DELTA AND PINE LAND COMPANY
ONE COTTON ROW
SCOTT, MISSISSIPPI 38772 USA
(662) 742-4500
March 1, 2000
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of the Stockholders of
Delta and Pine Land Company, which will be held on Thursday, March 30, 2000, at
10:30 a.m., Central Standard Time, at the Peabody Hotel, 149 Union Avenue,
Memphis, Tennessee. All stockholders of record as of February 22, 2000, are
entitled to vote at the annual meeting.
We appreciate your confidence in the Company and hope you will attend this
Annual Meeting in person.
Whether or not you expect to attend the meeting, please complete, sign, date and
promptly return the enclosed proxy card to ensure that your shares will be
represented at the meeting. If you attend the meeting, you may vote in person
even if you have sent in your proxy card.
Sincerely,
Roger D. Malkin
Chairman of the Board
and Chief Executive Officer
<PAGE>
DELTA AND PINE LAND COMPANY
ONE COTTON ROW
SCOTT, MISSISSIPPI 38772 USA
(662) 742-4500
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD ON MARCH 30, 2000
To the Stockholders of
Delta and Pine Land Company:
The Annual Meeting of the Stockholders of Delta and Pine Land Company will be
held at the Peabody Hotel, 149 Union Avenue, Memphis, Tennessee, on Thursday,
March 30, 2000, at 10:30 a.m., Central Standard Time, for the following
purposes:
1. to elect two Class III members to the Board of Directors to three-year
terms expiring at the 2003 Annual Meeting of Stockholders;
2. to amend the 1995 Long Term Incentive Plan;
3. to ratify the appointment of Arthur Andersen LLP as the independent public
accountants for the fiscal year ending August 31, 2000; and
4. to transact such other business as may properly come before the meeting or
any adjournments thereof.
The accompanying Proxy Statement contains further information with respect to
these matters.
The stockholders of record at the close of business on February 22, 2000, are
entitled to notice of and to vote at the Annual Meeting. The list of
stockholders will be available for examination for the 10 days prior to the
meeting at Delta and Pine Land Company's Corporate office, One Cotton Row,
Scott, Mississippi 38772.
Your vote is important. Whether or not you plan to attend the meeting, please
complete, sign and promptly return the enclosed proxy using the enclosed
addressed envelope, which requires no postage if mailed within the United
States.
BY ORDER OF THE BOARD OF DIRECTORS
Jerome C. Hafter
Secretary
March 1, 2000
<PAGE>
DELTA AND PINE LAND COMPANY
ONE COTTON ROW
SCOTT, MISSISSIPPI 38772
(662) 742-4500
- --------------------------------------------------------------------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
MARCH 30, 2000
This Proxy Statement is furnished in connection with the solicitation of proxies
by the Board of Directors of Delta and Pine Land Company ("D&PL" or the
"Company") from stockholders holding shares of D&PL Common Stock ("Shares") for
use at its Annual Meeting of Stockholders to be held on March 30, 2000, and at
any adjournment or adjournments thereof. To assure adequate representation at
the Annual Meeting, stockholders are requested to promptly sign and return the
enclosed proxy.
Any stockholder giving a proxy has the power to revoke it at any time before it
is voted. Revocation of a proxy is effective upon receipt by the Secretary of
the Company of either: (i) an instrument revoking it or (ii) a duly- executed
proxy bearing a later date. In addition, a stockholder who is present at the
meeting may revoke the stockholder's proxy and vote in person if the stockholder
so desires. Proxies furnished by stockholders pursuant hereto will be voted;
and, if the person solicited specifies in the proxy a choice with respect to
matters to be acted upon, the Shares will be voted in accordance with such
specification. If no choice is specified, the proxy will be voted FOR approval
of the nominees for directors, FOR the amendments to the 1995 Long Term
Incentive Plan, FOR the appointment of the independent public accountants named
herein, and in the discretion of the proxy holders with regard to such other
business as may come before the meeting.
Stockholders of record at the close of business on February 22, 2000, are
entitled to vote at the meeting. The Proxy Statement and the accompanying form
of proxy were mailed on or about March 1, 2000, to all stockholders of record as
of the close of business on that date. The transfer agent, Harris Trust and
Savings Bank ("Harris"), will tabulate the votes received prior to the meeting.
The Secretary of the Company and W. Thomas Jagodinski, Vice President-Finance
and Treasurer of the Company, will be appointed as inspectors of the Annual
Meeting to count all votes and ballots and perform the other duties required of
inspectors.
The presence at the Annual Meeting, in person or by proxy, of a majority of the
Shares outstanding on February 22, 2000, will constitute a quorum. At that date
approximately 38,376,781 Shares were outstanding. The affirmative vote of the
holders of a plurality of the Shares that are represented in person or by proxy
at the meeting and entitled to vote is required to approve the election of
directors. All matters other than the election of directors submitted to the
stockholders shall be decided by a majority of the votes cast with respect to
such matters. Each Share is entitled to one vote. The Company's stock is traded
on the New York Stock Exchange under the symbol DLP.
All references herein to a particular year refer to the Company's fiscal year,
which ends or ended on August 31 of the year indicated.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
To the best knowledge of the Company based on information filed with the
Securities and Exchange Commission and the Company's stock records, the
following table sets forth as of December 31, 1999, Shares beneficially owned by
each director, each nominee for director, certain executive officers, any person
owning more than 5% of the Shares individually and by all executive officers and
directors as a group.
Name of Beneficial Owner Shares Beneficially Owned
- ------------------------ -------------------------
Amount of
Beneficial Percentage
Ownership of Class
--------- --------
G Industries Corporation (1) 5,632,002 14.5
John Hancock Mutual Life Insurance Company (2) 4,128,764 10.7
Stephens Group, Inc. (3) 2,589,137 6.7
Monsanto Company (4) 1,777,776 4.6
Roger D. Malkin (5)(6) 997,714 2.6
Steven M. Hawkins (5) -- *
W. Thomas Jagodinski (5)(7) 70,211 *
Thomas O. Luehder (5) 26,333 *
Charles R. Dismuke, Jr. (5) 82,666 *
Joseph M. Murphy (8) 20,498 *
Jon E.M. Jacoby (9) 147,825 *
Rudi E. Scheidt (10) 22,112 *
Nam-Hai Chua (11) 45,505 *
Stanley P. Roth (12) 27,500 *
All Directors and Executive Officers as a Group 2,050,123 5.3
[20 persons] (13)(14)
- --------------------------------------------
* Less than one percent
1. The mailing address for G Industries Corporation is 300 Delaware Avenue,
Wilmington, Delaware 19801.
2. The mailing address for John Hancock Mutual Life Insurance Company is John
Hancock Place, 5th Floor, Boston, Massachusetts 02117.
3. Mr. Jacoby, a director of Stephens Group, Inc., and its subsidiary,
Stephens, Inc. ("SGI"), owns 147,825 Shares which are not included. See
Note 8 below. SGI and Mr. Malkin are negotiating an arrangement with
respect to certain loans by a third party to Mr. Malkin. As part of that
arrangement, SGI would pledge to Mr. Malkin's lender Shares having a market
value of approximately $5.14 million as additional collateral for Mr.
Malkin's loans. Mr. Malkin and his lender also would grant SGI a right of
first refusal to buy, at the market price on the date of sale, any of Mr.
Malkin's Shares which may be sold to satisfy Mr. Malkin's loan obligations.
Mr. Malkin also would grant SGI an option to buy (at $.01 per Share) Shares
from him equal in value to a specified percentage of any increase in the
fair market value of his Shares above their fair market value at the date
of the arrangements. In the event Mr. Malkin sells any of his Shares, he
also would agree to pay SGI that same specified percentage of the excess of
the sales price above their fair market value at the date of the
arrangements. The mailing address for Stephens Group, Inc. and affiliates
is 111 Center Street, Little Rock, Arkansas 72201.
4. Excludes shares obtainable by conversion of Series M Convertible Preferred
Stock. If Monsanto converts pursuant to the terms of the preferred stock,
they would receive 1,066,667 Shares of Common Stock which would make its
amount of beneficial ownership 2,844,443 Shares, or 7.2%. The mailing
address for Monsanto Company is 800 North Lindbergh Blvd., St. Louis,
Missouri 63167.
<PAGE>
5. The mailing address for Messrs. Malkin, Jagodinski, Hawkins, Luehder and
Dismuke is One Cotton Row, Scott, Mississippi 38772.
6. See also footnote (3) above.
7. Includes 3,555 Shares owned by Mr. Jagodinski's wife. Mr. Jagodinski
disclaims beneficial ownership of Shares owned by his wife.
8. The Shares indicated are owned by Mr. Murphy's wife. Mr. Murphy disclaims
beneficial ownership of these Shares. The mailing address for Mr. Murphy is
2687 North Ocean Boulevard, Boca Raton, Florida 33431.
9. Includes the following Shares: 113,637 Shares owned by Jacoby Enterprises,
Inc., as to which Mr. Jacoby has sole power to vote and sole power of
disposition; 21,713 Shares owned by Coral Partners in which Mr. Jacoby is a
general partner, as to which Mr. Jacoby has shared power to vote and shared
power of disposition; and 12,475 Shares owned beneficially by Mr. Jacoby.
Does not include Shares owned by Stephens Group, Inc., or other of its
affiliates, except Jacoby Enterprises, Inc. and Coral Partners. See Note 3
above. The mailing address for Coral Partners, Jacoby Enterprises, Inc.,
and Mr. Jacoby is 111 Center Street, Little Rock, Arkansas 72201.
10. The mailing address for Mr. Scheidt is 54 South White Station Road,
Memphis, Tennessee 38117.
11. Consists of 10,666 Shares owned by Dr. Chua's wife and 34,839 Shares held
jointly by Dr. Chua's wife and child. Dr. Chua disclaims beneficial
ownership of these Shares. The mailing address for Dr. Chua is c/o
Laboratory of Plant Molecular Biology, Rockefeller University, 1230 York
Avenue, New York, New York 10021-6399.
12. These Shares are owned by North American Capital Corporation, as to which
Mr. Roth has sole power to vote and sole power of disposition. The mailing
address for Mr. Roth is 510 Broad Hollow Road, Suite 206, Melville, New
York 11747.
13. Includes the following Shares: 20,498 Shares owned by the wife of Joseph M.
Murphy; 3,555 Shares owned by the wife of Mr. Jagodinski; and 45,505 Shares
owned by the wife and child of Dr. Chua.
14. As a group, the amount shown excludes vested and unvested options for
506,296 Shares pursuant to the 1993 Delta and Pine Land Company Stock
Option Plan and options for 745,875 Shares pursuant to the 1995 Long- Term
Incentive Plan (with regard to the 1995 Plan, including 46,539 options for
an officer no longer employed by the Company which must be exercised by
March 1, 2000, or will be forfeited). For each individual listed above, the
amounts shown exclude exercisable options granted pursuant to the 1993 Plan
and 1995 Plan with respect to the following: Roger D. Malkin, 14,043;
Steven M. Hawkins, 74,000; Joseph M. Murphy, 5,155; Jon E.M. Jacoby,
60,266; W. Thomas Jagodinski, 65,422; Thomas O. Luehder, 17,333; Rudi E.
Scheidt, 60,266; Charles R. Dismuke, Jr., 82,489 Shares; Nam-Hai Chua,
60,266; and Stanley P. Roth, 60,266.
<PAGE>
OFFICERS OF THE COMPANY
<TABLE>
<CAPTION>
Offices Held with Company;
Name (Age) Position Principal Occupation for Past Five Years
---------- -------- ----------------------------------------
<S> <C> <C>
Roger D. Malkin (68) Chairman and Chief Mr. Malkin has served as Chairman and Chief Executive
Executive Officer Officer of D&PL since 1978. Also, he served as Chairman
of Southwide, Inc., a Delaware corporation and the former
parent of D&PL, from 1971 through its liquidation in 1993.
Steven M. Hawkins (49) President and Chief Mr. Hawkins has served as President and Chief Operating
Operating Officer Officer since December 1998. Before that time, he served
as Executive Vice President of D&PL from
May 1998 until December 1998. From September 1996
until May 1998, he served as Director of Marketing
and Vice President of Sales and Marketing for
Deltapine Seed. Prior to joining D&PL, he worked
for Asgrow Seed Company from October 1976 until
September 1996. His last assignment with Asgrow
was as Director of Marketing, Logistics and
New Business. Prior to that he held various
marketing, sales and operation positions with
the Company.
Charles R. Dismuke, Jr. Senior Vice Mr. Dismuke has served as Senior Vice President
(45) President since August 1999. From January 1997 until August 1999,
he served as Senior Vice President and as President of
Deltapine Seed Division. From October 1989 until January
1997, he served as Vice President-Operations. Mr. Dismuke
was a General Manager of one of the Company's
subsidiaries, Greenfield Seed Company, from 1982 until
1989. Mr. Dismuke has been employed by D&PL or one of
its subsidiaries since June 1977.
Thomas O. Luehder (59) Senior Vice Mr. Luehder has served as Senior Vice President
President since February 1998. From April 1997 until February 1998 he
was Senior Vice President in the International Division.
He joined D&PL in May 1994 and was the Chief Representative of D&PL
China Pte. Ltd. Prior to joining D&PL, he served as President of Jacques
Seed Company, Prescott, Wisconsin.
Harry B. Collins (59) Vice President- Dr. Collins has served as Vice President-Technology Transfer since
Technology Transfer April 1998. From 1985 until April 1998, Dr. Collins served as the
Company's Vice President-Research. Prior to that, Dr. Collins was the
senior soybean breeder for the Company. Dr. Collins has been employed
by D&PL since 1974.
<PAGE>
Earl E. Dykes (46) Vice President- Mr. Dykes has served as Vice-President - Operations since
Operations February 1997 until present. Prior to that time, Mr. Dykes
served as the General Manger - Arizona Processing, Inc.
(which was acquired by the Company in May 1996 as the
result of the Sure Grow merger). Mr. Dykes was a
shareholder of Arizona Processing, Inc. at the time of
acquisition.
W. A. Ellis, III (46) Senior Vice President Mr. Ellis has served as Senior Vice President
since August 1999. From January 1997 until August 1999,
he served as Senior Vice President and as President-Sure
Grow Seed Division. From 1990 until 1996 he served as
President-Ellis Brothers Seed, Inc. and Sure Grow Seed, Inc.
(which were acquired by the Company in May 1996 as the
result of the Sure Grow merger). Before that time Mr. Ellis
was Vice President of Ellis Brothers Seed, Inc.
William V. Hugie (40) Vice President-New Dr. Hugie has served as Vice President-New Technologies
Technologies Research since September 1996. From August 1994 until
Research September 1996, he served as a Project Leader of the
Transgenic Cotton Breeding Program, and
from December 1988 until August 1994, he served as
a Project Leader of the Sorghum Breeding Program.
Prior to joining the Company, Dr. Hugie was
employed by Funk Seed International from 1986
to 1988.
W. Thomas Jagodinski Vice President- Mr. Jagodinski has served as Vice President-Finance and
(43) Finance and Treasurer since February 1993 and Treasurer and Chief
Treasurer and Financial Officer from May 1992 to February 1993. From
Assistant Secretary October 1991 to May 1992, Mr. Jagodinski served as
Director of Corporate Accounting, Financial
Reporting and Income Taxes. Prior to joining
the Company, Mr. Jagodinski was employed
by Arthur Andersen LLP in various capacities since
1983.
Thomas A. Kerby (55) Vice President- Dr. Kerby has served as Vice President-Technical Services
Technical Services since September 1994 and Director - Technical Services
from November 1993, when he joined D&PL, until
1994. Prior to joining the Company, Dr. Kerby
served the cotton industry of California
and the University of California as Extension
Cotton Agronomist from 1981 through October
1993.
Donald L. Kimmel (61) Vice President- Mr. Kimmel has served as Vice President-Sales and Marketing of
Sales and Marketing D&PL since 1986, and from 1985 to 1986, as its Marketing
Manager.
<PAGE>
Charles V. Michell (37) Vice President- Mr. Michell has served as Vice President-Information
Information Systems from October 1998 until present, and prior to that
Systems time, as Corporate Director-Information Systems and
Telecommunications since March 1995. He joined the
Company in 1987 as Manager of Information
Systems. Prior to joining the Company, Mr. Michell
was Manager of Computer Operations at St. Dominic
Jackson Memorial Hospital and he was self-employed
as an Information Technology Consultant in
the hospital, banking and custom welding industries.
Alan L. Rubida (38) Vice President- Mr. Rubida has served as Vice President-Quality
Quality since October 1998. Mr. Rubida joined D&PL in 1994 and
served as the Company's Western Cottonseed
Production Manager until 1998. Prior to joining
D&PL, Mr. Rubida served as manager of the
Cottonseed Production Department for the Supima
Association of America.
Ann J. Shackelford (42) Vice President- Ms. Shackelford has served as Vice President - Corporate
Corporate Services Services since September 1997 and, until that time, as
Director of New Business Product Development since
January 1997. From October 1994 until
December 1996, she served as Legal Coordinator.
Prior to joining the Company, Ms. Shackelford
was involved in private business.
James H. Willeke (55) Senior Vice President Mr. Willeke has served as Senior Vice President
since August 1999. From January 1997 until
August 1999, he served as Senior Vice President and
as President-Paymaster Division. From 1987 until
1996, he served as President - Hartz Seed in
Stuttgart, Arkansas, a subsidiary of Monsanto
Company. From 1982 to 1987, he directed Lynks
in Marshalltown, IA, a subsidiary of Mycogen
Seeds, as General Manager.
Jerome C. Hafter (54) Secretary Mr. Hafter has served as Secretary of D&PL since July
1993, and he served as Assistant Secretary from April 1990
until July 1993. Since 1976, Mr. Hafter has been a partner
in Lake Tindall LLP, D&PL's general counsel, and he has
performed legal services for D&PL since 1983.
</TABLE>
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The number of directors is established by the Board of Directors and is
currently set at six. The Company's Restated Certificate of Incorporation and
By-Laws provide that the Board of Directors shall be divided into three classes
(Class I, Class II, and Class III), with each class containing one-third, or as
close to one-third as possible, of the total number of directors. Directors are
elected at each annual meeting to succeed those directors whose terms then
expire. Directors serve for terms of three years and until their successors have
been duly elected. The directors chosen to succeed those whose terms are
expiring are of the same class as the director they succeed. Class I Directors
were elected at the 1997 Annual Meeting to serve a term expiring at the 2000
Annual Meeting. Class II Directors were elected at the 1998 Annual Meeting to
serve a term expiring at the 2001 Annual Meeting. Class III Directors were
elected at the 1996 Annual Meeting to serve a term expiring at the 1999 Annual
Meeting.
On May 8, 1998, D&PL entered into a merger agreement with Monsanto Company,
pursuant to which D&PL would be merged with and into Monsanto. Because the
pending merger with Monsanto was expected to be consummated, the Company did not
schedule a 1999 Annual Meeting, and the Class III Directors that would have been
up for reelection in 1999 continue to serve as directors. Accordingly, the Class
III Directors are to be elected by the stockholders at this 2000 Annual Meeting
to a three-year term, and they have agreed to serve. The Company will hold
another Annual Meeting, currently intended to convene in the Fall of 2000, at
which nominees for Class I Directors will be considered by the stockholders. To
return the Company's schedule of elections to one class of directors per year,
the individuals nominated for election as Class III Directors at the March 30,
2000, Annual Meeting have agreed to tender at that Annual Meeting their
resignations which will become effective immediately prior to the 2002 Annual
Meeting. The Class III Directors will then be elected to a three-year term
expiring at the 2005 Annual Meeting.
The Board of Directors proposes the re-election of the two Class III Directors
listed below:
<TABLE>
<CAPTION>
Name Offices Held with the Company;
(Year First Elected a Director) Principal Occupation for Past
- ------------------------------- Five Years
----------
CLASS III
---------
<S> <C>
Roger Malkin (1978) (See the description of Mr. Malkin's offices with the Company and
principal occupation under "Officers of the Company".)
Jon E.M. Jacoby (1992) Mr. Jacoby has been employed by Stephens, Inc. and Stephens
Group, Inc., companies that engage in investment banking
activities, since 1963 and is presently a director and officer for
each of these companies. Stephens Inc. and Stephens Group, Inc.
are stockholders of D&PL. Mr. Jacoby is a director of Beverly
Enterprises, Inc., Medicus Systems Corp. and Power-One, Inc. He
was a director of American Classic Voyages Co. until he resigned
on June 30, 1997. Mr. Jacoby is 61 years of age.
<PAGE>
Continuing Directors
- --------------------
CLASS I
-------
Stanley P. Roth (1988) Mr. Roth controls and is the Chairman of NACC, a private
merchant banking firm, and has been its President since 1976.
Since 1988, Mr. Roth has served as the Chairman of Royal-Pioneer
Industries, Inc., and a director of Hollis Corporation. Mr. Roth
became the Vice Chairman of CPG International, Inc., in 1990 and
the Chairman of GPC International, Inc., its successor corporation,
in 1994. Mr. Roth is 63 years of age.
Nam-Hai Chua (1993) Dr. Chua has acted as a consultant to D&PL since April 1991. Dr.
Chua is the Andrew W. Mellon Professor and Head of the Plant
Molecular Biology Laboratory of Rockefeller University, New
York, New York, and has been with the University for over 20
years. Also, he is member of the Board of Directors of
BioInnovations of America, an entity owned by the Government of
Singapore, which invests in United States biotechnology
companies. Dr. Chua was also a member of the Board of Directors
of DNAP Holdings (formerly DNA Plant Technology
Corporation), until he resigned in 1998. In addition, Dr. Chua serves
as the Chairman of the Management Board of Directors of the Institute of Molecular
Agrobiology ("IMA") and as the Chairman of the Board of
IMAGEN Holdings Pte. Ltd, an affiliate of IMA. Dr. Chua also
acted as a scientific consultant to Monsanto Company for matters
relating to plant biology through 1995. Dr. Chua is 55 years of age.
CLASS II
--------
Joseph M. Murphy (1992) Since 1987 and February 1993, respectively, Mr. Murphy has been
the Chairman of Value Investors, Inc., a closely-held real estate
investment company, and the Chairman of Country Bank, New York,
New York. Mr. Murphy is 64 years of age.
Rudi E. Scheidt (1993) Since 1990, Mr. Scheidt has been a private investor. From 1973 to
1989, he served as President of Hohenberg Bros. Co., a worldwide
cotton merchant, headquartered in Memphis, Tennessee, and as its
Chairman during 1990. Mr. Scheidt is Director Emeritus of
National Commerce Bancorporation, a bank holding company,
headquartered in Memphis, Tennessee. Mr. Scheidt is 75 years of
age.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION OF
EACH OF THE INDIVIDUALS LISTED AS CLASS III DIRECTORS.
<PAGE>
THE BOARD OF DIRECTORS AND ITS COMMITTEES
Board Meetings and Attendance of Directors
The Board of Directors had 19 meetings in fiscal 1999, including 16 special
meetings. All Directors attended at least 75% of the aggregate of (i) the total
number of meetings of the Board of Directors held while they were members, and
(ii) the total number of meetings held by all Committees of the Board on which
they served as members. The Company did not have a Nominating Committee in 1999.
Director's Compensation
Each Director receives an annual fee of $25,000 and participation fees of $1,000
for each meeting of the Board of Directors attended. Directors are reimbursed
for actual expenses incurred in connection with attending Board or Committee
meetings. In addition, under the 1993 Stock Option Plan, as amended, each
present director was granted an option to purchase 53,333 shares at the fair
market price at the date of grant. Under the 1995 Long-Term Incentive Plan, as
amended, the initial option granted to each new (and present) director of the
Company was increased by 8,889 shares, and each director will be granted options
for an additional 2,667 shares in each of the second through sixth years each
director serves as such (which began in February 1997 for present directors).
Committees of the Board
The Board of Directors has an Executive Committee, an Audit Committee and a
Compensation Committee. Officers are elected by and serve at the discretion of
the Board of Directors.
Executive Committee
-------------------
The members of the Executive Committee are Messrs. Malkin, Murphy and Roth. This
Committee met one time during 1999. During the intervals between meetings of the
Board of Directors, the Executive Committee has and may exercise all of the
powers and authority of the Board of Directors, except as limited by law and
except for the power to change the membership or to fill vacancies in the Board
or said Committee. Action taken by the Executive Committee is reported to the
Board of Directors at its first meeting following such action.
Audit Committee
---------------
The members of the Audit Committee are Messrs. Murphy and Roth. This Committee
met one time in 1999. This Committee: (1) recommends annually to the Board of
Directors the independent public accountants for the Company and its direct and
indirect subsidiaries; (2) meets with the independent public accountants
concerning their audit, their evaluation of the Company's financial statements,
accounting developments that may affect the Company and their nonaudit services;
(3) meets with management concerning similar matters and (4) makes
recommendations to all of the aforesaid groups that it deems appropriate.
Compensation Committee (Compensation Committee Interlocks and Insider
---------------------------------------------------------------------------
Participation)
--------------
The members of the Compensation Committee are Messrs. Jacoby and Murphy. The
Company is not aware of any conflicts of interests which might be required to be
disclosed. This Committee met one time during 1999. This Committee reviews and
approves annual compensation, including bonuses, for senior management of the
Company and administers the Company's 1993 Stock Option Plan, as amended, and
the 1995 Long-term Incentive Plan, as amended, including the grant of options
under each plan.
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee is composed entirely of independent, outside
directors. The Compensation Committee is responsible for reviewing and approving
the compensation of the Chief Executive Officer, Mr. Malkin, and the other
executive officers of the Company and reviewing and approving stock-based awards
when recommended, including stock options, for each executive officer.
The Company's policy is to pay cash compensation (salary and bonus) in
sufficient amounts so that the Company's officers receive compensation that is
competitive with that paid by other companies of similar size within the seed
industry, after considering cost-of-living factors such as location, as well as
providing long-term incentives based on the performance of the Company. The
long-term incentives are designed to attract and retain key executives by
providing rewards for outstanding performance relative to peer companies. The
Company has followed this policy since 1989.
Salary and Bonus
Salary ranges of executive officers are based on a written job responsibility
measurement system created by an independent, outside salary consultant. This
system is adjusted annually. This system applies to all employees of the
Company, and not just to the executive officers. Each job responsibility has an
established salary range based on skill level and experience required to perform
the duties, along with the position's level of importance to overall Company
operations. Individual salary ranges are established at levels that provide
internal equity, as well as competitiveness with similar positions in other
companies with similar businesses. Merit salary increases are determined
annually based on job performance and current salary level within the salary
range set for that position. Each executive officer's performance review
includes achievement against an established set of management responsibilities,
as well as specific individual objectives. Objectives relate to the business
function of that respective officer and may include financial performance
objectives (i.e., achievement of budget goals), as well as other objectives
relating to the individual's particular role in the Company (i.e., market share
goals, unit cost improvement, plant safety record, new product introductions,
etc.). The objectives of each executive officer are set by the Chief Operating
Officer after consultation with the Chief Executive Officer. Each executive
officer's performance is rated by the Chief Operating Officer and is subject to
review and approval by the Chief Executive Officer and the Compensation
Committee. Non-merit increases are a function of inflation and, as a result, in
recent years have been modest.
The method of salary measurement described above also applies to the Chief
Operating Officer and the Chief Executive Officer. Objectives for the Chief
Operating Officer are set by the Chief Executive Officer, and objectives for the
Chief Executive Officer are set by the Board of Directors. The Chief Executive
Officer recommends to the Compensation Committee the salary for the Chief
Operating Officer based on this system. The salary of the Chief Executive
Officer is discussed by the Chief Executive Officer with the Compensation
Committee. Based on such discussions and the salary ranges and objectives
discussed above, the Compensation Committee determines the Chief Executive
Officer's compensation.
A bonus pool is created annually based on a specified percentage of pre-tax,
pre-bonus, and pre-pension earnings. Under the Company's incentive bonus
program, the total of bonuses paid in any year is limited to the lowest of two
limitations: (1) the bonus pool reduced by pension costs and (2) the sum of all
performance-based maximum individual awards. The Chief Executive Officer and
Chief Operating Officer can reduce, but may not increase, the overall bonus pool
from the amount calculated using the pre-established formula. The Compensation
Committee, upon the recommendation of the Chief Executive Officer and the Chief
Operating Officer, may also adjust the size of the bonus pool. All positions
eligible for bonus are placed in one of four categories that govern the maximum
bonus available as a percentage of the mid-point of the job's salary range.
These four categories include: (1) Chief Executive Officer and Chief Operating
Officer, (2) other executive officers, (3) senior managers and (4) all other
bonus-eligible positions. This maximum is based on the potential impact on the
Company's profit of the job's responsibilities.
<PAGE>
Each executive officer's bonus is based on his performance and achievement
against individual goals as described for merit salary increase review.
Performance is expressed as a percentage which, when multiplied by the maximum
bonus available for that job, results in an adjusted performance-based maximum
individual award for that year. All bonus awards to eligible employees are
calculated in this manner, and actual awards are effectively the pro rata share
of the available bonus pool or the performance-based maximum, whichever is less.
Thus, the bonus of each executive officer is dependent on the achievement of the
Company's earnings and the level of performance of each officer against
established performance criteria and personal objectives.
The bonus for the Chief Executive Officer and the Chief Operating Officer are
similarly set, based on the individual's job performance. The Chief Executive
Officer and Chief Operating Officer recommend their bonuses to the Compensation
Committee. The Compensation Committee reviews and approves the bonus amounts for
the Chief Executive Officer, the Chief Operating Officer, the other executive
officers and senior management.
Stock Awards
Awards of stock options for each executive officer and other key employees must
first be approved by the Compensation Committee and are granted at the sole
discretion of the Committee. Based on an assessment of competitive factors, the
Compensation Committee determines a suitable award that provides an incentive
for both performance and employee retention purposes.
Chief Executive Officer's Compensation
Mr. Malkin's salary is based on his contribution to the Company. He is entitled
to merit salary increases. These merit increases are determined in accordance
with the procedures and guidelines described above. The Compensation Committee
approved Mr. Malkin's 1999 bonus based on his achievement with respect to the
targeted earnings goal for the Company. Other factors in the Compensation
Committee's decision were Mr. Malkin's leadership in developing Corporate growth
strategies, developing and international business activities and his
contribution made in developing the market for biotechnology-enhanced seed. For
fiscal 1999, Mr. Malkin's base salary was $290,000 with a bonus of $487,228
(consisting of a cash bonus of $250,000 and the transfer by the Company to Mr.
Malkin of certain real property with a fair market value of $237,228).
Compensation Committee
Jon E.M. Jacoby
Joseph M. Murphy
<PAGE>
PERFORMANCE OF DELTA AND PINE LAND COMPANY SHARES
The Company's Shares were first publicly traded on June 29, 1993. The following
table shows a comparison of cumulative total return to stockholders for D&PL
Common Stock, the NYSE/AMEX/NASDAQ Market Index and a peer group composed of the
following company: Pioneer HiBred International, Inc. DeKalb Genetics Corp.,
Mycogen Corp., and Calgene, Inc., each of which has been included in the peer
group in the past, are excluded from the Company's peer group because their
respective stocks are no longer traded on a public market. The table assumes
$100 invested on June 29, 1993, and the reinvestment of dividends.
<TABLE>
<CAPTION>
Comparison of Cumulative Total Return
Delta and Pine Land
Fiscal Year Ending Company Stock Market Peer Group
- ------------------ ------- ------------ ----------
<S> <C> <C> <C>
August 1994 100.0 100.0 100.0
August 1995 184.7 121.9 140.3
August 1996 318.7 142.8 182.8
August 1997 552.3 195.7 288.2
August 1998 863.3 200.9 344.1
August 1999 571.5 280.0 403.7
</TABLE>
<PAGE>
EXECUTIVE COMPENSATION
Annual Compensation
The following table sets forth certain information regarding compensation paid
to, or accrued for, the Company's Chief Executive Officer and the Company's four
other most highly-compensated executive officers (the "Named Officers") during
the year ended August 31, 1999:
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Compensation
Name and Securities
Principal Position Annual Compensation Underlying All Other
Year Salary($) Bonus($) Options(1) Compensation
---- --------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Roger D. Malkin 1999 290,000 487,228 (5) 2,666(2) $30,000 (4)
Chief Executive Officer
1998 290,000 -- 2,666(2) $35,000 (4)
1997 290,000 220,000 62,222(3) $29,000 (4)
Steven M. Hawkins 1999 218,000 150,000 -- --
President and
Chief Operating Officer
1998 163,000 -- 130,000 --
1997 140,000 40,000 53,000 --
W. Thomas Jagodinski 1999 162,500 75,000 -- --
Vice President-Finance
and Treasurer
1998 150,000 -- -- --
1997 140,000 75,000 79,999 --
Thomas O. Luehder 1999 165,000 51,000 -- --
Senior Vice President
1998 150,000 25,000 30,000 --
1997 150,000 22,500 8,889 --
Charles R. Dismuke 1999 170,000 45,000 -- --
Senior Vice President
1998 165,000 -- -- --
1997 160,000 50,000 24,889 --
</TABLE>
- --------------------------------------------
(1) All stock options reflected on a post-split basis.
(2) Includes options for 2,666 shares granted by formula to Mr. Malkin in his
capacity as a director of the Company, concurrently with identical grants
to all directors of the Company.
(3) Includes options for 8,889 Shares granted to Mr. Malkin in his capacity as
a director of the Company, concurrently with identical grants to all
directors of the Company.
<PAGE>
(4) Director's and attendance fees for serving as a director of the Company.
(5) Consists of a cash bonus of $250,000 and the transfer by the Company to Mr.
Malkin of certain real property with a fair market value of $237,228.
Employment Contracts and Change-In-Control Arrangements
Mr. Jagodinski is employed pursuant to an employment agreement effective
September 1, 1997 which provided for an annual base salary of $150,000 subject
to upward adjustment plus bonus, the amount of which is determined in accordance
with the bonus program described herein, plus insurance and other fringe
benefits. The agreement is automatically extended each day so that at any given
date, the time remaining under the contract will be for an additional two year
period. The contract may be terminated, except as a result of a change in
control or in anticipation of a change in control, upon three months written
notice. The employment agreement includes provisions pursuant to which Mr.
Jagodinski will receive, in the event of the termination of his employment due
to a change in control or in anticipation of a change in control, an amount that
in effect is equal to two times his highest salary and bonus paid during any of
the previous five calendar years; plus a continuation for 24 months of his
insurance and fringe benefits. Mr. Jagodinski's agreement provides him the right
to surrender his stock options to the Company and receive cash in lieu of stock,
plus provides for certain tax protection payments on a portion of amounts paid
to him under this plan. In addition, Mr. Jagodinski was granted an option for
53,333 shares of common stock at $28.04 per share excercisable ratably or upon a
change in control. Pursuant to the terms of this agreement, Mr. Jagodinski shall
not compete with the Company for one year upon his termination in the event of a
change in control.
Option Grants in Last Fiscal Year
The only options exercisable into securities of the Company are those
outstanding under the 1993 Stock Option Plan adopted in April 1993 and the 1995
Long-term Incentive Plan. The 1993 Plan has not been available for further
grants since 1996. The Company granted options for 70,996 Shares under the 1995
Plan in 1999. All options granted under both plans vest 20% per annum commencing
on the first day of the second and each succeeding year following each grant and
expire ten years from the date of grant.
The following table sets forth certain information concerning stock options
granted during fiscal 1999:
<TABLE>
<CAPTION>
Option Grants in Fiscal 1999
Number of Percentage of Total Potential Realized Value at
Securities Options Granted Assumed Annual Rates of Stock
Underlying to Employees In Price Appreciation for Option
Name (2) Options Fiscal Year Exercise Price Expiration Date Term (1)
- -------- ------- ----------- -------------- --------------- --------
0% 5% 10%
-- -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Roger D. Malkin 2,666 3.76% 32.80 2/25/09 -- 55,000 139,000
</TABLE>
- --------------------------------------------
(1) The dollar amount under these columns are the result of calculations at 5%
and 10% rates arbitrarily set by the Securities and Exchange Commission
and, therefore, are not intended to forecast possible future appreciation,
if any, of the Company's stock price. Any actual gain on exercise of
options is dependent on the future performance of the Company's stock.
(2) No other Named Officers were granted options in 1999.
<PAGE>
Options Exercised in Last Fiscal Year
The following table sets forth certain information concerning stock option
exercises during 1999 and unexercised options held as of August 31, 1999 for
each of the Named Officers:
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
Number of Securities
Underlying Unexercised Value of Unexercised
Options at the In-The-Money Options at
Fiscal Year End the Fiscal Year End (1)
--------------- -----------------------
Shares Gain
Acquired Realized
on on # # $ $
Exercise Exercise Exercisable Unexercisable Exercisable Unexercisable
-------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Roger D. Malkin (2)(3) -- -- 130,310 42,132 2,843,982 228,359
Steven M. Hawkins (3) -- -- 47,333 136,000 288,893 493,040
W.T. Jagodinski -- -- 56,534 55,111 722,494 229,593
Thomas O. Luehder (3) -- -- 30,889 29,333 519,344 31,747
Charles R. Dismuke, Jr. -- -- 73,956 22,045 1,508,167 214,207
</TABLE>
- --------------------------------------------
(1) Based on $28.3125 per Share, the August 31, 1999, closing value as quoted
by the New York Stock Exchange.
(2) According to the terms of Mr. Malkin's options, all of his options would be
fully exercisable upon his retirement because he is over 65 years of age.
(3) Computation excludes the "out-of-the-money" options for the following
number of shares: 5,332 Shares for Mr. Malkin, 50,000 Shares for Mr.
Hawkins, and 30,000 Shares for Mr. Luehder.
Compensation Pursuant to Plans
Pension Plan
The Company maintains a noncontributory defined benefit plan (the "Pension
Plan") that covers substantially all full- time employees, including the Named
Officers. All employees of the Company and its domestic subsidiaries, who have
both attained age 21 and completed one year of eligibility service, are eligible
to participate in the Pension Plan. The Pension Plan provides a normal
retirement benefit (if employment terminates on or after age 65) equal to the
sum of: (i) 22.75% of the average compensation (the average of the participant's
five highest consecutive calendar years of earnings, including overtime but
excluding bonuses) reduced by 1/25th for each year of credited service less than
25 at normal retirement; and (ii) 22.75% of average compensation exceeding the
greater of one-half of average social security covered compensation and $10,000,
reduced by 1/35th for each year of credited service less than 35 at normal
retirement.
<PAGE>
The following table shows the estimated benefits payable in the form of a
single-life annuity upon retirement in specified average compensation and years
of credited service classifications:
<TABLE>
<CAPTION>
Pension Plan Table
------------------
Years of Credited Service
-------------------------
<S> <C> <C> <C> <C> <C>
Compensation 15 20 25 30 35
- ------------ -- -- -- -- --
$25,000 $4,238 $5,651 $7,064 $7,339 $7,614
$50,000 $10,088 $13,451 $16,841 $17,902 $18,989
$75,000 $15,938 $21,251 $26,564 $28,464 $30,364
$100,000 $21,788 $29,051 $36,341 $39,027 $41,739
$150,000 $33,488 $44,651 $55,841 $60,152 $64,489
200,000 $34,424 $45,899 $57,374 $61,842 $66,309
250,000 $34,424 $45,899 $57,374 $61,842 $66,309
300,000 $34,424 $45,899 $57,374 $61,842 $66,309
400,000 $34,424 $45,899 $57,374 $61,842 $66,309
</TABLE>
The above estimated annual benefits were calculated by the actuary for the
Pension Plan. Benefit amounts shown are the annual pension benefits payable in
the form of a single-life annuity for an individual attaining the age of 65 in
1999. In addition, such amounts reflect the 1999 maximum compensation limitation
under the Internal Revenue Code of 1986, as amended, and are not subject to any
deduction for social security or other amounts.
The estimated years of credited service and eligible average compensation for
each of the Named Officers as of January 1, 1999, the most recent Pension Plan
valuation date, are as follows:
Years of Credited
Name Service Average Plan Compensation
- ---- ------- -------------------------
Roger D. Malkin 29 $154,000
Steven M. Hawkins 1 153,750
W.T. Jagodinski 7 128,282
Thomas O. Luehder 5 152,500
Charles R. Dismuke, Jr. 22 140,643
Supplemental Executive Retirement Plan
The Company adopted a Supplemental Executive Retirement Plan ("SERP"), which
became effective January 1, 1992, and covers certain management personnel,
including certain of the Named Officers. The SERP provides for payments to
participants in the form of a single-life annuity, or as otherwise provided by
the SERP commencing at age 65 or the
<PAGE>
participant's postponed retirement date. The following table sets forth the
scheduled estimated annual benefits expected to be paid pursuant to the SERP to
the Named Officers who are currently participants:
Name (1) Annual Cash Benefit
Roger D. Malkin............................. $12,000
(1) Estimated annual benefits in the amount of $29,000 are also expected to be
paid pursuant to the SERP to F. Murray Robinson, a former officer of the
Company who retired April 15, 1999.
The SERP also provides that on the death of an active employee, the Company will
pay a death benefit to the participant's surviving spouse equal to the actuarial
equivalent of the participant's accrued benefit, which is based upon the
participant's years of service with the Company and the years of service the
participant would have had at age 65, if employment had continued. If a
participant's employment with the Company is terminated prior to age 65 for
reasons other than death, then the participant shall be paid a vested percentage
of his accrued benefit equal to the participant's annual cash benefit above
multiplied by a fraction (not greater than one), the numerator of which is the
participant's years of service as of the date of termination of employment and
the denominator of which is the participant's projected years of service as of
age 65, if employment had not terminated.
Each participant's vested percentage in the SERP is determined as follows:
Number of Years of Service Vested Percentage
1 but less than 2.................................... 20%
2 but less than 3.................................... 40%
3 but less than 4.................................... 60%
4 but less than 5.................................... 80%
5 or more............................................ 100%
Under the terms of the SERP, the Company may discontinue additional eligibility
and planned payments under the SERP at any time. The Named Officers noted above
are fully vested in the SERP.
Defined Contribution Plan
Effective April 1, 1994, the Company established a defined contribution plan
under the rules of Internal Revenue Code Section 401(k) (the "401(k) Plan"). The
401(k) Plan covers substantially all full-time employees. Eligible employees of
the Company and its domestic subsidiaries, who have both attained age 21 and
completed one year of service, may participate in the 401(k) Plan. A participant
may elect to contribute up to 18% of his or her eligible earnings to the 401(k)
Plan. The 401(k) Plan allows the Company to match a maximum of six percent of
eligible employee contributions. As of August 31, 1999, the Company has elected
not to match such contributions.
Incentive Plans
The Company maintains two incentive plans that compensate key employees and
directors through the grant of options to buy shares of Common Stock. In July
1993, the Company adopted the 1993 Stock Option Plan, which is now expired. On
October 17, 1995, the Company's Board of Directors adopted the 1995 Long-term
Incentive Plan which the shareholders ratified at the 1996 Annual Meeting.
Pursuant to the 1995 Plan, the Board of Directors may award stock options, stock
appreciation rights, restricted Shares of Common Stock and performance units to
officers, key employees and directors. Under the 1995 Plan, 2,560,000 Shares are
authorized for grant. As of December 31, 1999, options for 2,205,136 Shares have
been granted under the 1995 Plan, leaving available for grant 354,864 Shares,
net of forfeitures.
<PAGE>
Under both plans, all options for stock granted vest 20% per annum commencing on
the first day of the second and each succeeding year following each grant and
expire ten years from the date of grant. Shares subject to options and awards
under the LTIP which expire unexercised are available for new option grants and
awards. The number of shares available for grant under the 1993 Plan upon
forfeitures of options outstanding thereunder has been reduced to zero and the
granting of options thereunder has ceased.
CERTAIN TRANSACTIONS
Consulting Agreement
Nam-Hai Chua earned approximately $4,000 in consulting fees in 1998 associated
with the Company's effort to enter into joint ventures with parties in the
People's Republic of China. No such payments were made in 1999.
Registration Rights
John Hancock Mutual Life Insurance Company has a one-time right to register,
under the Act, Shares owned by it on June 28, 1993, less the number of Shares
sold by Hancock in the Company's initial public offering. All of the expenses of
such registration, except for the cost of printing and Hancock's counsel, will
be paid by the Company. Hancock's registration rights are conditioned on Hancock
providing the Company with a legal opinion that its Shares may not otherwise be
publicly sold.
The holder of the convertible Series M Non-Voting Preferred Stock has certain
registration rights associated with the Common Stock into which the Preferred
Stock is convertible. The Preferred Stock is convertible into Common Stock
beginning upon the seventh anniversary of the date on which it was issued
(February 1996) or the occurrence of certain specified events, whichever occurs
first.
Future Transactions with Affiliates and Advances
The Company will require that any future transactions between the Company and
persons or entities affiliated with officers, directors, employees or
stockholders of the Company be on terms no less favorable to the Company than
could be obtained in an arm's-length transaction with an unaffiliated party.
Such transactions will also be subjected to approval by a majority of the
non-employee directors of the Company. The Board of Directors has adopted
resolutions prohibiting advances without its approval, except for ordinary
business and travel advances in accordance with the Company's policy.
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely on review of the copies of reporting forms furnished to the
Company, or written representations that no forms were required, the Company
believes that during 1999, all required events of its officers, directors and
10% stockholders to the Securities and Exchange Commission of their ownership
and changes in ownership of Shares (as required pursuant to Section 16(a) of the
Securities Exchange Act of 1934) have been filed, except that the following
individuals filed the following number of late reports with respect to the
following number of transactions: one Form 4 each for Messrs. Hugie and Kimmel
relating to an option exercise; one Form 4 for Mr. Ellis relating to stock
gifts; and one Form 4 each for Messrs. Malkin, Chua, Jacoby, Murphy, Roth, and
Scheidt relating to stock option grants.
<PAGE>
PROPOSAL NO. 2
AUTHORIZATION OF AN ADDITIONAL 2,560,000 SHARES UNDER
THE 1995 LONG TERM INCENTIVE PLAN
The Company has heretofore maintained the 1995 Long Term Incentive Plan pursuant
to which stock options have been awarded to key employees (approximately 159
persons, including 13 current executive officers) and directors (6 persons). Of
the 2,560,000 Shares of common stock currently authorized under the 1995 Plan,
only 354,864 remain available for grant. The Company granted options in fiscal
1998 for 722,996 Shares (of which 34,935 have since been forfeited) and in
fiscal 1999 for 70,996 Shares, and proposes to grant options in 2000 (subject to
stockholder approval of this Proposal 2). The Compensation Committee's current
expectation is for annual grants of stock options at substantially the same
levels as those made in years prior to 1999.
The Compensation Committee believes the lack of stock options available for
grant under the 1995 Plan will adversely affect the Company's ability to attract
and retain key executives. Accordingly, the Compensation Committee recommended
the following amendment to the 1995 Plan:
Increase the authorized number of Shares available under the 1995 Plan by
2,560,000 Shares. The total Shares available under the 1995 Plan will be
5,120,000 Shares, of which only 2,914,864 will be eligible for grant.
Since the adoption of the 1995 Plan, all employees as a group have been granted
2,205,136 options (net of 218,848 options which have been forfeited, and thus
are available for re-grant). The table below indicates the number of stock
options currently outstanding under the 1995 Plan. The exercise price of all the
options is the fair market value of a Share of Common Stock on the date of the
grant.
<TABLE>
<CAPTION>
1995 Plan Benefits Outstanding To Date
$ Value Total # of
Name Position (In the Money)(1)(2) Options Remaining (3)
- ---- -------- ------------------ -----------------
<S> <C> <C> <C>
Roger D. Malkin Chief Executive Officer 0 42,664
Steven M. Hawkins President and Chief $79,200 183,333
Operating Officer
W. Thomas Jagodinski Vice President-Finance 0 74,666
and Treasurer and
Assistant Secretary
Thomas O. Luehder Senior Vice President 0 38,889
Charles R. Dismuke, Jr. Senior Vice President 0 24,889
All Current Executives $170,775 676,548
as a Group (13 persons) (4)
Non-Executive Directors 0 69,326
as a Group (5 persons)
</TABLE>
- --------------------------------------------
<PAGE>
(1) Represents the difference between the price of the Company's Common Stock
at December 31, 1999 ($17.375), less the exercise price of the options.
(2) Value represents in the money value of remaining shares that were granted
pursuant to the 1995 Plan.
(3) Includes outstanding options which are currently out-of-the money.
(4) 10,665 of the remaining options were granted to Mr. Malkin in his capacity
as director.
The following summary of the 1995 Plan is qualified in its entirety by the full
text of the 1995 Plan and the amendments, copies of which may be obtained by
stockholders of the Company upon request directed to the Secretary of the
Company at the address on the cover of this Proxy Statement.
The 1995 Plan is administered by the Compensation Committee (the "Committee").
Key employees and directors of the Company who are in positions in which their
decisions, actions and counsel can make substantial contributions to the
Company's profitability and success are eligible to participate in the 1995
Plan.
Stock options may be granted under the 1995 Plan at the discretion of the
Committee. No cash consideration will be received by the Company for the
granting of any option. Stock options may be options which are intended to
qualify as incentive stock options ("Incentive Stock Options") within the
meaning of Section 422(b) of the Internal Revenue Code of 1986, as amended (the
"Code"), or options which are not intended to so qualify ("Nonqualified Stock
Options"). The Committee has the discretion to fix the exercise price of the
options; however, the exercise price for Incentive Stock Options cannot be less
than 100% of the fair market value as of the date of grant. The option exercise
price may be satisfied in cash or by exchanging Shares of Common Stock owned by
the optionee, or a combination of cash and Shares. The Company may facilitate
the cashless exercise of options through customary brokerage arrangements. If
the exercise price is paid by tendering Shares, the Committee in its discretion
may grant the optionee a new stock option for the number of Shares used to pay
the exercise price. The Committee has broad discretion as to the terms and
conditions upon which options granted shall be exercised. Options have a maximum
term of ten years from date of grant. All options granted to date vest 20% per
annum commencing on the first day of the second and each succeeding year
following each grant and expire ten years from the date of the grant.
Stock appreciation rights ("SARs") are rights to receive cash or Shares, or a
combination thereof, as the Committee may determine, in an amount equal to the
excess of the fair market value of the Shares with respect to which the SAR is
exercised, over a specified price which must not be less than 100% of the fair
market value of the Shares at the time the SAR is granted, or, if the SAR is
granted in connection with a previously issued stock option, not less than 100%
of the fair market value of Shares at the time such option is granted. SARs may
be granted in connection with a previously or contemporaneously granted stock
option or independently. No cash consideration will be received by the Company
for the granting of any SAR. If a SAR is granted in relation to a stock option,
(i) the SAR will be exercisable only at such times and by such persons as the
related option is exercisable, and (ii) the grantee's right to exercise either
the related option or the SAR will be canceled to the extent that the other is
exercised. No SAR may be exercised earlier than six months or later than ten
years after the date of grant. The Committee may provide in the SAR agreement
circumstances under which SARs will become immediately exercisable and may,
notwithstanding the foregoing restriction on time of exercise, accelerate the
exercisability of any SAR at any time.
Awards of restricted Shares under the 1995 Plan may be made at the discretion of
the Committee and consist of Shares of stock granted to a participant and
subject to a stock restriction agreement. At the time of an award, a participant
has the benefits of ownership in respect of such Shares, including the right to
vote such Shares and receive dividends thereon and other distributions subject
to the restrictions set forth in the 1995 Plan and in the stock restriction
agreement. The share certificates bear a restrictive legend and the Shares may
not be sold, transferred or disposed of until such restrictions have elapsed.
Upon the expiration, lapse or removal of restrictions, share certificates free
of a restrictive legend will be issued to the grantee. The Committee has broad
discretion as to the specific terms and conditions of each award, including
applicable rights upon certain terminations of employment.
Performance unit awards entitle grantees to future payments based upon the
achievement of pre-established long-term performance objectives. A performance
unit agreement will establish with respect to each unit award (i) a performance
period of not fewer than two years, (ii) a value for each unit which will not
thereafter change, or which may vary thereafter pursuant to criteria specified
by the Committee and (iii) maximum and minimum performance targets to be
achieved during the applicable performance period. Under each agreement, the
grantee will be entitled to full value of a unit award for achievement of
maximum targets and a portion of a unit award for performance exceeding minimum
targets but less than maximum targets. The Committee has discretion to determine
the participants to whom performance unit awards are to be made, the times in
which such awards are to be made, the size of such awards and all other
conditions and awards, including any restrictions, deferral periods or
performance requirements.
The Committee has the discretion to provide financing to a participant in a
principal amount sufficient for the purchase of Shares pursuant to an award. The
participant, prior to the issuance or transfer of Shares under the 1995 Plan,
shall satisfy any tax withholding obligations, in whole or in part, and may
elect to have the Company withhold Shares for the value equal to the amount of
taxes required by law to be withheld.
If a Change in Control of the Company, as defined in the 1995 Plan, occurs, any
SAR outstanding for at least six months and any stock options awarded and not
previously exercisable and vested will become fully exercisable and vested and
all restrictions applicable to any restricted stock, performance units or other
stock-based awards will lapse.
In the event of any change in the outstanding Common Stock of the Company by
reason of a stock dividend or distribution, recapitalization, merger,
consolidation, reorganization, split-up, combination, exchange of Shares or the
like, the Board of Directors, in its discretion, may adjust proportionately the
number of Shares which may be issued under the 1995 Plan, the number of Shares
subject to outstanding awards, and the option exercise price of each outstanding
option. The Board of Directors may also make other such changes in outstanding
options, SARs, performance units and restricted stock awards as it deems
equitable in its absolute discretion to prevent dilution or enlargement of the
rights of grantees, provided that any fractional Shares resulting from such
adjustments will be eliminated.
The Board of Directors may terminate, amend, modify or suspend the 1995 Plan at
any time, except that the Board of Directors may not, without the authorization
of the holders of a majority of the Company's outstanding Shares, increase the
maximum number of Shares which may be issued under the 1995 Plan (other than
adjustments pursuant to the 1995 Plan), extend the last date on which awards may
be granted under the 1995 Plan, extend the date on which the 1995 Plan expires,
change the class of persons eligible to receive awards, or change the minimum
option price.
The 1995 Plan provides that each director will receive a Nonqualified Stock
Option for 2,667 Shares, which option becomes exercisable 20% per year beginning
on the first day of the second and each succeeding year form the date of grant.
Federal Income Tax Consequences
(1) Options: No income will be realized by an optionee upon the optionee's
purchase of Shares pursuant to the exercise of an Incentive Stock Option. In
order to receive this tax benefit, the optionee must not dispose of the Shares
before he or she has held such Shares for at least one year after the date of
exercise and at least two years after the date of grant. Assuming compliance
with this and other applicable tax provisions, an optionee will recognize
long-term capital gain or loss when the optionee disposes of the Shares,
measured by the difference between the option price and the amount realized for
the Shares at the time of disposition. If the optionee disposes of Shares
purchased upon the exercise of the option before the expiration of the
above-noted periods, any amount realized from such disqualifying disposition
will
<PAGE>
be taxable as ordinary income in the year of disposition to the extent of the
lesser of the amount realized by the optionee in excess of the option price, or
the spread between the option price and the fair market value of the Shares at
the time the option is exercised. Any amount realized in excess of the fair
market value of the Shares on the date of exercise will be treated as long- or
short-term capital gain, depending upon the holding period of the Shares. No
deduction will be allowed to the Company for federal income tax purposes at the
time of the grant or exercise of an Incentive Stock Option. At the time of a
disqualifying disposition by an optionee, the Company will be entitled to a
deduction for the amount taxable to the optionee as ordinary income. The
exercise of a Nonqualified Stock Option will result in the recognition of
ordinary income by the optionee for federal income tax purposes in an amount
equal to the difference between the option price and the fair market value of
the Shares acquired upon the exercise of the option. The Company will be
entitled to a deduction equal to the amount of income recognized by the
optionee. Upon the later sale of any Shares acquired upon the exercise of a
Nonqualified Stock Option, any amount realized by the optionee in excess of the
amount recognized by the optionee as ordinary income will be treated as long- or
short-term capital gain to the optionee, depending upon the holding period of
the Shares.
(2) SARs: A grantee of a SAR will realize ordinary income upon the exercise of a
SAR equaling the amount of cash received or the current fair market value of
stock acquired, and the Company will receive a corresponding deduction. Upon
subsequent disposition of any Shares received, any gain or loss will be a long-
or short-term capital gain or loss depending upon the applicable holding period.
(3) Restricted Stock: The federal income tax consequences of restricted stock
awards will depend on the facts and circumstances of each restricted stock
award, and in particular, the nature of the restrictions imposed with respect to
the stock which is the subject of the award. In general, if the stock is subject
to a "substantial risk of forfeiture", i.e., if rights to full enjoyment of the
benefit of ownership of the stock are conditioned upon the future performance of
substantial services by the grantee, a taxable event occurs only when the risk
of forfeiture ceases. At such time, the grantee will realize ordinary income to
the extent of the excess of the fair market value of the stock on the date the
risk ceases over the grantee's cost for such stock, and the Company will be
entitled to a deduction in the same amount. Under certain circumstances, the
grantee can accelerate the taxable event with respect to the stock, in which
event, the ordinary income amount and the Company's deduction will be measured
as of the date the stock is deemed to have been transferred to the grantee. If
the restrictions with respect to stock which is the subject of a restricted
stock award do not subject the grantee to a "substantial risk of forfeiture" of
the stock, then the grantee will realize ordinary income with respect to the
stock to the extent of the difference at the time of the transfer of the stock
to the grantee between the fair market value of the stock and the grantee's cost
therefor, and the Company will be entitled to a deduction in the same amount.
Subsequent to the determination and satisfaction of the ordinary income tax
consequences, any further gain or loss realized on the subsequent disposition of
such stock will be a long- or short-term capital gain depending upon the
applicable holding period.
(4) Performance Unit Awards: A grantee of a performance unit award will realize
ordinary income upon receipt equaling the amount of cash or the current market
value of the stock received, and the Company will receive a corresponding
deduction. Upon subsequent disposition of any Shares received, any gain or loss
will be a long- or short-term gain or loss depending upon the applicable holding
period.
The foregoing description of tax consequences is based on present federal income
tax laws and is subject to change as the law changes. The summary does not cover
any State or local tax consequences of participation in the 1995 Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO INCREASE THE NUMBER
OF AUTHORIZED SHARES UNDER THE 1995 PLAN.
<PAGE>
PROPOSAL NO. 3
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Subject to ratification by the stockholders at the Annual Meeting, the Board of
Directors, upon the recommendation of the Audit Committee, has appointed Arthur
Andersen LLP to serve as the Company's independent public accountants for 2000.
Arthur Andersen LLP has served the Company as its independent public accounting
firm since 1984. A representative of Arthur Andersen LLP will be present at the
meeting and will have the opportunity to make a statement, if so desired, and
will be available to respond to appropriate questions. If the appointment is not
ratified or if Arthur Andersen LLP becomes incapable of serving in this capacity
or if their employment is terminated, the Board will appoint independent public
accountants whose continued employment after the next Annual Meeting following
such event shall be subject to ratification by the stockholders.
The affirmative vote of the holders of a majority of the Shares that are
represented in person or by proxy at the meeting and entitled to vote is
required to approve this appointment of Arthur Andersen LLP.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE RATIFICATION OF
THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS FOR 2000.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows of no
matters that will be presented for consideration at the Annual Meeting other
than those mentioned in this Proxy Statement. If any other matters are properly
brought before the Annual Meeting, it is intended that the persons named in the
proxy will act in respect thereof in accordance with their best judgment.
SOLICITATION OF PROXIES AND COST THEREOF
The expense of soliciting proxies and the cost of preparing, assembling and
mailing material in connection with the solicitation of proxies will be paid by
the Company. In addition to the use of mails, certain directors, officers or
employees of the Company and its subsidiaries, who receive no compensation for
their services other than their regular salaries, may solicit proxies. The
Company will reimburse brokerage firms, nominees, custodians and fiduciaries for
their reasonable out-of-pocket expenses for forwarding proxy materials to
beneficial owners and seeking instruction with respect thereto.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be included in the proxy statement and
presented at the Fall 2000 or the 2001 Annual Meeting must be received by the
Company no later than June 2, 2000 or September 30, 2000, respectively. With
regard to stockholder proposals not included in the Company's proxy statement
but which a stockholder wishes to be brought before the 2001 Annual Meeting, the
Company's bylaws establish an advance notice procedure which requires that the
Company receive notice of such a proposal by not less than 60 days nor more than
90 days prior to the date of the Annual Meeting; provided, however, that in the
event that less than 70 days notice or prior public disclosure of the date of
the meeting is given or made to stockholders, notice by the stockholder to be
timely must be received not later than the close of business on the 10th day
following the day on which such notice of the date of the Annual Meeting was
mailed or such public disclosure was made. In addition to the above requirements
as to timeliness, the proposals must meet certain eligibility requirements of
the Securities and Exchange Commission.
ANNUAL REPORT AND FINANCIAL STATEMENTS
Stockholders may obtain a copy of the Company's annual report on Form 10-K
("Report 10-K"), as filed with the Securities and Exchange Commission, without
charge (except for exhibits), by contacting: W.T. Jagodinski, Vice
President-Finance, Delta and Pine Land Company, One Cotton Row, Scott,
Mississippi 38772.
<PAGE>
Financial Statements meeting the requirements of Regulation S-X are incorporated
herein by reference and can be found in the Company's Form 10-K filed with the
Securities and Exchange Commission.
BY ORDER OF THE BOARD OF DIRECTORS
Jerome C. Hafter
Secretary
