<PAGE>
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
<PAGE>
NOTICE OF 1999 ANNUAL MEETING
OF STOCKHOLDERS
AND PROXY STATEMENT
[IMC Global LOGO]
<PAGE>
March 25, 1999
[IMC LOGO]
Dear Stockholder:
You are cordially invited to attend the IMC Global Inc. 1999 Annual Meeting
of Stockholders. The meeting will be held in the Versailles Suite of The Ritz-
Carlton Chicago, 160 East Pearson Street, Chicago, Illinois 60611 on April 27,
1999 at 12:00 noon local time. Directions to The Ritz-Carlton Chicago are
included in this Proxy Statement. A Notice of the Annual Meeting, a Proxy
Statement covering the formal business of the meeting, the 1998 Annual Report
of the Company, a proxy card and related information are enclosed. At the
meeting we will report on the Company's operations during the fiscal year
ended December 31, 1998.
I encourage you to attend the meeting. If you plan to do so, check the
appropriate box on the accompanying proxy card. Regardless of whether you
expect to attend, please promptly sign and return the proxy card in the
enclosed postage-paid envelope. Even if 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.
I also want to remind you that the Company maintains an Internet site on the
World Wide Web (http://www.imcglobal.com) to provide up-to-date information
about the Company.
Your cooperation and prompt attention to this matter are appreciated.
Sincerely,
Robert E. Fowler, Jr.
Chairman of the Board and Chief Executive Officer
2100 Sanders Road
Northbrook, Illinois 60062-6146
Telephone 847-272-9200
<PAGE>
Headquarters Office:
2100 Sanders Road
Northbrook, Illinois
60062-6146
[IMC LOGO]
----------------
Notice of 1999 Annual Meeting of Stockholders
----------------
To Our Stockholders:
The 1999 Annual Meeting of Stockholders of IMC Global Inc., a Delaware
corporation, will be held in the Versailles Suite of The Ritz-Carlton Chicago,
160 East Pearson Street, Chicago, Illinois 60611 on April 27, 1999, at 12:00
noon local time, to consider and act upon the following matters, each of which
is explained more fully in the following Proxy Statement:
1. To elect three directors for terms expiring in 2002, each as
recommended by the Board of Directors;
2. To authorize and approve the IMC Global Inc. Management Incentive
Compensation Program, as recommended by the Board of Directors;
3. To authorize and approve an amendment to the IMC Global Inc. Amended
and Restated 1988 Stock Option and Award Plan to increase by 5,700,000 the
number of shares available to be awarded thereunder, as recommended by the
Board of Directors;
4. To ratify the appointment of Ernst & Young LLP as independent auditors
to examine and report on the financial statements of IMC Global Inc. for
the year ending December 31, 1999, as recommended by the Board of
Directors; and
5. To transact any other business that may properly come before the 1999
Annual Meeting of Stockholders or any adjournment thereof.
A proxy card for your use in voting on these matters is also enclosed.
In accordance with our Amended and Restated By-Laws and resolutions of the
Board of Directors, only common stockholders of record at the close of
business on March 15, 1999 are entitled to notice of and to vote at the 1999
Annual Meeting of Stockholders.
By Order of the Board of Directors
[IMC LOGO]
Rose Marie Williams
Corporate Secretary
March 25, 1999
<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............................................. 5
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.................. 9
Executive Compensation..................................................... 10
Compensation of Executive Officers....................................... 10
Defined Benefit Pension Plans............................................ 13
Contingent Employment Agreements......................................... 15
Employment Agreements.................................................... 15
Management Compensation and Benefit Assurance Program.................... 16
Severance Agreements..................................................... 16
Non-Competition Agreements............................................... 17
Compensation Committee Interlocks and Insider Participation.............. 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. Management Incentive Compensation
Program............................................................... 22
Approval of the Amendment to the IMC Global Inc. Amended and Restated
1988 Stock Option and Award Plan...................................... 24
Ratification of the Appointment of Independent Auditors................ 29
Miscellaneous Information.................................................. 30
Discretionary Voting Authority........................................... 30
Stockholder Proposals and Nominations for the 2000 Annual Meeting of
Stockholders............................................................ 30
Directions to The Ritz-Carlton Chicago..................................... 31
EXHIBIT A--IMC Global Inc. Management Incentive Compensation Program ...... A-1
EXHIBIT B--IMC Global Inc. Amended and Restated 1988 Stock Option and Award
Plan...................................................................... B-1
</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 1999 Annual Meeting of Stockholders (the "Annual Meeting") to
be held on April 27, 1999. Notice of this meeting to all stockholders of
record entitled to vote as of March 15, 1999 (the "Record Date") 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 the Record Date, there were 114,342,634
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 the Record Date 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 card are first being mailed to stockholders on or about
March 25, 1999.
The Annual Report of the Company for the year ended December 31, 1998 is
being mailed to stockholders with this Proxy Statement, 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 (the "Board") consists of twelve
members. Two of the twelve current directors are also employees of the
Company. Robert E. Fowler, Jr. is Chairman of the Board and Chief Executive
Officer and Douglas A. Pertz 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.
The Board oversees the management of the business of the Company 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.
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, Health and Safety Committee, each of which
plays a significant role in the discharge of the Board's duties and
obligations. The membership of each committee 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 Chairman of the Board and Chief Executive Officer and four non-
employee Directors, met four times in 1998. The responsibilities of the
Executive Committee include acting on matters requiring emergency action when
the full Board cannot be convened.
The Audit Committee. The Audit Committee, which is comprised of three non-
employee Directors, met seven times in 1998. The responsibilities of the Audit
Committee include evaluating the performance and compensation of the
independent auditors of the Company and Phosphate Resource Partners Limited
Partnership, a Delaware limited partnership of which the Company is the
administrative managing general partner ("Phosphate Resource Partners");
reviewing the scope of the annual audits; reviewing the audit results with the
independent auditors, management and internal auditors; and reviewing internal
control systems and internal audit functions.
<PAGE>
The Compensation Committee. The Compensation Committee, which is comprised
of three non-employee Directors, met three times in 1998. 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 three non-employee Directors (together
with the Chairman of the Board and Chief Executive Officer, who serves as a
non-voting member of the Committee), met three times in 1998. The
responsibilities of the Committee on Directors and Board Affairs include
selecting and recommending to the Board nominees for director; 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, Health and Safety Committee. The Environmental, Health
and Safety Committee, which is comprised of four non-employee Directors, met
five times during 1998. The responsibilities of the Environmental, Health and
Safety Committee include reviewing with management and providing oversight for
the Company's policies, programs and procedures relating to the environment,
health and safety ("EHS") and the implementation thereof; reviewing the
Company's compliance with applicable laws, regulations and the EHS policies of
the Company; and reviewing reports from management regarding significant
administrative, regulatory and judicial proceedings and proposed legislation
and rule-making initiatives that may impact the Company.
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 the
Company 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 the Company 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 the Company;
. recognize and reward sustained superior performance by individual
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
There are three major components of the Company's executive officer
compensation: (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 that 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 Company performance, the
Committee intends that base salary will comprise approximately 25% to 35% of
an executive's total compensation.
Bonus. Executive officers and other key employees of the Company and its
subsidiaries participate in the IMC Global Inc. Management Incentive
Compensation Program (the "MICP"). Under the MICP, target annual incentive
awards for eligible executives are equivalent to approximately 45% to 65% of
base salary contingent upon the attainment of pre-established individual
performance objectives and business performance goals established by the
Compensation Committee for the Company as a whole and for each of the
Company's major operating subsidiaries and business segments. The majority of
an executive's MICP award is tied to the attainment of business performance
objectives and the remaining portion of such award is tied to individual
performance objectives. For 1998, individual, Company and business unit
performance objectives applicable to the Company's executives were achieved at
varying levels, resulting in an average of 139% of target, and corresponding
MICP awards were made to such executives.
Long-Term Incentive Awards
Amended and Restated 1988 Stock Option and Award Plan. Under the IMC Global
Inc. Amended and Restated 1988 Stock Option and Award Plan (the "1988 Option
Plan"), the Company uses stock options and restricted stock awards as
components of its compensation package because they align the interests of
officers and other key employees with those of the Company's stockholders.
Stock 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.
1996 Long-Term Incentive Plan. The 1996 Long-Term Incentive Plan (the
"LTIP") is intended to operate in conjunction with the 1988 Option Plan to
further advance the interests of the Company by directly linking a significant
component of the long-term incentive compensation of the Company's officers
and other key employees to the achievement of specific performance goals
established by the Committee. Under the LTIP, performance awards may be made
to an officer or other participating key employee at the beginning of each
performance period (generally consisting of three consecutive fiscal years)
and are earned during such three-year period. At the beginning of each year
during the performance period, annual performance targets are established by
the Committee based on the "Economic Profit" (after-tax operating earnings in
excess of net assets multiplied by the cost of capital) improvement of the
Company, a business unit of the Company or both. Payment of awards for each
three-year performance period is based on the average payout multiple earned
for each of the three years during such performance period. The LTIP was
phased-in during fiscal 1997 and 1998, and payment of awards for the
performance period ended December 31, 1998 is based on the average payout
multiple earned for each of fiscal 1997 and 1998. Payments may be made in
cash, shares of Common Stock, including shares of restricted stock, or a
combination thereof.
Policy on Deductibility of Compensation
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"), limits the tax deductibility by a corporation of
annual compensation in excess of $1 million paid to the chief executive
officer or any of its four most highly compensated executive officers (other
than the chief executive officer). However, performance-based compensation
that has been approved by stockholders is excluded from the $1 million 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."
3
<PAGE>
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 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 in the best interests of IMC Global and its stockholders.
The LTIP, the 1988 Option Plan and the Proposed MICP (as described below)
are designed to permit certain awards made thereunder to meet the performance-
based criteria of Section 162(m) of the Internal Revenue Code.
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. Fowler participates in the executive compensation programs described
throughout this report. Mr. Fowler's total compensation in 1998 reflects his
leadership of constructive change and his significant contributions in leading
the Company's long-term strategic growth and in overseeing the acquisition of
Harris Chemical Group, Inc., the pending divestitures of each of IMC
AgriBusiness and IMC Chemicals and the restructuring of the phosphates
business. Mr. Fowler's base salary was $650,000 for the period of January 1,
1998 through June 30, 1998, at which time his base salary increased to
$750,000, based on the Committee's evaluation of Mr. Fowler's and the
Company's performance and his promotion to Chairman of the Board of Directors
of the Company. Mr. Fowler's incentive compensation included a bonus equal to
$750,752 under the MICP. Mr. Fowler's business performance incentive portion
(i.e., 65%) of his bonus under the MICP was based upon the Company's
achievement of Economic Profit improvement substantially in excess of target.
The remaining 35% of Mr. Fowler's MICP award was based upon his achievement of
individual performance objectives. Mr. Fowler's incentive compensation also
included a payout under the LTIP. This LTIP award was based upon the Company's
performance during 1997 and 1998 and consisted of a cash payment of $746,900
and the right to be granted a restricted stock award during fiscal 1999 equal
to 39,054 shares of Common Stock which vest in full on the earlier of the
fifth anniversary of the date of grant or the date on which the fair market
value of the Company's Common Stock reaches $30 per share. Mr. Fowler's LTIP
award was based upon the Company's achievement of Economic Profit improvement
at target during 1997 and 1998. In addition, Mr. Fowler was awarded an option
to purchase 150,000 shares of Common Stock in connection with the Company's
annual grant of stock options to key employees under the 1988 Option Plan.
Pursuant to the terms of his employment agreement that was entered into upon
his promotion to Chief Executive Officer, Mr. Fowler also was awarded 33,000
restricted shares of Common Stock, vesting in full upon his attainment of age
65.
The Compensation Committee's decisions relating to Mr. Fowler's compensation
were ratified by the Board of Directors.
We believe that IMC Global's historical and future value is inextricably
linked to strong 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,
Raymond F. Bentele, Chairman
Rod F. Dammeyer
David B. Mathis
4
<PAGE>
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 Stock Index (the "S&P 500"), the Standard
& Poor's Specialty Chemicals Index (the "S&P Group Index"), a peer group of
companies selected by the Company (the "1999 Peer Group") and the peer group
of companies selected by the Company in connection with the 1998 Annual
Meeting (the "1998 Peer Group").
The following companies comprise the 1999 Peer Group: Agrium, Inc.,
Mississippi Chemical Corp., Potash Corporation of Saskatchewan, Terra
Industries, Inc. and Terra Nitrogen Co. L.P. In addition to the companies
included in the 1999 Peer Group, the 1998 Peer Group consisted of Asia Pacific
Resources Ltd., ChemFirst Inc., Phosphate Resource Partners and The Scotts
Company. Such companies are not included in the 1999 Peer Group for the
following reasons: Asia Pacific Resources Ltd. is no longer considered to
provide a meaningful comparison with other peers; ChemFirst Inc. is no longer
a fertilizer company; the Company directly owns 51.6% of Phosphate Resource
Partners and indirectly owns 79.9% of one of Phosphate Resource Partners'
principal business operations; and The Scotts Company no longer provides a
meaningful comparison on account of the Company's divestiture of its IMC
Vigoro lawn and garden business. The S&P Group Index is comprised of Ecolab
Inc., Great Lakes Chemical Corporation, Hercules Incorporated, International
Flavors & Fragrances Inc., Morton International, Inc., Nalco Chemical Company,
Sigma-Aldrich Corp. and W.R. Grace & Co. The Company is not included in the
S&P 500. The comparisons set forth below assume an initial investment of $100
and reinvestment of dividends or distributions.
Comparison of Five-Year Cumulative Total Return
IMC Global, S&P 500, S&P Group Index, 1998 Peer Group and 1999 Peer Group
34217pk
<TABLE>
<CAPTION>
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
IMC Global $100 $ 96.64 $181.39 $175.56 $148.32 $ 98.02
S&P 500 $100 $101.32 $139.40 $171.41 $228.59 $293.92
S&P Group Index $100 $ 87.30 $114.75 $117.69 $145.74 $124.11
1998 Peer Group $100 $106.39 $172.71 $194.10 $163.30 $129.37
1999 Peer Group $100 $128.93 $227.51 $263.87 $236.00 $162.90
</TABLE>
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 Amended and Restated 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. During 1998 each non-employee Director received an
annual retainer of $27,000, 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 such Director was assigned. Each non-employee Director also
received an additional annual retainer of $3,000 for services as chairperson
of a Board committee. Prior to the beginning of each calendar year, each non-
employee director may elect to defer some or all of his or her retainer and
attendance fees for such year until a specified future date or until
retirement.
Pursuant to the 1998 Stock Option Plan for Non-Employee Directors (the "1998
Directors Option Plan"), each non-employee Director received options to
purchase 2,500 shares of Common Stock in May 1998. The options were granted at
100% of the fair market value of the Common Stock on the date of grant, are
immediately exercisable and may be exercised at any time while the Director
remains in office and for two years thereafter.
Employee Directors. Employee Directors (currently Messrs. Fowler and Pertz)
receive no fees or remuneration, as such, for service on the Board or any
committee of the Board.
Attendance
The full Board held six regular and five special meetings during 1998. Each
Director was present for at least 75% of the aggregate number of meetings of
the Board and committees of the Board of which such Director was a member that
occurred during 1998 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 the Company's executive officers and others regarding the
business and affairs of the Company.
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 re-election to the
Board after he or she has attained the age of 70. 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 from 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 Common Stock that are
owned beneficially, as of February 15, 1999, by (i) each Director, (ii) each
executive officer named in the Summary Compensation Table and (iii) the
Directors and all executive officers of the Company as a group (22 persons),
with sole voting and investment power unless otherwise indicated.
<TABLE>
<CAPTION>
Number of Shares
Owned Beneficially
as of February 15,
Name 1999(1)
---- ------------------
<S> <C>
Raymond F. Bentele............................. 11,500(2)
Wendell F. Bueche.............................. 401,480(3)(4)
Rod F. Dammeyer................................ 61,500(2)(5)(6)
James M. Davidson.............................. 10,250(2)
Robert E. Fowler, Jr........................... 394,687(4)(5)(7)
Harold H. MacKay............................... 24,100(2)(5)
David B. Mathis................................ 10,500(2)
Donald F. Mazankowski.......................... 11,350(2)(5)
Douglas A. Pertz............................... 6,700
Joseph P. Sullivan............................. 638,175(2)(5)(7)
Richard L. Thomas.............................. 21,500(2)
Billie B. Turner............................... 61,506(2)
C. Steven Hoffman.............................. 129,293(4)
John U. Huber.................................. 276,361(4)(5)(8)
J. Bradford James.............................. 14,333(4)
Robert M. Van Patten........................... 271,251(4)(5)(7)(9)
Directors and all executive officers as a
group......................................... 2,434,015(10)
</TABLE>
- --------
(1) Beneficial ownership of Common Stock is based on information furnished or
confirmed by each Director or executive officer described above. 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 2.13% of the outstanding shares of Common
Stock.
(2) Includes shares of Common Stock purchasable within 60 days of February 15,
1999 through the exercise of options granted to non-employee Directors
under the 1998 Directors Option Plan and the 1994 Stock Option Plan for
Non-Employee Directors (the "1994 Directors Option Plan"), as follows: Mr.
Bentele, 10,500 shares; Mr. Dammeyer, 6,500 shares; Dr. Davidson, 8,500
shares; Mr. MacKay, 6,500 shares; Mr. Mathis, 8,500 shares; Mr.
Mazankowski, 2,500 shares; Mr. Sullivan, 6,500 shares; Mr. Thomas, 6,500
shares; and Mr. Turner, 10,500 shares.
(3) Includes 1,600 shares of Common Stock held by the Nancy Bird Jacobson
Trust dated March 27, 1974 (the "Trust"). Mr. Bueche disclaims beneficial
ownership of the 1,600 shares of Common Stock held by the Trust.
(4) Includes shares of Common Stock purchasable within 60 days of February 15,
1999 through the exercise of options granted under the 1988 Option Plan as
follows: Mr. Bueche, 342,000 shares; Mr. Fowler, 70,333 shares; Mr.
Hoffman, 108,133 shares; Mr. Huber, 28,333 shares; Mr. James, 13,333
shares; and Mr. Van Patten, 24,332 shares.
(5) Includes shares of Common Stock purchasable within 60 days of February 15,
1999 through the exercise of options granted under The Vigoro Corporation
1991 Stock Option Plan, as amended (the "Vigoro Option Plan"), as follows:
Mr. Dammeyer, 8,000 shares; Mr. Fowler, 275,095 shares; Mr. MacKay, 16,000
shares; Mr. Mazankowski, 8,000 shares; Mr. Sullivan, 253,000 shares; Mr.
Huber, 72,441 shares; and Mr. Van Patten, 46,919 shares.
7
<PAGE>
(6) Does not include shares of Common Stock held by Great American Management
and Investment, Inc. through its subsidiary, Eagle-GVI One, Inc. (See "--
Ownership of Common Stock by Others") Mr. Dammeyer is the President and
Chief Executive Officer and is a director of each of Great American
Management and Investment, Inc. and Eagle-GVI One, Inc.
(7) This table does not include units of Phosphate Resource Partners as
follows: Mr. Fowler, 10,000 units; Mr. Sullivan, 300 units; and Mr. Van
Patten, 2,750 units. No other Director or executive officer owns any units
of Phosphate Resource Partners.
(8) Includes 155,000 shares of Common Stock held by the John and Janice Huber
Family Limited Partnership, an Illinois limited partnership (the "Huber
Partnership"). Mr. Huber and his wife are the sole general partners of the
Huber Partnership. Mr. Huber disclaims beneficial ownership of any of the
155,000 shares of Common Stock owned by the Huber Partnership except to
the extent of his ownership interest in the Huber Partnership.
(9) Includes 200,000 shares of Common Stock held by the Robert and Susan Van
Patten Family Limited Partnership, an Illinois limited partnership (the
"Van Patten Partnership"). Mr. Van Patten and his wife are the sole
general partners of the Van Patten Partnership. Mr. Van Patten disclaims
beneficial ownership of any of the 200,000 shares of Common Stock owned by
the Van Patten Partnership except to the extent of his ownership interest
in the Van Patten Partnership.
(10) Includes 1,404,653 shares of Common Stock purchasable within 60 days of
February 15, 1999 by Directors and all executive officers as a group
through the exercise of options granted under the 1988 Option Plan, the
Vigoro Option Plan, the 1998 Directors Option Plan and the 1994 Directors
Option Plan.
Ownership of Common Stock by Others
The Company believes that, as of December 31, 1998, based on filings with
the Securities and Exchange Commission (the "SEC"), only the following named
organizations are the beneficial owners of more than 5% of the outstanding
Common Stock.
<TABLE>
<CAPTION>
Percent of
Shares Outstanding
Beneficially Common
Name and Address of Beneficial Owner Owned Stock
- ------------------------------------ ------------ -----------
<S> <C> <C>
Wellington Management Company, LLP (1)............... 14,478,190 12.66%
75 State Street
Boston, Massachusetts 02109
FMR Corp. (2)........................................ 10,893,116 9.50%
82 Devonshire Street
Boston, Massachusetts 02109
Brinson Partners, Inc. (3)........................... 9,653,800 8.40%
UBS AG
209 South LaSalle Street
Chicago, Illinois 60604-1295
Princeton Services, Inc. (4)......................... 8,581,289 7.40%
Merrill Lynch Asset Management, L.P.
Merrill Lynch Growth Fund, Inc.
800 Scudders Mill Road
Plainsboro, New Jersey 08536
Great American Management and Investment, Inc. (5)... 6,510,286 5.70%
Eagle-GVI One, Inc.
Samstock, L.L.C.
Two North Riverside Plaza
Chicago, Illinois 60606
Institutional Capital Corporation (6)................ 6,156,551 5.40%
225 West Wacker Drive
Suite 2400
Chicago, Illinois 60606
</TABLE>
8
<PAGE>
- --------
(1) Based solely on a Schedule 13G dated February 10, 1999, Wellington
Management Company, LLP ("Wellington") is a parent holding company which,
together with its affiliates, shares voting power over 3,126,310 shares
and shares dispositive power over 14,478,190 shares. Wellington holds the
shares in its capacity as investment adviser to various clients, including
Vanguard Windsor Funds--Windsor Fund ("Vanguard"). Vanguard reported on a
Schedule 13G dated February 10, 1999 that it has sole voting and shared
dispositive power over 11,042,280 of these shares.
(2) Based solely on a Schedule 13G dated February 1, 1999, FMR Corp. is a
parent holding company which, together with its affiliates has sole voting
power with respect to 491,259 shares and sole dispositive power with
respect to 10,893,116 shares.
(3) Based solely on a Schedule 13G dated February 3, 1999, Brinson Partners,
Inc. and UBS AG share voting and dispositive power with respect to the
Common Stock reported. Brinson Partners, Inc. serves as an investment
adviser to UBS AG.
(4) Based solely on a Schedule 13G dated January 8, 1999, Princeton Services,
Inc., Merrill Lynch Asset Management, L.P. and Merrill Lynch Growth Fund,
Inc. share voting and dispositive power with respect to the Common Stock
reported.
(5) Based solely on a Schedule 13G dated February 16, 1999, Great American
Management and Investment, Inc. and Eagle-GVI One, Inc. share voting and
dispositive power over 6,510,286 shares. Samstock, L.L.C. has sole voting
and dispositive power over an additional 300,000 shares, or .3% of the
outstanding Common Stock.
(6) Based solely on a Schedule 13G dated February 10, 1999, Institutional
Capital Corporation has sole voting power over 5,788,961 shares and sole
dispositive power over 6,156,551 shares.
Section 16(a) Beneficial Ownership Reporting Compliance
Each Director and 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 or her 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
1998, with the exception of Mr. Dammeyer, who failed to file in a timely
manner one report pertaining to one transaction on October 12, 1998.
9
<PAGE>
EXECUTIVE COMPENSATION
Compensation of Executive Officers
The following table sets forth information as to the compensation of the
Chairman of the Board and Chief Executive Officer and each of the other four
most highly compensated executive officers of the Company serving as such on
December 31, 1998. The executive officers listed below are collectively
referred to as the "Named Executive Officers" in this Proxy Statement.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
---------------------------- ------------------------------------------------
Awards Payouts
---------- -------
Restricted Securities
Other Annual Stock Underlying LTIP All Other
Name and Principal Fiscal Salary Bonus Compensation Award(s) Options Payouts Compensation
Position Year ($) ($) ($) ($) (#) ($) ($) (10)
- ------------------ ------ ------- ------- ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
R. E. Fowler, Jr. (1) 1998 700,002 750,752 1,922(5) 1,064,250(6) 150,000 746,913(8) 56,858
Chairman & CEO 1997 550,002 423,118 0 0 105,000 480,472 32,211
1996 373,558 311,204 0 0 53,000 185,512 37,897
C. S. Hoffman 1998 262,896 201,115 1,801(5) 0 31,000 297,653 26,569
Senior VP 1997 250,020 128,685 0 0 30,000 118,302 17,601
1996 240,420 117,177 0 0 17,000 336,569(9) 17,044
J. U. Huber (2) 1998 353,870 319,254 1,801(5) 371,250(7) 60,000 443,165 113,833
Senior VP 1997 303,570 253,546 0 0 43,000 192,628 61,541
J. B. James (3) 1998 288,750 238,219 0 0 40,000 382,612 51,730
Senior VP & CFO
R. M. Van Patten (4) 1998 291,551 145,776 1,801(5) 0 0 178,823 78,321
Senior VP 1997 294,423 159,564 0 0 35,000 175,126 25,413
</TABLE>
- -------
(1) Mr. Fowler's employment with the Company commenced on March 4, 1996. Mr.
Fowler was promoted from President and Chief Operating Officer to
President and Chief Executive Officer effective July 1, 1997. On July 1,
1998, Mr. Fowler was promoted to the additional office of Chairman of the
Board. On October 1, 1998, Douglas A. Pertz joined the Company as
President and Chief Operating Officer. Mr. Fowler resigned the position
of President on September 30, 1998 but continued to serve as Chairman of
the Board and Chief Executive Officer.
(2) Mr. Huber was elected Senior Vice President of the Company on February
25, 1997.
(3) Mr. James was elected Senior Vice President and Chief Financial Officer
of the Company on February 16, 1998.
(4) Mr. Van Patten was elected Senior Vice President of the Company on
February 25, 1997.
(5) Represents amounts reimbursed during the fiscal year for the payment of
taxes.
(6) Mr. Fowler received an award of 33,000 shares of restricted stock on
January 29, 1998 which vests in full when he reaches 65 years of age. On
the date of grant, the aggregate value of such award was $1,064,250. At
December 31, 1998, Mr. Fowler held 33,000 shares of restricted stock with
an aggregate value of $705,375. Each share of restricted stock earns a
quarterly dividend of $0.08.
(7) Mr. Huber received an award of 10,000 shares of restricted stock on
February 23, 1998 which vests in full on February 23, 2001. On the date
of grant, the aggregate value of such award was $371,250. At
December 31, 1998, Mr. Huber held 10,000 shares of restricted stock with
an aggregate value of $213,750. Each share of restricted stock earns a
quarterly dividend of $0.08.
(8) The LTIP was approved during fiscal 1996 and phased-in during fiscal 1997
and 1998, with payment of the award for the two-year performance period
ended December 31, 1998 being based on the average payout multiple earned
for each of fiscal 1997 and 1998. One-half of Mr. Fowler's award for the
performance period ended on December 31, 1998 was paid in cash and the
other one-half of such award entitled Mr. Fowler to be granted during
fiscal 1999 shares of restricted stock having an aggregate value on the
date of such grant equal to
10
<PAGE>
one-half of such award. Accordingly, on February 19, 1999, Mr. Fowler was
granted 39,054 shares of Common Stock which vest in full on the earlier of
the fifth anniversary of the date of grant or the date on which the fair
market value of the Company's Common Stock reaches $30 per share. The
amount shown in the above table represents the cash portion of the total
award for Mr. Fowler's performance during the performance period ended on
December 31, 1998.
(9) Reflects restricted shares and contingent stock unit payouts under the
1994 Long-Term Performance Incentive Plan that were deemed fully vested on
June 30, 1996, pursuant to action taken by the Board of Directors. The
awards were originally scheduled to vest on June 30, 1997.
(10) Consists of: (i) the value of the benefit for life insurance premiums paid
by the Company in fiscal 1998 as follows: Mr. Fowler, $56,858; Mr.
Hoffman, $11,718; Mr. Huber, $26,131; Mr. James, $16,184; and Mr. Van
Patten, $15,974; (ii) contributions made by the Company to the savings
component of the Company's Profit Sharing and Savings Plan in fiscal 1998
as follows: Mr. Hoffman, $7,200; Mr. Huber, $2,592; and Mr. Van Patten,
$5,280; (iii) contributions made by the Company for fiscal 1998 to the
profit sharing component of the Company's Profit Sharing and Savings Plan
as follows: Mr. Huber, $19,548; Mr. James, $16,348; and Mr. Van Patten,
$16,348; (iv) estimated contributions to be made by the Company for fiscal
1998 pursuant to the Company's Restoration Plan as follows: Mr. Hoffman,
$7,651; Mr. Huber, $62,260; Mr. James, $19,198; and Mr. Van Patten,
$40,719; and (v) payments in fiscal 1998 (discontinued as of
February 16, 1998) of $3,302 to compensate Mr. Huber for lower pension
benefits to be paid by the Company than were payable under the plan of Mr.
Huber's former employer.
OPTION GRANTS IN THE LAST FISCAL YEAR
The following table sets forth information with respect to all options to
purchase shares of Common Stock granted in 1998 to each of the Named Executive
Officers. There were no grants of stock appreciation rights to the Named
Executive Officers in 1998.
<TABLE>
<CAPTION>
Individual Grants Grant Date Value
------------------------- -------------------
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees in Price Expiration Grant Date
Name Granted(#)(1) Fiscal Year ($/Share)(2) Date Present Value($)(3)
---- ------------- ------------ ------------ ---------- -------------------
<S> <C> <C> <C> <C> <C>
R. E. Fowler, Jr........ 150,000 7.68 30.66 6/18/2008 2,094,000
C. S. Hoffman........... 31,000 1.59 30.66 6/18/2008 432,760
J. U. Huber............. 60,000 3.07 30.66 6/18/2008 837,600
J. B. James............. 40,000 2.05 34.69 2/16/2008 660,400
R. M. Van Patten........ 0 0 -- -- 0
</TABLE>
- --------
(1) All options granted and reported in this table have the following terms:
each option vests over a three-year period, with one-third of the options
becoming exercisable at the end of each of the first three years following
the date of grant and with the entire option becoming exercisable at the
end of the third year, unless the vesting schedule is accelerated in
accordance with the Company's 1988 Option Plan.
(2) Exercise price is the fair market value 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 the New York Stock Exchange.
(3) The Black-Scholes Option Pricing Model was used to determine the grant date
present value of the options to purchase shares of Common Stock granted in
1998 by the Company. Based on the Black-Scholes Model, the present value of
each option granted to Mr. James during fiscal 1998 is $16.51 and the
present value of each option granted to each other Named Executive Officer
during fiscal 1998 is $13.96. The material assumptions and adjustments
incorporated in the model in estimating the value of the options include
the following: (i) option exercise prices of $34.69 and $30.66 for the
option grants made on February 16, 1998, and June 18, 1998, respectively,
in each case 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
5.57% and 5.50% on the option grants
11
<PAGE>
made on February 16, 1998 and June 18, 1998, respectively, in each case
representing the interest rate on a U.S. Treasury security on the date of
grant with a maturity date corresponding to that of the option term; (iv)
volatilities of 30.95% and 29.62% on the option grants made on February 16,
1998 and June 18, 1998, respectively, in each case calculated using daily
stock prices for the one-year period prior to the date of grant; (v)
dividends at the rate of $0.32 per share, representing the annualized
dividends paid with respect to a share of Common Stock at the date of
grant; and (vi) reductions of approximately 17.57% on all option grants to
reflect the probability of forfeiture due to termination prior to vesting,
and approximately 15.61% and 15.44% for the option grants made on February
16, 1998 and June 18, 1998, respectively, in each case to reflect the
probability of a shortened option term due to termination of employment
prior to the option exercise date. The ultimate value of the options will
depend upon the future market price of the Common Stock, which cannot be
forecast with reasonable accuracy. The actual value, if any, an optionee
will realize upon exercise of an option will depend upon the excess of the
market value of the Common Stock over the exercise price on the date the
option is exercised.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL
YEAR-END OPTION VALUES
The following table sets forth information with respect to all exercises of
options to purchase shares of Common Stock in 1998 by each of the Named
Executive Officers and all outstanding options to purchase Common Stock held
by such individuals as of December 31, 1998.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised In-
Options at Fiscal the-Money Options
Year-End(#) at Fiscal Year-End($)(1)
Shares Acquired Value ------------------------- --------------------------
Name on Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- ----------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
R. E. Fowler, Jr........ 0 0 345,428 / 237,667 376,496 / --
C. S. Hoffman........... 0 0 108,133 / 56,667 251,740 / --
J. U. Huber............. 0 0 100,774 / 95,667 97,968 / --
J. B. James............. 0 0 13,333 / 26,667 -- / --
R. M. Van Patten........ 0 0 71,251 / 29,668 -- / --
</TABLE>
- --------
(1) The value is calculated based on a December 31, 1998 stock price of
$21.375 as quoted on the New York Stock Exchange, less the relevant
exercise price.
LONG-TERM INCENTIVE PLANS--AWARDS IN
LAST FISCAL YEAR
The following table sets forth certain information concerning awards made
during fiscal 1998 to the Named Executive Officers under the LTIP.
<TABLE>
<CAPTION>
Performance or Estimated Future Payouts Under
Number of Shares, Other Period Until Non-Stock Price-Based Plans
Units or Other Maturation ---------------------------------
Name Rights(#) or Payout Threshold($) Target($) Maximum($)
---- ----------------- ------------------ ------------ --------- ----------
<S> <C> <C> <C> <C> <C>
R. E. Fowler, Jr........ -- 3 years 0 616,732 1,850,196
C. S. Hoffman........... -- 3 years 0 122,888 368,664
J. U. Huber............. -- 3 years 0 237,440 712,320
J. B. James............. -- 3 years 0 215,863 647,589
R. M. Van Patten........ -- 3 years 0 135,172 405,516
</TABLE>
Awards under the LTIP are made at the beginning of each three-year
performance period and are earned based on the performance of the Company or a
business unit of the Company or a combination thereof during such three-year
period. For Messrs. Fowler, Hoffman and James, awards are earned based on the
performance of
12
<PAGE>
the Company. For Messrs. Huber and Van Patten, awards are earned based on the
performance of a business unit of the Company, namely IMC-Agrico and IMC
Kalium for Mr. Huber and IMC AgriBusiness for Mr. Van Patten. Each award made
to a participant is expressed as a percentage of the salary midpoint for the
salary grade of such participant. For the performance period commencing in
fiscal 1998, such percentages were 80% for Mr. Fowler, 50% for Mr. Hoffman,
60% for Mr. Huber, 60% for Mr. James and 50% for Mr. Van Patten. At the
beginning of each year during the performance period annual performance
targets are established based on Economic Profit improvement of the Company, a
business unit of the Company or a combination thereof. A performance target is
determined for the Company and each of the Company's business units each year
during the performance period, with each participant earning 100% of such
participant's target award if the annual performance target of the Company, or
the participant's business unit, or a combination thereof, is met during each
fiscal year in the performance period, or a greater or lesser percentage of
such target award if the average payout multiple earned for the three fiscal
years in the performance period is greater or less than 100%. The LTIP was
approved during fiscal 1996 and phased-in during fiscal 1997 and 1998, with
payouts for fiscal 1997 being based on the payout multiple earned for that
year and payouts for 1998 being based on the average payout multiple earned
for fiscal 1997 and 1998. All future awards will be based on a full three-year
performance period. Payouts of the awards may be made in cash, shares of
Common Stock of the Company, including shares of restricted stock, or a
combination of the foregoing. The payouts for fiscal 1998 were made completely
in cash, except that only one-half of Mr. Fowler's award for fiscal 1998 was
paid in cash. The other one-half of Mr. Fowler's award entitled him to be
granted during fiscal 1999 shares of restricted stock having an aggregate
value on the date of such grant equal to one-half of such award.
All of the terms relating to the satisfaction of the annual performance
targets and the termination of the performance period relating to an
outstanding award, or the cancellation of such award, upon the termination of
employment of a participant, whether by reason of disability, retirement,
death or other termination, is subject to the determination of the
Compensation Committee. In addition, the Compensation Committee, in its
discretion, may make adjustments to outstanding awards in the event of a
Change in Control of the Company (as defined below), including causing the
performance period relating to such award to lapse and the performance targets
applicable to such award to be deemed attained at the maximum level. A "Change
in Control" of the Company will occur as of the first day that any one of the
following conditions has been satisfied: certain acquisitions of 15% or more
of the Common Stock, or 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.
Defined Benefit Pension Plans
The Company maintains a non-contributory qualified defined benefit pension
plan which covers certain salaried employees, including certain Named
Executive Officers. The annual pension to which a participant is entitled at
normal retirement age (65) is an amount based on the 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. Remuneration for these purposes includes salary and 50% of bonus as
shown in the Summary Compensation Table.
The Internal Revenue 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 Internal Revenue
Code's limitations, the Board of Directors has approved a non-qualified plan,
the Supplemental Benefit Plan, which provides for payment of amounts in excess
of the Internal Revenue Code's limitations from the Company's operating funds
to its participants. Of the Named Executive Officers, only Mr. Hoffman
participates in the Supplemental Benefit Plan.
13
<PAGE>
The following table shows the estimated annual pension benefits, which would
be payable to the eligible Named Executive Officers for life at normal
retirement under the qualified pension plan, calculated without regard to the
Internal Revenue Code limitations. (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 Covered Remuneration for Annual Benefits for Years of Service Indicated
Pension Purposes in Ten Years -----------------------------------------------------
Preceding Normal Retirement 35 Years
Date 10 Years 15 Years 20 Years 25 Years 30 Years or More
- ------------------------------ -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$ 300,000.............. $ 52,100 $ 78,100 $104,200 $130,200 $151,000 $171,800
$ 400,000.............. $ 69,900 $104,800 $139,800 $174,700 $202,600 $230,600
$ 500,000.............. $ 87,700 $131,500 $175,400 $219,200 $254,300 $289,400
$ 600,000.............. $105,500 $158,200 $211,000 $263,700 $305,900 $348,200
$ 700,000.............. $123,300 $184,900 $246,600 $308,200 $357,600 $407,000
$ 800,000.............. $141,100 $211,600 $282,200 $352,700 $409,200 $465,800
$ 900,000.............. $158,900 $238,300 $317,800 $397,200 $460,900 $524,600
$1,000,000.............. $176,700 $265,000 $353,400 $441,700 $512,500 $583,400
$1,100,000.............. $194,500 $291,700 $389,000 $486,200 $564,200 $642,200
</TABLE>
Credited service under the pension plan as of December 31, 1998 for the
eligible Named Executive Officers is as follows: Mr. Fowler, 2 years, 10
months and Mr. Hoffman, 24 years, 9 months.
The Company also maintains a defined benefit Supplemental Executive
Retirement Plan, a non-contributory, non-qualified plan in which certain key
executives have participated and in which Mr. Fowler is the only remaining
participant. Mr. Hoffman was a participant in the plan prior to January 1,
1998. Effective January 1, 1998, Mr. Hoffman's participation in this plan was
terminated and Mr. Hoffman became a participant in the new defined
contribution Supplemental Executive Retirement Plan described below and was
credited with an opening balance in the amount of $236,888 in place of his
former benefit under this plan. 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 qualified defined benefit
pension plan.
The following table shows the additional amount of annual retirement
benefits payable under the Supplemental Executive Retirement Plan beginning at
age 65, based upon 10, 15 and 20 years of service.
<TABLE>
<CAPTION>
Benefits for Years of
Annual Average of Highest Five Years Covered Service Indicated
Remuneration for Pension Purposes in Ten --------------------------
Years Preceding Normal Retirement Date 10 Years 15 Years 20 Years
-------------------------------------------- -------- -------- --------
<S> <C> <C> <C>
$ 900,000.......................................... $140,000 $275,000 $410,000
$1,000,000.......................................... $170,000 $320,000 $470,000
$1,100,000.......................................... $200,000 $365,000 $530,000
</TABLE>
Effective January 1, 1998, the Company added a profit sharing provision to
the Investment Plan for Salaried Employees of IMC Global Operations Inc. (the
"Profit Sharing and Savings Plan"). The Profit Sharing and Savings Plan, a
defined contribution plan, became the primary retirement vehicle for all
employees not covered by a collective bargaining agreement who were either (1)
not participants in the qualified defined benefit pension plan or (2) hired on
or after January 1, 1998. Employees who were participants in the qualified
defined benefit pension plan as of December 31, 1997 were given the option of
remaining in such plan, or of becoming a participant in the Profit Sharing and
Savings Plan effective January 1, 1998. Of the Named Executive Officers, Mr.
Huber, Mr. James and Mr. Van Patten participate in the Profit Sharing and
Savings Plan.
Effective January 1, 1998, the Company adopted a new non-qualified defined
contribution Supplemental Executive Retirement Plan which covers certain Named
Executive Officers and certain other key executives. All of the Named
Executive Officers participate in the plan with the exception of Mr. Fowler.
14
<PAGE>
Contingent Employment Agreements
An agreement with Mr. Hoffman which will become effective in the event of a
Change in Control of the Company is intended to assure the Company of his
continued services. In general, the agreement provides that, if there is a
Change in Control, the executive shall remain employed by the Company in his
then current position at the then current taxable 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 agreement. 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.
Certain provisions of the Internal Revenue Code impose a 20% excise tax upon
an executive of a corporation and deny federal income tax deductibility to the
corporation as to a significant portion of the compensation 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 before the year in which the Change in Control
occurs. The amounts estimated to be payable under the aforesaid agreement, if
this agreement becomes effective, could be large enough to subject Mr. Hoffman
to the excise tax and to deprive the Company of a deduction. The Company has
agreed with the executive that, if an excise tax were imposed 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 agreement
were to be breached by the Company within three years thereafter, the amount
of cash that would be payable in respect of this agreement is estimated (as of
March 1, 1999 and excluding any "grossed-up" reimbursements for taxes) to be
$1.2 million.
Employment Agreements
In January 1998, Mr. Fowler and the Company entered into an employment
agreement (the "Employment Agreement") which provides for an annual base
salary of at least $650,000, and participation in the MICP, the LTIP and the
1988 Option Plan. The Employment Agreement also provides that Mr. Fowler will
participate in the Company's qualified defined benefit pension plan, the
savings component of the Profit Sharing and Savings Plan and the defined
benefit Supplemental Executive Retirement Plan with his vesting service period
under each plan including the period of his employment with The Vigoro
Corporation ("Vigoro"). In addition, the Employment Agreement provides for the
grant of a restricted stock award equal to 33,000 shares of Common Stock which
vest upon Mr. Fowler's attainment of age 65. Should Mr. Fowler's employment be
terminated, other than for "cause," by the Company prior to October 31, 2000
or should Mr. Fowler resign for "good reason" (as defined in the Employment
Agreement), Mr. Fowler is entitled to receive his base salary, an annual bonus
equal to the highest bonus received during the three previous years under the
MICP and standard employee benefits for the balance of the employment period.
If his employment is terminated because of a Change in Control, Mr. Fowler is
entitled to a lump sum severance allowance in an amount equal to the sum of
three times his base salary and three times his average annual incentive
compensation and "grossed-up" reimbursement of any Change in Control excise
tax as provided under the Contingent Employment Agreement of Mr. Hoffman
discussed above. If Mr. Fowler's employment is terminated for cause, death or
inability to perform, he or his estate is to receive accrued but unpaid base
salary, vacation and bonus. The Employment Agreement supersedes and terminates
all prior agreements between Mr. Fowler and the Company, including Mr.
Fowler's Non-Competition Agreement dated March 1, 1996 (which expired March 1,
1999), participation in The Vigoro Corporation Severance Plan (which expired
in November, 1998) and his letter agreement dated April 1, 1996 regarding a
Change in Control and the related tax gross-up agreement dated April 16, 1996.
15
<PAGE>
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, grantor trusts have been established with the Wachovia
Bank of North Carolina, N.A. of Winston-Salem, North Carolina (the "Trustee")
to ensure appropriate payment when due of commitments, awards and benefits
under the MICP (including any deferred bonuses), the Supplemental Executive
Retirement Plan, the 1988 Option Plan, the contingent employment agreements and
gross-up arrangements referred to under the caption "--Contingent Employment
Agreements" and "--Employment Agreements." 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. The assets of these trusts are subject to the claims of the Company's
creditors.
Assuming a Change in Control were to occur, distributions by the Trustee
would be made only if an officer were terminated involuntarily 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. Full funding
under the arrangements that could be required would depend upon the Company's
outstanding commitments subject to the Program from time to time.
Severance Agreements
In March of 1999, in order to provide Mr. James with appropriate assurances
to continue to perform his duties and responsibilities as the Company's Senior
Vice President and Chief Financial Officer, and thereby promote the stability
of the Company, the Company entered into a severance agreement (the "Executive
Severance Agreement") with Mr. James for an initial term of two years.
The Executive Severance Agreement provides that Mr. James will receive
"Executive Severance Benefits" if his employment is terminated in circumstances
that constitute an "Executive Severance Event" and he executes a release of
claims. The Executive Severance Benefits include an amount equal to two times
Mr. James' base salary plus two times the highest annual bonus earned for any
of the three years immediately preceding his termination, paid in equal monthly
installments over a two-year period. The Executive Severance Benefits also
include continuation of medical, dental, life and disability insurance coverage
for the lesser of two years or until Mr. James becomes eligible to participate
in and receive similar benefits under another employer's plan. An Executive
Severance Event occurs if, during the term of the Executive Severance
Agreement, Mr. James' employment is terminated: (i) by the Company other than
for cause, disability or death; or (ii) by Mr. James within 90 days after he
has or should have knowledge that "good reason" (as defined in the Executive
Severance Agreement) exists. As of March 1, 1999, the amount of cash that would
be payable pursuant to the severance provisions of the Executive Severance
Agreement is estimated to be $1.2 million.
In consideration of the Executive Severance Benefits, the Executive Severance
Agreement provides that for the two-year period following Mr. James' separation
from employment with the Company for any reason, Mr. James will not compete
with the Company. During such non-competition period, Mr. James is prohibited
from rendering services to any business enterprise in North America in the
business of producing and distributing potash, phosphate, animal feed
ingredients or salt or any other significant business in which the Company is
engaged at the time of termination. In addition, Mr. James is prohibited from
soliciting, in competition with the Company, any client, customer or prospect
of the Company and from soliciting any employee, contractor or agent of the
Company to enter into any employment, agency or other relationship in
competition with the Company.
The Executive Severance Agreement further provides that in the event of a
Change in Control of the Company, the Change in Control provisions of the
Executive Severance Agreement become effective and the severance provisions
described above become void. These Change in Control provisions provide that,
in the event of a Change in Control of the Company, Mr. James 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,
16
<PAGE>
subject to an earlier expiration due to voluntary resignation, mandatory
retirement, disability or termination for cause, all as defined in the
Executive Severance Agreement. If the Company breaches such Change in Control
provisions, Mr. James is entitled to a lump sum Change in Control severance
allowance in an amount equal to the sum of three times his base salary and
three times his average annual incentive compensation for the three prior
years and "grossed-up" reimbursement of any Change in Control excise tax
imposed on Mr. James as provided under the Contingent Employment Agreement of
Mr. Hoffman described above. If a Change in Control were to occur and the
Change in Control provisions of the Executive Severance Agreement were to be
breached by the Company within three years thereafter, the amount of cash that
would be payable in respect of these Change in Control provisions of the
Executive Severance Agreement is estimated (as of March 1, 1999 and excluding
any "grossed-up" reimbursements for taxes) to be $1.8 million.
In connection with the pending divestiture of IMC AgriBusiness, a business
unit of the Company, the Company has entered into severance agreements (the
"Severance Agreements") with certain key employees working for IMC
AgriBusiness, including Mr. Van Patten who currently serves as a Senior Vice
President of the Company. Each Severance Agreement provides that the covered
employee will receive severance benefits ("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 one, two or three years' pay (i.e., the employee's base
salary plus the highest annual bonus earned for any of the prior three years
determined as of August 1, 1998), paid in equal monthly installments over the
applicable one, two or three-year period. Severance Benefits also include
continuation of medical, dental and life insurance coverage for the lesser of
one year or until the employee becomes eligible to participate in and receive
similar benefits under another employer's plan. A Severance Event occurs if,
within three years of August 1, 1998, the employee's employment is terminated:
(i) by the employer other than for cause, disability or death; or (ii) by the
employee within 60 days after the employee has or should have knowledge that
"good reason" (as defined in the Severance Agreement) exists. An employee is
not entitled to Severance Benefits under the Severance Agreement if such
employee is terminated from employment with IMC AgriBusiness and subsequently
offered a comparable position with the Company or with the purchaser of IMC
AgriBusiness or accepts any position with the Company or such purchaser. The
Severance Agreements obligate the Company to require the purchaser of IMC
AgriBusiness to assume responsibility for the severance obligations thereunder
with respect to those employees who accept employment with the purchaser. The
Severance Agreements supersede and terminate all prior severance and similar
agreements with the Company, including the non-competition agreements, dated
March 1, 1996, entered into in connection with the Company's merger with
Vigoro. The amount of cash that would be payable in respect of Mr. Van
Patten's Severance Agreement is $1,356,627 (i.e., three years' compensation).
Other than as described above, no named Executive Officer is eligible to
receive Severance Benefits under the Severance Agreements.
Non-Competition Agreements
In consideration of the substantial Severance Benefits available to certain
key employees of IMC AgriBusiness under the Severance Agreements described
above, the Company entered into non-competition agreements (the "Non-
Competition Agreements") with such employees, including Mr. Van Patten. The
Non-Competition Agreements provide that, for the period during which the
employee is receiving Severance Benefits under the Severance Agreement, the
employee will not compete with the Company. During such non-competition
period, those employees who executed Non-Competition Agreements will be
prohibited from rendering services to any business enterprise in North America
in the business of producing, brokering and/or distributing in a wholesale
capacity crop nutrients, animal feed ingredients, salt, soda ash, sodium
bicarbonate, sodium sulfate or boron chemicals. In addition, each employee
subject to a Non-Competition Agreement is prohibited from soliciting, in
competition with the Company, any client, customer or prospect of the Company
and from soliciting any employee, contractor or agent of the Company to enter
into any employment, agency or other relationship in competition with the
Company.
Other than as described above, no Named Executive Officer is a party to a
Non-Competition Agreement.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of Directors of the Company is
comprised of Messrs. Bentele, Dammeyer and Mathis. Mr. Fowler, Chairman of the
Board and Chief Executive Officer of the Company, is the Chairman of the
compensation committee of the board of directors of Anixter International,
Inc. ("Anixter"). Mr. Dammeyer is the Vice Chairman of Anixter and is a member
of the Compensation Committee of the Board of Directors of the Company.
17
<PAGE>
THE ANNUAL MEETING
Proxies and Voting at the Annual Meeting
As of the close of business on March 15, 1999 (the "Record Date"), there
were 114,342,634 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 the Record Date 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 adoption of the IMC Global
Inc. Management Incentive Compensation Program, (iii) in favor of the adoption
of the amendment to the IMC Global Inc. Amended and Restated 1988 Stock Option
and Award Plan, (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 are 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.
A stockholder may, with respect to the election of Directors, (i) vote for
all three nominees named herein, (ii) withhold authority to vote for all such
nominees or (iii) vote for all such nominees other than any nominee with
respect to whom the stockholder withholds authority to vote. 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 three persons standing for election for the class of Directors
whose term expires at the 2002 Annual Meeting who receive the greatest number
of votes will be elected to serve as Directors. Therefore, withholding
authority to vote for one or more Directors and non-voted shares with respect
to the election of Directors will not affect the outcome of the election of
Directors. A stockholder may, with respect to each other matter specified in
the notice of the meeting, (i) vote "FOR," (ii) vote "AGAINST" or (iii)
"ABSTAIN" from voting. 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 nonetheless 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 $7,000, 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.
18
<PAGE>
Prompt execution and return of the proxy card 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.
Matters to Be Considered at the Annual Meeting
I. Election of Directors
The Board of Directors of the Company consists of twelve members. Two of the
twelve members of the Board are also employees of the Company. Robert E.
Fowler, Jr. is Chairman of the Board and Chief Executive Officer, and Douglas
A. Pertz 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.
Four Directors currently serve in the class of Directors whose term expires
at the Annual Meeting. Two of these four Directors, Wendell F. Bueche and
Billie B. Turner, intend to retire from the Board at the Annual Meeting and,
therefore, will not be standing for re-election. James M. Davidson and Joseph
P. Sullivan, each of whose term expires at the Annual Meeting, will stand for
re-election at the Annual Meeting. In order to achieve balance among the
classes of Directors, David B. Mathis, who is currently serving in the class
of Directors whose term expires at the 2000 Annual Meeting, has agreed to
stand for re-election at the Annual Meeting to a new three-year term as a
member of the class of Directors whose term expires in 2002. The Board intends
to reduce the number of Directors which constitutes the entire Board from
twelve to ten 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 James M. Davidson, David B. Mathis and Joseph P.
Sullivan to serve until the Annual Meeting of Stockholders in 2002 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 card will be voted for such
substitute nominee or nominees as may be selected by the Board.
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 are set forth
below.
NOMINEES FOR ELECTION AS A DIRECTOR FOR A TERM EXPIRING IN 2002
James M. Davidson, Ph.D.
Age 64. Vice President Emeritus, University of Florida. Dr.
Davidson joined the University of Florida, Gainesville,
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 in 1986, and Vice President
for Agriculture and Natural Resources in 1992. He retired
from the University of Florida in 1998. Dr. Davidson has
served as a Director of the Company since July 1991. Dr.
Davidson currently serves as Chairman of the Audit Committee
and as a member of the Environmental, Health and Safety
Committee.
19
<PAGE>
David B. Mathis
Age 60. Chairman and Chief Executive Officer of Kemper
Insurance Companies. Mr. Mathis served as Chairman, President
and Chief Executive Officer of Kemper Insurance Companies
from March 1996 to September 1996. From February 1992 through
February 1996, he served as Chairman and Chief Executive
Officer of Kemper Corporation. Mr. Mathis has been employed
by Kemper since 1960 in management positions of successively
increasing importance. He is currently a director of Kemper
Insurance Companies. Mr. Mathis also 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
trustees of the Chicago Symphony Orchestra. Mr. Mathis has
served as a Director of the Company since February 1995. Mr.
Mathis currently serves as Chairman of the Committee on
Directors and Board Affairs and as a member of the Executive
Committee and the Compensation Committee.
[PHOTO OF DAVID B. MATHIS APPEARS HERE]
Joseph P. Sullivan
Age 65. Retired Chairman of the Board of Vigoro, a position
he held from March 1991 through February 1996. From March
1991 to September 1994, Mr. Sullivan served as Chief
Executive Officer of Vigoro. He served as Chief Operating
Officer of Vigoro from March 1991 to July 1993 and as
President from January 1986 to March 1991. Mr. Sullivan
served as a director of Vigoro from January 1986 through
February 1996. He is a director of American Classic Voyages
Co. In addition, Mr. Sullivan is a member of the board and
the executive committee of the National Opinion Research
Center and is a member of the board and president-elect of
the International Food and Agribusiness Management
Association. Mr. Sullivan has served as a Director of the
Company since March 1996. Mr. Sullivan currently serves as a
member of the Executive Committee and as a member of the
Environmental, Health and Safety Committee.
[PHOTO OF JOSEPH P. SULLIVAN APPEARS HERE]
DIRECTORS CONTINUING IN OFFICE
Raymond F. Bentele
Age 62. Retired President and Chief Executive Officer,
Mallinckrodt Inc. Mr. Bentele 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 Inc., Leggett & Platt Inc. and
was previously a director of IMC Global from 1990 to 1991.
Mr. Bentele has served as a Director of the Company since
June 1994, and his term expires in April 2001. Mr. Bentele
currently serves as Chairman of the Compensation Committee
and as a member of the Committee on Directors and Board
Affairs.
[PHOTO OF RAYMONG F. BENTELE APPEARS HERE]
Rod F. Dammeyer
Age 58. Managing Partner of Equity Group Investments, Inc.
Since February 1998 Mr. Dammeyer has served as Vice Chairman
of Anixter. From January 1993 to February 1998, Mr. Dammeyer
served as Chief Executive Officer of Anixter, and from
October 1985 to February 1998 he served as President of
Anixter. In addition, Mr. Dammeyer has served as a director
of Anixter since October 1985. He is also a trustee of Van
Kampen Investments, Inc. closed end funds. Mr. Dammeyer is a
director of Antec Corporation, CNA Surety Corp., Inc., Grupo
Azucarero Mexico (GAM), Jacor Communications, Inc., Matria
Healthcare, Inc., Metal Management, Inc., Stericycle, Inc.,
TeleTech Holdings, Inc. and Transmedia Network, Inc. He
previously served as a director of Vigoro from August 1993
until March 1996 and has served as a Director of the Company
since March 1996. His term expires in April 2001. Mr.
Dammeyer currently serves on the Compensation Committee.
[PHOTO OF ROD F. DAMMEYER APPEARS HERE]
20
<PAGE>
Robert E. Fowler, Jr.
Age 63. Chairman of the Board and Chief Executive Officer of
the Company. Mr. Fowler served as Chairman, President and
Chief Executive Officer of the Company from July 1, 1998
through September 30, 1998. From July 1, 1997 through June
30, 1998, he served as President and Chief Executive Officer
of the Company. Mr. Fowler served as President and Chief
Operating Officer of the Company from March 1996 through June
1997. He served as President and Chief Executive Officer of
Vigoro from September 1994 through February 1996 and as
President and Chief Operating Officer from July 1993 to
September 1994. He is a director of Anixter. Mr. Fowler
previously served as a director of Vigoro from August 1993
through February 1996 and has served as a Director of the
Company since March 1996. His term expires in April 2000. Mr.
Fowler currently serves as Chairman of the Executive
Committee and is a non-voting member of the Committee on
Directors and Board Affairs.
[PHOTO OF ROBERT E. FOWLER, JR. APPEARS HERE]
Harold H. MacKay
Age 58. Partner of the law firm MacPherson Leslie & Tyerman
in Regina, Saskatchewan, Canada. Mr. MacKay served as
Managing Partner of MacPherson Leslie & Tyerman from 1989
through 1996 and is presently the Chairman of the firm, a
position to which he recently returned after serving as Chair
of the Task Force on the Future of the Canadian Financial
Services Sector. He 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 a Director of the Company since March
1996. His term expires in April 2000. Mr. MacKay currently
serves as Chairman of the Environmental, Health and Safety
Committee and as a member of the Audit Committee.
[PHOTO OF HAROLD H. MACKAY APPEARS HERE]
Donald F. Mazankowski
Age 63. Now retired from politics, Mr. Mazankowski served as
Canada's Minister of Finance from 1991 to 1993 and Minister
of Agriculture from 1988 to 1991. From 1986 to 1993, he
served as Canada's Deputy Prime Minister and President of the
Queen's Privy Council. Mr. Mazankowski is a director of the
Weyerhaeuser Company and its subsidiary, Weyerhaeuser Canada
Ltd., Shaw Communications Inc., Power Corporation of Canada,
The Great West Life Assurance Co., Investors Group Inc., Gulf
Canada Resources Ltd., Gulf Indonesia Resources Ltd.,
Canadian Utilities Limited and Canada Brokerlink Inc. Mr.
Mazankowski previously served as a director of Vigoro from
February 1994 until March 1996 and has served as a Director
of the Company since October 1997. His term expires in April
2001. He is a member of the Audit Committee.
[PHOTO OF DONALD F. MAZANKOWSKI APPEARS HERE]
Douglas A. Pertz
Age 44. President and Chief Operating Officer of the Company
since October 1998. From 1995 to 1998, Mr. Pertz served as
President and Chief Executive Officer and as a director of
Culligan Water Technologies, Inc., a leading manufacturer and
distributor of water purification and treatment products.
From 1994 until January 1995, he was Corporate Vice President
and Group Executive of the Danaher Corporation ("Danaher"), a
manufacturer of products in the tool, process/environmental
controls and transportation industries and was also President
and a director of Danaher's subsidiary, Hennessy Industries,
a manufacturer of transportation equipment. In
[PHOTO OF DOUGLAS A PERTZ APPEARS HERE]
21
<PAGE>
addition, from 1990 to January 1995, he was President, Chief
Executive Officer and a director of Danaher's subsidiary,
NMTC, Inc. d/b/a Matco Tools, a manufacturer of hand tools,
and NMTC, Inc.'s predecessor company, Matco Tools
Corporation. Mr. Pertz has served as a Director of the
Company since October 1998, and his term expires in April
2001.
Richard L. Thomas
Age 68. Retired Chairman of First Chicago NBD Corporation and
The First National Bank of Chicago. Mr. Thomas is also a
director of CNA Financial Corporation, The PMI Group, Inc.,
The Sabre Group Holdings, Inc., Sara Lee Corporation,
Scotsman Industries, Inc. and Unicom Corporation. Mr. Thomas
is a life trustee of the Chicago Symphony Orchestra, a
trustee of Rush-Presbyterian-St. Luke's Medical Center
(Chicago), Northwestern University and Kenyon College. Mr.
Thomas has served as a Director of the Company since June
1996, and his term expires in April 2000. Mr. Thomas
currently serves on the Executive Committee and the Committee
on Directors and Board Affairs.
[PHOTO OF RICHARD L. THOMAS APPEARS HERE]
The Board of Directors recommends a vote FOR the election of the three
nominees listed above (Proposal No. 1 on the proxy card).
II. Approval of the IMC Global Inc. Management Incentive Compensation Program
The Board of Directors is proposing for stockholder approval the IMC Global
Inc. Management Incentive Compensation Program (the "Proposed MICP"). The
Proposed MICP is intended to provide 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 best interests of the
Company's stockholders. If approved by the stockholders, the Proposed MICP
will replace the existing MICP, which was terminated effective December 31,
1998. The Proposed MICP is intended to comply, whenever possible and
consistent with the objectives of the Proposed MICP, with the requirements of
Section 162(m) of the Internal Revenue Code ("Section 162(m)"). The
relationship between Section 162(m) and the Proposed MICP is described more
fully below.
Description of the Proposed MICP
Administration. The Proposed MICP will be administered by the Compensation
Committee which currently consists of three 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).
Section 162(m) generally limits to $1 million the amount that a publicly
held corporation is allowed to deduct each year 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). As a
result, and based on certain Internal Revenue Service regulations,
compensation under the Proposed MICP attributable to "business performance
incentive awards" (defined below) is expected not to be subject to the $1
million deduction limit under Section 162(m).
22
<PAGE>
Subject to the express provisions of the Proposed MICP, the Compensation
Committee will have the authority to select officers and other key employees
of the Company, and its subsidiaries, who will receive performance incentive
awards and to determine all of the terms and conditions of each award.
Approximately 160 officers and other key employees are eligible to participate
in the Proposed MICP. All performance incentive awards will be subject to such
provisions not inconsistent with the Proposed MICP as the Compensation
Committee shall approve. The Compensation Committee will also have authority
to prescribe rules and regulations for administering the Proposed MICP and to
decide questions of interpretation or application of any provision of the
Proposed MICP. Except with respect to grants to persons whose compensation is
likely to be subject to the $1 million deduction limit under Section 162(m),
the Compensation Committee may delegate some or all of its power and authority
to administer the Proposed MICP 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 Compensation Committee will have the
discretion to make such adjustments to outstanding awards under the Proposed
MICP 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 Proposed MICP will become effective as of January 1,
1999. The Compensation Committee may amend the Proposed MICP at any time,
subject to any requirement of stockholder approval required by applicable law,
rule or regulation.
Performance Incentive Awards. The Proposed MICP provides for the grant of
performance incentive awards. Each performance incentive award is a right,
contingent upon the attainment of performance measures within a specified
performance period, to receive payment in cash of a specified amount. The
maximum amount that may be paid to any individual under any performance
incentive award for any performance period shall not exceed $2 million,
adjusted for increases in the Consumer Price Index between January 1, 1999 and
the beginning of the performance period. All of the terms relating to the
satisfaction of performance measures and the termination of the performance
period relating to a performance incentive award, or any cancellation or
forfeiture of such performance incentive award upon a termination of
employment with the Company of the holder of such performance incentive 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 incentive award at the time the award is granted.
Performance incentive awards may be either business performance incentive
awards, which entitle a participant to a specified amount contingent upon the
attainment of business performance measures within a specified performance
period or individual performance incentive awards, which entitle a participant
to a specified amount contingent upon the attainment of individual performance
measures within a specified performance period. A participant may be awarded
both a business performance incentive award and an individual performance
incentive award for the same performance period.
Performance Goals. Under the Proposed MICP, the payment of business
performance incentive awards will be subject to the satisfaction of certain
business 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 operating earnings in excess of net assets multiplied by the cost of
capital. The payment of individual performance incentive awards will be
subject to the satisfaction of certain individual performance goals
established for each participant. If the Compensation Committee desires that
compensation payable pursuant to any award subject to either business
performance measures or individual performance measures be "qualified
performance-based compensation" within the meaning of Section 162(m), the
applicable performance measures (i) will be established by the Compensation
Committee no later than 90
23
<PAGE>
days after the beginning of the performance period (or such other time
designated by the Internal Revenue Service) and (ii) will satisfy all other
applicable requirements imposed under regulations promulgated under Section
162(m), including the requirement that such performance measures be stated in
terms of an objective formula or standard.
Performance Periods. A Performance Period is one fiscal year of the Company.
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 Proposed MICP.
A participant receiving a performance incentive 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
incentive award 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) apply.
Awards in Fiscal 1999
Set forth below are the target awards that each of the following is eligible
to receive under the Proposed MICP during fiscal 1999:
<TABLE>
<CAPTION>
Name and Position Target Dollar Value ($)
----------------- -----------------------
<S> <C>
R. E. Fowler, Jr., Chairman of the Board and Chief
Executive Officer..................................... 507,000
C. S. Hoffman, Senior Vice President................... 128,477
J. U. Huber, Senior Vice President..................... 219,772
J. B. James, Senior Vice President and Chief Financial
Officer............................................... 171,600
R. M. Van Patten, Senior Vice President................ 157,872
All Executive Officers as a Group (12 persons)......... 1,999,375
All Non-Employee Directors as a Group (8 persons)...... 0
All Employees as a Group (excluding Executive Officers)
(148 persons)......................................... 4,167,215
</TABLE>
The Proposed MICP will not be effective unless it is approved by the vote of
the holders of a majority of the outstanding shares of the Company's Common
Stock present in person or by proxy at the Annual Meeting and entitled to vote
on the Proposed MICP.
The Board of Directors recommends a vote FOR authorization and approval of
the IMC Global Inc. Management Incentive Compensation Program (Proposal No. 2
on the proxy card).
III. Approval of the Amendment to the IMC Global Inc. Amended and Restated 1988
Stock Option and Award Plan
In order to provide employees of the Company with an additional incentive to
contribute to the success of the Company by making available to them an
opportunity to acquire Common Stock ownership in the Company, the Company
adopted a Stock Option and Award Plan (the "1988 Option Plan") for officers and
other key employees which was approved by the sole stockholder of the Company
on September 24, 1987 and became effective February 3, 1988. The 1988 Option
Plan was amended and restated with the approval of the stockholders, effective
as of October 19, 1995.
An aggregate of 6,000,000 shares of Common Stock (after adjustment for the 2-
for-1 stock split in November, 1995) have been authorized to be sold through
the exercise of options or issued through restricted
24
<PAGE>
stock awards pursuant to the 1988 Option Plan. The Compensation Committee of
the Board of Directors has the authority to determine the number of shares to
be subject to options and restricted stock awards granted to such officers and
other key employees as it selects to receive such options and awards.
Approximately 475 officers and other key employees are eligible to participate
in the 1988 Option Plan.
Proposed Amendment
As of January 1, 1999, no more than 565,046 shares were available under the
1988 Option Plan for issue in connection with stock options or restricted stock
awards. Accordingly, on February 23, 1999, the Board of Directors adopted an
amendment to the 1988 Option Plan, subject to stockholder approval, which would
provide for an increase in the number of shares which may be awarded under the
1988 Option Plan to 11,700,000 shares from 6,000,000 shares. The additional
5,700,000 shares which could be awarded under the 1988 Option Plan are believed
necessary so that an adequate number of shares is available for purposes of the
1988 Option Plan.
The 1988 Option Plan has also been amended to authorize the Compensation
Committee, in its discretion (which discretion is exercisable before or after a
participant's termination of employment), to vest options held by a participant
whose employment has terminated or to extend (but not beyond the expiration of
ten years from the date of grant) the post-termination vesting and exercise
periods, or both, of such options.
Other changes provide that, upon the death of a participant after termination
of employment, the person to whom the participant's options are transferred by
will or the laws of descent and distribution may exercise the options, to the
extent exercisable by the participant at the time of his death, during the
remainder of the period during which the participant could have exercised the
options if he had survived or, if longer, during the one-year period following
the participant's death, but in no event after the expiration of ten years from
the date of grant.
Description of the 1988 Option Plan
Administration. The 1988 Option Plan is administered by the Compensation
Committee. Each member of the Compensation Committee is currently a "Non-
Employee Director" within the meaning of Rule 16b-3 under the Exchange Act and
an "outside director" within the meaning of Section 162(m).
Section 162(m) 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 and the corporation's four most
highly compensated executive officers other than the chief executive officer.
However, "qualified performance-based compensation" is not subject to the $1
million deduction limit. Qualified performance-based compensation is
compensation that satisfies the following requirements: (i) the compensation is
payable after the attainment of performance goals 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 approved by a majority of the corporation's stockholders; and (iii) the
committee certifies that the applicable performance goals were satisfied before
payment of any performance-based compensation is made. As noted above, the
Compensation Committee currently consists solely of "outside directors" for
purposes of Section 162(m). As a result, and based on regulations issued by the
Internal Revenue Service, certain compensation under the 1988 Option Plan, such
as that payable with respect to options and stock appreciation rights ("SARs"),
is not expected to be subject to the $1 million deduction limit, but other
compensation payable under the 1988 Option Plan, such as any restricted stock
award which is not subject to a performance condition with respect to grant or
vesting, would be subject to such limit.
Subject to the express provisions of the 1988 Option Plan, the Compensation
Committee will have the authority to select eligible persons to receive awards
and determine all of the terms and conditions of each award. All awards will be
evidenced by a written agreement containing such provisions not inconsistent
with the 1988 Option Plan as the Compensation Committee shall approve. The
Compensation Committee will also have authority to establish rules and
regulations for administering the 1988 Option Plan and to decide questions of
interpretation or application of any provision of the 1988 Option Plan. Except
with respect to grants to executive officers of the Company and persons whose
compensation is likely to be subject to the $1 million deduction limit under
Section 162(m), the Compensation Committee may delegate some or all of its
power and authority to administer the 1988 Option Plan to the Chief Executive
Officer or other executive officer of the Company.
25
<PAGE>
Available Shares. Under the 1988 Option Plan, 6,000,000 (11,700,000 if the
proposed amendment is approved by stockholders) shares of Common Stock are
available for awards, subject to adjustment in the event of a stock split,
stock dividend, recapitalization, reorganization, merger, consolidation,
combination, exchange of shares, liquidation, spin-off or other similar change
or event. The number of available shares will be reduced by the sum of the
aggregate number of shares of Common Stock which become subject to outstanding
options or restricted stock awards. To the extent that shares of Common Stock
subject to an outstanding option (except to the extent shares of Common Stock
are issued or delivered by the Company in connection with the exercise of an
SAR) or restricted stock award are not issued or delivered by reason of the
expiration, termination, cancellation or forfeiture of such award or by reason
of the delivery or withholding of shares of Common Stock to pay all or a
portion of the exercise price of an award, if any, or to satisfy all or a
portion of the tax withholding obligations relating to an award, then such
shares of Common Stock will again be available under the 1988 Option Plan. The
maximum number of shares of Common Stock with respect to which options may be
granted during any calendar year to any person is 500,000, subject to
adjustment as described above.
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 more than 60% of
the stock of the surviving company) or the approval by stockholders of a
liquidation or dissolution of the Company, all outstanding awards will be
"cashed-out" by the Company except, in the case of a merger or similar
transaction in which the stockholders receive publicly traded common stock,
all outstanding options and SARs will be exercisable in full, all restricted
stock awards will vest, and each option, SAR and restricted stock award will
represent a right to acquire the appropriate number of shares of common stock
received in the merger or similar transaction.
Effective Date, Termination and Amendment. The 1988 Option Plan became
effective as of February 3, 1988 and will terminate when shares of Common
Stock are no longer available for the grant of awards, unless terminated
earlier by the Board of Directors. The Board of Directors may amend the 1988
Option 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 (i) increase
the maximum number of shares of Common Stock available under the 1988 Option
Plan, (ii) reduce the minimum purchase price in the case of an option, or
(iii) effect any change inconsistent with Section 422 of the Internal Revenue
Code.
Stock Options-General. The Compensation Committee will determine the
conditions to the exercisability of each option. Upon exercise of an option,
the purchase price may be paid in cash or by delivery of previously owned
shares of Common Stock.
Non-Qualified Stock Options. Each non-qualified stock option will be
exercisable for no more than ten years after its date of grant. The exercise
price of a non-qualified stock option will not be less than 100% of the fair
market value of the Common Stock on the date of grant.
Incentive Stock Options. Each incentive stock option will be exercisable for
no more than ten years after its date of grant, unless the optionee owns
greater than ten percent of the voting power of all shares of capital stock of
the Company (a "ten percent holder"), in which case the option will be
exercisable for no more than five years after its date of grant. The exercise
price of an incentive stock option will not be less than 100% of the fair
market value of the Common Stock on its date of grant, unless the optionee is
a ten percent holder, in which case the option exercise price will be the
price required by the Internal Revenue Code, currently 110% of fair market
value.
Stock Appreciation Rights. The Compensation Committee may grant SARs in
conjunction with all or part of any stock option granted under the 1988 Option
Plan, upon such terms and conditions and limitations as the Compensation
Committee determines. Any SAR related to an incentive stock option shall be
granted at the same time that such incentive stock option is granted. An SAR
is the right to receive, without payment to the Company, in lieu of the
purchase of shares under a related option, a number of shares of Common Stock
and/or
26
<PAGE>
cash equivalent to the difference or spread between the option price and the
market price at the time of exercise. The Compensation Committee shall have
the sole discretion to determine whether payment of the right will be made in
shares of Common Stock, cash or a combination thereof. Upon exercise of an
SAR, the related option or its applicable part must be surrendered and shall
be deemed to have been exercised for the purpose of the limitation of the
number of shares issuable under the 1988 Option Plan.
In the event of termination of employment or service by reason of total
disability, each stock option and SAR will be exercisable only to the extent
exercisable on the date of termination for a period of no more than three
years after such termination (or such other period set forth in the award
agreement), but in no event after the expiration of such option or SAR. In the
event of termination of employment or service by reason of retirement on or
after age 55 ("Retirement"), each stock option and SAR that was granted at
least one year prior to the date of termination will be fully exercisable for
a period of no more than three years after such termination (or such other
period set forth in the award agreement), but in no event after the expiration
of such option or SAR. In the event of termination of employment or service by
reason of death, each stock option and SAR will be exercisable only to the
extent exercisable on the date of death for a period of no more than 12 months
after the date of death (or such other period set forth in the award
agreement), but in no event after the expiration of such option or SAR. In the
event of termination of employment or service for any other reason, each stock
option and SAR will be exercisable only to the extent exercisable on the date
of termination for a period of no more than three months after such
termination (or such other period set forth in the award agreement), but in no
event after the expiration of such option or SAR. If an optionee dies during
the specified periods following termination of employment or service by reason
of total disability, Retirement or for any other reason, each stock option and
SAR will be exercisable only to the extent exercisable on the date of death
for a period of no more than the greater of 12 months after the date of death
or the remaining period during which the optionee could have exercised the
stock option or SAR had the optionee survived (or such other period set forth
in the award agreement), but in no event after the expiration of such option
or SAR.
Notwithstanding the foregoing, the Compensation Committee may in its sole
discretion before or after termination of an optionee's employment permit the
optionee to exercise his options and SARS in full, whether or not such options
or SARs were otherwise exercisable at the time of his termination and may
extend the time following termination of employment when the employee's
options and SARs may become exercisable and during which exercisable options
and SARs may be exercised (but not after the expiration of such options or
SARs).
Restricted Stock Awards. The 1988 Option Plan provides for the grant of
restricted stock awards. Shares of restricted stock will be non-transferable
and subject to forfeiture if the holder does not remain continuously in the
employment of or service to the Company during the restriction period. In the
event of termination of employment or service, the portion of a restricted
stock award that is not vested will be forfeited and canceled by the Company
except to the extent determined by the Compensation Committee in its sole
discretion before or after such termination. Unless otherwise set forth in a
restricted stock award agreement, the holder of a restricted stock award will
have rights as a stockholder of the Company, including the right to vote and
receive dividends with respect to the shares of restricted stock.
Federal Income Tax Consequences
The following is a brief summary of certain of the U.S. federal income tax
consequences generally arising with respect to grants and awards under the
1988 Option Plan.
Stock Options. A participant will not recognize any income upon the grant of
a stock option. A participant will recognize compensation taxable as ordinary
income (and subject to income tax withholding) upon exercise of a non-
qualified stock option equal to the excess of the fair market value of the
shares purchased over their exercise price, and the Company will be entitled
to a corresponding deduction. A participant will not recognize any income
(except for purposes of the alternative minimum tax) upon exercise of an
incentive stock option. If the shares acquired by exercise of an incentive
stock option are held for the longer of two years from the date the option was
granted and one year from the date it was exercised, any gain or loss arising
from a subsequent
27
<PAGE>
disposition of such shares will be taxed as long-term capital gain or loss,
and the Company will not be entitled to any deduction. If, however, such
shares are disposed of within such period, then in the year of such
disposition the participant will recognize compensation taxable as ordinary
income equal to the excess of (i) the lesser of either (a) the amount realized
upon such disposition or (b) the fair market value of such shares on the date
of exercise, over (ii) the exercise price, and the Company will be entitled to
a corresponding deduction.
SARs. A participant will not recognize any income upon the grant of an SAR.
A participant will recognize compensation taxable as ordinary income (and
subject to income tax withholding) upon exercise of an SAR equal to the fair
market value of any shares delivered and the amount of cash paid by the
Company upon such exercise, and the Company will be entitled to a
corresponding deduction.
Restricted Stock. A participant will not recognize any income at the time of
the grant of shares of restricted stock (unless the participant makes an
election to be taxed at such time), and the Company will not be entitled to a
tax deduction at such time. A participant will recognize compensation taxable
as ordinary income at the time the restrictions lapse on restricted stock (if
the above-described election was not made) 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 is
deductible by the Company as compensation expense, except to the extent the
deduction limit of Section 162(m) applies. 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 compensation taxable as ordinary income (subject to
income tax withholding), 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 limit of Section 162(m) applies.
Awards in Fiscal 1999
Set forth below are the awards that are expected to be made under the 1988
Option Plan to each of the following during fiscal 1999:
<TABLE>
<CAPTION>
Shares Subject to Shares Subject to
Name and Position Dollar Value($) Options Restricted Stock
----------------- --------------- ----------------- -----------------
<S> <C> <C> <C>
R. E. Fowler, Jr., Chairman
of the Board and Chief
Executive Officer......... (1) 158,000 0
C. S. Hoffman, Senior Vice
President................. (1) 33,000 0
J. U. Huber, Senior Vice
President................. (1) 63,000 0
J. B. James, Senior Vice
President and Chief
Financial Officer......... 191,250(2) 57,000 10,000
R. M. Van Patten, Senior
Vice President............ 0 0 0
All Executive Officers as a
Group (12 persons)........ 286,875(2) 424,000 15,000
All Non-Employee Directors
as a Group (8 persons).... 0 0 0
All Employees as a Group
(excluding Executive
Officers) (463 persons)... 153,000(2) 1,001,903 8,000
</TABLE>
- --------
(1) The exercise price per share of the options equals the fair market value
of a share of Common Stock on the date of grant. If the stockholders
approve the amendment to the 1988 Option Plan, these options will be
granted as of April 27, 1999.
(2) This amount includes only the value of the shares subject to restricted
stock. The exercise price per share of the options equals the fair market
value of a share of Common Stock on the date of grant. If the stockholders
approve the amendment to the 1988 Option Plan, these options will be
granted as of April 27, 1999.
The proposed amendment will not be effective unless it is approved by the
vote of the holders of a majority of the outstanding shares of the Company's
Common Stock present in person or by proxy at the Annual Meeting and entitled
to vote on the proposed amendment.
The Board of Directors recommends that the stockholders vote FOR approval of
the proposed amendment to the IMC Global Inc. Amended and Restated 1988 Stock
Option and Award Plan (Proposal No. 3 on the proxy card).
28
<PAGE>
IV. Ratification of the 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 December 31, 1999, subject to stockholder approval
at the Annual Meeting.
During the fiscal year ended December 31, 1998, 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 SEC 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).
29
<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 card 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 2000 Annual Meeting of
Stockholders
For stockholders who may be interested in submitting a resolution for
consideration at the 2000 Annual Meeting of Stockholders, the deadline for
submitting such proposals in order to be considered for inclusion in the 2000
Proxy Statement is November 18, 1999. The Committee on Directors and Board
Affairs considers stockholder recommendations of future nominees for election
to the Board of Directors. The Amended and Restated By-Laws of the Company
establish an advance notice procedure for stockholder proposals which provides
that a stockholder wishing to nominate a candidate for election to the Board
or wishing to bring business before an annual meeting is required to give
written notice to the Corporate Secretary of the Company of his or her
intention to make such a nomination. For business to be properly brought
before an annual meeting by a stockholder, the stockholder must have given
written notice thereof to the Corporate Secretary, delivered or mailed to and
received at the principal executive offices of the Company not less than 60
days nor more than 90 days prior to the meeting, or if less than 70 days'
notice of the meeting or prior public disclosure of the date of the meeting is
given or made to stockholders, not later than the close of business on the
10th day following the day on which the notice of the meeting was mailed or,
if earlier, the day on which such public disclosure was made. A 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. Stockholders at the 1999 Annual Meeting
may consider stockholder proposals or nominations brought by a stockholder of
record on March 15, 1999, who is entitled to vote at the 1999 Annual Meeting
and who has given the Company timely written notice, in proper form, of the
stockholder's proposal or nomination. A stockholder proposal or nomination
intended to be brought before the 1999 Annual Meeting must have been received
by the Corporate Secretary on or after January 28, 1999 and before
February 26, 1999. The 2000 Annual Meeting is expected to be held on April 25,
2000. A stockholder proposal or nomination intended to be brought before the
2000 Annual Meeting must be received by the Company on or after January 26,
2000 and on or prior to February 25, 2000. 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
[LOGO OF SIGNATURE]
Rose Marie Williams
Corporate Secretary
Dated: March 25, 1999
30
<PAGE>
DIRECTIONS TO THE RITZ-CARLTON CHICAGO
The Ritz-Carlton Chicago is located at 160 East Pearson Street in downtown
Chicago, Illinois. The telephone number of The Ritz-Carlton Chicago is 312-
266-1000.
General
The meeting will be held in the Versailles Suite. The Versailles Suite is
located on the lobby level of the hotel.
From points North and West:
I-90/94 East to Ohio Street exit. Follow Ohio Street east 1 mile to Michigan
Avenue. Left on Michigan 6 blocks to Pearson Street. Right on Pearson to 160
East Pearson. The hotel will be on your left-hand side.
From points West and Southwest:
I-290 East until it ends, then continue straight on Congress Parkway to
Michigan Avenue. Left on Michigan about 1 1/2 miles to Pearson Street. Right
on Pearson to 160 East Pearson. The hotel will be on your left-hand side.
OR
I-55 North to I-90/94 West, then follow directions below.
From points South and East:
I-90/94 West to Ohio Street exit. Follow Ohio Street east 1 mile to Michigan
Avenue. Left on Michigan 6 blocks to Pearson Street. Right on Pearson to 160
East Pearson. The hotel will be on your left-hand side.
31
<PAGE>
EXHIBIT A
IMC GLOBAL INC.
MANAGEMENT INCENTIVE COMPENSATION PROGRAM
I. INTRODUCTION
1.1 Purpose. The Management Incentive Compensation Program (the "Plan") of
IMC Global Inc. (the "Company") is intended to provide 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 best interests
of the Company's stockholders.
1.2 Certain Definitions.
"Annual Incentive Period" shall mean a fiscal year of the Company.
"Board" shall mean the Board of Directors of the Company.
"Business Performance Incentive Award" shall mean a right, contingent upon
the attainment of specified Business Performance Measures within an Annual
Incentive Period, to receive payment in cash of a specified amount.
"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 3.5(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 an "outside director"
within the meaning of Section 162(m) of the Code.
"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.
"Incumbent Board" shall have the meaning set forth in Section 3.5(b)(2)
hereof.
"Individual Performance Incentive Award" shall mean a right, contingent upon
the attainment of specified Individual Performance Measures within an Annual
Incentive Period, to receive payment in cash of a specified amount.
"Participant" shall mean an officer or key employee of the Company or a
Subsidiary who has been selected for participation in the Plan by the
Committee.
"Performance Incentive Award" shall mean either a Business Performance
Incentive Award or an Individual Performance Incentive Award.
A-1
<PAGE>
"Performance Measures" shall mean the criteria and objectives, established
by the Committee, which shall be satisfied or met during the applicable Annual
Incentive Period as a condition to the holder's receipt of the payment with
respect to a Performance Incentive Award. Such criteria and objectives shall
include, in the case of a Business Performance Incentive Award, "Business
Performance Measures" which shall be based on the Economic Profit improvement
of a Business Unit and/or of the Company as a whole and, in the case of an
Individual Performance Incentive Award, "Individual Performance Measures"
which shall be based on a Participant's areas of responsibility within his
Business Unit or the Company as a whole, as well as individual performance
goals established for the Participant. If the Committee desires that
compensation payable pursuant to any award subject to Business Performance
Measures or Individual Performance Measures be "qualified performance-based
compensation" within the meaning of Section 162(m) of the Code, the Business
Performance Measures or Individual Performance Measures, whichever is
applicable, (i) shall be established by the Committee no later than 90 days
after the beginning of the Annual Incentive 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 Business
Performance Measures or Individual Performance Measures, whichever is
applicable, be stated in terms of an objective formula or standard.
"Subsidiary" shall have the meaning set forth in Section 1.4.
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 Annual Incentive
Period applicable to any outstanding Performance Incentive Award shall lapse,
and the Performance Measures applicable to any outstanding Performance
Incentive 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 and establish rules and regulations it deems
necessary or desirable for the administration of this Plan. All such
interpretations, rules and regulations 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 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 covered employee at any time during the period an award hereunder to such
employee would be outstanding.
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.
A-2
<PAGE>
II. PERFORMANCE INCENTIVE AWARDS
2.1 Performance Incentive Awards. The Committee may, in its discretion,
grant Performance Incentive Awards to such eligible persons as may be selected
by the Committee.
2.2 Terms of Performance Incentive Awards. Performance Incentive 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 Incentive Award. The amount of a Performance
Incentive Award shall be determined by the Committee; provided, however,
that the maximum amount that may be paid to any individual under any
Performance Incentive Award for any Annual Incentive Period shall not
exceed $2,000,000, adjusted for increases in the Consumer Price Index
between January 1, 1999 and the beginning of the Annual Incentive Period.
(b) Business Performance Measures. The Business Performance Measures
applicable to a Business Performance Incentive Award shall be determined by
the Committee based upon the achievement during the applicable Annual
Incentive Period of the Economic Profit improvement goals established by
the Committee for the Business Unit in which the holder of the Business
Performance Incentive Award is employed and/or for the Company as a whole.
"Economic Profit" means "After-Tax Operating Earnings" (defined below) in
excess of "Net Assets" (defined below) multiplied by the "Cost of Capital"
(defined below).
"After-Tax Operating Earnings" means operating earnings less provision
for income taxes.
"Net Assets" means capital invested in the Company's business.
"Cost of Capital" means the Company's weighted average cost of debt and
equity.
(c) "Individual Performance Measures". The Individual Performance
Measures applicable to an Individual Performance Incentive Award shall be
determined by the Committee based upon achievement during the applicable
Annual Incentive Period of the individual performance goals established for
the Participant.
(d) Settlement of Performance Incentive Awards. All Performance Incentive
Awards shall be settled in cash.
2.3 Termination of Employment or Service. All of the terms relating to the
satisfaction of Performance Measures and the termination of an Annual
Incentive Period, or any cancellation or forfeiture of a Performance Incentive
Award upon a termination of employment with the Company of the holder of such
Performance Incentive 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 Incentive Award at the time the
Performance Incentive Award is granted.
III. GENERAL
3.1 Effective Date. 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
1999 annual meeting of stockholders of the Company, shall become effective
January 1, 1999.
3.2 Amendments. The Committee 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) of the Code. No
amendment may impair the rights of a holder of an outstanding Performance
Incentive Award without the consent of such holder.
A-3
<PAGE>
3.3 Non-Transferability of Awards. No Performance Incentive 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
Performance Incentive Award may be settled during the holder's lifetime only
by the holder or the holder's legal representative or similar person. No
Performance Incentive 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 withhold any
Federal, state, local or other taxes which may be required to be withheld in
connection with such award.
3.5 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 Annual Incentive Period applicable
to any Performance Incentive Award to lapse, causing the Performance Measures
applicable to any Performance Incentive 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 payment from the Company in an amount equal to the amount
payable with respect to such Performance Incentive 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 3.5(b);
(2) individuals who, as of the date this Plan is approved by the
stockholders of the Company 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
A-4
<PAGE>
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 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.
3.6 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.
3.7 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.
3.8 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.
A-5
<PAGE>
EXHIBIT B
IMC GLOBAL INC.
1988 STOCK OPTION AND AWARD PLAN
AS AMENDED AND RESTATED EFFECTIVE OCTOBER 19, 1995
----------------
I. Purpose
The purpose of this plan is to further the growth and success of the Company
and its subsidiaries by providing key employees with additional incentive to
contribute to such growth and success and by aiding the Company in attracting
and retaining such key employees.
II. Administration of the Plan
The Board of Directors of the Company shall appoint a committee (the
"Committee") of not less than three of its members to administer the Plan. A
majority of the members of the Committee shall constitute a quorum, and the
acts of a majority of the members present at any meeting at which a quorum is
present, or acts approved in writing by a majority of the members of the
Committee, shall be the acts of the Committee. Each member of the Committee
shall be (a) a "disinterested person" within the meaning of Rule 16b-3 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and (b)
shall qualify as an "outside director" within the meaning of Section 162(m) of
the Internal Revenue Code of 1986, as amended (the "Code"). The Committee
shall have the power to grant options, stock appreciation rights and awards of
Restricted Stock ("Restricted Stock Awards") under the Plan, to interpret the
Plan and options, stock appreciation rights and Restricted Stock Awards
granted under it, to make regulations and to formulate administrative
provisions for carrying out the Plan, and to make all other determinations in
connection with the granting of options, stock appreciation rights and
Restricted Stock Awards and administration of the Plan.
The Committee may delegate some or all of its power and authority hereunder
to the President and Chief Executive Officer or 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 under this Plan to any person who is a "covered employee"
within the meaning of Section 162(m) of the Code and the regulations
thereunder who, in the Committee's judgment, is likely to be a 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, pricing or amount of an award to such an
officer or other person.
III. Stock Subject to the Plan
(a) The stock to be offered for sale by the Company pursuant to exercise of
options or which may be delivered upon the exercise of stock appreciation
rights or which may be delivered pursuant to Restricted Stock Awards granted
under the Plan shall be shares of the authorized Common Stock, par value $1.00
per share, of the Company (hereafter sometimes call the "Stock") and may
consist of either unissued shares or shares reacquired by the Company, or a
combination of both as the Board of Directors or the Committee may from time
to time determine. Subject to the provisions of subsection (b) of this Section
3, the aggregate number of shares of Stock which may be delivered under the
Plan shall not exceed 11,700,000 shares, reduced by the sum of the aggregate
number of shares of Common Stock (i) that are issued upon the grant of
Restricted Stock Awards and (ii) which become subject to outstanding options.
To the extent that shares of Common Stock subject to an outstanding option
(except to the extent shares of Common Stock are issued or delivered by the
Company in connection with the exercise of a stock appreciation right) or
Restricted Stock Award are not issued or delivered by reason of the
expiration, termination, cancellation or forfeiture of such award or by reason
of the delivery or withholding of shares of Common Stock to pay all or a
portion of the exercise price of an award, if any, or to satisfy all or a
portion of the tax withholding obligations relating to an award, then such
shares of Common Stock shall again be available under this Plan.
B-1
<PAGE>
To the extent required by Section 162(m) of the Code and the rules and
regulations thereunder, the maximum number of shares of Common Stock with
respect to which options may be granted during any calendar year to any person
shall be 500,000, subject to adjustment as provided in Section 3(b).
Except as set forth in this Section 3, any securities resulting from any
stock dividend, stock split, stock distribution or other recapitalization or
any substituted securities in the event of any substitution referred to in the
this Section 3, shall be subject to the shares covered by the related option,
stock appreciation right or Restricted Stock Award pursuant to the Plan
including, in the case of a Restricted Stock Award, escrow of such shares or
other securities.
(b)(i) In the event of any stock split, stock dividend, 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 under this Plan, the
number and class of securities subject to each outstanding option and the
purchase price per security, the terms of each outstanding stock
appreciation right, and the number and class of securities subject to each
outstanding Restricted Stock Award shall be appropriately adjusted by the
Committee, such adjustments to be made in the case of outstanding options
without an increase in the aggregate purchase price. 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 (1) available under this Plan, such fractional security shall be
disregarded, or (2) subject to an award under this Plan, the Company shall
pay the holder of such award, in connection with the first vesting or
exercise of such award, in whole or in part, occurring after such
adjustment, an amount in cash determined by multiplying (x) the fraction of
such security (rounded to the nearest hundredth) by (y) the excess, if any,
of (A) the fair market value (determined in accordance with Section 6) on
the vesting or exercise date over (B) the exercise price, if any, of such
award.
(ii) Notwithstanding any provision in this Plan or any agreement, in the
event of a Change in Control in connection with which the holders of Common
Stock receive shares of common stock that are registered under Section 12
of the Exchange Act, (1) all outstanding options shall immediately become
exercisable in full, (2) the restrictions applicable to any outstanding
Restricted Stock Award shall lapse and (3) there shall be substituted for
each share of Common Stock available under this Plan, whether or not then
subject to an outstanding award, the number and class of shares into which
each outstanding share of Common Stock shall be converted pursuant to such
Change in Control. In the event of any such substitution, the purchase
price per share in the case of an option shall be appropriately adjusted by
the Committee, such adjustments to be made without an increase in the
aggregate purchase price.
(iii) Notwithstanding any provision in this Plan or any agreement, in the
event of a Change in Control (other than a Change in Control in connection
with which the holders of Common Stock receive consideration other than
shares of common stock that are registered under Section 12 of the Exchange
Act), each outstanding award shall be surrendered to the Company by the
holder thereof, and each such award shall immediately be canceled by the
Company, and the holder shall receive within ten days of the occurrence of
such Change in Control, a cash payment from the Company in an amount equal
to (1) in the case of an option, the number of shares of Common Stock then
subject to such option, multiplied by the excess, if any, of the greater of
(A) the highest per share price offered to stockholders of the Company in
any transaction whereby the Change in Control takes place or (B) the Fair
Market Value of a share of Common Stock on the date of occurrence of the
Change in Control, over the purchase price per share of Common Stock
subject to the option and (2) in the case of a Restricted Stock Award, the
number of shares of Common Stock then subject to such award, multiplied by
the greater of (A) the highest per share price offered to stockholders of
the Company in any transaction whereby the Change in Control takes place or
(B) the Fair Market Value of a share of Common Stock on the date of
occurrence of the Change in Control. In the event of a Change in Control,
each stock appreciation right shall be surrendered by the holder thereof
and shall be canceled simultaneously with the cancellation of the related
option. The Company may, but is not required to, cooperate with any person
who is subject to Section 16 of the Exchange Act to assure that any cash
payment in accordance with the foregoing to such person is made in
compliance with Section 16 and the rules and regulations thereunder.
B-2
<PAGE>
IV. Eligibility
Any regular salaried employee of the Company or any of its subsidiary
companies shall be eligible to receive options, stock appreciation rights and
Restricted Stock Awards under the Plan. Members of the Board of Directors of
the Company who are not employed in any other capacity as regular salaried
employees of the Company or of any subsidiary are not eligible to receive
options, stock appreciation rights and Restricted Stock Awards under the Plan.
V. Offering to Designated Employees
Subject to the terms of the Plan, the Committee shall have the authority to
select the persons to whom options are to be granted under the Plan (it being
understood that more than one option may be granted to the same person), the
number of shares to be subject to each such option, the option price of such
shares, the time or times when each option may be exercised within the limits
stated in this Plan, and other terms of the option. An option, or a portion
thereof, may be an "incentive stock option" within the meaning of Section 422
of the Code (an "ISO") or an option that is not an ISO (a "Non-Statutory Stock
Option"), provided that no ISO may be granted more than ten years after the
date on which the stockholders of the Company approve this amendment and
restatement of the Plan providing for the grant of ISOs hereunder. The
Committee shall also have the authority, subject to the terms of the Plan, to
determine (a) whether stock appreciation rights are to be granted in
conjunction with an option and (b) which employees shall receive Restricted
Stock Awards, the number of shares to be subject to each such Award and the
terms and conditions of such Awards. Each option, stock appreciation right and
Restricted Stock Award issued under the Plan may in the discretion of the
Committee be covered by an agreement executed on behalf of the Company and the
Grantee. Each such Agreement shall be in form approved by the Committee and
shall contain such restrictions, terms and conditions as the Committee may
require and as are not inconsistent with the provisions of the Plan. Each
option and stock appreciation right shall be deemed to have been granted and
shall take effect on the date that the Committee approves the granting of the
option or stock appreciation right, or the date the Grantee enters the employ
of the Company or a subsidiary, whichever is later, regardless of when the
agreement or other document evidencing the option or stock appreciation right
is executed and delivered. Each such agreement or other document shall be
dated as of the date the option, stock appreciation right or Restricted Stock
Award evidenced thereby is granted.
VI. Price
The option price shall not be less than 100% of the fair market value of the
Stock at the time the option is granted; provided, however, that if an ISO
shall be granted to any person who, at the time such ISO is granted, owns
capital stock possessing more than ten percent of the total combined voting
power of all classes of capital stock of the Company (or of any parent or
subsidiary) (a "Ten Percent Holder"), the purchase price per share of Common
Stock shall be the price (currently 110% of Fair Market Value) required by the
Code in order to constitute an ISO. The fair market value at the time the
option is granted shall, for purposes of the Plan, be the mean between the
highest and lowest prices at which the Stock is traded on the day on which the
option is granted, 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 Stock on the date the
option is granted (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 day shall be deemed to be the fair market value of the Stock.
VII. Exercise of Options
(a) The period during which an option may be exercised shall be determined
by the Committee at the time the option is granted, except (but subject to
Section 3) that
(i) except as otherwise provided in Section 11, an employee must continue
in the employ of the Company and/or one or more of its subsidiaries for a
period of not less than one year after the date of grant of the option
before he may exercise such option;
B-3
<PAGE>
(ii) except as otherwise provided in Section 11, not more than 50% of the
total number of shares subject to his option may be purchased by an
employee during the one-year period beginning on the first anniversary of
the date of grant of the option;
(iii) except as otherwise provided in Section 11, no option shall be
exercisable after the Grantee ceases to be an employee of the Company; and
(iv) no option shall be exercisable more than ten years after its date of
grant, provided, that if an ISO shall be granted to a Ten Percent Holder,
such ISO shall not be exercisable more than five years after its date of
grant.
For purposes of the foregoing and Section 11, any Grantee who shall retire
from employment with the Company and/or one or more of its subsidiaries prior
to the first of the month following his 65th birthday, and who at the time of
such retirement shall be committed to render consulting services to the
Company and/or one or more of its subsidiaries pursuant to a contract which is
approved by the Board of Directors and which in the judgment of the Committee
requires that during the period of such contract he be obligated to devote a
substantial portion of his time to rendering such services, shall, if the
Committee so determines, be deemed for purposes of the Plan to continue in the
employment of the Company and/or its subsidiaries so long as his obligation to
render consulting services under such contract shall continue in effect, but
not beyond three years from the date of his retirement or ten years from the
date of grant whichever shall first occur.
Subject to the foregoing and Section 11, options may be exercised from time
to time in whole or in part. Each exercise of an option shall be accomplished
by giving written notice of such exercise to the Treasurer of the Company,
specifying the number of shares to be purchased and accompanied by payment in
full of the purchase price therefor (or arrangement made for such payment to
the satisfaction of the Company). An employee to whom an option is granted
shall be under no obligation whatsoever to exercise it, and he may exercise
the option or not in his discretion.
(b) Payment for the options exercised shall be either in (i) cash, or check,
bank draft or money order (collectively referred to as "cash") to the order of
IMC Global Inc. for an amount in United States dollars equal to the total
option price for the number of shares upon which options are being exercised,
or (ii) shares of Common Stock of the Company (which shall be valued, for this
purpose, at a price per share which is the mean between the highest and lowest
prices at which the Stock is traded on the exercise date (or, if such date is
not a trading day, on the first trading day preceding the exercise date), as
reflected on the consolidated tape of New York Stock Exchange issues, or if
there are no such sales of Stock on the exercise date (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) with a value equal to or less
than the total option price, plus cash for an amount in United States dollars
equal to the amount, if any, by which the total option price exceeds the value
(determined as aforesaid) of such shares of Company stock. Payment of the
option exercise price in cash may be made by a broker-dealer acceptable to the
Company to whom the optionee has submitted an irrevocable notice of exercise.
Payment of the option exercise price by shares of Common Stock shall be either
(1) by delivery of previously owned whole shares of Common Stock (which the
optionee has held for at least six months prior to delivery of such shares and
for which the optionee has good title, free and clear of all liens), (2) by
authorizing the Company to withhold whole shares of Common Stock which would
otherwise be delivered upon exercise of the option or (3) a combination of (1)
and (2), in each case to the extent set forth in the agreement relating to the
option. The Committee shall have sole discretion to disapprove of an election
pursuant to any of clauses (1)-(3) and in the case of an optionee who is
subject to Section 16 of the Exchange Act, the Company may require that the
method of making such payment be in compliance with Section 16 and the rules
and regulations thereunder. The exercise date as used herein shall mean the
business day on which an optionee delivers written notice to the Treasurer of
the Company specifying the number of shares the optionee then desires to
purchase under options held by such optionee.
Payment for shares exercised for Stock and/or cash shall be delivered to the
Treasurer of the Company not later than the end of the third business day
after the exercise date. In the case of payment by delivery of
B-4
<PAGE>
previously owned shares of Stock, such payment shall be made by delivery of
the necessary share certificates, with executed stock powers attached, to the
Treasurer of the Company or, if such certificates have not yet been delivered
to the optionee by written notice to the Treasurer of the Company requesting
that the shares represented by such certificates be applied toward payment as
hereinabove provided.
(c) At the request of a participant, the Company may satisfy any of its tax
withholding obligations arising upon the exercise of an option under Federal,
State or other tax laws by withholding from the number of shares otherwise to
be delivered to the Grantee that number of shares equal to the amount of such
tax to be withheld. Shares to be withheld under this Section 7(c) shall be
valued in accordance with the provisions of Section 7(b)(ii) above. In the
alternative, the Grantee may deliver to the Company in whole or partial
satisfaction of the Company's tax withholding requirements, previously owned
whole shares of Common Stock (which the optionee has held for at least six
months prior to delivery of such shares and for which the optionee has good
title, free and clear of all liens), which shares shall be valued for such
purpose in accordance with the provisions of Section 7(b)(ii) above. The
Committee shall have sole discretion to disapprove of an election or request
to withhold or deliver shares of Stock in order to satisfy tax withholding
obligations and in the case of an optionee who is subject to Section 16 of the
Exchange Act, the Company may require that the method of satisfying such
obligations be in compliance with Section 16 and the rules and regulations
thereunder.
VIII. Stock Appreciation Rights
(a) Stock appreciation rights may be granted in conjunction with all or part
of any option granted under this Plan, either at the time of the grant of such
option or at any subsequent time during the term of the option; provided,
however, that any stock appreciation right related to an ISO shall be granted
at the same time that such ISO is granted. A "stock appreciation right" is a
right to receive, without payment to the Company, a number of shares of Common
Stock of the Company and/or cash, as provided in this Section 8, in lieu of
the purchase of shares under a related option. A stock appreciation right
shall terminate and no longer be exercisable upon the termination of the
related option. Stock appreciation rights may be exercised, in accordance with
subsection (b) of this Section 8, by a Grantee by surrendering the related
option or applicable portion thereof. Upon such exercise and surrender, the
Grantee shall be entitled to receive an amount determined in the manner
prescribed in subsection (b) of this Section 8. Options which have been so
surrendered, in whole or in part, shall no longer be exercisable to the extent
the related stock appreciation rights have been exercised.
(b) Stock appreciation rights shall be subject to such terms and conditions
not inconsistent with other provisions of the Plan as shall be determined from
time to time by the Committee, which shall include the following:
(i) Stock appreciation rights shall be exercisable at such time or times
and only to the extent that the option to which they relate shall be
exercisable in accordance with the provisions of Section 7 and this Section
8 of this Plan.
(ii) Upon the exercise of a stock appreciation right, an optionee shall
be entitled to receive an amount equal to the excess of the fair market
value of one share of Common Stock over the option price per share
specified in the related option multiplied by the number of shares in
respect of which the stock appreciation right shall have been exercised. If
shares of Common Stock are to be delivered for such excess amount, the
number of whole shares shall be determined by dividing such excess amount
by the fair market value of one share of Common Stock on the date of
exercise of the stock appreciation right. No fractional shares shall be
issued upon exercise of the stock appreciation right and no cash shall be
paid for such fractional shares. The fair market value of Common Stock on
the date of exercise of stock appreciation rights shall be determined in
the same manner as the fair market value of Common Stock on the date of
grant of an option is determined pursuant to Section 6 hereof.
(iii) The Committee shall have the sole discretion to determine the form
in which payment of the amount described in paragraph (ii) of this
subsection (b) will be made (i.e., cash, Common Stock, or any combination
thereof).
B-5
<PAGE>
(iv) The obligation to make payments with respect to stock appreciation
rights shall not be funded or secured in any manner.
(c) Upon the exercise of a stock appreciation right, the option or part
thereof to which such stock appreciation right is related shall be deemed to
have been exercised for the purpose of the limitation of the number of shares
of Common Stock to be issued under the Plan as set forth in Section 3 hereof.
IX. Restricted Stock Awards
(a) Restricted Stock Awards are awards of restricted shares of Common Stock
which are subject to the terms, conditions and restrictions contained in this
Plan and in the Award relating to such shares. Upon the grant of any
Restricted Stock Award, the awarded shares shall be registered in the name of
the Grantee as soon as reasonably practicable after the award is made, but not
until the Grantee has executed an award agreement and any other documents
which the Committee in its absolute discretion may require. The awarded shares
shall be retained by the Treasurer of the Company, an escrow holder, and the
Grantee shall not be required to make any payment of cash consideration for
such Award. All such Awards shall be contingent and the rights of the Grantee
with respect thereto prior to vesting or forfeiture as provided in this Plan
shall be only as set forth in this Plan.
(b) Unless and until the shares awarded to a Grantee shall have vested as
provided in this Section 9, but subject to the provisions of Section 3 where
applicable, such shares shall not be sold, transferred or otherwise disposed
of or pledged, but the Grantee, after delivery of the shares to the escrow
holder, shall have the right to vote the shares and receive all dividends and
other distributions paid or made with respect thereto.
(c) Each Restricted Stock Award shall be granted by the Committee, in its
absolute discretion, subject to the provisions of the Plan, and shall contain
such terms and conditions as the Committee shall determine consistent with the
Plan, but in no event (except as provided in Section 3 hereto) may any portion
of a Restricted Stock Award vest prior to one year after the date of grant.
(d) Upon the forfeiture of any share of Restricted Stock in accordance with
the provisions of the Plan, or the terms and conditions of the Award, such
share shall automatically be transferred to and reacquired by the Company at
no cost to the Company.
(e) Vested Restricted Stock Awards shall be paid by delivery to the Grantee
of certificates for the appropriate number of shares of Common Stock of the
Company, registered in his name, free of any restriction or condition other
than such restrictions on the resale of such Stock as the Committee, on advice
of counsel, may require, which restrictions may be expressed, at the option of
the Committee, in a legend on the stock certificate, with appropriate
instructions given to the Company's transfer stock agent.
X. Necessary Approvals
Each option and stock appreciation right and Restricted Stock Award shall be
subject to the requirement that if at any time the Board of Directors shall
determine, in its discretion, that the listing, registration or qualification
of the shares subject to such option or stock appreciation right or Restricted
Stock Award upon any securities exchange or under any state or federal law, or
that the consent or approval of any governmental authority, is necessary or
desirable as a condition of, or in connection with, the issuance or purchase
of shares under such option or upon exercise of such stock appreciation right
or the award, vesting or delivery of shares covered by a Restricted Stock
Award, such option or stock appreciation right may not be exercised in whole
or in part, and such Restricted Stock Award shall not be made or vest, and
shares thereunder may not be delivered, as the case may be, unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Board of
Directors. Any option or stock appreciation right may be exercised only in
accordance with the provisions of all applicable law.
B-6
<PAGE>
XI. Termination of Employment
(a) Subject to subsection (f) of this Section 11, if an employee ceases to
be employed for any reason, whether by his own volition or otherwise, except
where termination is due to death, total disability or retirement (as defined
in Section 11(c) of this Plan) of the employee, all options and stock
appreciation rights held by the employee under this Plan shall be
automatically canceled at the time of termination of employment except that
any such option and stock appreciation right may be exercised by him within
three months after such termination (but not after the expiration of ten years
from the date of grant or after the expiration of any other period for
exercise made applicable by the Committee at the time of grant) to the extent
exercisable by him at the time of such termination; provided, however, that in
the case of an ISO, the period of time after such termination of employment
shall not be greater than three months.
(b) Subject to subsection (f) of this Section 11, if an employee dies while
in the employ of the Company or any of its subsidiary companies, any option
and stock appreciation right held by him at the time of his death shall be
transferred as provided in his will or as determined by the laws of descent
and distribution, and may be exercised, to the extent exercisable by him at
the time or from time to time within twelve months after the date of death
(but not after the expiration of ten years from the date of grant or after the
expiration of any other period for exercise made applicable by the Committee
at the time of grant) unless the option or stock appreciation right by its
terms shall provide a shorter period of time during which the option or stock
appreciation right may be exercised after death.
(c) Subject to subsection (f) of this Section 11, an employee whose
employment terminates because of total disability may exercise his options and
stock appreciation rights, to the extent exercisable by him at the time of
such termination, at any time or from time to time within three years after
the termination of his employment (but not after the expiration of ten years
from the date of grant or after the expiration of any other maximum period for
exercise made applicable by the Committee at the time of grant).
Subject to subsection (f) of this Section 11, an employee whose employment
terminates because of Retirement (as defined in this subsection) may exercise
his options and stock appreciation rights that were granted at least one year
prior to his termination date in full, whether or not such options or stock
appreciation rights were otherwise exercisable at the time of his termination,
at any time or from time to time within the three years after the termination
of his employment (but not after the expiration of ten years from the date of
grant or after the expiration of any other period for exercise made applicable
by the Committee at the time of grant). "Retirement," for purposes of this
Plan, shall mean termination of employment, other than for death, cause or
disability, on or after the date on which the Grantee attains age 55.
(d) If the employment of a Grantee terminates before a Restricted Stock
Award is vested in accordance with the Plan, he shall automatically forfeit
all shares of Stock then subject to Restricted Stock Awards under the Plan,
except to the extent otherwise determined by the Committee in its sole
discretion before or after such termination.
(e) If a former employee dies after termination of employment, but within
the applicable period during which his options and stock appreciation rights
could have been exercised by the former employee if the former employee had
survived, the options and stock appreciation rights shall be transferred as
provided in the former employee's will or as determined by the laws of descent
and distribution, and may be exercised, to the extent exercisable by the
former employee at the time of death, by the person or persons entitled
thereto at any time or from time to time within the remaining portion of the
applicable period during which the former employee could have exercised the
options and stock appreciation rights if the former employee had survived, or
if longer than such remaining portion, within twelve months after the date of
death, unless the option or stock appreciation right by its terms shall
provide otherwise.
(f) Notwithstanding anything in the Plan to the contrary, the Committee may
in its sole discretion before or after termination of an employee's employment
permit the employee to exercise his options and stock
B-7
<PAGE>
appreciation rights in full, whether or not such options or stock appreciation
rights were otherwise exercisable at the time of his termination and may
extend the time following termination of employment when the employee's
options and stock appreciation rights may become exercisable and during which
exercisable options and stock appreciation rights may be exercised (but not
after the expiration of ten years from the date of grant).
XII. Miscellaneous
(a) While an option or stock appreciation right is unexercised, an employee
shall have no voting rights or other rights of stockholders with respect to
shares which are subject to his option or which he may receive upon exercise
of his stock appreciation right. Furthermore, no cash dividends shall accrue
or be payable with respect to any such shares. However, an employee shall have
full voting and other rights upon the date on which the Committee determines
that Stock will be issued to him in connection with the exercise of the stock
appreciation right.
(b) Stock which is subject to options but has not yet been purchased or
which may be issued upon exercise of a stock appreciation right has no
subscription rights.
(c) No fractional shares of Stock shall be issued upon exercise of an option
or a stock appreciation right and in case a fractional share shall become
subject to an option or stock appreciation right by reason of a stock dividend
or otherwise, the employee holding such option or stock appreciation right
shall not be entitled to exercise it with respect to such fractional share.
(d) The rights granted to any employee pursuant hereto shall be exercisable,
during his lifetime, only by him or by his guardian or legal representative
and none of such rights shall be subject to sale, hypothecation, assignment or
pledge or be transferable otherwise than by will or intestacy.
(e) No Grantee of an option, stock appreciation right or Restricted Stock
Award shall have any right to be retained in the employ of the Company or a
subsidiary thereof by virtue of his participation in the Plan.
(f) This Plan, each option, stock appreciation right and Restricted Stock
Award hereunder and the related agreement, 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.
XIII. Amendments
Subject to any requirement of stockholder approval required by applicable
law, rule or regulation including Rule 16b-3 under the Exchange Act and
Section 162(m) of the Code, the Board of Directors shall have the power (a) to
make such changes in the Plan and in any option, stock appreciation right or
Restricted Stock Award previously granted under the Plan as in the opinion of
counsel to the Company may be necessary or appropriate from time to time so
that options granted under the Plan will continue to be ISOs or Non-Statutory
Stock Options, as the case may be, under the Code as in existence from time to
time, and (b) to make such other changes in the Plan and in any option or
stock appreciation right previously granted under the Plan as from time to
time the Board deems proper and in the best interests of the Company;
provided, however, that no amendment shall be made without stockholder
approval if such amendment would (i) increase the maximum number of shares of
Common Stock available under this Plan (subject to Section 3), (ii) reduce the
minimum purchase price in the case of an option or the base price in the case
of a stock appreciation right, (iii) effect any change inconsistent with
Section 422 of the Code or (iv) 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.
XIV. Effective Date and Termination
(a) The Plan or any amendment hereto shall become operative and in effect as
of the date the Plan or any such amendment is approved by the affirmative vote
of a majority of the shares of Common Stock present in person or represented
by proxy at the 1995 annual meeting of stockholders.
B-8
<PAGE>
(b) The Plan shall remain in effect until termination by action of the
Board. Termination of this Plan shall not affect the rights of employees under
the options theretofore granted to purchase Common Stock under the Plan, or
the rights of employees pursuant to stock appreciation rights and Restricted
Stock Awards theretofore granted under the Plan, and all such options, stock
appreciation rights and Restricted Stock Awards shall continue in force and in
operation after termination of the Plan, except as they may be terminated
through death or other termination of employment in accordance with the terms
of the Plan.
XV. Definitions of Certain Terms Referenced Hereto in the Plan
(a) Change in Control: The term "Change in Control" of the Company when used
in this Plan, shall mean, and be deemed to have occurred as of the first day
that any one or more of the following conditions have been satisfied.
(i) 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 (1) the
then outstanding shares of common stock of the Company (the "Outstanding
Company Common Stock") or (2) 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 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 (1), (2)
and (3) of subsection (iii) of this definition;
(ii) 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;
(iii) 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 (1) 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, (2) no Person (other than: the Company; any
employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company; the corporation
resulting from such Corporation 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
B-9
<PAGE>
Corporate Transaction or the combined voting power of the outstanding
securities of such corporation entitled to vote generally in the election
of directors and (3) 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
(iv) approval by the stockholders of the Company of a plan of complete
liquidation or dissolution of the Company.
(b) "Non-Statutory Stock Option" shall mean a stock option which is not an
ISO.
(c) "Permanent and Total Disability" shall have the meaning set forth in
Section 22(e)(3) of the Code or any successor thereto.
(d) "Termination of Employment" shall mean the termination of employment by
IMC Global Inc. or the Company or its successor company of an employee who is
a participant in the Plan, that occurs after a Change in Control (as herein
defined) has occurred and is not due to cause and is not voluntary.
Termination shall not be deemed to be voluntary if the employee elects to
resign because his or her position, responsibility, benefits or compensation
have been adversely changed or diminished.
This definition is applicable to "termination of employment" when used in
the Plan only when the reference to Section 16 appears along with it.
B-10
<PAGE>
IMC GLOBAL INC.
Proxy Solicited on Behalf of the Board of Directors of
the Company for the Annual Meeting, April 27, 1999
The undersigned hereby constitutes and appoints Robert E. Fowler, Jr., J.
Bradford James 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 Ritz-Carlton Chicago, 160
East Pearson Street, Chicago, Illinois 60611 on Tuesday, April 27, 1999, at
12:00 noon, 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 2002:
James M. Davidson
David B. Mathis
Joseph P. Sullivan
P R O X Y
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
----
Please mark your votes as in this example.
X
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 a Term Expiring in 2002:
James M. Davidson David B. Mathis Joseph P. Sullivan
FOR
WITHHELD
FOR
AGAINST
ABSTAIN
1. Election of three Directors
2. Authorize and approve the IMC Global Inc. Management Incentive Compensation
Program
For, except vote withheld from the following nominee(s):
-------------------------------------------------------------------------------
3. Authorize and approve the amendment to the IMC Global Inc. Amended and
Restated 1988 Stock Option and Award Plan
4. Ratification of the appointment of Independent Auditors
Please check this box if you plan to attend the Annual Meeting.
SIGNATURE(S) __________________________DATE ___________________________________
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.
The signer hereby revokes all proxies heretofore given by the signer to vote at
said meeting or any adjournments thereof.
