE 6-STOCK CUSTOM COMPOSITE INDEX CONSISTS OF AGRIUM INC., IMC GLOBAL INC.,
NORSK HYDRO AS-ADR, PHOSPHATE RESOURCE PARTNERS, POTASH CORPORATION OF
SASKATCHEWAN AND TERRA INDUSTRIES INC.
14
<PAGE> 17
GENERAL INFORMATION
SHAREHOLDER PROPOSALS
Any proposals that shareholders desire to have presented at the 2000 Annual
Meeting of Shareholders must be received by us at our principal executive
offices no later than July 1, 2000, for inclusion in our 2000 proxy materials.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Exchange Act requires all of the Company's executive officers and
directors to report any changes in their ownership of the Company's common stock
to the Securities and Exchange Commission and to us. Based solely upon a review
of these reports, we believe that during fiscal 1999 our executive officers and
directors complied with all Section 16 filing requirements.
INDEPENDENT AUDITORS
Arthur Andersen LLP, independent certified public accountants, served as
the Company's independent auditor for fiscal year 1999. Representatives of
Arthur Andersen LLP are expected to be present at our Annual Meeting. They will
have the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions. Upon the recommendation of the
Audit Committee, the Board has selected Arthur Andersen LLP as the Company's
independent auditor for fiscal year 2000.
PROPOSAL -- APPROVAL OF THE MISSISSIPPI CHEMICAL CORPORATION
AMENDED AND RESTATED 1994 STOCK INCENTIVE PLAN
(PROXY ITEM NO. 2)
On August 2, 1994, the Board adopted the Mississippi Chemical Corporation
1994 Stock Incentive Plan (the "Stock Incentive Plan"). The shareholders
approved the Stock Incentive Plan on November 14, 1995. The Stock Incentive Plan
currently reserves 1,400,000 shares of the Company's common stock for issuance
to executive officers and key employees of the Company through grants of stock
options, SARs and stock awards. As of August 1, 1999, options to purchase
1,267,805 shares of common stock have been granted under the Stock Incentive
Plan and options to purchase 1,255,714 of those shares remain outstanding. No
SARs or stock awards have been granted under the Stock Incentive Plan. Only
132,195 shares of common stock remain available for future grants under the
Stock Incentive Plan.
In order to continue the issuance of stock incentives to the Company's
executive officers and key employees, on July 22, 1999, the Compensation
Committee recommended, and the Board adopted, an amended and restated version of
the Stock Incentive Plan (the "Restated Stock Incentive Plan") that (i)
increases the number of shares of the Company's common stock available for
issuance under the Stock Incentive Plan from 1,400,000 shares to 3,400,000
shares, (ii) clarifies the Company's ability to deduct compensation paid under
the Stock Incentive Plan to certain individuals under Section 162(m) of the
Internal Revenue Code, and (iii) makes other clarifications in the Stock
Incentive Plan. The Board requests that the shareholders approve the Restated
Stock Incentive Plan to enable the Company to attract, retain and motivate
outstanding officers and employees.
The following description of the Restated Stock Incentive Plan is a summary
of its terms and is qualified in its entirety by reference to the complete text
of the Restated Stock Incentive Plan, a copy of which appears as Appendix A to
this Proxy Statement. The following summary describes the material features of
the Restated Stock Incentive Plan.
SHARES RESERVED. There have been reserved for issuance under the Restated
Stock Incentive Plan 3,400,000 shares of common stock. This represents an
incremental increase of 2,000,000 shares. The maximum number of stock options
which may be awarded to any single participant in any fiscal year during the
term of the Restated Stock Incentive Plan remains at 200,000.
15
<PAGE> 18
ADMINISTRATION. The Compensation Committee of the Board will continue to
administer the Restated Stock Incentive Plan. The Compensation Committee
determines individuals to receive grants, the form of such grants, the number of
shares to be awarded, and the period, terms and conditions of the grants. The
Compensation Committee may interpret the Restated Stock Incentive Plan and
establish rules to administer the Plan. The Compensation Committee may delegate
to the Chief Executive Officer the administration of benefits granted to
nonofficer participants.
ELIGIBILITY. Benefits may be granted to executive officers and other key
employees of the Company and its subsidiaries selected by the Compensation
Committee.
BENEFITS UNDER THE PLAN. Benefits under the Restated Stock Incentive Plan
may be granted in any one or a combination of stock options, SARs and stock
awards. Stock options can be either incentive stock options or nonqualified
stock options. To date, only nonqualified stock options have been awarded under
the Stock Incentive Plan. That practice is expected to continue for the
foreseeable future.
The option exercise price (i.e., the purchase price which the optionee is
required to pay) of both incentive stock options and nonqualified stock options
must be at least 100% of the fair market value of the Company's common stock on
the date of grant. The value of SARs will be based on the fair market value on
the date of grant of the related option or on the date of grant of the SARs,
whichever is applicable. Stock options and SARs shall be exercisable not earlier
than six months and not later than ten years after the date of grant. The option
price may be paid by check or by delivery of shares of common stock then owned
by the employee. Cashless exercise is also permitted.
Absent special sanction by the Compensation Committee, benefits are
generally not transferable and may be exercised only by the employee. Benefits
may be exercised after death by the executor or administrator or by the person
to whom the benefit has passed under will or by law.
ADJUSTMENT. The number of shares of the Company's common stock subject to a
benefit shall be adjusted if there is an increase in the number of issued shares
without the payment of new consideration to the Company (for example, due to a
stock dividend or stock split). Each benefit may also provide for the
continuation or adjustment of benefits if the Company is merged, reorganized or
similarly affected.
AMENDMENT. The Board may amend the Restated Stock Incentive Plan at any
time (subject to shareholder approval); provided, however, that any amendment
may not adversely affect the Restated Stock Incentive Plan's status as a
protected plan for purposes of Section 16(b) of the Securities Exchange Act of
1934 (the "Exchange Act").
CHANGE IN CONTROL. In the event of a change in control of the Company, all
outstanding stock options and SARs shall become immediately exercisable and all
stock awards shall immediately vest. The plan states that a "change in control"
of the Company shall occur if (i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) directly or indirectly of
securities of the Company representing 20% or more of the combined voting power
of our then-outstanding securities, or (ii) individuals who constitute a
majority of the Board immediately prior to a contested election for position on
the Board cease for any reason to constitute at least a majority of the Board as
a result of such contested election, or (iii) the Company is combined (by
merger, share exchange, consolidation, or otherwise) with another entity and, as
a result of such combination, less than 75% of the outstanding securities of the
surviving or resulting entity are owned in the aggregate by our former
shareholders, or (iv) the Company sells, leases, or otherwise transfers all or
substantially all of its properties or assets to another person or entity.
FEDERAL INCOME TAX CONSEQUENCES. Under current U.S. federal tax law, a
participant who is granted an option or SAR will not realize any taxable income
at the time of grant. The participant will have taxable income at the time of
exercise of a nonqualified stock option equal to the difference between the
option price and the fair market value of the shares on the date of exercise,
and the Company will be entitled to a corresponding deduction. The participant
will have no taxable income at the time of the exercise of an incentive stock
option and any gain realized on the subsequent disposition of the stock will
qualify for long-term capital gain treatment if the shares are held for at least
two years from the date of grant of the
16
<PAGE> 19
option and one year from the date of its exercise. The Company will not be
entitled to any deduction if shares obtained upon the exercise of an incentive
stock option are disposed of after meeting the holding periods. The participant
will have taxable income at the time of the exercise of an SAR equal to the
amount of cash or value of shares received upon exercise.
SHAREHOLDER APPROVAL. The Restated Stock Incentive Plan shall be null and
void if shareholder approval is not obtained at the Annual Meeting.
VOTE REQUIRED
The vote of a majority of the shares present and voting at the Annual
Meeting is required for approval of the Restated Stock Incentive Plan.
THE BOARD RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE RESTATED STOCK INCENTIVE
PLAN.
17
<PAGE> 20
APPENDIX A
MISSISSIPPI CHEMICAL CORPORATION
AMENDED AND RESTATED
1994 STOCK INCENTIVE PLAN
1. Purpose. The purpose of this Stock Incentive Plan (the "Plan") is to
enable Mississippi Chemical Corporation (the "Company") to offer certain
officers and other key employees of the Company and its subsidiaries
performance-based incentives and other equity interests in the Company, thereby
attracting, retaining and rewarding such employees and strengthening the
mutuality of interest between such employees and the Company's shareholders.
2. Administration. The Plan shall be administered by the Compensation
Committee of the Board of Directors of the Company (the "Board of Directors") or
by such other committee of the Board of Directors designated by the Board of
Directors for such purpose. The Compensation or other Committee administering
this Plan (the "Committee") shall be comprised solely of two or more individuals
who are each a "nonemployee director" as defined in Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and also an
"outside director" within the meaning of Treasury Regulation sec. 1.162-27(e)(3)
(the "Committee"). The Committee will approve the forms of agreements relating
to the benefits granted hereunder, containing such terms and conditions
consistent with the provisions of this Plan as are determined by the Committee,
which agreements may be executed on behalf of the Company by the Chief Executive
Officer or any Vice President of the Company. Notwithstanding the foregoing, the
Committee shall have exclusive authority to make and administer grants to
individuals who are or may reasonably be expected to become "covered employees,"
as defined in Section 162(m)(3) of the Internal Revenue Code of 1986, as amended
from time to time (the "Code"), which are intended to qualify as
performance-based compensation under Code Section 162(m)(4)(C).
The Committee will have complete authority to construe, interpret and
administer the provisions of this Plan and the provisions of the agreements
relating to the benefits granted hereunder; to prescribe, amend and rescind
rules and regulations pertaining to this Plan; and to make all other
determinations necessary or deemed advisable in the administration of the Plan.
The determinations, interpretations and constructions made by the Committee are
final and conclusive. No member of the Committee may be held liable for any
action taken, or failed to be taken, made in good faith relating to the Plan or
any benefit hereunder, and the members of the Committee will be entitled to
defense, indemnification and reimbursement by the Company in respect of any
claim, loss, damage or expense (including attorneys' fees) arising therefrom to
the fullest extent permitted by law and by the Articles of Incorporation of the
Company. Except to the extent prohibited by applicable law or the applicable
rule of a stock exchange, the Committee may delegate all or any part of its
responsibilities and powers with respect to nonofficer participants to the Chief
Executive Officer of the Company or any other person selected by it, which
delegation may be revoked at any time.
3. Eligibility. Benefits under the Plan may be granted to any officer or
other key employee of the Company or one of its subsidiaries on the basis of the
special importance of their services in the management, development and/or
operations of the Company and its subsidiaries. For these purposes, a subsidiary
includes any corporation, partnership or other entity that is a "subsidiary
corporation" (as that term is defined in Code Section 424(f)) with respect to
the Company.
4. Benefits. The benefits that may be granted under the Plan consist of (a)
stock options, (b) stock appreciation rights, and (c) stock awards.
5. Shares Reserved. There is hereby reserved for issuance under the Plan an
aggregate of 3,400,000 shares of common stock of the Company, subject to
adjustment pursuant to Section 13 below, which may be authorized but unissued or
treasury shares. All of such shares may, but need not, be issued pursuant to the
exercise of incentive stock options. The maximum number of shares that may be
covered by benefits granted to any one participant in any fiscal year is 200,000
shares, subject to adjustment pursuant to Section 13 below. No more than 160,000
shares, subject to adjustment pursuant to Section 13 below, may be issued as
stock awards hereunder. If there is a lapse, expiration, termination or
cancellation of any option prior
A-1
<PAGE> 21
to the issuance of shares thereunder, or if shares are issued and thereafter are
reacquired by the Company pursuant to rights reserved upon issuance thereof,
those shares may again be used for new awards under this Plan. Notwithstanding
the foregoing, subject to adjustment pursuant to Section 13 below, no more than
200,000 shares may be subject to stock options or stock appreciation rights that
are intended to be "performance-based compensation," as that term is used in
Section 162(m) of the Code, granted to any one participant in any fiscal year;
solely for purposes of this limitation, options or stock appreciation rights
that are cancelled continue to count against the limit, and options or stock
appreciation rights that are repriced are treated as if they had been cancelled
and new grants made.
6. Stock Options. Stock options shall consist of options to purchase shares
of common stock of the Company. Certain options granted under this Plan are
intended to qualify as "incentive stock options" pursuant to Code Section 422,
while certain other options granted under the Plan will constitute nonqualified
options, in each case as determined by the Committee. The exercise price for any
stock option shall be not less than 100% of the fair market value of the common
stock of the Company on the date the stock option is granted; provided, however,
that, if the participant owns on the date of grant more than 10% of the total
combined voting power of all classes of stock of the Company or its parent or
any of its subsidiaries (a "10% Holder"), as more fully described in Section
422(b)(6) of the Code or any successor provision, the exercise price for any
incentive stock option granted to the 10% Holder must not be less than 110% of
the fair market value of the common stock of the Company on the date of grant.
The aggregate fair market value (determined as of the time the stock option is
granted) of the shares of common stock with respect to which incentive stock
options are exercisable for the first time by a participant during any calendar
year (under all plans of the employer of such participant and its parent and
subsidiary corporations as defined in Section 424(e) and (f) of the Code, or a
corporation or a parent or subsidiary corporation of such corporation issuing or
assuming a stock option in a transaction to which Section 424(a) of the Code
applies) may not exceed $100,000 or such other amount as from time to time
provided in Section 422(d) of the Code or any successor provision.
Upon exercise, the exercise price may be paid by check or, in the
discretion of the Committee, by the delivery of shares of common stock of the
Company then owned by the participant. A participant may also use cashless
exercise as permitted under Regulation T, 12 CFR Part 220, or any successor
provision
("Regulation T"), if the shares to be purchased are covered by an effective
registration statement under the Securities Act of 1933, as amended. Under
Regulation T, any stock option granted under the Plan may be exercised by a
broker-dealer acting on behalf of a participant if (a) the broker-dealer has
received from the participant or the Company a fully- and duly-endorsed
agreement evidencing such stock option, together with instructions signed by the
participant requesting the Company to deliver the shares subject to such stock
option to the broker-dealer on behalf of the participant and specifying the
account into which such shares should be deposited, (b) adequate provision has
been made with respect to the payment of any withholding taxes due upon such
exercise, and (c) the broker-dealer and the participant have otherwise complied
with Section 220.3(e)(4) of Regulation T.
Stock options will become exercisable at such time or times and subject to
such terms and conditions as may be determined by the Committee at the time of
grant; provided, however, that no stock option may be exercisable prior to six
months after the option grant date and no incentive stock option may be
exercisable later than ten years after the grant date, or five years for any
incentive stock option granted to a 10% Holder. The terms and conditions under
which a benefit may be exercised after a participant's termination of employment
will be determined by the Committee, except as otherwise provided herein. The
conditions under which such post-termination exercises may be permitted with
respect to incentive stock options must be determined in accordance with the
provisions of Section 422 of the Code and as otherwise provided in this Section
6 above.
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7. Stock Appreciation Rights. Stock appreciation rights may be granted in
conjunction with the grant of any nonqualified stock option granted hereunder
and shall be subject to such terms and conditions consistent with the Plan as
the Committee shall impose from time to time, including the following:
(a) A stock appreciation right may be granted with respect to a stock
option at the time of its grant or at any time thereafter up to six months
prior to its expiration;
(b) Stock appreciation rights will permit the holder to surrender any
related stock option or portion thereof which is then exercisable and elect
to receive in exchange therefor cash in an amount equal to:
(i) The excess of the fair market value on the date of such
election of one share of common stock over the option price, multiplied
by
(ii) The number of shares issuable upon exercise of such option or
portion thereof which is so surrendered.
(c) The Committee shall satisfy a participant's right to receive the
amount of cash determined under paragraph (b) hereof in whole or in part by
delivering shares of the common stock of the Company equal in value to such
amount as of the date of the participant's election.
(d) In the event of the exercise of a stock appreciation right, the
number of shares reserved for issuance hereunder shall be reduced by the
number of shares covered by the stock option or portion thereof
surrendered.
8. Stock Awards. Stock awards will consist of the grant of shares of common
stock of the Company to participants without other payment therefor as
additional compensation for their services to the Company or one of its
subsidiaries. A stock award shall be subject to such terms and conditions as the
Committee determines appropriate including, without limitation, restrictions on
the sale or other disposition of such shares, the right of the Company to
reacquire such shares upon termination of the participant's employment within
specified periods and conditions requiring that the shares be earned in whole or
in part upon the achievement of performance goals or other objective criteria
established by the Committee over a designated period of time. The Committee may
designate whether the grant of any stock award is intended to be
"performance-based compensation," as that term is used in Section 162(m) of the
Code, which stock award must be conditioned on the achievement of one or more
performance measures established by the Committee. The performance measures
established by the Committee may include earnings per share, total return on
shareholder equity, or such other goals as may be established by the Committee
in its discretion. For stock awards intended to be "performance-based
compensation," the grant of the stock award and the establishment of the
performance measures must be made during the period required under Section
162(m) of the Code.
9. Transferability. Incentive stock options granted under this Plan may not
be transferred other than by will or the laws of descent and distribution, and
each incentive stock option may be exercised during the participant's lifetime
only by the participant or the participant's guardian or legal representative.
Participants may transfer nonqualified stock options and stock awards only as
provided by the Committee.
10. Change in Control. In the event of a change in control of the Company,
all outstanding stock options and stock appreciation rights shall become
immediately exercisable and all stock awards shall immediately vest with all
performance goals deemed fully achieved. For these purposes, change in control
means the occurrence of any of the following events, as a result of one
transaction or a series of transactions:
(a) any "person" (as that term is used in Sections 13(d) and 14(d) of
the Exchange Act, but excluding the Company, its affiliates and any
qualified or nonqualified plan maintained by the Company or its affiliates)
becomes the "beneficial owner" (as defined in Rule 13d-3 promulgated under
the Exchange Act), directly or indirectly, of securities of the Company
representing more than 20% of the combined voting power of the Company's
then outstanding securities;
(b) individuals who constitute a majority of the Board of Directors
immediately prior to a contested election for positions on the Board of
Directors cease to constitute a majority as a result of such contested
election;
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<PAGE> 23
(c) the Company is combined (by merger, share exchange, consolidation,
or otherwise) with another entity and, as a result of such combination,
less than 75% of the outstanding securities of the surviving or resulting
entity are owned in the aggregate by the former shareholders of the
Company; or
(d) the Company sells, leases, or otherwise transfers all or
substantially all of its properties or assets to another person or entity.
Notwithstanding the foregoing, benefits payable on a change of control shall be
limited so that no excess parachute payments, as defined in Code Section
280G(b)(1), occur in accordance with such additional provisions as the Committee
includes in the award pursuant to Section 11 below.
11. Other Provisions. The award of any benefit under the Plan may also be
subject to other provisions (whether or not applicable to the benefit awarded to
any other participant) as the Committee determines appropriate, including such
provisions as may be required to comply with federal or state securities laws
and stock exchange requirements and understandings or conditions as to the
participant's employment.
12. Fair Market Value. The fair market value of the Company's common stock
at any time shall be determined in such manner as the Committee may deem
equitable or as required by applicable law or regulation.
13. Adjustment Provisions.
(a) If the Company at any time changes the number of issued shares of
common stock without new consideration to the Company (such as by stock
dividend or stock split), the total number of shares reserved for issuance
under this Plan and the number of shares covered by each outstanding
benefit hereunder shall be adjusted to the number of shares as is equitably
required, together with an appropriate adjustment to the exercise price of
stock options so that the aggregate consideration payable to the Company,
if any, upon exercise of such option will not be changed.
(b) Notwithstanding any other provision of this Plan, and without
affecting the number of shares reserved or available hereunder, the Board
of Directors may authorize the issuance or assumption of benefits in
connection with any merger, consolidation, acquisition of property or
stock, or reorganization upon such terms and conditions as it may deem
appropriate.
(c) In the event of any merger, consolidation or reorganization of the
Company with any other entity, there may be substituted, on an equitable
basis as determined by the Committee, for each share of common stock then
reserved for issuance under the Plan and for each share of common stock
then subject to a benefit granted under the Plan, the number and kind of
shares of stock, other securities, cash or other property to which holders
of common stock of the Company will be entitled pursuant to the
transaction.
14. Taxes. The Company shall be entitled to withhold the amount of any tax
attributable to any shares deliverable under the Plan after giving the person
entitled to receive the shares notice as far in advance as practicable and the
Company may defer making delivery as to any benefit if any such tax is payable
until indemnified to its satisfaction. The Committee may, in its discretion and
subject to rules that it may adopt, permit a participant to pay all or a portion
of the taxes arising in connection with any benefit under the Plan by electing
to have the Company withhold shares of common stock from the shares otherwise
deliverable to the participant, having a fair market value equal to the amount
to be withheld.
15. Term of Plan; Amendment, Modification or Cancellation of Benefits. The
Plan will be unlimited in duration and, in the event of termination of the Plan,
will remain in effect as long as any benefits granted hereunder remain
outstanding; provided, however, that no incentive stock option may be granted
more than ten years after the date of the approval of this Plan by the
shareholders of the Company, or the date of approval of this amendment and
restatement for incentive stock options granted based upon the increase in
shares affected by such amendment and restatement. The terms and conditions
applicable to any benefits granted prior to termination of the Plan may at any
time be amended or cancelled by mutual agreement between the Committee and the
participant or any other persons as may then have an interest therein and may
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<PAGE> 24
be unilaterally modified by the Committee whenever such modification is deemed
necessary to protect the Company or its shareholders.
16. Amendment or Discontinuation of Plan. The Board of Directors may amend
the Plan at any time, provided that no such amendment shall be effective unless
approved within 12 months after the date of the adoption of such amendment by
the affirmative vote of a majority of the shareholders. The Board of Directors
may suspend the Plan or discontinue the Plan at any time; provided, however,
that no such action may adversely affect any outstanding benefit.
17. Shareholder Approval. The Plan was adopted by the Board of Directors on
August 2, 1994, and was approved by the shareholders on November 9, 1994. This
amendment and restatement of the Plan was adopted by the Board of Directors on
July 22, 1999, subject to shareholder approval. This amendment and restatement
of the Plan and any benefits granted based upon such amendment and restatement
will be null and void if shareholder approval is not obtained at the next annual
meeting of shareholders.
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<PAGE> 25
PROXY MISSISSIPPI CHEMICAL CORPORATION PROXY
ANNUAL MEETING OF SHAREHOLDERS - NOVEMBER 9, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
The undersigned shareholder of Mississippi Chemical Corporation hereby appoints
Coley L. Bailey and Charles O. Dunn, and each of them, attorneys and proxies,
with full power of substitution, to vote at the Annual Meeting of Shareholders
to be held at the Owen Cooper Administration~Building, Highway 49 East, Yazoo
City, Mississippi, at 9:00 a.m. (local time), on Tuesday, November 9, 1999, and
at any adjournments thereof, in the name of the undersigned and with the same
force and effect as the undersigned could do if personally present, upon the
matters set forth below as indicated.
NOMINEES FOR ELECTION TO SERVE AS DIRECTORS UNTIL 2002: Haley Barbour, W. R.
Dyess, David M. Ratcliffe and Wayne Thames.
APPROVAL OF AMENDED AND RESTATED MISSISSIPPI CHEMICAL CORPORATION 1994 STOCK
INCENTIVE PLAN.
SEE REVERSE SIDE. If you wish to vote in accordance with the Board's
recommendations, just sign on the reverse side. You need not mark any ovals.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
(Continued and to be signed on reverse side.)
MISSISSIPPI CHEMICAL CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
1. Election of Directors (see reverse)
ALL
FOR WITHHOLD EXCEPT
[ ] [ ] [ ]
----------------------
Nominee Exceptions
2. Amended and Restated Stock Incentive Plan
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. In their discretion, to act on any other matters which may properly come
before the meeting and any adjournments thereof.
The shares represented by this Proxy will be voted at the meeting. This
Proxy is solicited on behalf of the Board and will be voted in accordance
with the specifications made above. IF NO CONTRARY INSTRUCTIONS ARE
INDICATED, THIS PROXY SHALL BE DEEMED TO GRANT AUTHORITY TO VOTE "FOR" ALL
NOMINEES AS DIRECTORS AND "FOR" APPROVAL OF THE AMENDED AND RESTATED STOCK
INCENTIVE PLAN.
Dated: , 1999
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(Signature(s) of Shareholder(s))
(Joint owners must EACH sign. Please sign EXACTLY as your name(s) appear(s)
on this card. When signing as attorney, trustee, executor, administrator,
guardian or corporate officer, please give your full title.)
