<PAGE>
[LOGO OF STANDARD COMMERCIAL CORPORATION APPEARS HERE]
STANDARD COMMERCIAL CORPORATION
2201 Miller Road
Wilson, North Carolina 27893
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Notice of Annual Meeting of Shareholders
To Be Held August 8, 2000
Dear Shareholder:
You are cordially invited to attend the 2000 Annual Meeting of Shareholders
of Standard Commercial Corporation to be held at Hardy Alumni Hall on the campus
of Barton College in Wilson, North Carolina, on Tuesday, August 8, 2000 at 12
noon to:
(a) elect four directors;
(b) amend the Performance Improvement Compensation Plan to increase
the number of shares available for issuance thereunder from
682,850 to 1,432,850;
(c) ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors for fiscal 2001; and
(d) transact such other business as may properly come before the
meeting.
Shareholders of record at the close of business on June 14, 2000 will be
entitled to vote at the meeting.
Sincerely,
/s/ Robert E. Harrison
Robert E. Harrison
President
June 26, 2000
You are invited to a luncheon immediately following the meeting. If you
plan to attend, please complete and return the enclosed card directly to the
Company or telephone Carol Whitehead at 252-291-5507 Extension 259. If you need
directions to Barton College please contact Mrs. Whitehead.
PLEASE VOTE YOUR SHARES PROMPTLY BY COMPLETING AND RETURNING YOUR PROXY IN THE
ENVELOPE PROVIDED
<PAGE>
STANDARD COMMERCIAL CORPORATION
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Proxy Statement
Annual Meeting of Shareholders
August 8, 2000
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The accompanying proxy is solicited by the Board of Directors. A
shareholder giving a proxy may revoke it at any time before it is exercised.
Shareholders of record at the close of business on June 14, 2000 will be
entitled to vote at the meeting or any adjournments thereof. It is expected that
proxy material will be mailed to shareholders on or about June 26, 2000.
ELECTION OF DIRECTORS
The Company's Articles of Incorporation divide the Board of Directors into
three classes as nearly equal in number as possible, each of which serves for
three years. The term of office of one class of directors expires each year in
rotation so that one class is elected at each Annual Meeting for a full three-
year term. Two of the present directors, J. Alec G. Murray and Daniel M.
Sullivan, who were elected for three-year terms expiring at this Annual Meeting,
B. Clyde Preslar who was appointed to the Board in June 1999 to fill the
unexpired term (2000) of Ery W. Kehaya who died in November of 1998, and Mark W.
Kehaya who was appointed to the Board February 10, 2000 have been nominated for
three-year terms expiring at the Annual Meeting in 2003. The two other classes
of directors, who were elected for terms expiring at the Annual Meetings in 2001
and 2002, will remain in office.
INFORMATION ABOUT NOMINEES AND OTHER DIRECTORS
The information that follows as to the principal occupations and
directorships and the number of shares of the Company's common stock
beneficially owned, directly or indirectly, has been furnished to the Company by
such persons.
<TABLE>
<CAPTION>
Name, Age and Year First Became Director Principal Occupation During Past Five Years
---------------------------------------- -------------------------------------------
<S> <C>
Nominees for Terms Expiring in 2003
J. Alec G. Murray - 63, Director 1977 Chairman of the Board since August 1996; previously President/Vice
Chairman and Chief Executive Officer.
Daniel M. Sullivan - 76, Director 1995 Founder and retired Chief Executive Officer, Frost & Sullivan, Inc.;
currently Chairman JLM Couture, Inc. and director of four private
companies.
B. Clyde Preslar - 45, Director 1999 Vice President - Finance and Chief Financial Officer, Lance, Inc.
Prior thereto he was Director of Financial Services with Black &
Decker.
Mark W. Kehaya - 32, Director 2000 Prior to his resignation in February, 2000, he was employed by
the Company, serving variously as Finance Director of the Tobacco
Division, Vice President-Planning, and as General Director of the
Company's tobacco processing facility in St. Petersburg, Russia.
Directors Continuing in Office Until 2002
Marvin W. Coghill - 66, Director 1974 Chairman - Tobacco Division; prior to April 1994, President of the
Company.
Robert E. Harrison - 46, Director 1995 President and Chief Executive Officer since August 1996. He was
employed in July 1995 as Senior Vice President and Chief Financial
Officer and retained the latter position until April 1998.
William A. Ziegler - 75, Director 1985 Retired partner, Sullivan & Cromwell, attorneys.
Directors Continuing in Office Until 2001
William S. Barrack, Jr. - 70, Director 1992 Retired Senior Vice President, Texaco Inc. Director, Dominion
Resources, Inc.
Charles H. Mullen - 72, Director 1995 Retired Chairman and Chief Executive Officer, The American
Tobacco Company, and retired Vice President, American Brands, Inc.
A director of Swisher International Group Inc.
William S. Sheridan - 46, Director 1998 Senior Vice President and Chief Financial Officer Sotheby's
Holdings, Inc. since 1996. Prior thereto he was a partner with
Deloitte & Touche LLP.
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</TABLE>
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There are no family relationships among any of the directors and executive
officers except that Mark W. Kehaya is the brother of Ery W. Kehaya II, a Vice
President and officer of the Company.
PRINCIPAL SHAREHOLDERS
The following table sets forth at June 14, 2000 the common stock owned
beneficially, according to advice received by the Company, by each 5% or larger
shareholder, by each director, by each of the executive officers listed in the
Summary Compensation Table and by all corporate officers and directors as a
group :
<TABLE>
<CAPTION>
Name and Address Shares Owned % of Class
------------ ----------
<S> <C> <C>
Estate of Ery W. Kehaya 1,541,666 1 11.9%
474 Dover Road
Tequesta, FL 33469
FMR Corp. 1,258,900 9.7%
82 Devonshire Street
Boston, MA 02109
Franklin Resources, Inc. 1,018,972 7.8%
777 Mariners Island Blvd
San Mateo, CA 94403-7777
Dimensional Fund Advisors, Inc. 845,610 6.5%
1299 Ocean Avenue
Santa Monica, CA 90401
Royce & Associates, Inc. 744,612 5.7%
1414 Avenue of the Americas
New York, NY 10019
Helga L. Kehaya 730,808 2 5.6%
474 Dover Road
Tequesta, FL 33469
Wellington Management Company, LLP 725,200 5.6%
75 State Street
Boston, MA 02109
Mark W. Kehaya 516,585 3 4.0%
474 Dover Road
Tequesta, FL 33469
Marvin W. Coghill 224,789 4 1.7%
J. Alec G. Murray 207,371 5 1.6%
William A. Ziegler 11,371 *
Robert E. Harrison 10,557 6 *
Henry C. Babb 8,174 7 *
Alfred F. Rehm, Jr. 6,254 8 *
Charles H. Mullen 5,888 *
William S. Barrack, Jr. 5,393 9 *
Daniel M. Sullivan 4,249 *
William S. Sheridan 4,118 *
B. Clyde Preslar 2,650 *
Paul H. Bicque 1,542 *
All Directors and Corporate Officers as a Group1,488,886 11.4%
</TABLE>
------------------------------------------
* Less than one percent.
1 Executors of the estate are Helga L. Kehaya, Mark W. Kehaya and First Union
National Bank.
2 Includes 9,463 shares underlying $278,000 principal amount of the Company's
7 1/4% Convertible Subordinated Debentures assuming conversion thereof at
the current conversion price of $29.38 per share. Mrs. Kehaya is deemed a
10% owner by virtue of her
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status as an executor of the estate of Ery W. Kehaya.
3 Mark W. Kehaya is deemed a 10% owner by virtue of his status as an executor
of the estate of Ery W. Kehaya. Includes 1,830 shares owned by his wife,
2,558 shares owned by his child and 1,175 shares held for Mr. Kehaya's
account by the trustee of the Company's 401K Savings Plan.
4 Includes 4,969 shares held for Mr. Coghill's account by the trustee of the
Company's 401-K Savings Plan.
5 Includes 11,556 shares owned by Mr. Murray's wife.
6 Includes 1,674 shares held for Mr. Harrison's account by the trustee of the
Company's 401-K Savings Plan.
7 Includes 1,339 shares held for Mr. Babb's account by the trustee of the
Company's 401-K Savings Plan.
8 Includes 3,150 shares held for Mr. Rehm's account by the trustee of the
Company's 401-K Savings Plan.
9 Includes 555 shares owned by Mr. Barrack's wife.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning compensation of the
Chief Executive Officer and the other four most highly compensated
executive officers of the Company (the "named executive officers") for
services in all capacities for the fiscal year ended March 31, 2000.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------- ------------
Restricted Securities
Fiscal Other Annual Stock Underlying
Name and Principal Position Year Salary Bonus Compensation/1/ Awards/2/ Options
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<S> <C> <C> <C> <C> <C> <C>
Robert E. Harrison/3/ 2000 $ 385,000 $ 45,236 $ 3,200 0 0
President & Chief Executive 1999 375,000 125,000 3,200 20,776 45,144/5/
Officer 1998 350,000 100,000 3,200 37,083 100,000
Marvin W. Coghill 2000 $348,840 $ 22,572 $ 3,200 0 7,500
Chairman- Tobacco Division 1999 342,000 55,000 3,200 16,424 6,000
1998 325,000 50,000 3,200 61,145 0
Henry C. Babb/4/ 2000 $232,700 $ 17,396 $ 3,200 0 3,000
VP, Corporate Counsel & 1999 227,400 8,000 3,200 4,008 600
Secretary 1998 75,800 0 0 0 0
Alfred F. Rehm, Jr 2000 $204,000 $ 30,781 $ 3,200 0 5,000
President & Chief Operating 1999 200,000 29,000 3,200 7,072 4,000
Officer - Tobacco Division 1998 140,000 40,000 2,800 25,638 0
Paul H. Bicque 2000 $193,947 $ 17,455 $ 0 0 7,500
Managing Director - Wool 1999 190,147 19,000 0 4,360 6,000
Division 1998 182,430 18,000 0 16,118 0
</TABLE>
1. Employer contributions under the Company's 401(k) Savings Incentive Plan.
Eligible employees in the United States may contribute the lesser of 18% of
recognizable compensation or the maximum amount permitted under the
Internal Revenue Code. Employee contributions are partially matched with
employer contributions in the form of common stock of the Company. Noncash
personal benefits for the persons named above did not exceed the lesser of
$50,000 or 10% of the cash compensation reported.
2. No restricted stock awards were made in fiscal 2000. Fiscal 1999 awards
were based on fiscal 1998 performance and fiscal 1998 awards were based on
fiscal 1997 performance. The amounts shown in this column were calculated
by multiplying the number of shares issued by the closing market price
($8.00 and $17.50, respectively) of the Company's common stock on the date
of issuance. Each recipient of restricted stock has all the rights,
including voting and dividends, of other shareholders, subject to certain
restrictions and forfeiture provisions.
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3. Mr. Harrison was elected President, Chief Executive Officer, and Chief
Financial Officer on August 13, 1996; from July, 1995 to August, 1996 he
was Senior Vice President and Chief Financial Officer. He relinquished the
position of Chief Financial Officer effective April 1, 1998.
4. Mr. Babb was hired December 1, 1997.
5. Mr. Harrison's original option grant of 100,000 shares was replaced on
December 15, 1998 by an option grant to purchase 45,144 shares.
Option Grants During Fiscal Year Ended March 31, 2000
The following table summarizes all option grants during the year ended
March 31, 2000 to the named executive officers:
<TABLE>
<CAPTION>
% of Total Potential Realizable
Number of Options Value at Assumed
Shares Granted to Exercise Annual Rates of Stock
Underlying Employees in Or Base Price Appreciation for
Options Fiscal Year Price Per Expiration Option Term/2/
Name Granted 2000 Share Date/1/ 5% 10%
---- ------- ---- ----- ------- -- ---
<S> <C> <C> <C> <C> <C> <C>
Robert E. Harrison 0 - - - - -
Marvin W. Coghill 7500 11% $5.000 August 10, 2006 $39,375 $41,250
Henry C. Babb 3000 4% $5.000 August 10, 2006 $15,750 $16,500
Alfred F. Rehm, Jr. 5000 7% $5.000 August 10, 2006 $26,250 $27,500
Paul H. Bicque 7500 11% $5.000 August 10, 2006 $39,375 $41,250
</TABLE>
1. The stock option grants shown were made in August 1999 as a part of the
Long-Term Incentive component of the Executive Compensation Program and
become exercisable in equal annual installments over four years from the
date of the grant.
2. The compounding assumes a four-year exercise period for all option
grants. These amounts represent certain assumed rates of appreciation
only. Actual gains, if any, on stock option exercises are dependent on
the future performance of the Common Stock, and overall stock market
conditions. The amounts reflected in this table may not necessarily be
achieved.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
The following table sets forth information concerning holdings as of
March 31, 2000, by the named executive officers. No named executive officer
exercised options during the fiscal year ended March 31, 2000.
<TABLE>
<CAPTION>
Number of Unexercised Options Value of Unexercised In-the-Money
March 31, 2000 Options at March 31, 2000/1/
Name Exercisable/2/ Unexercisable/2/ Exercisable/2/ Unexercisable/2/
---- -------------- ---------------- -------------- ----------------
<S> <C> <C> <C> <C>
Robert E. Harrison 11,286 33,858 $ -0- $ -0-
Marvin W. Coghill 1,500 12,000 $ -0- $ -0-
Henry C. Babb 150 3,450 $ -0- $ -0-
Alfred F. Rehm, Jr 1,000 8,000 $ -0- $ -0-
Paul H. Bicque 1,500 12,000 $ -0- $ -0-
</TABLE>
1. Calculated by subtracting the exercise price from the closing price of the
Company's Common Stock as reported by the New York Stock Exchange on March
31, 2000 and multiplying the difference by the number of shares underlying
each option.
2. The first number represents the number or value (as called for by the
appropriate column) of exercisable options; the second number represents
the number or value (as appropriate) of unexercisable options.
Employment Agreements
In March 1997, the Company entered into a three-year Employment
Agreement with Robert E. Harrison, its President and Chief Executive Officer
(and then Chief Financial Officer). The agreement provided for a base salary of
$350,000 per year, annual cash bonuses upon achievement of performance goals, as
determined by the Compensation
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Committee of the Board of Directors of the Company, and other employee benefits.
In addition, the agreement, which was ratified by the Board of Directors on
April 14, 1997, provided for the grant to Mr. Harrison of nonqualified options
to purchase 100,000 shares of Common Stock of the Company at an exercise price
equal to the fair market value as of the date of the grant. These options were
replaced on December 15, 1998, with an option to purchase 45,144 shares at
$8.875 per share, subject to the same vesting provisions as the options granted
to other executives. Mr. Harrison's employment agreement is automatically
renewable for successive two-year periods after its initial three-year term. The
agreement also contains a covenant by Mr. Harrison not to compete with the
Company for one year after his termination, except if he is terminated by the
Company without cause. The agreement also provides that in the event Mr.
Harrison's employment is terminated by the Company without cause, he shall
receive termination pay in a lump sum equal to two years' base salary and one
year's bonus.
In December 1997, the Company entered into an Employment Agreement
with Henry C. Babb, its Vice President - Public Affairs, Secretary, and General
Counsel. The agreement provided for a base salary at that time of $224,000 and
eligibility to participate in other employee benefit programs. The agreement
also provides that in the event Mr. Babb's employment is terminated without
cause by the Company, including or in connection with a change in control, he
shall receive termination pay in a lump sum equal to two years' base salary.
In August 1998, the Company entered into an Employment Agreement with
Paul H. Bicque, the Managing Director of its wool division. The agreement
provided for a base salary as determined from time to time by the Company's
management and eligibility to participate in other employee benefit programs.
The agreement also provides for certain severance benefits in the event of a
change in control of the Company's wool division; i.e., a lump sum of one half
of his then annual base salary in the event of his employment with an acquiring
entity, or a lump sum of two times his then annual base salary in the event of
his termination of employment without cause by the Company within one year after
a change in control of the wool division.
Retirement Plans
There is a Defined Benefit Pension Plan provided for participating
employees in the United States who retire directly from the Company or who
terminate service with vested rights. The Company pays the full cost of the
Plan. Employees who are at least 21 years old and have been employed for at
least one year are covered by the Plan. The right to receive benefits under the
Plan is 100% vested after five years of plan membership. The monthly benefit
payable upon retirement is based on average compensation for the three highest
years multiplied by various factors for each year of service up to 40 years. The
definition of compensation includes amounts deferred under the 401(k) Savings
Incentive Plan and Pretax Medical Plans, but excludes bonuses and other awards.
The benefit normally is computed in the form of a straight-life annuity, or the
actuarial equivalent thereof under other options specified in the Plan. In
addition, an immediate benefit is provided to the surviving spouse upon death of
an active or disabled participant. The maximum annual benefit payable from this
Plan is limited by Section 415 of the Internal Revenue Code to $135,000 in
calendar 2000 ($130,000 in 1999 and in 1998).
A nonqualified Supplemental Retirement Plan provides such benefits
from the Company's general funds as would otherwise be provided under the above
tax-qualified Plan except for Internal Revenue Code limitations on amounts which
may be paid out of a tax-qualified Plan.
The table below shows representative total annual retirement benefits
payable to an employee retiring in fiscal 2000 under the above Plans for
specified levels of compensation and years of service computed as a straight-
life annuity at age 65.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
Final Average Years of Credited Service at Age 65
Compensation 15 20 25 30 35 40
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
100,000 21,300 28,400 35,500 42,700 48,500 52,300
150,000 33,700 44,900 56,200 67,400 76,800 82,400
200,000 46,100 61,400 76,800 92,200 105,000 112,500
250,000 58,500 77,900 97,400 116,900 133,300 142,600
300,000 70,800 94,400 118,000 141,700 161,500 172,800
350,000 83,200 110,900 138,700 166,400 189,800 202,900
400,000 95,600 127,400 159,300 191,200 218,000 233,000
----------------------------------------------------------------------------------------
</TABLE>
As of March 31, 2000, Messrs. Harrison, Coghill, Babb, Rehm, and
Bicque had 4, 42, 2, 21, and 8 years of service, respectively, for pension
purposes. The pensionable compensation covered by the US and foreign retirement
plans in 2000, 1999, and 1998 for each executive officer listed in the Summary
Compensation Table is equal to the "salary" amount shown
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in the Table. Foreign pension plans use different formulae than the one used in
preparing the above table. At March 31, 2000, Mr. Bicque had accrued annual
benefits payable at age 65 of $23,599.
Performance Improvement Compensation Plan
On August 11, 1992, the shareholders of the Company approved the adoption
of a Performance Improvement Compensation Plan (the "PICP"), which is
administered by the Compensation Committee of the Board of Directors. The PICP
allows the granting of a number of different types of equity based compensation
vehicles. Awards under the PICP may be made to participants in the form of
incentive stock options, nonqualified stock options, discounted stock options,
restricted stock, stock appreciation rights, phantom stock, stock awards,
performance shares, and deferred stock. A maximum of 500,000 shares of common
stock, plus six percent of any increase in the number of authorized and issued
shares of common stock above the number of authorized and outstanding shares as
of the date the PICP was adopted, may be issued under the PICP. In May 1997, the
Company issued 3,047,500 shares of common stock in a public offering. Therefore,
pursuant to the terms of the PICP, the total shares authorized was increased by
182,850. To date there have been grants of restricted stock and nonqualified
stock options.
In fiscal 2000, no restricted stock awards were granted. The restricted
stock awards granted in fiscal 1999 vest proportionally over four years, with
any unvested portion of the award being subject to forfeiture if a recipient's
employment is terminated other than because of death, disability, or retirement
after age 62 under certain conditions. The restricted stock awards granted prior
to fiscal 1999 are subject to forfeiture for a period of seven years if a
recipient's employment is terminated other than for reasons listed previously.
The Compensation Committee may also waive the restriction. The recipient of an
award may vote the stock and is entitled to receive any declared cash dividends.
The nonqualified stock option awards granted in fiscal 2000 vest
proportionally over four years, with the option expiring seven years from grant
date. Conditions are imposed upon the exercisability of options in the event of
retirement, death, disability, or other termination of employment as determined
by the Compensation Committee.
The Company is proposing to increase the number of shares of common stock
available for issuance under the PICP by 750,000 shares. The proposal is
included in this proxy statement. If approved by the shareholders, the total
amount of shares of common stock available under the PICP will be 1,432,850.
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
The committees established by the Board of Directors to assist it in the
discharge of its responsibilities are: Executive Committee, Audit Committee,
Compensation Committee, Finance Committee and Nominating Committee.
The Executive Committee consists of J. Alec G. Murray, Marvin W. Coghill
and Robert E. Harrison. This committee meets on call and has authority to act on
most matters during the intervals between Board meetings. During the last fiscal
year, the committee acted on various matters by unanimous written consent.
The Audit Committee, which met four times during the last fiscal year,
consists of William S. Sheridan (Chairman), William S. Barrack, Jr., Charles H.
Mullen and B. Clyde Preslar, none of whom have ever been employees of the
Company. This committee is primarily concerned with assisting the Board in
fulfilling its fiduciary responsibilities relating to accounting policies and
auditing and reporting practices, and assuring the independence of the Company's
public accountants, the integrity of management and the adequacy of the
Company's financial disclosure. Its duties include recommending the selection of
independent accountants, reviewing the scope of the audits and the results
thereof, and reviewing the organization and scope of the Company's internal
systems of financial control and accounting policies. New rules concerning
independence, competence and mandated reviews have been adopted by the Audit
Committee and the appropriate disclosures will be included as they become
effective.
The Compensation Committee, which met six times during the last fiscal
year, consists of Charles H. Mullen (Chairman), William A. Ziegler, Daniel M.
Sullivan and William S. Sheridan, none of whom have ever been employees of the
Company. This committee is primarily concerned with administering the Company's
Performance Improvement Compensation Plan, determining the compensation of
executive officers and oversight of the Company's pension plans.
The Finance Committee, which met five times during the last fiscal year,
consists of B. Clyde Preslar (Chairman), Daniel M. Sullivan, William S. Barrack,
Jr., Robert E. Harrison, Marvin W. Coghill and William A. Ziegler. Of the
current membership on the Committee, only Mr. Harrison and Mr. Coghill are
officers of the Company, and there are no interlocking relationships. This
Committee is primarily concerned with monitoring the financial condition of the
Company; making recommendations regarding financial needs, business planning
policies, capital expenditures, dividends, stock repurchases, relations with the
financial community, mergers, acquisitions and other major projects; and
management structure and policy development.
The Nominating Committee, which met five times during the last fiscal year,
consists of William A. Ziegler (Chairman), Robert E. Harrison, Charles H. Mullen
and J. Alec G. Murray. This committee is primarily concerned with recommending
to the full Board of Directors candidates for election as director. The
Committee will consider candidates recommended by
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<PAGE>
shareholders. Such recommendations should be sent to the Nominating Committee,
c/o Henry C. Babb, Secretary, Standard Commercial Corporation, 2201 Miller Road,
Wilson, North Carolina 27893.
The Board of Directors held five meetings during the last fiscal year.
During that year, each director was present at 75% or more of the meetings of
the Board and its committees on which the director served.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The rules of the Securities and Exchange Commission require disclosure of
late Section 16 filings by directors and executive officers. To the best of the
Company's knowledge and belief, there were no late filings during fiscal 2000.
DIRECTORS' COMPENSATION
As a result of the Company's desire to further improve its governance
practices, it, in November, 1998, employed the services of Wm. M. Mercer's
Executive Compensation Practices Group to undertake a study both of its
governance and of its outside directors' compensation. The Independent
Directors' compensation was changed, effective August, 1999, to more closely
reflect the competitive compensation and governance practices recommended by
Mercer. Directors receive an annual retainer of $18,000 for serving on the Board
plus a fee of $1,500 for each meeting of the Board attended and $1,100 for each
committee meeting attended. Directors receive restricted stock based on 15% of
their annual retainer if the Company's restricted stock plan goals are met, plus
an annual grant of 1,000 option shares. A yearly award of deferred stock equal
to 50% of annual retainer replaced the Directors' retirement program. In fiscal
2000, a total of 9,900 deferred shares were awarded to non-employee directors.
These awards will vest at such time as the director is no longer a member of the
Board of Directors.
COMPENSATION COMMITTEE REPORT
The compensation of the executive officers is determined by the
Compensation Committee.
Compensation Objectives
In determining the total compensation of an executive officer the Committee
has in mind the necessity of attracting and retaining exceptionally competent
employees and motivating them to achieve maximum profitability of the Company.
Compensation paid comparable executive officers by competitors is taken into
account, along with performance of the Company and the individual and of the
activities for which he is responsible.
Compensation Arrangements
Apart from benefits, which are dealt with in the accompanying tables, an
executive officer's total compensation consists of base salary, annual cash
incentives, and long-term incentives.
Base Salary. In determining base salaries for the executive officers, the
Committee examines published market survey data from both the wholesale trade
and general industry and considers the executive officer's responsibilities, the
past and present performance of the Company and the individual, the activities
for which he is responsible, and future potential.
Annual Cash Incentives. On June 11, 1998, the Board of Directors adopted
the Annual Cash Incentive Plan pursuant to which executive leadership is
rewarded with a performance based cash award for team and personal achievements
that lead to business growth and increased shareholder value. Award payouts are
measured during the plan year and determined by two components: business results
and key performance objectives. The business results component is based on
desired financial and operating performance as determined by the Committee. Key
performance objectives are based on individual goals established as at the start
of each plan year.
Long-Term Incentives. The long-term incentive arrangements allow executives
the opportunity to receive shares of the Company's common stock based on the
Performance Improvement Compensation Plan (the "PICP") approved by the
shareholders on August 11, 1992. The PICP authorizes the Committee to make
effective for designated employees various arrangements based on shares of the
Company's common stock.
On June 14, 1993, the Committee adopted the Restricted Stock Plan (the
"RSP") as a means of awarding certain employees, to the extent specified
performance objectives are met, restricted shares of the Company's common stock.
In doing so, the Committee had in mind not only the objectives generally
applicable to the Company's compensation arrangements, but also causing
participating employees to own more shares of the Company's stock than might
otherwise be the case and to identify more closely with shareholder interests.
The Company's executive officers are among those who have been designated as
eligible to participate. The RSP calls for awards of restricted stock to be made
on the basis of overall Company performance in terms of return on net assets. No
awards are made in a year in which return on net assets is not at least equal to
a threshold figure that approximates the Company's weighted average cost of
capital. The Committee establishes a target
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<PAGE>
return on net assets for the year and the pool that will be available if that
target is achieved. Correspondingly more or fewer shares are awarded to the
extent the target is exceeded or not achieved. Shares awarded pursuant to the
RSP on or after June 10, 1998, vest over a four-year period at the rate of one
fourth per year. Shares awarded under the RSP prior to that date remain
restricted for seven years, except in the case of specified circumstances. The
Committee has the discretion to adjust awards because of changed conditions or
for other reasons. No restricted shares were awarded in fiscal 2000 based on
fiscal 1999 performance.
A Nonqualified Stock Option Plan (the "NSOP") was adopted by the Committee
on June 10, 1998. The NSOP awards are made to certain executives on the basis of
the factors considered in determining their salaries. The NSOP provides a
participant the opportunity to purchase shares of the Company's common stock at
a fixed price, regardless of the actual stock market price. In fiscal 2000, a
total of 71,000 option shares were awarded at an option price equal to the fair
market value as of the date of the grant. These grants vest one fourth on the
first anniversary of the grant date and an additional one fourth on each of the
second, third, and fourth anniversaries of the grant date. Each option expires
seven years from its grant date, except as otherwise is provided for in the
Rules, Regulations and Procedures of the NSOP or as determined by the Committee.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
In determining Mr. Harrison's base salary and cash bonus in the last
fiscal year, the Committee took into consideration primarily the compensation
paid to chief executive officers by the Company's principal competition and an
appropriate relationship between Mr. Harrison's compensation and those of the
executive officers reporting to him.
Although no executive officer of the Company received compensation in
fiscal 2000 in excess of the $1 million deductibility threshold established by
Section 162(m) of the Internal Revenue Code, the Committee will continue to
consider the deductibility and performance-based compensation issues raised by
Section 162(m).
This report has been provided by the Compensation Committee: Charles H.
Mullen, Chairman; William S. Sheridan; Daniel M. Sullivan; and, William A.
Ziegler.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are currently Charles H. Mullen,
Chairman; William S. Sheridan; Daniel M. Sullivan; and, William A. Ziegler.
Messrs. Mullen, Sheridan, Sullivan, and Ziegler were not at any time during the
fiscal year ended March 31, 2000 or at any other time an officer or employee of
the Company. No executive officer of the Company serves as a member of the Board
of Directors or Compensation Committee of any entity which has one or more
executive officers serving as a member of the Company's Board of Directors or
Compensation Committee.
-8-
<PAGE>
PERFORMANCE GRAPH
The following graph compares total return, including reinvestment of
dividends, on the Company's Common Stock to the total returns of the Standard &
Poor's 500 Stock Index and a Peer Group Index (PGI) (as defined below) for the
last five fiscal years ending March 31, 2000. The comparison assumes a $100
investment on March 31, 1995 in (1) Standard Commercial Common Stock, (2) the
Standard & Poor's 500 Index and (3) the PGI, and shows in each case the change
in stock price and dividends paid (assuming dividend reinvestment) over the
ensuing five years.
[GRAPH APPEARS HERE]
NOTE: The past performance shown in the graph above is not necessarily
indicative of future performance.
---------------------------------------------------------------------
FYE March 31 1996 1997 1998 1999 2000
---------------------------------------------------------------------
Standard $ 70 $145 $130 $ 40 $ 31
S&P 500 $132 $158 $234 $278 $327
Peer Group $128 $162 $189 $ 92 $ 57
---------------------------------------------------------------------
The PGI combines the weighted total return, based on the average month-end
market capitalization, of the other two leaf tobacco dealers (DIMON Incorporated
and Universal Corporation) publicly traded in the United States.
Anything to the contrary notwithstanding in any of the Company's previous
filings under the Securities Act of 1933 or the Securities Exchange Act of 1934
that incorporates future filings, including this Proxy Statement, in whole or in
part, the preceding Compensation Committee Report and Performance Graph shall
not be incorporated by reference into any such filings nor shall they constitute
soliciting material.
VOTING RIGHTS AND PROXY
On June 14, 2000, the Company had outstanding 12,999,012 shares of common
stock, all of one class and each share entitled to one vote. Shares cannot be
voted at the meeting unless the owner is present or represented by proxy. A
proxy may be revoked by the shareholder at any time before it is voted.
The election of directors and the amendment of the PICP requires a
plurality of the votes cast and the appointment of the Company's auditors
requires the affirmative vote of a majority of the votes cast at the meeting.
For purposes of determining the number of votes cast with respect to a
particular matter, only those cast "For" or "Against" are included. Abstentions
and votes withheld, as well as broker nonvotes will be counted only in
determining the presence of a quorum.
Unless a shareholder specifies otherwise in a proxy, it will be voted FOR
the election as director of the four nominees listed under the caption "Election
of Directors" herein, FOR the amendment of the PICP and FOR approval of the
appointment of Deloitte & Touche LLP as the Company's independent auditors for
fiscal 2001.
AMENDMENT OF PERFORMANCE IMPROVEMENT COMPENSATION PLAN
-9-
<PAGE>
The Standard Commercial Corporation Performance Improvement Compensation
Plan (the "PICP") was approved by the shareholders of the Company in 1992. The
PICP is an equity-based compensation plan, designed for the benefit of the
Company, by enabling it to better attract and retain personnel of exceptional
ability. The PICP provides for a variety of different types of equity-based
compensation to be awarded to eligible participants under a single plan.
The company proposes to increase the number of shares of common stock
reserved for issuance under the PICP. Currently, 682,850 shares of common stock
are available for issuance under the PICP. However, as of May 31, 2000, 352,490
shares were either committed to existing awards under the PICP or had been
issued under the PICP, leaving only 330,360 shares available for future
issuance.
The PICP allows the grant of a number of different types of equity-based
compensation vehicles. Awards under the PICP may be made to participants in the
form of incentive stock options, nonqualified stock options, discounted stock
options, restricted stock, stock appreciation rights, phantom stock, stock
awards, performance shares, deferred stock, and other forms of equity-based
compensation. The PICP was adopted by the Board of Directors to assist the
Company in attracting and retaining personnel of exceptional ability, in
motivating such personnel through added incentives to make a maximum
contribution to greater profitability, in developing and maintaining a highly
competent management team, and in maintaining the Company's competitive position
with other companies with respect to executive compensation.
The Company believes that the 330,360 remaining shares under the PICP are
insufficient to accomplish the purposes of the PICP as described above.
Equity-based compensation has become an extremely important component of
management compensation in businesses world-wide. The Company anticipates that
in order to attract and retain qualified individuals, it will need to use the
equity compensation envisioned in the PICP. Consequently, the Company is
proposing to increase the number of shares reserved for issuance under the PICP
by 750,000 shares which would bring the total shares available under the PICP to
1,432,850.
Administration
The PICP is administered by the Compensation Committee of the Board of
Directors of the Company. The Committee has the exclusive right to interpret,
construe, and administer the PICP and to select the persons eligible to receive
awards under the PICP. The Committee determines the number of stock options,
stock rights, shares of stock, or performance shares subject to an award and the
form, terms, conditions, and duration of each award.
Securities to be Offered
If approved by shareholders entitled to vote at the 2000 Annual Meeting,
the Company will be authorized to issue 1,432,850 shares of common stock under
the PICP. If in the future the number of outstanding shares of common stock
increases, other than an increase due to awards under the PICP or any other
similar plan, then six percent of any such increase will be added to the
1,432,850 shares of common stock otherwise available for issuance under the
PICP. Such amount may also be increased by proportionate and equitable
adjustments to be made by the Committee upon a reorganization, recapitalization,
stock split-up, stock dividend, merger, consolidation, sale of assets, or
certain similar events affecting the Company. The common stock subject to an
award under the PICP will be made available from the authorized and unissued
shares of common stock of the Company.
Eligible Participants
Eligible participants under the PICP include any employees of the
Company as determined by the Committee. Other personnel, including directors,
may also be eligible for awards under the PICP. The Company estimates that
currently approximately 165 employees participate in the PICP. The Committee has
the exclusive right to select the persons who are eligible to receive awards
under the PICP.
Types of Awards
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<PAGE>
The Committee is provided broad discretion to determine the terms and
conditions of the various types of awards under the PICP. The various forms of
awards that may be made to participants under the PICP are described below.
Incentive Stock Options. The Company may grant tax-favored incentive stock
options ("ISOs") to eligible participants under the PICP at such time or times
as determined by the Committee until August 11, 2002, subject to certain
conditions. The exercise price of an ISO may not be less than 100% of the fair
market value of the common stock at the date of grant. An ISO and the related
stock right, if any, granted under the PICP must be exercised in whole or in
part from time to time within 10 years from the date of grant, or such shorter
period as specified by the Committee in the award agreement. Upon a termination
of employment of the optionee with the Company, the period of time during which
in ISO or related stock right remains exercisable will be restricted. The
aggregate fair market value of the shares of common stock with respect to which
ISOs are first exercisable during a calendar year by an eligible participant may
not exceed $100,000. Under certain circumstances, the amount of an option
granted in excess of the foregoing limitation will be treated as a nonqualified
stock option. ISOs may not be granted under the PICP to any eligible participant
who, at the time of the option grant, owns stock possessing more than 10% of the
voting power of the Company. Subject to the limitation on the maximum number of
shares of common stock that may be issuable pursuant to the PICP, the maximum
number of shares of common stock that may be subject to ISO awards under the
PICP cannot exceed 375,000 shares.
Nonqualified Stock Options. The Company may also grant nonqualified stock
options ("NQSOs") to eligible participants under the PICP to purchase shares of
common stock at such time or times as determined by the Committee. The exercise
price of an NQSO will be as established by the Committee in the agreement
evidencing the award. Such exercise price may be less than 100% of the fair
market value at the time of grant. An NQSO and the related stock right, if any,
granted under the PICP will be exercisable in full or in part from time to time
as specified by the Committee or in the award agreement. Upon termination of
employment, the period of time during which the NQSO and any related stock right
may be exercisable will be restricted. An NQSO may also be subject to such other
terms and conditions, not inconsistent with the PICP, as determined by the
Committee and specified in the award agreement.
Stock Appreciation Rights. The Company may grant a stock appreciation
right (an "SAR") to an eligible participant under the PICP either in connection
with in ISO or an NQSO or independent of any related stock option. An SAR is a
stock right that provides for an amount payable in shares of stock and/or cash,
as determined by the Committee, equal to the excess of the fair market value of
a share of common stock on the date the stock right is exercised over the price
at which a participant could exercise a related stock option to purchase the
share of common stock. Any SAR granted under the PICP in conjunction with a
stock option will be subject to the same terms and conditions as the related
stock option, including limits on transferability, and will be exercisable only
to the extent the stock option is exercisable. If the related stock option
terminates or lapses, the SAR will also terminate or lapse. Upon exercise of an
SAR, the number of shares of common stock subject to exercise under any related
stock option will be reduced automatically by the number of shares of common
stock represented by the related stock option, or portion thereof, that is
surrendered. The Committee is also empowered under the PICP, in its sole
discretion, to grant limited stock appreciation rights ("Limited SARs"), which
will become exercisable only upon a change in control and/or a potential change
in control of the Company, as defined in the PICP, and may be settled only in
cash. See "Effect of Change in Control" below.
Incidents of Stock Options and Stock Rights. Each stock option (ISO or
NQSO) and stock right (SAR or Limited SAR) granted under the PICP will be
subject to such terms and conditions, including employment requirements, not
inconsistent with the PICP, as may be determined by the Committee. A stock
option or stock right under the PICP will not be transferable by the participant
other than by will or the laws of descent and distribution and will be
exercisable during the lifetime of the participant only by the participant or
his or her guardian or legal representative. The purchase price for shares of
common stock upon exercise of a stock option under the PICP will be payable in
such amounts, at such times, and upon such terms as will be determined by the
Committee, subject to any limitations set forth in the award agreement. The
Committee may establish payment terms for the exercise of stock options that
permit the participant to deliver shares of common stock with a fair market
value equal to the stock option exercise price as payment upon exercise of a
stock option. No cash dividends will be paid on shares of common stock subject
to unexercised stock options under the PICP. The Committee, however, may, in its
sole discretion, provide for the payment of "divided equivalents" on shares of
common stock subject to an exercisable stock option under the PICP. The
Committee may also, in its discretion, authorize payment of "interest
equivalents" on dividend equivalents under the PICP.
Restricted Stock. Restricted stock awards my be made to participants under
the PICP as an incentive for the performance of future services that will
contribute materially to the successful operation of the Company. A restricted
stock award will be an award of common stock issued with the restriction that
the holder may not sell, transfer, pledge, or assign
-11-
<PAGE>
such stock and with such other restrictions as the Committee, in its sole
discretion, may impose, including without limitation, a restriction on the right
to vote such shares to the extent, if any, such shares possess voting rights and
the right to receive cash dividends. In addition to determining the applicable
restrictions on restricted stock, which may include service or performance
restrictions, the Committee may also in its discretion determine the purchase
price, if any, to be paid for such restricted stock, the length of time during
which the restrictions will apply, and whether dividends and other distributions
on the restricted stock will be paid currently to the participant or paid to the
Company for the account of the participant. Upon termination of employment of a
participant with the Company prior to the lapse of restrictions, all shares of
restricted stock then held by the participant will be forfeited, unless
otherwise provided in the award agreement or determined by the Committee.
Deferred Stock. The PICP also empowers the Company to issue shares of
deferred stock to eligible participants. The Committee is empowered to determine
the individuals to whom, and the time or times at which, awards of deferred
stock may be made, the number of shares to be awarded, the price, if any, to be
paid for the deferred stock, the time or times within which such awards may be
subject to forfeiture, whether shares of deferred stock will accrue cash
dividend equivalents, and all other conditions of the deferred stock awards. The
Committee may also condition awards of deferred stock upon the attainment of
specified performance goals or such other factors or criteria as the Committee
may determine. Deferred stock awards generally may not be sold, transferred,
pledged, assigned, or otherwise encumbered during the deferral period, as
specified by the Committee. Upon the expiration of the deferral period,
certificates for shares of common stock will be delivered to the participant
representing the number of shares of common stock covered by the deferred stock
award. Upon termination of employment of a recipient of a deferred stock award
with the Company, the deferred stock covered by an award will be forfeited by
the participant, unless otherwise provided in the PICP or the applicable award
agreement.
Stock Awards. The Company may grant an award of common stock to
eligible participants under the PICP in payment of compensation that has been
earned or as compensation to be earned, including without limitation,
compensation awarded concurrently with or prior to the grant of the stock award.
Shares of common stock subject to a stock award may be issued to the participant
at the time the award is granted, or at any time subsequent thereto, or in
installments from time to time, as determined by the Committee. A stock award
will be subject to such terms and conditions, including without limitations,
restrictions on the sale or other disposition of the stock award or the shares
of common stock issued pursuant thereto, as determined by the Committee.
Performance Shares. Awards of performance shares may be made to eligible
participants under the PICP as an incentive for the performance of future
services that will contribute materially to the successful operation of the
Company. A performance share under the PICP will be an award of a unit valued by
reference to a designated number of shares of common stock, which value may be
paid to the participant by the delivery of such cash or common stock, or any
combination thereof, as determined by the Committee, upon achievement of such
performance objectives during the applicable performance period as the Committee
may establish at the time of the award grant or thereafter. The Committee in its
sole discretion may determine the participants to whom awards of performance
shares will be made, the performance period, and/or the performance objectives
applicable to such awards, the form of settlement of a performance share, and
any other terms and conditions of such awards.
Other Stock-Based Awards. The PICP also authorizes the grant of other
awards that are valued in whole or in part by reference to, or otherwise based
on, common stock. These other stock-based awards will include without limitation
convertible preferred stock, convertible debentures, exchangeable securities,
phantom stock, and stock-award options valued by reference to book value or
performance. The Committee in its sole discretion is empowered to determine the
participants eligible to receive other stock-based awards, the time or times at
which such awards may be made, the number of shares of common stock subject to
such awards, and all other terms and conditions of such awards. Shares of common
stock subject to other stock-based awards may not be sold, assigned,
transferred, pledged, or otherwise encumbered prior to the date on which the
shares are issued or, if later, the date on which any applicable restriction,
performance, or deferral period lapses.
Effects of Change in Control
The Committee is granted broad discretion under the PICP to deal with
awards under the PICP in the event of a change in control or a potential change
in control of the Company, as defined in the PICP. Under such circumstances, the
Committee will be authorized to take such action as it determines to be
necessary or advisable, and fair and equitable to
-12-
<PAGE>
participants, with respect to awards under the PICP. The Committee's action may
include without limitation, establishing, amending, or waiving the forms, terms,
conditions and duration of an award and the award agreement, so as to provide
for earlier, later, extended, or additional times for exercise or payment,
differing methods for calculating payment, alternate forms and amounts of
payment, and accelerated release of restrictions, or other modifications, all as
more fully described in the PICP.
The PICP also allows the Committee in its sole discretion to grant Limited
SARs, which become exercisable only in the event of a change in control and/or a
potential change in control of the Company, subject to such terms and conditions
as the Committee, in its sole discretion, may specify. Limited SARs will be
settled solely in cash. A Limited SAR will entitle the holder of the related
stock option to surrender such stock option, or any portion thereof, to the
extent unexercised, and to receive a cash payment equal to the difference
between the SAR fair market value, at the date of surrender, of a share of
common stock for which the surrendered stock option or portion thereof is then
exercisable, and the price at which a participant could exercise a related stock
option to purchase the share of common stock. For these purposes, the "SAR fair
market value" means a value established by the Committee for the exercise of an
SAR or Limited SAR.
Amendment and Termination
If approved by shareholders, the PICP will continue in effect until
terminated by the Company as provided in the PICP. The Company may also amend
the PICP. Generally, no amendment to the PICP may be made without approval by
the Company's shareholders entitled to vote that would make certain changes,
including altering the group of persons eligible to participate in the PICP,
increasing the maximum number of shares of common stock available for awards
under the PICP, except as otherwise provided thereunder, limiting or restricting
the powers of the Committee in administering the PICP, making certain changes
with respect to ISOs under the PICP, or materially increasing the benefits
accruing to participants under the PICP. No amendment to or discontinuation of
the PICP or any provision thereof may adversely affect any award previously
granted to a participant under the PICP, without the written consent of such
participant.
Federal Income Tax Consequences
The following is a summary of the federal income tax treatment under
the Internal Revenue Code of 1986, as amended, of stock options, stock rights,
and other stock awards under the PICP. The federal income tax laws pertaining to
the PICP are highly technical, and such laws are subject to change at any time.
Some variations on the federal income tax consequences described below may occur
with respect to participation by persons subject to Section 16(b) of the
Securities Exchange Act. The following summary is not intended to be exhaustive
and does not discuss any foreign, state or local taxes that may be associated
with participation under the PICP.
Qualified Options. In general, no taxable income will be recognized by an
optionee, and no tax deduction will be allowed to the Company, upon the grant or
exercise of an ISO. The difference between the option price and the fair market
value of the shares upon exercise, however, will be a preference item subject to
the federal alternative minimum tax. If the optionee makes a "disqualifying
disposition" of the shares of common stock acquired through the exercise of an
ISO before the later to occur of (1) two years from the date of the grant of the
ISO or (2) one year after the date of the transfer of the shares to him (the
"Holding Period"), the optionee must include as ordinary income the gain
realized on that disposition to the extent of the lesser of (1) the fair market
value of the common stock on the date of exercise of the ISO minus the option
price or (2) the amount realized on the disposition minus the option price. Upon
the occurrence of a "disqualifying disposition", the Company will be entitled to
deduct, as compensation paid, the amount so included as ordinary income by the
optionee. If the optionee has held the shares for the requisite Holding Period
prior to the disposition, the optionee will be taxed according to the rules of
sales and exchanges generally, and the Company will not be entitled to a tax
deduction by reason of the disposition. An optionee exercises an option under
the PICP may be allowed to pay for his or her shares with cash or with shares of
common stock, including shares acquired in a prior ISO exercise. Generally, such
payment would not give rise to recognition by the optionee of a gain or loss.
If, however, an optionee exercises an option and pays for the shares upon
exercise with shares that the optionee acquired in a prior ISO exercise but has
not held for the requisite Holding Period, the optionee will be taxed on the
disposition of the shares acquired in the prior ISO exercise as if a
"disqualifying disposition" of those shares had occurred.
Nonqualified Options. An optionee granted an NQSO realizes no taxable
income upon receipt of the NQSO, but is deemed to have realized ordinary taxable
income equal to the excess of the fair market value of the stock acquired at the
time of exercise of the NQSO, over the option price paid, unless at the time of
exercise the stock remains subject to a "substantial risk of forfeiture" as
defined in Section 83 of the Code. Whether an optionee who exercises an NQSO
under the PICP will
-13-
<PAGE>
acquire the stock subject to such risk will depend upon the terms of the NQSO
award as determined by the Committee and set forth in the agreement evidencing
the award. For a discussion of the income tax treatment when a participant
acquires common stock subject to a "substantial risk of forfeiture," see
"Restricted Stock" below. The Company is required for federal income tax
purposes to withhold tax on the amount of income realized by the optionee in the
transaction. In general, when an NQSO is exercised by the exchange of previously
acquired stock, the optionee receives a tax-free exchange and basis carryover
for old shares for an equivalent number of new shares. The basis for any
additional shares will equal the sum of the amount included in gross income by
reason of the exercise of the NQSO, plus any amount of cash paid by the optionee
upon the exercise of the NQSO. The Company will be entitled to a deduction for
federal income tax purposes in the year the optionee must report the income in
an amount equal to the ordinary income realized by the optionee as a result of
exercise of his NQSO.
Stock Rights. The grant of a stock right to a participant under the PICP
will not require recognition of taxable income. Upon the exercise of a stock
right, however, payments received by the participant will be included in that
participant's income as compensation in that year. If payment is made in cash,
that amount of cash must be recognized as income. If the stock right is paid in
common stock, income will be recognized in the amount of the fair market value
of the common stock. The Company will be entitled to a deduction for
compensation in an equal amount, to be recognized in its taxable year in which
the participant's taxable year of income inclusion ends.
Restricted Stock. A recipient of restricted stock, or any other stock
award under the PICP that is subject to a "substantial risk of forfeiture,"
generally will be subject to tax at ordinary income rates on the excess over the
purchase price, if any, of the fair market value of the restricted stock, or
other stock award, at such time that the stock is no longer subject to
forfeiture and restrictions on transfer for purposes of Section 83 of the Code.
However, a recipient who so elects under Section 83(b) within 30 days of the
date of transfer of the shares will have ordinary taxable income on the date of
transfer of the shares equal to the excess of the fair market value of such
shares, determined without regard to the restrictions, over the purchase price,
if any, of such restricted stock, or other stock award. The Company will be
entitled to a deduction for federal income tax purposes in the year the
participant is taxable in an amount equal to the ordinary income realized by the
participant as a result of the restricted stock or other stock award.
Deferred Stock. The recipient of a deferred stock award under the PICP
will generally be subject to tax at ordinary income rates on the fair market
value of the deferred unrestricted stock on the date that such stock is
transferred to the participant under the award. The Company will be entitled to
a deduction for federal income tax purposes in the year the participant is
taxable in an amount equal to the ordinary income realized by the participant as
a result of the deferred stock.
Stock Awards. Unrestricted awards of common stock will be taxable to the
participant and deductible by the Company at the time of the award in an amount
equal to the fair market value of the shares at that time. If the shares are
subject to forfeitability and nontransferability restrictions, the federal
income tax consequences will be as described under "Restricted Stock" above. The
Company will be entitled to a deduction for federal income tax purposes in the
year the participant is taxable in an amount equal to the ordinary income
realized by the participant as a result of the stock award.
Performance Shares. A participant granted an award of performance shares
will not recognize income at the time of grant but generally will recognize
ordinary income when the award is settled, either at the conclusion of the
performance period or at the end of the deferral period elected by a
participant. The amount of ordinary income recognized will be equal to the sum
of the cash received, if any, plus the then fair market value of the shares of
common stock received. The Company will be entitled to a deduction for federal
income tax purposes in the year the participant is taxable in an amount equal to
the ordinary income realized by the participant as a result of the performance
share award.
Payments Upon Change in Control
The PICP authorizes the acceleration of payment of awards and related
shares of common stock in the event of a change in control or potential change
in control of the Company, as defined in the PICP. Such acceleration of payment
may cause part or all of the consideration involved to be treated as a
"parachute payment" under the Code, which may subject the recipient thereof to a
20% excise tax and which may not be deductible by the Company.
Required Vote and Recommendation
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<PAGE>
The approval of the amendment to the PICP requires the affirmative vote of
a majority of the shares of the Company's Common Stock present and voting at the
annual meeting. A copy of the plan document may be obtained from the Secretary
of the Company.
THE BOARD OF DIRECTORS BELIEVES THAT THE AMENDMENT TO THE PERFORMANCE INCENTIVE
COMPENSATION PLAN IS IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS
AND UNANIMOUSLY RECOMMENDS VOTING "FOR" THE APPROVAL OF THE AMENDMENTS AND THE
RESERVATION OF AN ADDITIONAL 750,000 SHARES OF COMMON STOCK FOR ISSUANCE
THEREUNDER.
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Deloitte & Touche LLP audited the financial statements of the
Company in 2000 and, subject to shareholder ratification, the Board of Directors
has reappointed this firm as the Company's Independent Public Accountants for
fiscal 2001. Representatives of Deloitte & Touche LLP will be present at the
Annual Meeting, and will have an opportunity to respond to questions relating to
their audit of the Company's financial statements and to make a statement if
they so desire.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 2001 Annual
Meeting of Shareholders must be received by the Company before February 25,
2001. To be included, all such proposals must comply with the requirements of
Rule 14a-8 promulgated under the Exchange Act and the Board of Directors directs
the close attention of interested shareholders to that Rule. In addition, the
Company's Bylaws require that shareholders give advance notice and furnish
certain information to the Company in order to bring a matter of business before
an annual meeting or to nominate a person for election as a director.
SOLICITATION OF PROXIES
The cost of soliciting proxies in the accompanying form will be borne by
the Company. In addition to solicitations by mail, employees of the Company may
solicit proxies in person or by telephone.
At the time of mailing this Proxy Statement, the management is not aware of
any matters not referred to herein to be presented for action at the meeting. If
any other matters properly come before the meeting, it is intended that the
shares represented by proxies will be voted with respect thereto in accordance
with the judgment of the persons voting them.
/s/ Henry C. Babb
Henry C. Babb
June 26, 2000 Secretary
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<PAGE>
[LOGO OF STANDARD COMMERCIAL CORPORATION APPEARS HERE]
STANDARD COMMERCIAL CORPORATION
Annual Meeting of Shareholders
Hardy Alumni Hall
400 Atlantic Christian Drive
Barton College
Wilson, North Carolina
August 8, 2000
12:00 Noon
Shareholders are invited to a luncheon immediately following the Annual Meeting.
If you plan to attend, please complete and return the enclosed card directly to
the Company or telephone Carol Whitehead at 252-291-5507, Extension 259. If you
need directions to Barton College please contact Mrs. Whitehead.
.FOLD AND DETACH HERE.
...............................................................................
SHAREHOLDER RECORD DATA
________________________________________________________________________________
(Continued from other side)
A MAJORITY OF SAID PROXIES OR THEIR SUBSTITUTES
WHO SHALL BE PRESENT AND ACT, OR IF ONLY ONE
SHALL BE PRESENT AND ACT, THEN THAT ONE SHALL
HAVE AND MAY EXERCISE ALL THE POWERS OF
SAID PROXIES HEREUNDER.
Dated______________________ ,2000
_________________________________
_________________________________
[Signature(s)]
_________________________________
Please date and sign as name(s)
appear hereon. When shares are
held by joint tenants, both
should sign. When signing on
behalf of a corporation,
partnership, estate, trust or
other shareholder, state your
capacity or otherwise indicate
that you are authorized to sign.
PLEASE COMPLETE, SIGN AND RETURN AS SOON AS POSSIBLE IN ENCLOSED ENVELOPE.
<PAGE>
.FOLD AND DETACH HERE.
................................................................................
STANDARD COMMERCIAL CORPORATION
Proxy solicited on behalf of the Board of Directors
The undersigned hereby appoints Henry C. Babb and Keith H. Merrick proxies,
each with full power of substitution, to vote all shares the undersigned is
entitled to vote at the Annual Meeting of Shareholders of STANDARD COMMERCIAL
CORPORATION to be held at Hardy Alumni Hall, Barton College in Wilson, North
Carolina, on August 8, 2000 and at any adjournments thereof.
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(1) ELECTION OF DIRECTORS: [_] FOR all nominees listed below [_] VOTE WITHHOLD
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(INSTRUCTION: To withhold vote for individual nominee(s), strike a line
through the name(s) in the list below.)
Three-year terms expiring in 2003: J. Alec G. Murray, Daniel M. Sullivan,
B. Clyde Preslar and Mark W. Kehaya
(2) Amend the Performance Improvement Compensation Plan to increase authorized
shares by 750,000.
[_] FOR [_] AGAINST [_] ABSTAIN
(3) Ratification of the appointment of Deloitte & Touche LLP as the Company's
independent auditors for fiscal 2001.
[_] FOR [_] AGAINST [_] ABSTAIN
(4) In the discretion of such proxies, upon such other business as may
properly come before the meeting.
(Continued, and to be signed on the other side)
