<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
IMC GLOBAL INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
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:
------------------------------------------------------------------------
<PAGE>
September 13, 1996
[LOGO]
Dear Stockholder:
You are cordially invited to attend the 1996 Annual Meeting of the
Stockholders of IMC Global Inc. The meeting will be held at the Chicago Botanic
Garden, Alsdorf Auditorium, 1000 Lake-Cook Road, in Glencoe, Illinois 60022 on
Thursday, October 17, 1996, at 11:00 a.m. local time. The back page of this
Proxy Statement contains directions to the Chicago Botanic Garden and parking
information. A Notice of the Annual Meeting, a Proxy Statement covering the
formal business of the meeting, the 1996 Annual Report of the Company and
related information are enclosed. At the meeting, we will report on the
Company's operations during the fiscal year ended June 30, 1996.
We encourage you to attend the meeting. If you plan to do so, kindly check
the appropriate box on the accompanying proxy card. Whether or not you expect to
attend, please promptly sign and return the proxy card in the accompanying
postage-paid envelope. This will assure that your shares are represented at the
meeting and will help us avoid the expense of a follow-up mailing. Even though
you execute this proxy, you may revoke it at any time before it is voted. If you
attend the meeting and wish to vote in person, you will be able to do so even if
you have previously returned your proxy card.
Your cooperation and prompt attention to this matter will be appreciated.
Sincerely,
[SIGNATURE]
CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
2100 Sanders Road
Northbrook, Illinois 60062-6146
Telephone 847-272-9200
<PAGE>
<TABLE>
<S> <C>
HEADQUARTERS OFFICE:
2100 SANDERS ROAD
NORTHBROOK, ILLINOIS
60062-6146
</TABLE>
[LOGO]
--------------------
NOTICE OF 1996 ANNUAL MEETING OF STOCKHOLDERS
----------------------------------------------------------------------------
To Our Stockholders:
The 1996 Annual Meeting of the Stockholders of IMC Global Inc., a Delaware
corporation, will be held at the Chicago Botanic Garden, Alsdorf Auditorium,
1000 Lake-Cook Road, in Glencoe, Illinois 60022 on Thursday, October 17, 1996,
at 11:00 a.m. local time, to consider and act upon the following matters, each
of which is explained in the following Proxy Statement:
1. To elect four directors for terms expiring in 1999 and to elect one
director for a term expiring in 1998, each as recommended by the Board
of Directors.
2. To authorize and approve the IMC Global Inc. 1996 Long-Term Incentive
Plan.
3. To authorize and approve an amendment to the 1988 Stock Option and Award
Plan, as amended.
4. To ratify the appointment of Ernst & Young LLP as independent auditors
to examine and report on the financial statements of the Company for the
fiscal year ending June 30, 1997.
5. To transact any other business that may properly come before the 1996
Annual Meeting or any adjournment thereof.
A proxy card for your use in voting on these matters is also enclosed.
In accordance with the By-Laws and resolution of the Board of Directors,
only common stockholders of record at the close of business on August 30, 1996
are entitled to notice of and to vote at the 1996 Annual Meeting of
Stockholders.
By Order of the Board of Directors,
[SIGNATURE]
ROSE MARIE WILLIAMS
CORPORATE SECRETARY
September 13, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
The IMC Global Board and Board Committees............................................. 1
The Board of Directors.............................................................. 1
Committees of the Board of Directors................................................ 1
Report of the Compensation Committee.................................................. 2
Compensation Philosophy and Objectives.............................................. 2
Compensation Components and Process................................................. 3
Policy on Deductibility of Compensation............................................. 3
Stock Ownership Guidelines.......................................................... 4
Chief Executive Officer Compensation................................................ 4
Stockholder Return Information...................................................... 4
Policies Relating to the Board of Directors........................................... 6
Nomination and Selection of Directors............................................... 6
Compensation of Directors........................................................... 6
Attendance.......................................................................... 6
Retirement from the Board........................................................... 6
Beneficial Ownership of Common Stock.................................................. 7
Ownership of Common Stock by Directors and Executive Officers....................... 7
Ownership of Common Stock by Others................................................. 8
Section 16(a) Beneficial Ownership Reporting Compliance............................. 8
Executive Compensation................................................................ 9
Compensation of Executive Officers.................................................. 9
Pension Plans....................................................................... 12
Termination of Employment Arrangements.............................................. 13
Employment and Other Agreements..................................................... 13
Management Compensation and Benefit Assurance Program............................... 14
Severance Plans..................................................................... 15
Bonus Agreements.................................................................... 16
Non-Competition Agreements.......................................................... 16
Transactions with Principal Stockholders, Directors and Executive Officers............ 17
The Annual Meeting.................................................................... 18
Proxies and Voting at the Annual Meeting............................................ 18
Matters to Be Considered at the Annual Meeting...................................... 19
Election of Directors............................................................. 19
Approval of the IMC Global Inc. 1996 Long-Term Incentive Plan..................... 22
Approval of an Amendment to the 1988 Stock Option and Award Plan, as amended...... 25
Ratification of Appointment of Independent Auditors............................... 25
Miscellaneous Information............................................................. 26
Discretionary Voting Authority...................................................... 26
Stockholder Proposals and Nominations for the 1997 Annual Meeting of Stockholders... 26
Directions to the Chicago Botanic Garden.............................................. 27
</TABLE>
<PAGE>
PROXY STATEMENT
IMC GLOBAL INC.
2100 SANDERS ROAD
NORTHBROOK, ILLINOIS 60062-6146
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of IMC Global Inc. (the "Company" or "IMC
Global") for the 1996 Annual Meeting of Stockholders (the "Annual Meeting") to
be held on October 17, 1996. Notice of this meeting to all stockholders of
record entitled to vote as of August 30, 1996 accompanies this Proxy Statement.
Additional information with respect to voting at the Annual Meeting and the
matters to be voted on at the Annual Meeting are described in this Proxy
Statement under the caption "The Annual Meeting." As of the close of business on
August 30, 1996, there were 92,419,558 outstanding shares of Common Stock, par
value $1.00 per share, of the Company (the "Common Stock") which may be voted at
the Annual Meeting. Only common stockholders of record at the close of business
on August 30, 1996 shall be entitled to vote at the Annual Meeting. Each issued
and outstanding share of Common Stock is entitled to one vote. This Proxy
Statement and the accompanying proxy are first being mailed to stockholders on
or about September 13, 1996.
The Annual Report of the Company for the fiscal year ended June 30, 1996 is
being mailed to stockholders with this Proxy Statement and the proxy card, but
the Annual Report is not incorporated in this Proxy Statement and is not a part
of the proxy soliciting material.
THE IMC GLOBAL BOARD AND BOARD COMMITTEES
THE BOARD OF DIRECTORS
The Board of Directors of the Company consists of fourteen members. Two of
the fourteen current Directors are also employees of the Company. Wendell F.
Bueche is Chairman of the Board and Chief Executive Officer of the Company, and
Robert E. Fowler, Jr. is President and Chief Operating Officer of the Company.
The Board is divided into three classes with staggered terms of three years
each, so that the term of one class expires at each Annual Meeting of
Stockholders.
The Board oversees the management of the business of IMC Global and its
subsidiaries and determines overall corporate policies. The Board's primary
responsibilities are directing the fundamental operating, financial and other
corporate strategies of the Company and evaluating the overall effectiveness of
the Company's management. The Board meets not less than six times a year, and
the agenda is set by the Chairman and Chief Executive Officer, although
Directors are consulted and may suggest items for inclusion. Information is made
available to the Board a reasonable period before each meeting.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board has five standing committees: the Executive Committee, the Audit
Committee, the Compensation Committee, the Committee on Directors and Board
Affairs and the Environmental, Safety and Public Affairs Committee, each of
which plays a significant role in the discharge of the Board's duties and
obligations. The membership of such Committees is described in this Proxy
Statement under the caption "The Annual Meeting -- Matters to Be Considered at
the Annual Meeting -- Election of Directors."
THE EXECUTIVE COMMITTEE
The Executive Committee, which is comprised of the Company's Chief Executive
Officer, Chief Operating Officer and three non-employee Directors, met three
times in fiscal 1996. The responsibilities of the Executive Committee include
acting on matters requiring emergency action when the full Board cannot be
convened and, through March 1997, overseeing the merger of The Vigoro
Corporation ("Vigoro") into IMC Global and reporting to the Board on a regular
basis regarding the status of merger implementation.
1
<PAGE>
THE AUDIT COMMITTEE
The Audit Committee, which is comprised of four non-employee Directors, met
four times in fiscal 1996. The responsibilities of the Audit Committee include
evaluating the performance and compensation of the independent auditors;
reviewing the scope of the annual audit; reviewing the audit results with the
independent auditors, management and internal auditors; and reviewing the
Company's internal control systems and the internal audit function.
THE COMPENSATION COMMITTEE
The Compensation Committee, which is comprised of four non-employee
Directors, met six times in fiscal 1996. The responsibilities of the
Compensation Committee include recommending to the Board the amount and nature
of compensation paid by the Company to its executive officers and key employees;
administering the stock option, incentive compensation, and similar executive
benefit plans; reviewing incentive compensation awards; and considering the
competitiveness of the Company's executive compensation and other compensation
programs with respect to relevant industries and the business community
generally.
THE COMMITTEE ON DIRECTORS AND BOARD AFFAIRS
The Committee on Directors and Board Affairs, which is comprised of four
non-employee Directors (together with the Chief Executive Officer, who serves as
a non-voting member of the Committee), met seven times in fiscal 1996. The
responsibilities of the Committee on Directors and Board Affairs include
selecting and recommending to the Board nominees for director; and, together
with the Chief Executive Officer, recommending to the Board all committee
assignments, reviewing the succession plan for senior management and developing
a compensation and benefits program for the Board.
THE ENVIRONMENTAL, SAFETY AND PUBLIC AFFAIRS COMMITTEE
The Environmental, Safety and Public Affairs Committee, which is comprised
of three non-employee Directors, was created by Board resolution in April 1996
and held its first meeting in August 1996. The responsibilities of the
Environmental, Safety and Public Affairs Committee include oversight in respect
of the Company's policies and procedures relating to the environment, health and
safety; reviewing the Company's compliance with applicable laws and regulations;
oversight in respect of the Company's policies and procedures in matters of
public and social concern to encourage the achievement of high standards of
social responsibility; and monitoring domestic and international public policy
issues which may impact the Company's operations.
REPORT OF THE COMPENSATION COMMITTEE
Dear Fellow Stockholders:
Our Committee is responsible for recommending to the Board of Directors the
amount and nature of compensation paid to executive officers and key employees
of the Company and administering the Company's employee stock option and
incentive plans. Our decisions are based on our in-depth understanding of IMC
Global and its long-term strategies, as well as our knowledge of the
capabilities and performance of the Company's executives.
COMPENSATION PHILOSOPHY AND OBJECTIVES
The Committee's principal objective in designing and recommending
compensation policies is to develop and administer a comprehensive program
designed to attract, motivate and retain outstanding managers who are likely to
enhance the profitability of IMC Global and create value for its stockholders.
Within this overall philosophy, the Committee's specific objectives are to:
- pay for performance on both an individual and corporate level;
- align stockholder and executive interests by placing a significant portion
of executive compensation "at risk";
- tie executive compensation to the achievement of certain short-term and
long-term performance objectives of IMC Global;
- recognize and reward sustained superior performance by individual
executive officers and key employees; and
- offer a total compensation program that takes into account the
compensation practices of comparable companies.
2
<PAGE>
COMPENSATION COMPONENTS AND PROCESS
The three major components of IMC Global's executive officer compensation
are (i) base salary, (ii) bonus and (iii) long-term incentive awards.
BASE SALARY
Base salary levels for executives are established based on the Committee's
review of industry and national surveys of compensation levels and its review of
the recommendations of the compensation professionals retained by the Company.
The Committee strives to maintain salary levels which support management
development and career enhancement of executives while being competitive with
the Company's compensation comparator group. Based on the industry and national
surveys described above and the Committee's objective of linking total
compensation to individual and corporate performance, the Committee intends that
base salary will compose approximately 25% to 35% of an executive's total
compensation.
BONUS
To reward executive officers for meeting corporate performance goals, the
Committee established and the Board approved an annual bonus target under the
Company's Management Incentive Compensation Plan. The Committee intended that if
those goals were met executives would receive a bonus equivalent to
approximately 45% to 60% of base salary. The Company exceeded the fiscal 1996
performance goals, and accordingly, bonus amounts were paid under the Management
Incentive Compensation Plan consistent with achievement of these goals.
LONG-TERM INCENTIVE AWARDS
1988 STOCK OPTION AND AWARD PLAN. The Company uses stock options as a
component of its compensation package because they align the interests of key
management with those of the Company's stockholders. The options are exercisable
over a ten-year period, subject to vesting requirements, and allow grantees to
purchase shares at the full market price of the stock on the day the options
were granted.
LONG-TERM PERFORMANCE INCENTIVE PLAN. Certain executive officers of the
Company participated in the 1994 Long-Term Performance Incentive Plan pursuant
to which such executive officers were awarded shares of restricted Common Stock
and contingent stock units. Because the specified goals in the 1994 Long-Term
Performance Incentive Plan were achieved by the end of fiscal 1996 and because
of the changes in IMC Global's management following the Vigoro merger, the Board
of Directors accelerated the vesting of the restricted shares and contingent
stock unit payouts from June 30, 1997 to June 30, 1996. Upon vesting, contingent
stock units were paid in cash based on the market price of the Common Stock on
the vesting date.
POLICY ON DEDUCTIBILITY OF COMPENSATION
Section 162(m) of the Internal Revenue Code of 1986, as amended, limits the
tax deductibility by a company of annual compensation in excess of $1,000,000
paid to any of its five most highly compensated executive officers. However,
performance-based compensation that has been approved by stockholders is
excluded from the $1,000,000 limit if, among other requirements, the
compensation is payable only upon attainment of pre-established, objective
performance goals and the board committee that establishes such goals consists
only of "outside directors."
All members of IMC Global's Compensation Committee qualify as outside
directors. While the tax impact of any compensation arrangement is one factor to
be considered, such impact is evaluated in light of the Committee's overall
compensation philosophy. The Compensation Committee will consider ways to
maximize the deductibility of executive compensation, while retaining the
discretion the Committee deems necessary to compensate officers in a manner
commensurate with performance and the competitive environment for executive
talent. However, from time to time the Committee may award compensation which is
not fully deductible if the Committee determines that such award is consistent
with its philosophy and is in the best interests of IMC Global and its
stockholders.
The IMC Global Inc. 1996 Long-Term Incentive Plan to be voted on by
stockholders at the Annual Meeting is designed to meet the performance-based
criteria of Section 162(m) of the Internal Revenue Code of 1986, as amended.
3
<PAGE>
STOCK OWNERSHIP GUIDELINES
In order to align stockholder and executive interests, IMC Global has
established Stock Ownership Guidelines (the "Guidelines") for executive officers
and business unit presidents. The Guidelines establish ownership targets of
Common Stock based on the base salary of the executive and are designed to
ensure that executives have invested a substantial portion of their personal
wealth in Common Stock.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Bueche participates in the executive compensation programs described
throughout this report. Mr. Bueche's total compensation in fiscal 1996 reflects
his outstanding performance, his leadership of constructive change, his
significant contributions in leading the Company's long-term strategic growth,
his role overseeing the merger of Vigoro into IMC Global and his influence on
improved financial results, which were reflected in the significantly improved
returns to IMC Global stockholders in fiscal 1996 as shown on the following
performance graph. Based on the foregoing, a bonus of $425,000 was paid to Mr.
Bueche. In addition, Mr. Bueche received a payout of $1,472,078 under the
Company's 1994 Long-Term Incentive Plan and was awarded options to purchase
50,000 shares of Common Stock. Mr. Bueche's base salary in fiscal 1996 was
$544,600.
The Compensation Committee's decisions relating to Mr. Bueche's compensation
were ratified by the Board of Directors.
STOCKHOLDER RETURN INFORMATION
The following performance graph compares the Company's cumulative total
return on its Common Stock for a five-year period with the cumulative total
return of the Standard & Poor's 500 Index, a peer group of companies selected by
the Company for purposes of comparison (the "1996 Peer Group") and the Media
General Industry Group 102, the peer group used by the Company in its 1995 Proxy
Statement (the "Media General Group").
Due to the Company's merger with Vigoro, which was completed on March 1,
1996, the Company believes that the Media General Group is no longer as
representative of IMC Global's industry peers as it was prior to the merger. IMC
Global has chosen for purposes of the performance graph to compare the yearly
percentage change in the cumulative total return on its Common Stock with that
of the 1996 Peer Group which IMC Global believes provides the basis for a more
representative comparison of returns. In addition, the Company believes that the
companies which compose the 1996 Peer Group are often used by financial analysts
to measure the performance of the Company.
The following companies comprise the 1996 Peer Group: Agrium Inc.,
Freeport-McMoRan Resource Partners Limited Partnership, Freeport-McMoRan Inc.,
Potash Corporation of Saskatchewan, The Scotts Company, Terra Industries Inc.,
Terra Nitrogen Co. L. P., Arcadian Corporation, First Mississippi Corp.,
Mississippi Chemical Corp. and Asia Pacific Resources Ltd.
4
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
IMC GLOBAL, S&P 500 STOCK INDEX, 1996 PEER GROUP
AND MEDIA GENERAL GROUP
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FISCAL YEAR ENDING JUNE
30, IMC GLOBAL S&P 500 1996 PEER GROUP MEDIA GENERAL GROUP
<S> <C> <C> <C> <C>
1991 100.00 100.00 100.00 100.00
1992 94.92 113.36 117.72 104.89
1993 66.42 128.74 109.58 98.37
1994 78.29 130.59 124.67 115.91
1995 123.14 164.53 172.74 150.80
1996 172.56 207.19 235.41 193.72
</TABLE>
*Total Return assumes reinvestment of dividends.
IN CONCLUSION
We believe that IMC Global's historical and future value is inextricably
linked to strong and thoughtful management. Accordingly, in approaching
decisions on compensation, we go beyond a simple evaluation of financial results
to consider a number of qualitative factors which we believe have contributed
and continue to contribute significantly to maximizing stockholder value over
the long term.
Respectfully submitted,
Richard A. Lenon, Chairman
Raymond F. Bentele
Rod F. Dammeyer
Thomas H. Roberts, Jr.
5
<PAGE>
POLICIES RELATING TO THE BOARD OF DIRECTORS
NOMINATION AND SELECTION OF DIRECTORS
Recommendations for new Directors may be made by stockholders to the
Corporate Secretary in accordance with the procedures set forth in the Company's
By-Laws. The Corporate Secretary will report such recommendations to the
Committee on Directors and Board Affairs for consideration.
COMPENSATION OF DIRECTORS
NON-EMPLOYEE DIRECTORS
Each non-employee Director receives an annual retainer of $24,000,
attendance fees of $1,000 for each Board meeting attended and an additional
$1,000 for attendance at each meeting of a Board committee to which he is
assigned. Each non-employee Director receives an additional annual retainer of
$3,000 for service as chairperson of a Board committee.
Pursuant to the 1994 Stock Option Plan for Non-Employee Directors, each
non-employee Director annually receives options to purchase 2,000 shares of
Common Stock. Options are granted at 100% of the fair market value of the stock
at the time of grant. Options granted are immediately exercisable and may be
exercised at any time while the Director remains in office and for 24 months
thereafter. However, Common Stock issuable upon exercise of options may not be
sold within the six-month period following the date of grant without the consent
of the Compensation Committee nor may options be exercised more than ten years
after the date of the grant.
Pursuant to the Directors' Retirement Service Plan, a non-employee Director
who has served at least six years as a Director, has agreed to remain available
to provide consultation services to the Company management and does not work for
a competitor will, upon attainment of age 70 and after retirement from the
Board, receive an annual pension for a period of ten years (subject to earlier
termination upon death). Such pension will be equal to 60% to 100% of the annual
retainer in effect at retirement, depending upon the length of the Director's
service (60% if six years, 70% if seven, 80% if eight, 90% if nine, and 100% if
ten years or more).
EMPLOYEE DIRECTORS
Employee Directors (currently Messrs. Bueche and Fowler) receive no fees or
other remuneration for service on the Board or any committee of the Board.
ATTENDANCE
The full Board held six regular and seven special meetings during fiscal
1996. Each Director was present for at least 75% of the total number of meetings
of the Board and committees of the Board of which such Director was a member
that occurred during fiscal 1996 subsequent to the election of such Director to
the Board. In addition to attendance at Board and committee meetings, Directors
discharge their responsibilities throughout the year by personal meetings and
telephone contact with IMC Global executive officers and others regarding the
business and affairs of IMC Global.
RETIREMENT FROM THE BOARD
The Board has a mandatory retirement policy which provides that any Director
who is not an employee of the Company may not stand for reelection to the Board
after he or she has attained the age of 70. This policy does not apply to any
person who was a non-employee Director on April 20, 1989. In addition, it is the
policy of the Board that employees of the Company (other than the Chief
Executive Officer) who serve on the Board resign from the Board upon their
retirement or other cessation of employment with the Company. The Board also has
a policy that any non-employee Director or the Chief Executive Officer submit
his or her resignation if he or she has a material change in employment, is the
subject of media attention that reflects unfavorably on his or her continued
service on the Board or has a conflict of interest with the Company. The Board
shall accept or reject the resignation based on the best interests of the
Company.
6
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
OWNERSHIP OF COMMON STOCK BY DIRECTORS AND EXECUTIVE OFFICERS
The following table shows the number of shares of the Common Stock that are
owned beneficially, as of August 30, 1996, by (i) each nominee for Director,
(ii) each Director continuing in office, (iii) each current or former executive
officer named in the Summary Compensation Table and (iv) the Directors, all such
current or former executive officers and all other executive officers as a group
(20 persons), with sole voting and investment power unless otherwise indicated.
<TABLE>
<CAPTION>
NUMBER OF SHARES
OWNED BENEFICIALLY
NAME AS OF 8/30/96(1)(2)
<S> <C>
- ----------------------------------------------------------------------
Wendell F. Bueche............................... 250,880(3)
Raymond F. Bentele.............................. 7,000(4)
Rod F. Dammeyer................................. 18,000(4)(5)
James M. Davidson............................... 6,000(4)
Robert E. Fowler, Jr............................ 415,235(5)
Harold H. MacKay................................ 19,600(4)(5)
David B. Mathis................................. 6,000(4)
Thomas H. Roberts, Jr........................... 23,000(4)
Joseph P. Sullivan.............................. 847,070(4)(5)
Richard L. Thomas............................... 3,000(4)
Billie B. Turner................................ 59,906(4)
Clayton K. Yeutter.............................. 2,480(4)
Brian J. Smith.................................. 11,000
C. Steven Hoffman............................... 97,960(3)
Marschall I. Smith.............................. 71,820(3)
James D. Speir.................................. 209,276(3)
Robert C. Brauneker............................. 95,096(3)
Robert M. Felsenthal............................ 1,000
Directors and the executive officers described
above as a group.............................. 2,145,472(3)(4)(5)
- ----------------------------------------------------------------------
<FN>
(1) Beneficial ownership of the Common Stock is based on information furnished
or confirmed by each Director or executive officer described above. Share
numbers reflect the 2-for-1 stock split of the Common Stock effected in the
form of a stock dividend distributed in November 1995.
(2) No individual Director or executive officer is a beneficial owner of more
than 1% of the outstanding shares of Common Stock. Directors and the
executive officers described above as a group beneficially own an aggregate
of approximately 2.32% of the outstanding shares of Common Stock.
(3) Includes shares of Common Stock purchasable within 60 days of August 30,
1996 through the exercise of options granted under the 1988 Stock Option
and Award Plan, as amended, as follows: Mr. Bueche, 193,000 shares; Mr.
Hoffman, 76,800 shares; Mr. M. Smith, 57,600 shares; Mr. Speir, 126,600
shares; Mr. Brauneker, 64,800 shares; and Directors and the executive
officers described above as a group, 519,525 shares.
(4) Includes shares of Common Stock purchasable within 60 days of August 30,
1996 through the exercise of options granted to non-employee Directors
under the 1994 Stock Option Plan for Non-Employee Directors, as follows:
Mr. Bentele, 6,000 shares; Mr. Dammeyer, 2,000 shares; Dr. Davidson, 4,912
shares; Mr. MacKay, 2,000 shares; Mr. Mathis, 4,000 shares; Mr. Roberts,
6,000 shares; Mr. Sullivan, 2,000 shares; Mr. Thomas, 2,000 shares; Mr.
Turner, 6,000 shares; and Dr. Yeutter, 2,000 shares.
</TABLE>
7
<PAGE>
<TABLE>
<S> <C>
(5) Includes shares of Common Stock purchasable within 60 days of August 30,
1996 through the exercise of options granted under The Vigoro Corporation
1991 Stock Option Plan, as amended, as follows: Mr. Dammeyer, 16,000
shares; Mr. Fowler, 395,763 shares; Mr. MacKay, 16,000 shares; and Mr.
Sullivan, 264,000 shares.
</TABLE>
OWNERSHIP OF COMMON STOCK BY OTHERS
The Company believes that, as of August 30, 1996, based on filings with the
Securities and Exchange Commission (the "SEC"), only the following named
institutions are the beneficial owners of more than five percent of the
outstanding Common Stock.
<TABLE>
<CAPTION>
SHARES PERCENT
BENEFICIALLY OF OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED COMMON STOCK
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
FMR Corp.(1)........................................................................ 11,031,824 11.94 %
82 Devonshire Street
Boston, Massachusetts 02109
GVI Holdings, Inc.(2)............................................................... 6,510,286 7.04 %
Two North Riverside Plaza
Suite 1100
Chicago, Illinois 60606
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) FMR Corp. is a parent holding company which files one Schedule 13G to report
beneficial ownership of Common Stock by all of its affiliates. Includes
shares as to which FMR Corp. has or shares investment and voting power as
follows: sole voting power, 1,610,216 shares; shared voting power, 0 shares;
sole investment power, 11,031,824; and shared investment power, 0 shares.
(2) GVI Holdings, Inc. has sole investment and voting power with respect to the
Common Stock reported.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Each Director and executive officer of the Company who is subject to Section
16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is
required by Section 16(a) of the Exchange Act to report to the SEC, by a
specified date, his beneficial ownership of or transactions in the Company's
securities. Reports received by the Company indicate that all such Directors and
officers filed all requisite reports with the SEC on a timely basis during
fiscal 1996, except that the Form 3 for Anne M. Scavone, the Controller of the
Company, was not timely filed with the SEC.
8
<PAGE>
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information as to the compensation of the
Chief Executive Officer, each of the other four most highly compensated
executive officers of the Company serving as such on June 30, 1996 and a retired
executive officer, Robert C. Brauneker, who would have been among the four most
highly compensated executive officers serving on June 30, 1996, had he not
retired on April 1, 1996, based on salary and bonus earned during fiscal 1996.
In addition, the table sets forth information as to the compensation of Robert
E. Fowler, Jr., the President and Chief Operating Officer of the Company, and
Brian J. Smith, the Executive Vice President, Chief Financial Officer and
Treasurer of the Company, from the respective commencement dates of their
employment with the Company. The executive officers listed below are
collectively referred to as the "Named Executive Officers" in this Proxy
Statement.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
LONG-TERM COMPENSATION
--------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------ ----------------------- ------------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL FISCAL SALARY BONUS COMPENSATION AWARDS(7) OPTIONS/ PAYOUTS COMPENSATION
POSITION YEAR ($) ($) ($) ($) SARS (#) ($) ($)
- ---------------------- ------ ------- ------- ------------ ---------- ---------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
W. F. Bueche 1996 544,600 425,000 0 0 50,000 1,472,078(9) 48,117(10)
Chairman & CEO 1995 530,040 460,000 0 0 20,000(8) 298,141 52,441
1994 500,040 300,000 10,567(6) 280,135 183,000(8) 0 35,542
R. E. Fowler, Jr.(1) 1996 148,600 85,000 0 0 0 0 0
President & COO
B. J. Smith(2) 1996 115,077 60,000 3,996(6) 0 25,000 0 36,442(10)
Executive VP, CFO &
Treasurer
C. S. Hoffman 1996 235,600 125,000 0 0 10,000 470,312(9) 16,847(10)
Senior VP 1995 226,840 145,000 0 0 0 95,244 23,941
1994 214,080 94,000 0 89,500 58,800(8) 0 13,793
M. I. Smith 1996 230,700 115,000 0 0 12,500 460,906(9) 23,453(10)
Senior VP 1995 216,680 120,000 0 0 0 93,339 19,590
& General Counsel 1994 175,000 68,000 6,390(6) 87,710 57,600(8) 0 6,712
J. D. Speir(3) 1996 365,040 200,000 0 0 25,000 823,159(9) 2,360,697(10)
Retired President & 1995 320,435 220,000 0 36,600 25,800(8) 120,933 35,883
COO 1994 270,000 115,000 0 113,665 74,200(8) 0 24,264
R. C. Brauneker(4) 1996 197,790 100,000 0 0 12,500 540,897(9) 1,122,628(10)
Retired Executive VP & 1995 255,040 175,000 0 0 0 109,504 31,367
CFO 1994 245,040 115,000 0 102,925 67,200(8) 0 21,209
R. M. Felsenthal(5) 1996 187,500 95,000 0 0 12,500 338,700(9) 12,499(10)
Former Senior VP, 1995 168,300 90,000 0 19,062 15,000(8) 44,490 14,536
Business Development 1994 150,000 42,000 0 42,065 27,400(8) 0 8,024
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Mr. Fowler's employment with the Company commenced on March 4, 1996.
(2) Mr. Smith's employment with the Company commenced on February 26, 1996.
(3) Mr. Speir retired on June 30, 1996.
(4) Mr. Brauneker retired on April 1, 1996.
(5) Mr. Felsenthal resigned on August 19, 1996.
(6) Represents payments to offset expenses incurred for relocation.
9
<PAGE>
(7) Reflects awards of restricted shares and contingent stock units under the
1994 Long-Term Performance Incentive Plan which vested based solely on
service with the Company. No awards were made in fiscal 1996 to the Named
Executive Officers under the 1994 Long-Term Performance Incentive Plan.
Neither Mr. Fowler nor Mr. B. Smith was employed by the Company when awards
were made under the 1994 Long-Term Performance Incentive Plan. The value of
such awards was based on the price of the Common Stock at the date the award
was granted.
(8) Reflects a 2-for-1 stock split effected in November, 1995.
(9) Reflects restricted shares and contingent stock units payouts under the
1994 Long-Term Performance Incentive Plan that vested on June 30, 1996,
pursuant to action taken by the Board of Directors. The awards were
scheduled to vest on June 30, 1997.
(10) Consists of (i) the value of the benefit for life insurance premiums paid
by the Company and contributions made by the Company to the Defined
Contribution Savings Plan as follows: Mr. Bueche, $39,117 and $9,000; Mr. B.
Smith $6,442 and $0; Mr. Hoffman, $7,847 and $9,000; Mr. M. Smith, $14,453
and $9,000; Mr. Speir, $21,677 and $9,000; Mr. Brauneker, $15,260 and
$2,308; and Mr. Felsenthal, $3,499 and $9,000; (ii) $30,000 paid to Mr. B.
Smith upon commencement of his employment; (iii) severance payments under
the IMC Global Severance Plan described under the caption "-- Severance
Plans" as follows: $331,545 payable and $110,515 paid to Mr. Brauneker;
$635,020 payable to Mr. Speir; and $300,020 payable to Mr. Felsenthal; (iv)
bonus payments pursuant to certain Transition Bonus Agreements described
under the caption "-- Bonus Agreements" as follows: $552,020 payable and
$110,980 paid to Mr. Brauneker and $450,030 payable to Mr. Felsenthal; and
(v) a $1,695,000 payment to be made to Mr. Speir pursuant to his
Non-Competition Agreement described under the caption "-- Non-Competition
Agreements."
OPTION GRANTS IN THE LAST FISCAL YEAR
The following table sets forth information with respect to all options to
purchase Common Stock granted in fiscal 1996 to each of the Named Executive
Officers. There were no grants of stock appreciation rights in fiscal 1996.
<TABLE>
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------
<CAPTION>
INDIVIDUAL GRANTS GRANT DATE VALUE
----------------------------------------------------- -----------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS EXERCISE
OPTIONS GRANTED TO PRICE GRANT DATE
GRANTED EMPLOYEES IN ($/SHARE) EXPIRATION PRESENT VALUE
NAME (#)(1) FISCAL YEAR (2) DATE ($)(3)
- ----------------- ------------- ------------- ----------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
W. F. Bueche 50,000 11.86 38.00 12/21/2005 12.53
R. E. Fowler, Jr. 0 -- -- -- --
B. J. Smith 25,000 5.93 39.31 02/26/2006 12.88
C. S. Hoffman 10,000 2.37 38.00 12/21/2005 12.53
M. I. Smith 12,500 2.96 38.00 12/21/2005 12.53
J. D. Speir 25,000 5.93 38.00 12/21/2005 12.53
R. C. Brauneker 12,500 2.96 38.00 12/21/2005 12.53
R. M. Felsenthal 12,500 2.96 38.00 12/21/2005 12.53
</TABLE>
(1) All options granted and reported in this table have the following terms:
each option vests over a two-year period, with 50% of the shares becoming
exercisable at the beginning of the first year following the date of grant
and with the entire option becoming exercisable at the end of the second
year, unless the vesting schedule is accelerated in the event of a change of
control of the Company in accordance with the 1988 Stock Option and Award
Plan, as amended.
10
<PAGE>
(2) Exercise price is the fair market of the Common Stock on the date of grant,
determined by calculating the average of the high and low prices at which
the Common Stock is traded on such date, as reflected on the consolidated
tape of New York Stock Exchange issues.
(3) The Black-Scholes Option Pricing Model was used to determine the grant date
present value of the options to purchase Common Stock granted in fiscal 1996
by the Company. The material assumptions and adjustments incorporated in the
model in estimating the value of the options which have an expiration date
of (a) December 21, 2005 and (b) February 26, 2006, respectively, include
the following: (i) option exercise prices of $38.00 and $39.3125,
respectively, equal to the fair market value of the underlying stock on the
date of grant; (ii) an option term of ten years; (iii) interest rates of
5.71% and 5.81%, respectively, representing the interest rate on a U. S.
Treasury security with a maturity date corresponding to that of the option
term; (iv) volatilities of 26.64% and 28.554%, respectively, calculated
using daily stock prices for the one-year period prior to the grant date;
(v) dividends at the rate of $0.20 per share and $0.32 per share,
respectively, representing the annualized dividends paid with respect to a
share of Common Stock at the date of grant; and (vi) reductions of
approximately 31.40% and 30.96%, respectively, to reflect the probability of
forfeiture due to termination prior to vesting and the probability of a
shortened option term due to termination of employment prior to the option
exercise date.
The ultimate value of the options will depend on the future market price of
the Common Stock, which cannot be forecast with reasonable accuracy. The
actual value, if any, an optionee will realize upon exercise of an option
will depend on the excess of the market value of the Common Stock over the
exercise price on the date the option is exercised.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
------------------------------------------------------------------------
The following table sets forth information with respect to all exercises of
options to purchase Common Stock in fiscal 1996 by each of the Named Executive
Officers and all outstanding options to purchase Common Stock held by such
individuals at June 30, 1996.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
SHARES YEAR-END (#) AT FISCAL YEAR-END ($)(1)
ACQUIRED ON VALUE -------------------------- --------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
W. F. Bueche -- -- 132,000 121,000 2,640,367 1,387,652
R. E. Fowler, Jr. -- -- 219,212 330,978 3,243,104 4,547,880
B. J. Smith -- -- 0 25,000 0 0
C. S. Hoffman -- -- 57,200 29,600 1,022,238 402,511
M. I. Smith -- -- 38,400 31,700 788,594 394,297
J. D. Speir -- -- 93,266 66,934 1,764,780 827,306
R. C. Brauneker 23,800 571,475 64,800 12,500 1,161,376 0
R. M. Felsenthal -- -- 28,266 31,634 528,291 373,254
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The value is calculated based on a June 30, 1996 closing stock price of
$37.625 as quoted on the New York Stock Exchange less the relevant exercise
price(s).
11
<PAGE>
PENSION PLANS
QUALIFIED PENSION PLAN
The Company maintains a non-contributory qualified pension plan which covers
all U. S. salaried employees, including Company officers. The annual pension to
which a participant is entitled at normal retirement age (65) is an amount based
on the highest final average annual remuneration for the five consecutive
highest paid years out of the ten years immediately preceding retirement and
years of credited service up to 35 years. The plan is integrated with benefits
payable under Old Age Survivors and Disability Insurance. Remuneration for these
purposes includes salary and 50% of bonus as shown in the Summary Compensation
Table.
The Internal Revenue Code of 1986, as amended (the "Code"), requires certain
limitations on benefits provided under a qualified retirement plan. To the
extent pension benefits otherwise payable under the qualified pension plan's
formula exceed the Code's limitations, the Board of Directors has approved a
non-qualified plan, the Supplemental Executive Retirement Plan, which provides
for payment of amounts in excess of the Code's limitations from the Company's
operating funds to its participants.
The following table shows the estimated annual pension benefits which would
be payable to the Named Executive Officers for life at normal retirement under
the qualified pension plan. (If elected, an optional form of pension would, on
an actuarial basis, reduce benefits to the participant but provide benefits to a
surviving beneficiary or permit a one-time lump sum present value payment.)
<TABLE>
<CAPTION>
ANNUAL AVERAGE OF
HIGHEST FIVE YEARS ANNUAL BENEFITS FOR YEARS
COVERED REMUNERATION OF SERVICE INDICATED
FOR PENSION PURPOSES ----------------------------------------------------------------
IN TEN YEARS PRECEDING 35 YEARS
NORMAL RETIREMENT DATE 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS OR MORE
- ---------------------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
$ 100,000 $ 16,700 $ 25,000 $ 33,300 $ 41,600 $ 48,100 $ 54,700
200,000 34,500 51,700 68,900 86,100 99,800 113,500
300,000 52,300 78,400 104,500 130,600 151,400 172,300
400,000 70,100 105,100 140,100 175,100 203,100 231,100
500,000 87,900 131,800 175,700 219,600 254,700 289,900
600,000 105,700 158,500 211,300 264,100 306,400 348,700
700,000 123,500 185,200 246,900 308,600 358,000 407,500
800,000 141,300 211,900 282,500 353,100 409,700 466,300
900,000 159,100 238,600 318,100 397,600 461,300 525,100
</TABLE>
- -------------------------------------------------------------------------------
Credited service under the pension plan for the Named Executive Officers as
of June 30, 1996 is as follows: Mr. Bueche, 3 years, 5 months; Mr. Fowler, 4
months; Mr. B. Smith, 5 months; Mr. Hoffman, 22 years, 3 months; Mr. M. Smith, 2
years, 10 months; Mr. Speir 33 years, 11 months; Mr. Brauneker 35 years; and Mr.
Felsenthal 12 years, 10 months.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Supplemental Executive Retirement Plan, which is a non-contributory,
non-qualified plan, provides an additional pension benefit for Company executive
officers and certain other key executives based on the participant's final
average annual remuneration for pension purposes. The plan takes into account
100% of bonus and years of credited service up to a maximum of 20 years, payable
to the extent that such benefits exceed those payable under the above-described
pension plan. There are no other offsets under this plan.
12
<PAGE>
The following table shows the additional annual retirement benefits payable
under the Supplemental Executive Retirement Plan to the Named Executive Officers
and covered key employees for life beginning at age 65 based upon 10, 15 and 20
years of service.
<TABLE>
<CAPTION>
ANNUAL AVERAGE OF NET ADDITIONAL
HIGHEST FIVE YEARS ANNUAL BENEFITS
COVERED REMUNERATION FOR YEARS OF
FOR PENSION PURPOSES SERVICE INDICATED
IN TEN YEARS PRECEDING -------------------------------
NORMAL RETIREMENT DATE 10 YRS. 15 YRS. 20 YRS.
- ---------------------- --------- --------- ---------
<S> <C> <C> <C>
$ 100,000 $ 13,300 $ 20,000 $ 26,700
200,000 25,500 38,300 51,100
300,000 37,700 56,600 75,500
400,000 49,900 74,900 120,000
500,000 62,100 105,000 180,000
600,000 74,300 150,000 240,000
700,000 90,000 195,000 300,000
800,000 120,000 240,000 360,000
900,000 150,000 285,000 420,000
- -------------------------------------------------------
</TABLE>
TERMINATION OF EMPLOYMENT ARRANGEMENTS
Agreements with Messrs. Bueche, Fowler, B. Smith, Hoffman and M. Smith, to
become effective in the event of a change in control of the Company, are
intended to assure the Company of the continued services of these executives. In
general, each of the agreements provides that, in the event there is a change in
control of the Company (as defined in the agreement), the executive shall remain
employed by the Company in his then current position at the then current base
and incentive compensation and benefit levels for a period of three years,
subject to earlier expiration because of voluntary resignation, mandatory
retirement, disability, or termination for cause, as defined in the agreements.
If the Company breaches the agreement, the Company is obligated to provide the
executive certain severance benefits, including three years' base salary plus
three times the average of the prior three years' bonuses. In addition, the
Company would become obligated to continue the executive's participation in
various compensation and benefit plans in which the executive was participating
when the agreement became effective. These agreements are in addition to the
other agreements and arrangements described in this Proxy Statement.
These agreements were amended in August 1995 to update the definition of
change in control and to increase the severance and bonus payment from two years
to three years.
Certain provisions of the federal tax law impose a 20% surcharge upon an
executive of a corporation and deny Federal income tax deductibility to the
corporation as to a significant portion of the severance payments made to an
executive because of a change in control, if such payments as a whole exceed
three times his or her average annual base and incentive compensation for the
most recent five years. The amounts estimated to be payable under the aforesaid
agreements, if those agreements become effective, could be large enough to
subject the executives to the surcharge and to deprive the Company of a
deduction. The Company has agreed with each of the executives that, if a
surcharge were assessed upon payment of the aforementioned severance benefits,
it will provide "grossed up" reimbursement to the executive, including any tax
payable on such additional amounts paid to him.
If a change in control were to occur and the contingent employment
agreements were to be breached by the Company within three years thereafter, the
amount of cash that would be payable in respect of these amended agreements is
estimated (as of July 1, 1997 and excluding any gross-up reimbursements for
taxes) to be: Mr. Bueche, $2,277,500; Mr. Fowler, $1,495,000; Mr. B. Smith,
$1,091,250; Mr. Hoffman, $860,971; and Mr. M. Smith, $853,121.
EMPLOYMENT AND OTHER AGREEMENTS
On March 4, 1996, the Company and Mr. Bueche entered into an agreement which
amended his employment agreement and which amended his agreement to provide
consulting services to the Company following his retirement as Chairman of the
Company. Pursuant to the employment agreement, as amended, Mr. Bueche is to
serve as Chief
13
<PAGE>
Executive Officer of the Company until June 30, 1997 at a salary rate of not
less than $530,040 per annum and as Chairman of the Company from July 1, 1997
through June 30, 1998 at a salary of $250,020 per annum. In addition, Mr. Bueche
will be retained as a consultant for one year from the date of his retirement as
Chairman for a total fee of $250,020.
Mr. B. Smith and the Company entered into a letter agreement effective as of
March 1, 1996 which provides that if Mr. B. Smith is terminated prior to
February 28, 1999, he will be entitled to receive the sum of: two times his
annualized salary as of the termination date and two times the highest annual
bonus (annualized if he is employed for less than a complete bonus year) earned
by him for one of the two consecutive complete bonus years ending immediately
preceding the termination. "Termination" is defined generally in the letter
agreement as the termination prior to February 28, 1999 of employment with the
Company for any reason other than death, disability, cause or voluntary
resignation.
In June 1996, the Company and Mr. Speir entered into a consulting agreement
pursuant to which Mr. Speir will be paid $17,500 per month from July 1, 1996
through June 30, 1997.
Certain of the Company's Directors and executive officers entered into
severance and other similar agreements in connection with the Vigoro merger
which are described under the captions "-- Severance Plans, -- Bonus Agreements
and Noncompetition Agreements."
MANAGEMENT COMPENSATION AND BENEFIT ASSURANCE PROGRAM
The Board adopted a Management Compensation and Benefit Assurance Program
(the "Program") in October 1988 and amended this Program in August 1995. The
purpose of the Program is to ensure that officers and key management personnel
receive the compensation and benefits that have been committed to, and are
reasonably expected by, them under the terms of certain benefit plans, including
severance and benefits in the event of termination of employment after a Change
in Control.
Under the Program, trusts have been established with the Wachovia Bank of
North Carolina, N.A. of Winston-Salem, North Carolina to ensure appropriate
payment when due of commitments, awards and benefits under the Management
Incentive Compensation Plan (including any deferred bonuses), the Supplemental
Executive Retirement Plan, the 1988 Stock Option and Award Plan, the contingent
employment agreements and gross-up arrangements referred to under the caption
"-- Termination of Employment Arrangements." These trusts are minimally funded
with operating funds of the Company, subject to full funding in the event that
the Trustee is notified that a Change in Control has occurred or is about to
occur.
Assuming a Change in Control were to occur, distributions by the Trustee
would be made only if an officer were involuntarily terminated without cause
within three years after a Change in Control and/or only to the extent the
Company were to fail to honor its commitments and subject to the claims of the
Company's creditors and to the terms of the benefit plan involved. The annual
cost to the Company to maintain the trusts is estimated to be $21,000. Full
funding under the arrangements that could be required would depend on the
Company's outstanding commitments subject to the Program from time to time.
"Change in Control" of the Company is defined to occur as of the first day
that any one or more of the following conditions shall have been satisfied:
(1) the acquisition by any individual entity or group (a "Person"),
including any "person" within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act, of beneficial ownership within the meaning of Rule 13d-3
promulgated under the Exchange Act, of 15% or more of either (i) the then
outstanding shares of Common Stock of the Company (the "Outstanding Company
Common Stock") or (ii) the combined voting power of the then outstanding
securities of the Company entitled to vote generally in the election of
Directors (the "Outstanding Company Voting Securities"); excluding, however,
the following: (A) any acquisition directly from the Company (excluding any
acquisition resulting from the exercise of an exercise, conversion or
exchange privilege unless the security being so exercised, converted or
exchanged was acquired directly from the Company); (B) any acquisition by
the Company; (C) any acquisition by an employee benefit plan (or related
trust) sponsored
14
<PAGE>
or maintained by the Company or any corporation controlled by the Company;
and (D) any acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (3) of this
definition;
(2) individuals who, as of the date hereof, constitute the Board of
Directors (the "Incumbent Board") cease for any reason to constitute at
least a majority of such Board; provided that any individual who becomes a
Director of the Company subsequent to the date hereof whose election, or
nomination for election by the Company's stockholders, was approved by the
vote of at least a majority of the Directors then comprising the Incumbent
Board shall be deemed a member of the Incumbent Board; and provided further,
that any individual who was initially elected as a Director of the Company
as a result of an actual or threatened election contest, as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, or
any other actual or threatened solicitation of proxies or consents by or on
behalf of any Person other than the Board shall not be deemed a member of
the Incumbent Board;
(3) approval by the stockholders of the Company of a reorganization,
merger or consolidation or sale or other disposition of all or substantially
all of the assets of the Company (a "Corporate Transaction"); excluding,
however, a Corporate Transaction pursuant to which (i) all or substantially
all of the individuals or entities who are the beneficial owners,
respectively, of the Outstanding Company Common Stock and the Outstanding
Company Voting Securities immediately prior to such Corporate Transaction
will beneficially own, directly or indirectly, more than 60% of,
respectively, the outstanding shares of common stock, and the combined
voting power of the outstanding securities of such corporation entitled to
vote generally in the election of Directors, as the case may be, of the
corporation resulting from such Corporate Transaction (including, without
limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly
or indirectly) in substantially the same proportions relative to each other
as their ownership, immediately prior to such Corporate Transaction, of the
Outstanding Company Common Stock and the Outstanding Company Voting
Securities, as the case may be, (ii) no Person (other than: the Company; the
corporation resulting from such Corporate Transaction; and any Person which
beneficially owned, immediately prior to such Corporate Transaction,
directly or indirectly, 25% or more of the Outstanding Company Common Stock
or the Outstanding Voting Securities, as the case may be) will beneficially
own, directly or indirectly, 25% or more of, respectively, the outstanding
shares of common stock of the corporation resulting from such Corporate
Transaction or the combined voting power of the outstanding securities of
such corporation entitled to vote generally in the election of Directors and
(iii) individuals who were members of the Incumbent Board will constitute at
least a majority of the members of the Board of Directors of the corporation
resulting from such Corporate Transaction; or
(4) approval by the stockholders of the Company of a plan of complete
liquidation or dissolution of the Company.
SEVERANCE PLANS
In connection with the Vigoro merger, the Vigoro Board adopted and IMC
Global assumed a Severance Plan (the "Vigoro Severance Plan") applicable to 28
employees of Vigoro, including Mr. Fowler, the current President and Chief
Operating Officer of IMC Global. The Vigoro Severance Plan provides that a
covered employee will receive "Severance Benefits" if the employee is terminated
in circumstances that constitute a "Severance Event" and such employee executes
a release of claims. Severance Benefits consist of an amount equal to the
employee's then annualized base salary or, if greater, annualized base salary as
of November 13, 1995 ("Base Salary"), plus an amount generally equal to the
employee's highest annual bonus and other incentive payments received for any of
the prior three years ("Bonus Base"), paid in 12 equal monthly installments plus
unpaid salary and pro-rated bonus and earned but unused vacation. Eligible
employees will also be entitled to continuation of benefits for the lesser of
one year or until the employee finds new employment providing comparable
benefits. A Severance Event occurs if within three years of November 13, 1995,
an eligible employee's employment is terminated: (i) by the employer other than
because such employee engaged in willful and intentional conduct which has
caused demonstrable and serious injury to IMC Global, was convicted of or
entered a plea of nolo contendere to any felony, was convicted of a criminal
offense or entered a plea of nolo contendere to any offense involving
dishonesty, breach of trust or moral turpitude, committed a breach of fiduciary
duty involving personal profit or willfully refused to perform or was grossly
negligent in the performance of his or her duties or
15
<PAGE>
responsibilities (unless significantly changed without the consent of the
employee) (collectively, "Cause"); (ii) by such employee within 90 days after
such employee has or should have knowledge that his or her Base Salary was not
maintained in accordance with prior levels, he or she is not included on a
comparable basis with similar employees in bonus plans or stock option or
similar plans or he or she is not included on a comparable basis with similar
employees in benefit plans or vacation or other perquisite plans (collectively,
"Good Reason"); or (iii) by such employee on or after the date such employee has
reached the age of 60. A covered employee is not entitled to Severance Benefits
if the employee terminates his or her employment other than in circumstances
constituting a Severance Event or the employee's employment is terminated as a
result of the death or disability of the employee.
Also in connection with the Vigoro merger, the IMC Global Board adopted a
Severance Plan (the "IMC Global Severance Plan") applicable to 28 employees of
IMC Global, including Mr. Hoffman and Mr. M. Smith. The terms and conditions of
the IMC Global Severance Plan are substantially similar to the terms and
conditions of the Vigoro Severance Plan except with regard to the following: The
"Effective Date," representing the effective date of the IMC Global Severance
Plan, the date on which the "Severance Period" commences and the date on which
the employee's "Base Salary" is determined, is designated as December 21, 1995.
Also, a covered employee's "Bonus Base" includes the highest annual bonus earned
by the employee for the prior three years, but does not include any other
incentive payments earned by the employee. In addition, an employee-initiated
termination on or after reaching age 60 does not constitute a "Severance Event"
for purposes of the IMC Global Severance Plan. Lastly, in addition to the
eligibility exclusions contained in the Vigoro Severance Plan, the IMC Global
Severance Plan provides that a covered employee is not entitled to "Severance
Benefits" if: (i) the employee takes a leave of absence which does not
constitute a termination of employment; (ii) the employee is transferred to
another facility on a nondiscriminatory basis and for a bona fide business
reason and such employee declines to accept the position; or (iii) the employee
is terminated in connection with the sale of stock or assets of IMC Global and
is offered a comparable position with IMC Global's successor in interest. Mr.
Brauneker is entitled to receive a Severance Benefit of $442,060, of which
$110,515 was paid in fiscal 1996. Mr. Speir and Mr. Felsenthal will be paid
Severance Benefits equal to $635,020 and $300,020, respectively.
Other than as described above, no Named Executive Officer is eligible to
receive Severance Benefits under either the Vigoro or IMC Global Severance Plan.
BONUS AGREEMENTS
After consummation of the Vigoro merger, IMC Global entered into Transition
Bonus Agreements ("Bonus Agreements") with certain officers and key employees of
Vigoro and IMC Global, including Mr. M. Smith. The Bonus Agreements provide that
an employee will be entitled to a "Transition Bonus," paid in nine equal monthly
installments if, within one year of the effective time (the "Effective Time") of
the Vigoro merger (the "Transition Period"), the employee is terminated in
circumstances that constitute a "Transition Bonus Event" and such employee
executes a release of claims. A Transition Bonus is an amount equal to 75% of
the sum of the employee's Base Salary and Bonus Base (each as defined above
under the caption "Severance Plans"). A Transition Bonus Event will have
occurred if during the Transition Period: (i) the employee's employment with
Vigoro (or any related entity) is terminated (A) by the applicable employer
other than for Cause (as defined under the caption "Severance Plans") or (B) by
the employee for Good Reason (as defined under the caption "Severance Plans") or
(ii) Vigoro or IMC Global or any related entity does not make an offer of
continued employment to the employee after the Effective Time with compensation,
authority and status at least equivalent to the compensation, authority and
status of the employee immediately prior to the Effective Time. A covered
employee would not be entitled to a Transition Bonus if the employee's
employment is terminated other than in circumstances constituting a Transition
Bonus Event or if the employee's employment is terminated as a result of the
death or disability of the employee. Mr. Brauneker is entitled to receive a
Transition Bonus of $663,000, of which $110,980 was paid in fiscal 1996. Mr.
Felsenthal will be paid a total Transition Bonus equal to $450,030. Other than
as described above, no Named Executive Officer is eligible to receive a
Transition Bonus.
NON-COMPETITION AGREEMENTS
Upon consummation of the Vigoro merger, IMC Global entered into
Non-Competition Agreements (the "Non-Competition Agreements") with a total of 14
officers and key employees of Vigoro and with nine key employees of IMC Global,
including Mr. Fowler and Mr. Hoffman, which provide that such employees will not
compete with IMC Global or
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any of its affiliates for specified periods following the termination of their
employment with Vigoro or its subsidiaries because of a Severance Event (as
defined under the caption "Severance Plans") and will receive scheduled payments
in equal monthly installments during the period of non-competition. Employees
entering into Non-Competition Agreements will agree not to compete (i) for a
period of three years if a Severance Event occurs on or before the first
anniversary of the Effective Time; (ii) for two years if a Severance Event
occurs after the first anniversary and on or before the second anniversary of
the Effective Time; and (iii) for one year if a Severance Event occurs after the
second anniversary and on or before the third anniversary of the Effective Time
(the "Non-Competition Periods"). During the Non-Competition Periods, certain
employees of IMC Global will be prohibited from rendering employment or
consulting services to any business enterprise in North America in a capacity in
which such employee will directly supervise a business which is directly
competitive with the business which the employee supervised during the one-year
period preceding the Severance Event. The maximum aggregate payments under the
Non-Competition Agreements payable to Mr. Fowler and Mr. Hoffman are $2,370,000
and $764,000, respectively. Mr. Speir will receive an aggregate payment of
$1,695,000 pursuant to his Non-Competition Agreement. Other than as described
above, no Named Executive Officer is a party to a Non-Competition Agreement.
TRANSACTIONS WITH PRINCIPAL STOCKHOLDERS,
DIRECTORS AND EXECUTIVE OFFICERS
------------------------------------------
The Company, Great American Management and Investment, Inc. ("GAMI") and
certain former stockholders of Vigoro (including Rod F. Dammeyer, a Director)
entered into a Registration Rights Agreement (the "Registration Rights
Agreement") in connection with the Vigoro merger. On May 8, 1996, pursuant to
such Registration Rights Agreement, GAMI requested that the Company register the
shares of Common Stock held by GVI Holdings, Inc., a wholly owned subsidiary of
GAMI. On July 2, 1996, the Company effected such registration. Mr. Dammeyer is
an executive officer of GAMI.
The Registration Rights Agreement provides that GAMI will cause any
affiliate or associate of GAMI to resign as a Director of the Company if GAMI's
direct or indirect ownership of Common Stock is reduced below 3.5% of the
outstanding shares of Common Stock.
On April 15, 1993, the Company and Billie B. Turner, a Director, entered
into a consulting arrangement under which Mr. Turner received $166,680 during
fiscal 1996. The term of the consulting agreement ended on February 29, 1996.
Certain of the Company's Directors and executive officers entered into
severance and other similar agreements in connection with the Vigoro merger
which are described under the caption "Executive Compensation -- Severance
Plans, -- Bonus Agreements and -- Non-Competition Agreements."
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THE ANNUAL MEETING
--------------------
PROXIES AND VOTING AT THE ANNUAL MEETING
As of the close of business on August 30, 1996, there were 92,419,558 shares
of Common Stock which may be voted at the Annual Meeting. Only holders of record
of the Common Stock at the close of business on August 30, 1996 shall be
entitled to notice of, and to vote at, the Annual Meeting. Each issued and
outstanding share of Common Stock is entitled to one vote.
Shares represented by proxies will be voted in accordance with directions
given on the proxy card by a stockholder. Any properly executed and returned
proxy not specifying to the contrary will be voted (i) for the election of the
Board's nominees for Director, (ii) in favor of the IMC Global Inc. 1996
Long-Term Incentive Plan, (iii) in favor of an amendment to the 1988 Stock
Option and Award Plan, as amended, (iv) in favor of ratifying the appointment of
the independent auditors and (v) in the discretion of the holder of proxies as
to any other matter that is properly presented at the Annual Meeting. A
stockholder giving a proxy has the right to revoke it at any time before it has
been voted at the Annual Meeting.
A proxy submitted by a stockholder may indicate that all or a portion of the
shares represented by such proxy is not being voted by such stockholder with
respect to a particular matter. This could occur, for example, when a broker is
not permitted to vote stock held in a street name on certain matters in the
absence of instructions from the beneficial owner of the stock. The shares
subject to any such proxy which are not being voted with respect to a particular
matter (the "non-voted shares") will be considered shares not present and
entitled to vote on such matter, although such shares may be considered present
and entitled to vote for other purposes and will count for purposes of
determining the presence of a quorum.
The affirmative vote of a plurality of the shares of Common Stock present in
person or by proxy at the Annual Meeting and entitled to vote in the election of
Directors is required to elect Directors. Accordingly, if a quorum is present at
the meeting, the four persons standing for election for the class of Directors
whose terms expire at the 1999 Annual Meeting who receive the greatest number of
votes will be elected to serve as Directors and the person standing for election
for the class of Directors whose term expires at the 1998 Annual Meeting who
receives the greatest number of votes will also be elected as a Director.
Therefore, withholding authority to vote for a Director(s) and non-voted shares
with respect to the election of Directors will not affect the outcome of the
election of Directors. If a quorum is present at the Annual Meeting, approval of
each matter other than the election of Directors requires the affirmative vote
of a majority of the shares of Common Stock present in person or by proxy at the
Annual Meeting and entitled to vote on such matter. An abstention with respect
to such matter has the legal effect of a vote against such matter. Non-voted
shares with respect to such matter will not affect the determination of whether
such matter is approved.
Proxies are solicited by the Board of Directors and management to assure
that stockholders who are unable to attend the Annual Meeting have the
opportunity to cast a vote on the issues to come before the Annual Meeting. In
addition to the use of the mails, proxies may be solicited by personal
interview, telephone and telegrams by Directors, officers and employees of the
Company. Arrangements may also be made with brokerage houses and other
custodians, nominees and fiduciaries for the forwarding of solicitation material
to the beneficial owners of stock held of record by such persons, and the
Company may reimburse them for reasonable out-of-pocket expenses incurred by
them in connection therewith. In addition, the Company has retained Morrow &
Co., Inc. to aid in the solicitation, at an estimated cost of $6,500, plus
expenses. The cost of all proxy solicitations, including payments to Morrow &
Co., Inc., will be borne by the Company.
The giving of the proxy does not affect the right to vote in person should
the stockholder be able to attend the Annual Meeting. Such proxy may be revoked
at any time prior to the effective exercise thereof by the execution of a
subsequent proxy or, if the stockholder attends the Annual Meeting and wishes to
vote in person, by notifying the Secretary at the Annual Meeting of his or her
intention to so vote.
Prompt execution and return of the proxy is requested in order to assure the
presence, in person or by proxy, of the holders of a majority of the shares
entitled to vote at the Annual Meeting, which is required for a quorum.
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MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
I. ELECTION OF DIRECTORS
The Board of Directors of the Company consists of fourteen members. Two of
the fourteen members of the Board are also employees of the Company. Wendell F.
Bueche is Chairman of the Board and Chief Executive Officer of the Company, and
Robert E. Fowler, Jr. is President and Chief Operating Officer of the Company.
The Board is divided into three classes with staggered terms of three years
each, so that the term of one class expires at each Annual Meeting of
Stockholders.
Six Directors currently serve in the class of Directors whose term expires
at the 1996 Annual Meeting. Two of these six Directors, Frank W. Considine and
Richard A. Lenon, intend to retire from the Board at the Annual Meeting and,
therefore, will not be standing for reelection. Robert E. Fowler, Jr., Harold H.
MacKay and Richard L. Thomas, each of whom is currently serving in the class of
Directors whose term expires at the 1996 Annual Meeting, will stand for
reelection at the Annual Meeting for a three-year term expiring in 1999. Billie
B. Turner, who is also currently serving in the class of Directors whose term
expires at the 1996 Annual Meeting, has expressed a willingness to serve as a
Director of the Company for only two additional years. Accordingly, Mr. Turner
is standing for reelection at the Annual Meeting for the class of Directors
whose term expires at the 1998 Annual Meeting of Stockholders. In order to
achieve balance among the classes of Directors without increasing the overall
size of any class of Directors, David B. Mathis, who is currently serving in the
class of Directors whose term expires at the 1998 Annual Meeting, has agreed to
stand for reelection at the Annual Meeting to a new three-year term as a member
of the class of Directors whose term expires in 1999. The Board of Directors
intends to reduce the number of Directors which constitutes the entire Board
from fourteen to twelve immediately following the Annual Meeting.
It is intended that the shares represented by the proxies named on the
enclosed proxy card will be voted, unless authorization to do so is withheld, in
favor of the election of Mr. Turner to serve until the Annual Meeting of
Stockholders in 1998 or until his successor has been duly elected and qualified
and in favor of the election of Messrs. Fowler, MacKay, Mathis and Thomas to
serve until the Annual Meeting of Stockholders in 1999 or until their respective
successors have been duly elected and qualified. Directors shall be elected by a
plurality of the votes of the shares of Common Stock present in person or by
proxy at the Annual Meeting and entitled to vote in the election.
All of the nominees are currently members of the Board. If one or more
nominees should become unavailable to serve as a Director, it is intended that
shares represented by the enclosed proxy statement will be voted for such
substitute nominee or nominees as may be selected by the Board, or the Board may
elect not to fill the vacancy and to reduce the number of Directors.
The names of the nominees for Director and of those Directors continuing in
office, their ages, their principal occupations during the past five years,
certain other directorships held, their length of service, if any, on the Board
and their service, if any, on any committees of the Board on which they serve
are set forth below.
NOMINEE FOR ELECTION AS A DIRECTOR
FOR A TERM EXPIRING IN 1998
-----------------------------------------------------
<TABLE>
<S> <C>
[PHOTO] BILLIE B. TURNER, 65, Chairman Emeritus of the Board. Retired President
and Chief Executive Officer, a capacity in which he served from the
Company's incorporation in 1987 until his retirement in February 1993.
He is a director of Cyprus-Amax Minerals Company. Mr. Turner has served
as an IMC Global Director since 1987. Mr. Turner currently serves on
the Audit Committee.
</TABLE>
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NOMINEES FOR ELECTION AS A DIRECTOR
FOR A TERM EXPIRING IN 1999
------------------------------------------------------
<TABLE>
<S> <C>
[PHOTO] ROBERT E. FOWLER, JR., 60, President and Chief Operating Officer of the
Company. Mr. Fowler served as President of Vigoro from July 1993
through February 1996 and as Chief Executive Officer of Vigoro from
September 1994 through February 1996. Mr. Fowler previously served as
Chief Operating Officer of Vigoro. Mr. Fowler served as President and
Chief Executive Officer of BCC Industrial Services from June 1991 to
June 1993. From October 1987 to October 1990, Mr. Fowler served as
Chairman, Chief Executive Officer and President of Josephson Office
Products, Inc. Mr. Fowler is a director of Alltrista Corporation and
Anixter International Inc. Mr. Fowler previously served as a director
of Vigoro from August 1993 through February 1996 and has served as an
IMC Global Director since March 4, 1996. Mr. Fowler currently serves on
the Executive Committee.
[PHOTO] HAROLD H. MACKAY, 56, managing partner of the law firm MacPherson
Leslie & Tyerman in Regina, Saskatchewan, Canada. Mr. MacKay became a
partner of MacPherson Leslie & Tyerman in 1969. Mr. MacKay is a
director of IPSCO Inc., Weyerhaeuser Canada Ltd. and the Bank of
Canada. Mr. MacKay previously served as a director of Vigoro from
November 1993 until March 1996 and has served as an IMC Global Director
since March 4, 1996. Mr. MacKay currently serves as Chairman of the
Environmental, Safety and Public Affairs Committee and as a member of
the Audit Committee.
[PHOTO] DAVID B. MATHIS, 58, Chairman, President and Chief Executive Officer of
Kemper Insurance Companies. From February 1992 through February 1996,
Mr. Mathis served as Chairman and Chief Executive Officer of Kemper
Corporation. He has been employed by Kemper since 1960 in management
positions of successively increasing importance. Mr. Mathis serves on
the board of trustees of Lake Forest College and is an advisory board
member of the J. L. Kellogg Graduate School of Management of
Northwestern University. He also serves on the board of directors of
Evanston Hospital Corporation and the board of trustees of the Chicago
Symphony Orchestra. Mr. Mathis has served as an IMC Global Director
since February 1995. Mr. Mathis currently serves on the Executive
Committee and the Committee on Directors and Board Affairs.
[PHOTO] RICHARD L. THOMAS, 65, Retired Chairman of First Chicago NBD
Corporation and The First National Bank of Chicago. Mr. Thomas is also
a director of First Chicago NBD Corporation, CNA Financial Corporation,
The PMI Group, Inc. and Sara Lee Corporation. Mr. Thomas is a life
trustee of the Orchestral Association of Chicago, a trustee of Rush-
Presbyterian-St. Luke's Medical Center (Chicago) and a trustee of
Northwestern University. He is also Chairman of the Board of Trustees
of Kenyon College. Mr. Thomas has served as an IMC Global Director
since June 20, 1996. Mr. Thomas currently serves on the Committee on
Directors and Board Affairs.
</TABLE>
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DIRECTORS CONTINUING IN OFFICE
------------------------------------------------
<TABLE>
<S> <C>
[PHOTO] RAYMOND F. BENTELE, 59, Retired President and Chief Executive Officer,
Mallinckrodt Inc., which manufactures medical equipment, specialty
chemicals and veterinary products. He was Executive Vice President of
Mallinckrodt Group Inc. (formerly known as IMCERA Group Inc.) from 1989
until his retirement. He is also a director of the Kellwood Company,
Mallinckrodt Group Inc., Legett & Platt Inc. and was previously a
director of IMC Global from 1990 to 1991. Mr. Bentele has served as an
IMC Global Director since June 1994 and his term expires in 1997. Mr.
Bentele currently serves as Chairman of the Committee on Directors and
Board Affairs and as a member of the Compensation Committee.
[PHOTO] WENDELL F. BUECHE, 65, Chairman of the Board and Chief Executive
Officer of the Company. He has served in this capacity since August
1994. From February 1993 until August 1994, he was President and Chief
Executive Officer. Mr. Bueche was Chairman of the Board, Chief
Executive Officer and President of Allis-Chalmers Corporation, a
diversified manufacturer of industrial equipment, from 1986 through
1988. He retired from full-time employment from 1989 until February
1993. He is also a director of Marshall & Ilsley Corporation, M&I
Marshall & Ilsley Bank, WICOR, Inc., Wisconsin Gas Company, and
Executive Association, American Industrial Partners, L. P. Mr. Bueche
has served as an IMC Global Director since July 1991 and his term
expires in 1998. Mr. Bueche currently serves on the Executive Committee
and is a non-voting member of the Committee on Directors and Board
Affairs.
[PHOTO] ROD F. DAMMEYER, 55, President and a director of Anixter International
since October 1985 and Chief Executive Officer of Anixter International
Inc. since January 1993. Mr. Dammeyer is a trustee of Van Kampen
American Capital, Inc. closed end investment companies and a member of
the Chase Manhattan Corporation National Advisory Board. Mr. Dammeyer
is also a director of Antec Corporation, Capsure Holdings Corp., Falcon
Building Products, Inc., Jacor Communications, Inc., Lukens Inc., Revco
D.S., Inc. and Sealy, Inc. Mr. Dammeyer previously served as a director
of Vigoro from August 1993 until March 1996 and has served as an IMC
Global Director since March 4, 1996. Mr. Dammeyer's term expires in
1997. Mr. Dammeyer currently serves on the Compensation Committee.
[PHOTO] JAMES M. DAVIDSON, PH.D., 62, Vice President for Agriculture and
Natural Resources, University of Florida. Dr. Davidson joined the
University of Florida in 1974, became Professor and Assistant Dean for
Research in 1979, Professor and Dean for Research, Institute of Food
and Agricultural Sciences, and Director, Florida Agricultural
Experiment Station, Gainesville, Florida in 1986, and assumed his
present position in 1992. Dr. Davidson has served as an IMC Global
Director since July 1991 and his term expires in 1998. Dr. Davidson
currently serves on the Audit Committee and the Environmental, Safety
and Public Affairs Committee.
</TABLE>
21
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<TABLE>
<S> <C>
[PHOTO] THOMAS H. ROBERTS, JR., 72, Retired Chairman and Chief Executive
Officer of DEKALB Energy Company (formerly known as DEKALB
Corporation). Mr. Roberts is a director of Pride Petroleum Services and
is a member of that Board's Compensation Committee. From 1968 through
1988 Mr. Roberts served as a director of International Minerals &
Chemical Corporation. Mr. Roberts has served as an IMC Global Director
since February 1988 and his term expires in 1997. Mr. Roberts currently
serves on the Compensation Committee.
[PHOTO] JOSEPH P. SULLIVAN, 63, Mr. Sullivan served as Chairman of the Board of
Vigoro from March 1991 through February 1996. From March 1991 to
September 1994, Mr. Sullivan served as Chief Executive Officer of
Vigoro. Mr. Sullivan served as Chief Operating Officer of Vigoro from
March 1991 to July 1993 and as President from January 1986 to March
1991. Mr. Sullivan previously served as a director of Vigoro from
January 1986 through February 1996 and has served as an IMC Global
Director since March 4, 1996. Mr. Sullivan's term expires in 1998. Mr.
Sullivan currently serves as Chairman of the Executive Committee and as
a member of the Environmental, Safety and Public Affairs Committee.
[PHOTO] CLAYTON K. YEUTTER, PH.D., 65, of counsel to the law firm Hogan &
Hartson in Washington, D.C. since 1993. Dr. Yeutter served as Counselor
to the President for Domestic Policy, a Cabinet-level post in the White
House in 1992. In 1991 Dr. Yeutter served as Chairman of the Republican
National Committee. From February 1989 to February 1991, Dr. Yeutter
served as U. S. Secretary of Agriculture, and prior thereto Dr. Yeutter
served as U. S. Trade Representative for four years. Dr. Yeutter is a
director of ConAgra, Inc., Caterpillar Inc., Texas Instruments, Inc.,
B.A.T. Industries and its subsidiary, Farmers Group, Inc., FMC
Corporation, and was a director of Vigoro from April 1994 to March
1996. Dr. Yeutter has served as an IMC Global Director since August 15,
1996. Dr. Yeutter's term expires in 1997. Dr. Yeutter will be assigned
to one or more Board Committees at a future meeting of the Board of
Directors.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION AS DIRECTORS OF
THE FIVE NOMINEES LISTED ABOVE (PROPOSAL NO. 1 ON THE PROXY CARD).
II. APPROVAL OF THE IMC GLOBAL INC. 1996 LONG-TERM INCENTIVE PLAN
GENERAL
The Board of Directors is proposing for stockholder approval the IMC Global
Inc. 1996 Long-Term Incentive Plan (the "Plan"). The Plan is intended to operate
in conjunction with the 1988 Stock Option and Award Plan, as amended, to provide
long-term incentives to executive officers and other key employees of the
Company and its subsidiaries and thereby advance the interests of the Company by
attracting and retaining executive officers and other key employees and
motivating such persons to act in the long-term best interests of the Company's
stockholders. All performance awards payable under the Plan in restricted shares
of Common Stock will be paid in shares previously authorized under the 1988
Stock Option and Award Plan, as amended. The Plan is intended to comply,
whenever possible, with the requirements of Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"). The relationship between Section
162(m) and the Plan is described more fully below.
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<PAGE>
DESCRIPTION OF THE PLAN
ADMINISTRATION.
The Plan will be administered by the Compensation Committee which currently
consists of four Directors, each of whom is (i) a "Non-Employee Director" within
the meaning of Rule 16b-3 under the Exchange Act and (ii) an "outside director"
within the meaning of Section 162(m) of the Code.
Section 162(m) of the Code generally limits to $1 million the amount that a
publicly held corporation is allowed each year to deduct for the compensation
paid to each of the corporation's chief executive officer (the "CEO") and the
corporation's four most highly compensated executive officers other than the
CEO. However, "qualified performance-based compensation" is not subject to the
$1 million deduction limit. To qualify as performance-based compensation, the
following requirements must be satisfied: (i) the performance goals are
determined by a committee consisting solely of two or more "outside directors";
(ii) the material terms under which the compensation is to be paid, including
the performance goals, are disclosed to stockholders and are approved by a
separate majority vote of the corporation's stockholders before the compensation
is paid; and (iii) the committee certifies that the applicable performance goals
were in fact satisfied before payment of any performance-based compensation is
made. The Compensation Committee consists solely of "outside directors" as
defined for purposes of section 162(m) of the Code. As a result, and based on
certain regulations issued by the United States Department of the Treasury,
compensation under the Plan is expected not to be subject to the $1 million
deduction limit under Section 162(m) of the Code.
Subject to the express provisions of the Plan, the Compensation Committee
will have the authority to select officers and other key employees of the
Company, and its subsidiaries, who will receive awards and to determine all of
the terms and conditions of each award. All awards will be subject to such
provisions not inconsistent with the Plan as the Compensation Committee shall
approve. The Compensation Committee will also have authority to prescribe rules
and regulations for administering the Plan and to decide questions of
interpretation or application of any provision of the Plan. Except with respect
to grants to executive officers of the Company or other persons subject to
Section 16 of the Exchange Act, and persons whose compensation is likely to be
subject to the $1 million deduction limit under Section 162(m) of the Code, the
Compensation Committee may delegate some or all of its power and authority to
administer the Plan to the CEO or other executive officer of the Company.
CHANGE IN CONTROL.
In the event of certain acquisitions of 15% or more of the Common Stock, a
change in a majority of the Board of Directors, or the consummation of a
reorganization, merger or consolidation or sale or disposition of all or
substantially all of the assets of the Company (unless, among other conditions,
the Company's stockholders receive 60% or more of the stock of the surviving
company) or the consummation of a liquidation or dissolution of the Company, the
Board will have the discretion to make such adjustments to outstanding awards
under the Plan as it deems appropriate, including, without limitation, causing
all outstanding awards to be "cashed-out" by the Company.
EFFECTIVE DATE, TERMINATION AND AMENDMENT.
If approved by stockholders at the Annual Meeting, the Plan will become
effective as of the date of the Annual Meeting and will terminate ten years
thereafter, unless terminated earlier by the Board. The Board may amend the Plan
at any time, subject to any requirement of stockholder approval required by
applicable law, rule or regulation and provided that no amendment may be made
without stockholder approval if such amendment would, among other things, extend
the term of the Plan.
PERFORMANCE AWARDS.
Each performance award is a right, contingent upon the attainment of
performance measures within a specified performance period, to receive payment
in cash or shares of restricted Common Stock of a specified amount. The maximum
amount that may be paid to any individual under any performance award for any
performance period shall not exceed $3,000,000, adjusted for increases in the
Consumer Price Index between July 1, 1996 and the beginning of the performance
period. Prior to the settlement of a performance award in shares of Common
Stock, the holder of such award will have no rights as a stockholder of the
Company with respect to the shares of Common Stock that may be issued in payment
of the award. All of the terms relating to the satisfaction of performance
measures and the termination of the performance period relating to a performance
award, or any cancellation or forfeiture of such performance award
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upon a termination of employment with the Company of the holder of such
performance award, whether by reason of disability, retirement, death or other
termination, shall be determined by the Compensation Committee and communicated
to the recipient of a performance award at the time the award is granted.
PERFORMANCE GOALS.
Under the Plan, the payment of performance awards will be subject to the
satisfaction of certain performance objectives and criteria, such objectives and
criteria to be based on the economic profit of a business unit of the Company
and/or of the Company as a whole. Economic profit is defined for this purpose as
after-tax cash flow in excess of capital employed times the cost of such
capital. If the Committee desires that compensation payable pursuant to any
award subject to performance measures be "qualified performance-based
compensation" within the meaning of Section 162(m) of the Code, the performance
measures (i) will be established by the Committee no later than 90 days after
the beginning of the performance period or restriction period, as applicable (or
such other time designated by the Internal Revenue Service) and (ii) will
satisfy all other applicable requirements imposed under Treasury Regulations
promulgated under Section 162(m) of the Code, including the requirement that
such performance measures be stated in terms of an objective formula or
standard.
PERFORMANCE PERIODS.
A Performance Period generally includes three fiscal years of the Company.
The first and second Performance Periods will include one and two fiscal years,
respectively, beginning with the fiscal year beginning July 1, 1996.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of certain U.S. federal income tax
consequences generally arising with respect to awards under the Plan.
A participant receiving a performance award will not recognize taxable
income upon the grant of such award and the Company will not be entitled to a
tax deduction at such time. Upon the payment of a performance award in cash, the
participant will recognize ordinary income in an amount equal to the cash paid
by the Company. This amount is deductible by the Company as compensation
expense, except to the extent the deduction limits of Section 162(m) of the Code
apply.
Upon the settlement of a performance award in shares of Common Stock by
means of a restricted stock award under the 1988 Stock Option and Award Plan, as
amended, the participant will not recognize taxable income at the time of the
restricted stock grant, and the Company will not be entitled to a tax deduction
at such time, unless the participant makes an election to be taxed at the time
the restricted stock is granted. If such election is not made, the participant
will recognize taxable income at the time the restrictions lapse in an amount
equal to the excess of the fair market value of the shares at such time over the
amount, if any, paid for such shares. The amount of ordinary income recognized
by a participant by making the above-described election or upon the lapse of the
restrictions is deductible by the Company as compensation expense, except to the
extent the deduction limits of Section 162(m) of the Code apply. In addition, a
participant receiving dividends with respect to restricted stock for which the
above-described election has not been made and prior to the time the
restrictions lapse will recognize taxable compensation, rather than dividend
income, in an amount equal to the dividends paid and the Company will be
entitled to a corresponding deduction, except to the extent the deduction limits
of Section 162(m) of the Code apply.
OTHER
The awards to be granted under the Plan to executive officers and key
employees of the Company in fiscal 1997 are not determinable as of the date of
this Proxy Statement.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR AUTHORIZATION AND APPROVAL OF
THE IMC GLOBAL INC. 1996 LONG-TERM INCENTIVE PLAN (PROPOSAL NO. 2 ON THE PROXY
CARD).
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III. APPROVAL OF AN AMENDMENT TO THE 1988 STOCK OPTION AND AWARD PLAN, AS
AMENDED
The Board of Directors is proposing for stockholder approval an amendment to
the 1988 Stock Option and Award Plan, as amended, to limit the aggregate number
of shares of Common Stock that may be subject to options granted in any fiscal
year to any employee to 500,000 shares (subject to adjustments in connection
with certain events). The purpose of the amendment is to comply with the
requirements of Section 162(m) of the Code, so that the compensation expense
resulting from options exercised under the 1988 Stock Option and Award Plan, as
amended, by the CEO and the Company's four highest paid executive officers other
than the CEO whose compensation for any taxable year exceeds $1 million may be
deductible by the Company for federal income tax purposes.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR AUTHORIZATION AND APPROVAL OF
THE AMENDMENT TO THE 1988 STOCK OPTION AND AWARD PLAN, AS AMENDED (PROPOSAL NO.
3 ON THE PROXY CARD).
IV. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors, upon recommendation of the Audit Committee,
appointed Ernst & Young LLP as independent auditors to examine and report on the
financial statements of the Company and its subsidiaries and affiliates for the
fiscal year ending June 30, 1997, subject to stockholder approval at the Annual
Meeting.
During the fiscal year ended June 30, 1996, Ernst & Young LLP provided the
Company with audit services, including examinations of and reporting on the
Company's consolidated financial statements, as well as those of several of its
subsidiaries and affiliates and of certain of its employee benefit plans. Audit
services also included accounting advisory services and review of filings with
the Securities and Exchange Commission and the Annual Report to Stockholders.
Ernst & Young LLP also performed certain non-audit services for the Company such
as federal, state and local tax advisory services.
Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting and will have the opportunity to make any statements they may
desire. They also will be available to respond to appropriate questions of the
stockholders.
Ratification of the appointment of Ernst & Young LLP as independent auditors
requires the affirmative vote of a majority of the shares of the Company's
Common Stock represented at the meeting in person or by proxy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT
OF ERNST & YOUNG LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY (PROPOSAL NO. 4
ON THE PROXY CARD).
25
<PAGE>
MISCELLANEOUS INFORMATION
------------------------------------
The Board of Directors and management know of no matters which will be
presented for consideration at the Annual Meeting other than those stated in the
notice of Annual Meeting and described in this Proxy Statement.
DISCRETIONARY VOTING AUTHORITY
If any matter properly comes before the Annual Meeting, the persons named in
the accompanying proxy form will vote such proxy in accordance with their
judgment regarding such matters, including the election of a Director or
Directors other than those named herein if an emergency or unexpected occurrence
makes the use of discretionary authority necessary, and also regarding matters
incident to the conduct of the Annual Meeting.
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR THE 1997 ANNUAL MEETING OF
STOCKHOLDERS
For stockholders who may be interested in submitting a resolution for
consideration at the 1997 Annual Meeting of Stockholders, the deadline for
submitting such proposals in order to be considered for inclusion in the 1997
Proxy Statement is May 16, 1997. The Committee on Directors and Board Affairs
considers stockholder recommendations of future nominees for election to the
Board of Directors. The By-Laws of the Company provide that a stockholder
wishing to nominate a candidate for election to the Board is required to give
written notice to the Secretary of the Company of his or her intention to make
such a nomination. The notice of nomination must be received by the Company not
less than 60 days prior to the stockholders' meeting or within ten days after
the Company has mailed to stockholders a notice of annual meeting of
stockholders, whichever is later. The notice of nomination is required to
contain certain information about both the nominee and the stockholder making
the nomination. The Company may require that the proposed nominee furnish other
information to determine that person's eligibility to serve as Director. A
nomination which does not comply with the above procedure will be disregarded.
Proposals should be sent to the Corporate Secretary of the Company, 2100 Sanders
Road, Northbrook, Illinois 60062-6146.
By Order of the Board of Directors,
[SIGNATURE]
ROSE MARIE WILLIAMS
CORPORATE SECRETARY
Dated: September 13, 1996
26
<PAGE>
DIRECTIONS TO THE CHICAGO BOTANIC GARDEN
-------------------------------------------
THE CHICAGO BOTANIC GARDEN IS LOCATED AT 1000 LAKE-COOK ROAD, JUST EAST OF THE
EDENS EXPRESSWAY IN GLENCOE, ILLINOIS. THE TELEPHONE NUMBER OF THE CHICAGO
BOTANIC GARDEN IS 847-835-5440.
GENERAL
Parking lot number 1 is most accessible to the entrance to the Chicago
Botanic Garden.
Please identify yourself to the parking attendant as an attendee of the IMC
Global 1996 Annual Meeting of Stockholders in order to receive free parking at
the Chicago Botanic Garden.
The meeting will be held in the Alsdorf Auditorium, located in the Education
Building.
FROM DOWNTOWN CHICAGO
Take the Kennedy Expressway to the Edens Expressway (I-94 North). Follow the
Edens Expressway approximately 20 miles north to Route 41. Do not take the I-94
West Tollway Milwaukee exit. Instead exit the Edens Expressway at Lake-Cook
Road, turn right (east) and proceed about 1/2 mile to the entrance to the
Chicago Botanic Garden which will be on your right.
FROM LOCATIONS FROM THE SOUTH VIA THE NORTHBOUND TRI-STATE TOLLWAY (I-294)
Exit at Lake-Cook Road, turn right (east) and take Lake-Cook Road past the
Edens Expressway approximately 1/2 mile to the entrance of the Chicago Botanic
Garden which will be on your right.
FROM MILWAUKEE AND LOCATIONS TO THE NORTH
Take the Tri-State Tollway (I-294) south to the Lake-Cook Road exit. At the
top of the exit turn left (east) and take Lake-Cook Road past the Edens
Expressway approximately 1/2 mile to the entrance of the Chicago Botanic Garden
which will be on your right.
27
<PAGE>
IMC GLOBAL INC.
1996 LONG-TERM INCENTIVE PLAN
I. INTRODUCTION
1.1 PURPOSE. The 1996 Long-Term Incentive Plan (the "PLAN") of IMC Global
Inc. (the "COMPANY") is intended to operate in conjunction with the IMC Global
Inc. 1988 Stock Option and Award Plan to provide long-term incentives to
officers and other key employees of the Company and its subsidiaries and thereby
advance the interests of the Company by attracting and retaining officers and
other key employees and motivating such persons to act in the long-term best
interests of the Company's stockholders.
1.2 CERTAIN DEFINITIONS.
"BOARD" shall mean the Board of Directors of the Company.
"BUSINESS UNIT" shall mean a subsidiary, division, joint venture or other
unit of the Company's business which is designated as such by the Committee.
"CHANGE IN CONTROL" shall have the meaning set forth in Section 3.6(b).
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMMITTEE" shall mean the Committee designated by the Board, consisting of
two or more members of the Board, each of whom shall be (i) a "Non-Employee
Director" within the meaning of Rule 16b-3 under the Exchange Act and (ii) an
"outside director" within the meaning of Section 162(m) of the Code, subject to
any transition rules applicable to the definition of outside director.
"COMMON STOCK" shall mean the common stock, $1.00 par value, of the
Company.
"COMPANY" has the meaning specified in Section 1.1.
"ECONOMIC PROFIT" shall have the meaning specified in Section 2.2(b).
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"FAIR MARKET VALUE" shall mean the mean between the highest and lowest
prices at which the Common Stock is traded on the date on which such value is
being determined, as reflected on the consolidated tape of New York Stock
Exchange issues, or if such date is not a trading day, on the first trading day
preceding such date. If there are no such sales of Common Stock on the date on
which such value is being determined (or on the first trading day preceding such
date, if applicable) the mean between the bid and the asked prices as reflected
on the consolidated tape of New York Stock Exchange issues at the close of the
market on such date shall be deemed to be the fair market value of the Common
Stock.
<PAGE>
"INCUMBENT BOARD" shall have the meaning set forth in Section 3.6(b)(2)
hereof.
"PERFORMANCE AWARD" shall mean a right, contingent upon the attainment of
specified Performance Measures within a specified Performance Period, to receive
payment in cash or in shares of Common Stock of a specified amount.
"PERFORMANCE MEASURES" shall mean the criteria and objectives,
established by the Committee, which shall be satisfied or met during the
applicable Performance Period as a condition to the holder's receipt of the
payment with respect to a Performance Award. Such criteria and objectives
shall be based on the Economic Profit of a Business Unit and/or of the
Company as a whole. If the Committee desires that compensation payable
pursuant to any award subject to Performance Measures be "qualified
performance-based compensation" within the meaning of Section 162(m) of the
Code, the Performance Measures (i) shall be established by the Committee no
later than 90 days after the beginning of the Performance Period (or such
other time designated by the Internal Revenue Service) and (ii) shall satisfy
all other applicable requirements imposed under Treasury Regulations
promulgated under Section 162(m) of the Code, including the requirement that
such Performance Measures be stated in terms of an objective formula or
standard.
"PERFORMANCE PERIOD" shall mean the period determined under Section
2.2(c)during which the Performance Measures applicable to a Performance Award
shall be measured.
"SUBSIDIARY" shall have the meaning set forth in Section 1.4.
"TAX DATE" shall have the meaning set forth in Section 3.4.
1.3 ADMINISTRATION. This Plan shall be administered by the Committee. The
Committee shall, subject to the terms of this Plan, select eligible persons
for participation in this Plan and determine the form, amount and timing of
each award to such persons, the time and conditions of payment of the award
and all other terms and conditions of the award. The Committee may, in its
sole discretion and for any reason at any time, subject to the requirements
imposed under Section 162(m) of the Code and regulations promulgated
thereunder in the case of an award intended to be qualified performance-based
compensation, take action such that all or a portion of the Performance
Period applicable to any outstanding Performance Award shall lapse, and the
Performance Measures applicable to any outstanding Performance Award shall be
deemed to be satisfied at the maximum or any other level. The Committee
shall, subject to the terms of this Plan, interpret this Plan and the
application thereof, establish rules and regulations it deems necessary or
desirable for the administration of this Plan and may impose, incidental to
the grant of an award, conditions with respect to the award, such as limiting
competitive employment or other activities. All such interpretations, rules,
regulations and conditions shall be final, binding and conclusive.
The Committee may delegate some or all of its power and authority hereunder
to the Chief Executive Officer (the "CEO") or such other executive officer of
the Company as the Committee deems appropriate; PROVIDED, HOWEVER, that the
Committee may not delegate its power and authority with regard to (i) the grant
of an award to any person who is a "covered employee" within the meaning of
Section 162(m) of the Code or who, in the Committee's judgment, is likely to be
a
<PAGE>
covered employee at any time during the period an award hereunder to such
employee would be outstanding or (ii) the selection for participation in this
Plan of an officer or other person subject to Section 16 of the Exchange Act or
decisions concerning the timing or amount of an award to such an officer or
other person.
A majority of the Committee shall constitute a quorum. The acts of the
Committee shall be either (i) acts of a majority of the members of the
Committee present at any meeting at which a quorum is present or (ii) acts
approved in writing by all of the members of the Committee without a meeting.
1.4 ELIGIBILITY. Participants in this Plan shall consist of such officers
and other key employees of the Company, and its subsidiaries (individually a
"SUBSIDIARY" and collectively the "SUBSIDIARIES"), including IMC-Agrico MP,
Inc., as the Committee in its sole discretion may select from time to time.
For purposes of this Plan, references to employment by the Company shall also
mean employment by a Subsidiary. The Committee's selection of a person to
participate in this Plan at any time shall not require the Committee to
select such person to participate in this Plan at any other time.
II. PERFORMANCE AWARDS
2.1 PERFORMANCE AWARDS. The Committee may, in its discretion, grant
Performance Awards to such eligible persons as may be selected by the
Committee.
2.2 TERMS OF PERFORMANCE AWARDS. Performance Awards shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the Committee
shall deem advisable.
(a) AMOUNT OF PERFORMANCE AWARD. The amount of a Performance Award
shall be determined by the Committee; provided, however, that the maximum
amount that may be paid to any individual under any Performance Award for any
Performance Period shall not exceed $3,000,000, adjusted for increases in the
Consumer Price Index between July 1, 1996 and the beginning of the
Performance Period.
(b) PERFORMANCE MEASURES. The Performance Measures applicable to a
Performance Award shall be determined by the Committee based upon the
achievement during the applicable Performance Period of the Economic Profit
goals established by the Committee for the Business Unit in which the holder
of the Performance Award is employed and/or for the Company as a whole.
Economic Profit means "After-Tax Cash Flow" (defined below) divided by
"Capital Employed" (defined below).
"AFTER-TAX CASH FLOW" means earnings before interest, taxes, depreciation,
depletion and amortization ("EBITDA") less cash taxes (i.e. provision for income
taxes excluding deferred taxes).
"CAPITAL EMPLOYED" means working capital (excluding cash, current and
deferred tax assets and liabilities and short-term debt) plus gross fixed
assets (before accumulated depreciation and
<PAGE>
depletion and excluding joint venture step-up) and other assets (before
accumulated amortization of goodwill). Capital Employed will be calculated
based on beginning of month (or quarter) balances resulting in a 12-month (or
4-quarter) average for the year.
(c) PERFORMANCE PERIODS. In general, a Performance Period shall be a
period consisting of three consecutive fiscal years of the Company. The
first and second Performance Periods, however, shall consist of one and two
fiscal years of the Company, respectively, beginning with the fiscal year of
the Company beginning July 1, 1996.
(d) SETTLEMENT OF PERFORMANCE AWARDS. A Performance Award may be
settled in shares of Common Stock by means of a restricted stock award under
the terms of the IMC Global Inc. 1988 Stock Option and Award Plan or cash or
a combination thereof, as determined by the Committee. Prior to the
settlement of a Performance Award in shares of Common Stock, the holder of
such award shall have no rights as a stockholder of the Company with respect
to the shares of Common Stock subject to such award and shall have rights as
a stockholder of the Company in accordance with Section 3.8.
2.3 TERMINATION OF EMPLOYMENT OR SERVICE. All of the terms relating to the
satisfaction of Performance Measures and the termination of the Performance
Period relating to a Performance Award, or any cancellation or forfeiture of
such Performance Award upon a termination of employment with the Company of
the holder of such Performance Award, whether by reason of disability,
retirement, death or other termination, shall be determined by the Committee
and communicated to the recipient of a Performance Award at the time the
Performance Award is granted.
III. GENERAL
3.1 EFFECTIVE DATE AND TERM OF PLAN. This Plan shall be submitted to the
stockholders of the Company for approval and, if approved by the affirmative
vote of a majority of the shares of Common Stock present in person or
represented by proxy at the 1996 annual meeting of stockholders of the
Company, shall become effective on the date of such approval. This Plan
shall terminate ten years after its effective date, unless terminated earlier
by the Board. Termination of this Plan shall not affect the terms or
conditions of any award granted prior to termination.
3.2 AMENDMENTS. The Board may amend this Plan as it shall deem advisable,
subject to any requirement of stockholder approval required by applicable
law, rule or regulation, including Section 162(m) and Section 422 of the
Code; PROVIDED, HOWEVER, that no amendment shall be made without stockholder
approval if such amendment would extend the term of this Plan. No amendment
may impair the rights of a holder of an outstanding award without the consent
of such holder.
3.3 NON-TRANSFERABILITY OF AWARDS. No award shall be transferable other than
by will, the laws of descent and distribution or pursuant to beneficiary
designation procedures approved by the Company. Each award may be settled
during the holder's lifetime only by the holder or the holder's
<PAGE>
legal representative or similar person. No award may be sold, transferred,
assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether
by operation of law or otherwise) or be subject to execution, attachment or
similar process. Upon any attempt to so sell, transfer, assign, pledge,
hypothecate, encumber or otherwise dispose of any such award, such award and
all rights thereunder shall immediately become null and void.
3.4 TAX WITHHOLDING. The Company shall have the right to require, prior to
the issuance or delivery of any shares of Common Stock or the payment of any
cash pursuant to an award made hereunder, payment by the holder of such award
of any Federal, state, local or other taxes which may be required to be
withheld or paid in connection with such award. The Committee may determine
that (i) the Company shall withhold whole shares of Common Stock which would
otherwise be delivered to a holder, having an aggregate Fair Market Value
determined as of the date the obligation to withhold or pay taxes arises in
connection with an award (the "TAX DATE"), or withhold an amount of cash
which would otherwise be payable to a holder, in the amount necessary to
satisfy any such obligation or (ii) the holder may satisfy any such
obligation by any of the following means: (A) a cash payment to the Company,
(B) authorizing the Company to withhold whole shares of Common Stock which
would otherwise be delivered having an aggregate Fair Market Value,
determined as of the Tax Date, or withhold an amount of cash which would
otherwise be payable to a holder, equal to the amount necessary to satisfy
any such obligation, (C) any combination of (A) and (B), in each case to the
extent set forth in the Agreement relating to the award; provided, however,
that the Company shall have sole discretion to disapprove of an election
pursuant to any of clauses (B) and (C) and that in the case of a holder who
is subject to Section 16 of the Exchange Act, the Company may require that
the method of satisfying such an obligation be in compliance with Section 16
and the rules and regulations thereunder. Any fraction of a share of Common
Stock which would be required to satisfy such an obligation shall be
disregarded and the remaining amount due shall be paid in cash by the holder.
3.5 ADJUSTMENT. In the event of any recapitalization, reorganization,
merger, consolidation, combination, exchange of shares, liquidation, spin-off
or other similar change in capitalization or event, or any distribution to
holders of Common Stock other than a regular cash dividend, the number and
class of securities available for the payment of Performance Awards under
this Plan shall be appropriately adjusted by the Committee. The decision of
the Committee regarding any such adjustment shall be final, binding and
conclusive. If any such adjustment would result in a fractional security
being available under this Plan, such fractional security shall be
disregarded.
3.6 CHANGE IN CONTROL.
(a) (1) Notwithstanding any provision in this Plan, in the event of a
Change in Control, the Committee may, but shall not be required to, make such
adjustments to outstanding awards hereunder as it deems appropriate,
including, without limitation, causing the Performance Period applicable to
any outstanding Performance Award to lapse, causing the Performance Measures
applicable to any outstanding Performance Award to be deemed to be satisfied
at the minimum, target or maximum level, or electing that each outstanding
award shall be surrendered to the Company by the holder thereof, and that
each such award shall immediately be canceled by the Company, and that the
holder shall receive, within a specified period of time from the occurrence
of the Change in Control, a cash
<PAGE>
payment from the Company in an amount equal
to the amount payable with respect to such Performance Award if the
applicable Performance Measures were satisfied at the maximum level.
(b) "CHANGE IN CONTROL" shall mean:
(1) the acquisition by any individual, entity or group (a "PERSON"),
including any "person" within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act, of beneficial ownership within the meaning of Rule 13d-3
promulgated under the Exchange Act, of 15% or more of either (i) the then
outstanding shares of common stock of the Company (the "OUTSTANDING COMMON
STOCK") or (ii) the combined voting power of the then outstanding securities
of the Company entitled to vote generally in the election of directors (the
"OUTSTANDING VOTING SECURITIES"); excluding, however, the following: (A) any
acquisition directly from the Company (excluding any acquisition resulting
from the exercise of an exercise, conversion or exchange privilege unless the
security being so exercised, converted or exchanged was acquired directly
from the Company), (B) any acquisition by the Company, (C) any acquisition
by an employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company or (D) any acquisition
by any corporation pursuant to a transaction which complies with clauses (i),
(ii) and (iii) of subsection (3) of this Section 3.6(b);
(2) individuals who, as of the date this Plan is approved by the Board
of Directors constitute the Board of Directors (the "INCUMBENT BOARD") cease
for any reason to constitute at least a majority of such Board; PROVIDED that
any individual who becomes a director of the Company subsequent to the date
this Plan is approved by the Board of Directors whose election, or nomination
for election by the Company's stockholders, was approved by the vote of at
least a majority of the directors then comprising the Incumbent Board shall
be deemed a member of the Incumbent Board; and PROVIDED FURTHER, that any
individual who was initially elected as a director of the Company as a result
of an actual or threatened election contest, as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act, or any other
actual or threatened solicitation of proxies or consents by or on behalf of
any Person other than the Board shall not be deemed a member of the Incumbent
Board;
(3) approval by the stockholders of the Company of a reorganization,
merger or consolidation of the Company or sale or other disposition of all or
substantially all of the assets of the Company (a "CORPORATE TRANSACTION");
excluding, however, a Corporate Transaction pursuant to which (i) all or
substantially all of the individuals or entities who are the beneficial
owners, respectively, of the Outstanding Common Stock and the Outstanding
Voting Securities immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 60% of, respectively, the
outstanding shares of common stock, and the combined voting power of the
outstanding securities of such corporation entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting from
such Corporate Transaction (including, without limitation, a corporation
which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or indirectly) in
substantially the same proportions relative to each other as their ownership,
immediately prior to such Corporate Transaction, of the Outstanding Common
Stock and the Outstanding Voting Securities, as the case may be, (ii) no
Person (other than: the Company; any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation
<PAGE>
controlled by the Company; the corporation resulting from such Corporate
Transaction; and any Person which beneficially owned, immediately prior to
such Corporate Transaction, directly or indirectly, 25% or more of the
Outstanding Common Stock or the Outstanding Voting Securities, as the case
may be) will beneficially own, directly or indirectly, 25% or more of,
respectively, the outstanding shares of common stock of the corporation
resulting from such Corporate Transaction or the combined voting power of the
outstanding securities of such corporation entitled to vote generally in the
election of directors and (iii) individuals who were members of the Incumbent
Board will constitute at least a majority of the members of the board of
directors of the corporation resulting from such Corporate Transaction; or
(4) the consummation of a plan of complete liquidation or dissolution of
the Company.
3.7 NO RIGHT OF PARTICIPATION OR EMPLOYMENT. No person shall have any right
to participate in this Plan. Neither this Plan nor any award made hereunder
shall confer upon any person any right to continued employment by the
Company, any Subsidiary or any affiliate of the Company or affect in any
manner the right of the Company, any Subsidiary or any affiliate of the
Company to terminate the employment of any person at any time without
liability hereunder.
3.8 RIGHTS AS STOCKHOLDER. No person shall have any right as a stockholder
of the Company with respect to any shares of Common Stock or other equity
security of the Company which is subject to an award hereunder unless and
until such person becomes a stockholder of record with respect to such shares
of Common Stock or equity security.
3.9 GOVERNING LAW. This Plan, each award hereunder, and all determinations
made and actions taken pursuant thereto, to the extent not otherwise governed
by the Code or the laws of the United States, shall be governed by the laws
of the State of Delaware and construed in accordance therewith without giving
effect to principles of conflicts of laws.
3.10 FOREIGN EMPLOYEES. Without amending this Plan, the Committee may
grant awards to eligible persons who are foreign nationals on such terms and
conditions different from those specified in this Plan as may in the judgment
of the Committee be necessary or desirable to foster and promote achievement
of the purposes of this Plan and, in furtherance of such purposes the
Committee may make such modifications, amendments, procedures, subplans and
the like as may be necessary or advisable to comply with provisions of laws
in other countries or jurisdictions in which the Company or its Subsidiaries
operates or has employees.
<PAGE>
/x/ Please mark your votes as in this example.
This proxy when properly executed will be voted in the manner directed
herein. If no direction is made, this proxy will be voted FOR proposals 1, 2,
3, and 4.
The Board of Directors recommends a vote FOR proposals 1, 2, 3, and 4.
FOR WITHHELD
1. Election of five Directors / / / /
For, except vote withheld from the following nominee(s):
- ---------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Authorize and approve the IMC Global Inc.
1996 Long-Term Incentive Plan / / / / / /
3. Authorize and approve the Amendment to the
1988 Stock Option Plan, as amended / / / / / /
4. Ratification of Independent Auditors / / / / / /
Please check this box if you plan to attend the Annual Meeting. / /
SIGNATURE(S) DATE
---------------------------------------------------- --------
The signer hereby revokes all proxies heretofore given by the signer to vote
at said meeting or any adjournments thereof.
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
<PAGE>
PROXY
IMC GLOBAL INC.
Proxy Solicited on Behalf of the Board of Directors of
the Company for Annual Meeting, October 17, 1996
The undersigned hereby constitutes and appoints Wendell F. Bueche, Marschall
I. Smith and Rose Marie Williams and each of them, with full power of
substitution, proxies to represent the undersigned at the Annual Meeting of
Stockholders of IMC Global Inc. to be held at the Chicago Botanic Garden,
Alsdorf Auditorium, 1000 Lake-Cook Road, Glencoe, Illinois 60022 on Thursday,
October 17, 1996, at 11:00 a.m. Local Time, and at any adjournments thereof,
and to vote on all matters coming before said meeting, hereby revoking any
proxy heretofore given.
Election of Directors, Nominees (see reverse side)
For A Term Expiring in 1998 For Terms Expiring in 1999
Billie B. Turner Robert E. Fowler, Jr.
Harold H. MacKay
David B. Mathis
Richard L. Thomas
Comments: (Such as change of Address)
- -----------------------------------------
- -----------------------------------------
- -----------------------------------------
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 as noted in the proxy
statement and on the reverse side. The Proxy Committee cannot vote your
shares unless you sign and return this card.
SEE REVERSE
SIDE
