DIMON INCORPORATED
512 BRIDGE STREET
P. O. BOX 681
DANVILLE, VIRGINIA 24543
NOTICE OF ANNUAL MEETING
AND PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 13, 1998
<PAGE>
DIMON INCORPORATED
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held
November 13, 1998
TO THE SHAREHOLDERS:
The annual meeting of shareholders of DIMON Incorporated will
be held at the offices of the Company, 512 Bridge Street, Danville,
Virginia, the 13th day of November, 1998, at 10:00 A.M., for the
following purposes:
1. To elect four members of the Board of Directors to serve
until the 2001 annual meeting or until the election of
their successors;
2. To approve the designation by the Board of Directors of
PricewaterhouseCoopers LLP as auditors for the fiscal year
ending June 30, 1999;
3. To approve the adoption of the 1998 DIMON Incorporated
Directors' Stock Option Plan; and
4. To transact such other business as may properly come
before the meeting, or any adjournment thereof.
Only record holders of Common Stock at the close of business on
September 30, 1998, are entitled to vote at the meeting.
By Order of the Board of Directors
/s/ J. O. HUNNICUTT III
Secretary
Danville, Virginia
October 13, 1998
You are cordially invited to attend the meeting. However, it
is important that your stock be represented if you do not attend,
and the Board of Directors of the Company requests that you date,
sign and return the accompanying proxy. A postage paid, addressed
envelope is enclosed for your convenience. You may revoke your
prior proxy at any time by submitting a newly dated proxy or by
attending the meeting and voting in person if desired.
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<PAGE>
DIMON INCORPORATED
512 Bridge Street
P. O. Box 681
Danville, Virginia 24543
October 13, 1998
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
November 13, 1998
GENERAL
This statement is furnished in connection with solicitation by
the Board of Directors of DIMON Incorporated (the "Company") of
proxies in the accompanying form to be voted at the annual meeting
of shareholders of the Company to be held on November 13, 1998, or
any adjournment thereof. Proxies received in the accompanying form
may be revoked at any time before exercise by written notice
addressed to the Secretary at the office of the Company or by a
later dated proxy, or attendance at the meeting and voting in
person if desired, but proxies so received, properly executed and
unrevoked, will be voted.
Only record holders of Common Stock of the Company at the close
of business on September 30, 1998, are entitled to notice of, to
vote at and to participate in the meeting. On September 30, 1998,
there were 44,525,004 shares of Common Stock outstanding. Each
share of Common Stock is entitled to one vote. A majority of votes
entitled to be cast on any matter will constitute a quorum on that
matter. If a quorum is not present at the meeting, the meeting may
be adjourned from time to time by vote of majority of shares
present without notice other than announcement at the meeting.
Cost of solicitation will be borne by the Company. In addition
to the use of mails, proxies may be solicited personally or by
telephone by regular employees of the Company. The Company will
reimburse banks, brokerage firms, and other custodians, nominees
and fiduciaries for expenses reasonably incurred by them in sending
proxy material to the beneficial owners of stock. The date of
mailing of this statement and the accompanying proxy was October 13,
1998.
On April 1, 1995, Dibrell Brothers, Incorporated ("Dibrell")
and Monk-Austin, Inc. ("Monk-Austin") merged into the Company (the
"Reorganization").
ELECTION OF DIRECTORS
(Proposal 1)
Four Directors will be elected, each of whom is to serve until
the 2001 annual meeting or until his successor shall have been
elected.
Votes pursuant to the accompanying proxy will be cast for the
election of the following nominees, all of whom are now members of
the Board of Directors: Mr. R. Stuart Dickson, Mr. Albert C. Monk
III, Mr. Claude B. Owen, Jr. and Mr. Norman A. Scher. Although
management does not anticipate that any of the persons named below
will be unable or unwilling to stand for election, a duly executed
and delivered proxy may be voted for an appropriately designated
substitute. The election of each nominee for Director requires a
plurality of the votes cast by record holders of Common Stock
entitled to vote in the election of Directors. Votes that are
withheld and shares held in street name that are not voted in the
election of Directors will not be included in determining the
number of votes cast.
-3-
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" ALL OF THE
NOMINEES.
The Board of Directors consists of thirteen persons divided
into three classes, Class I, Class II and Class III, with terms
expiring at successive annual meetings of the shareholders of the
Company. Each director has served since April 1995, with the
exception of Messrs. Dickson, Slee and Taberer who have served
since November 1995, November 1996 and November 1997, respectively.
The following information is furnished with respect to the
Company's directors and nominees:
<TABLE>
<CAPTION>
Business Experience Other Public
Name Age During Past Five Years Directorships Held
---- --- ---------------------- ------------------
<S> <C> <C> <C>
Class I Nominees (nominated for election to serve for a term expiring at the 2001 annual meeting of shareholders)
R. Stuart Dickson 69 Chairman of the Executive Committee First Union Corporation;
of Ruddick Corporation, a holding PCA International, Inc.;
company, Charlotte, North Carolina Ruddick Corporation;
since 1994; prior thereto Chairman of Textron, Inc.; United
the Board of Ruddick Corporation. Dominion Industries.
Albert C. Monk III (1) 59 President of DIMON since 1994 prior
thereto Chairman of the Board, Chief
Executive Officer and President of Monk
-Austin.
Claude B. Owen, Jr. 53 Chairman of the Board and Chief American National
Executive Officer of DIMON since Bankshares, Inc.;
1994; prior thereto Chairman of the Richfood Holdings, Inc.
Board, Chief Executive Officer and
President of Dibrell since 1993.
Norman A. Scher 60 Executive Vice President and Chief Tredegar Industries, Inc.
Financial Officer of Tredegar
Industries, Inc., a plastics and metal
products manufacturer, Richmond,
Virginia.
Class II Directors (term expiring at the 1999 annual meeting of shareholders)
James E. Johnson, Jr. 68 Partner of Womble Carlyle Sandridge &
Rice, PLLC, a law firm, Charlotte, North
Carolina.
Joseph L. Lanier, Jr. 66 Chairman and Chief Executive Officer of Dan River Inc.;
Dan River Inc., a textile manufacturer, Flowers Industries, Inc.;
Danville, Virginia. SunTrust Banks, Inc.;
Torchmark Corporation;
Wappell & Reed Financial.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Business Experience Other Public
Name Age During Past Five Years Directorships Held
---- --- ---------------------- ------------------
<S> <C> <C> <C>
Robert T. Monk, Jr. (1) 50 Retired Senior Vice President of
DIMON International, a division of
DIMON Incorporated, since June 1997;
prior thereto Senior Vice President
of DIMON International, Inc. since
1995; prior thereto Vice President
and Director of Processing Operations
of Monk-Austin.
William R. Slee 57 Senior Advisor, Schroders PLC, a Algemeen Burgerlijk
merchant bank, London, United Pensioen Fonds;
Kingdom since 1995; prior thereto Singulus Technologies
Group Managing Director, Schroders A.G.
PLC.
Class III Directors (term expiring at the 2000 annual meeting of shareholders)
Louis N. Dibrell, III 53 Senior Vice President of DIMON
International, since 1995; prior
thereto Senior Vice President
of Dibrell.
Henry F. Frigon 63 Private investor and consultant since Buckeye Technologies
1995; prior thereto Executive Vice Corporation;
President and Chief Financial Officer C2i, Inc.; H&R Block,
of Hallmark Cards, Inc. Inc.; Sypress Solutions Inc.
John M. Hines 58 Consultant to DIMON Incorporated since
July 1996; prior thereto Executive Vice
President of DIMON since 1995; prior
thereto Executive Vice President and
Chief Financial Officer of Monk-Austin.
Dr. Thomas F. Keller 67 R. J. Reynolds Professor of Business American Business
Administration, Fuqua School of Products, Inc.; Biogen,
Business, Duke University, Durham, Inc.; Hatteras Income
North Carolina since 1996; prior thereto, Securities, Inc.; LADD
Dean and R. J. Reynolds Professor, Furniture, Inc.;
Fuqua School of Business, Duke Mentor Investment Trust;
University. Nations Fund Trust.; Wendy's
International, Inc.;
Anthony C. B. Taberer 62 Consultont to DIMON Incorporated
since April, 1997; prior thereto
Chairman of the Board Intabex
Holdings Worldwide S.A.
_______________________
(1) Messrs. A. C. Monk III and R. T. Monk, Jr. are first cousins.
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<PAGE>
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
Five meetings of the Company's Board of Directors were held
during fiscal year 1998. No Director attended less than 75 percent
of the total number of meetings held by (i) the Board of Directors
and (ii) all committees of the Board on which a Director served.
The Board has standing Executive, Audit, Executive Compensation
and Nominating Committees.
Members of the Executive Committee are Messrs. Owen (Chairman),
Hines, Albert C. Monk III and Scher. The business of the Company
is under the general management of a board of directors as provided
by the laws of Virginia, the Company's state of incorporation. The
DIMON Articles and By-Laws provide that the Executive Committee has
authority to act in all matters that the full Board may act upon
when the Board is not in session. The Executive Committee reports
all of its actions to the full Board of Directors at its next
meeting. The Executive Committee met twice during fiscal year
1998.
The Board's Audit Committee is composed of Dr. Keller
(Chairman), and Messrs. Frigon, Johnson and Slee. The Audit
Committee is authorized to consult with the Company's outside
auditors and recommend the selection of such auditors for each
fiscal year. The Audit Committee's basic functions are to assist
the Board of Directors in preserving the integrity of the financial
information published by the Company through the review of
financial and accounting controls and policies, financial reporting
requirements, alternative accounting principles that could be
applied and the quality and effectiveness of the independent
accountants and the Company's internal auditors. The Audit
Committee met three times during fiscal year 1998.
The Board's Executive Compensation Committee is composed of
Messrs. Scher (Chairman), Dickson, Johnson and Lanier. The
Executive Compensation Committee's basic functions are to review
the effectiveness of the management compensation plans of the
Company, to set the compensation of the Chief Executive Officer and
the managers reporting to the Chief Executive Officer, to review
and approve the management incentive systems of the Company and the
awards granted thereunder and to administer the Company's stock
option plans. The Executive Compensation Committee met three times
during fiscal year 1998.
The Board's Nominating Committee is composed of Messrs. Frigon
(Chairman), Dickson, Lanier and Dr. Keller. The Nominating
Committee recommends to the full Board of Directors persons to
serve as Directors of the Company and establishes such procedures
as it deems proper to receive and review information concerning
potential candidates for election or re-election to the Board of
Directors. Shareholders entitled to vote for election of directors
may nominate candidates for consideration by the Nominating
Committee. (See Shareholders' Proposals and Nominations.) The
Company's employment agreements with Mr. Owen and Mr. Albert C.
Monk III include provisions related to their nomination to the
Board of Directors. The Nominating Committee met three times
during fiscal year 1998.
Persons who are employees of the Company or its subsidiaries or
persons who serve as paid consultants to the Company receive no
compensation for their services as directors of the Company.
During fiscal year 1998, directors who were neither employees nor
paid consultants of the Company received an annual retainer of
$18,000 and fees of $1,500 for each meeting of the Board of
Directors and $1,000 for each meeting of a committee of the Board
of Directors attended. The Chairmen of each committee of the Board
of Directors who were not employees or consultants received an
additional annual retainer of $2,000. In addition, pursuant to the
Company's Non-Employee Directors' Stock Option Plan, each year each
director who is neither an employee of the Company or its
subsidiaries nor a paid consultant is granted an option to purchase
1,000 shares of Common Stock for a per share exercise price equal
to the fair market value of one share of Common Stock on the date
of grant.
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<PAGE>
STOCK OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table provides information as of September 15,
1998, with respect to the direct and indirect ownership of shares
of Common Stock by (i) all Directors and nominees for Director;
(ii) each executive officer named in the Summary Compensation
Table, and (iii) all Directors and executive officers of the
Company as a group. No person known to the Company beneficially
owns more than 5 percent of the outstanding shares of Common Stock.
</TABLE>
<TABLE>
<CAPTION>
Number of Number of
Shares with Shares with Percent of
Sole Voting Shared Voting Total Class
Name of Beneficial and Investment and Investment Number of (if more
Owners Power (1) Power Shares than 1 percent (2)
------------------ -------------- -------------- --------- ------------------
<S> <C> <C> <C> <C>
Louis N. Dibrell, III 293,673 0 293,673
R. Stuart Dickson 4,000 0 4,000
Henry F. Frigon 3,000 5,000 8,000
Brian J. Harker 44,000 522 44,522
John M. Hines 70,950 0 70,950
James E. Johnson, Jr. 5,000 0 5,000
Thomas F. Keller 3,000 3,000 6,000
Joseph L. Lanier, Jr. 10,500 0 10,500
Albert C. Monk III 1,296,089 15,237 1,311,326 2.94
Robert T. Monk, Jr. 959,538 0 959,538 2.16
Richard D. O'Reilly 2,161 0 2,161
Claude B. Owen, Jr. 238,378 87,396 325,774
Norman A. Scher 13,122 0 13,122
William R. Slee 2,000 0 2,000
A. C. B. Taberer (3) 0 0 0
All Officers, Directors
and Nominees for
Director as a group 3,121,606 122,023 3,243,629 7.22
(27 persons)
________________
(1) The amounts in this column include shares of Common Stock with respect to which the following
persons have the right to acquire ownership within sixty days of September 15, 1998: Messrs.
Dibrell, 9,000 shares; Dickson, 3,000 shares; Frigon, 3,000 shares; Harker, 44,000 shares;
Hines, 60,400 shares; Johnson, 3,000 shares; Keller, 3,000 shares; Lanier, 3,000 shares;
A. Monk, 25,500 shares; O'Reilly, 0 shares; Owen, 113,630 shares; Scher, 3,000 shares;
Slee, 2,000 shares, and the officers, Directors and nominees as a group, 409,579 shares.
(2) Percentages determined include shares of Common Stock with respect to which certain persons
have the right to acquire ownership within sixty days of September 15, 1998.
(3) Mr. Taberer is a potential beneficiary of a trust which controls Folium, Inc., the
beneficial owner of 832,514 shares of Common Stock representing 1.87 percent of the class.
The Company has been advised by Mr. Taberer and his counsel that he is not an affiliate of
Folium, Inc., and Mr. Taberer disclaims beneficial ownership of these shares.
</TABLE>
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
The following table presents information relating to total
compensation for the three fiscal years ended June 30, 1998, 1997
and 1996, of the Chief Executive Officer and the three most highly
compensated executive officers of the Company during fiscal year
1998.
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<PAGE>
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------- -----------------------------------
Awards Payouts
-------- -------------------------
Other Annual All Other
Compen- Compen-
Name and Principal Fiscal Salary Bonus sation (1) Options/ LTIP sation (2)
Position Year $ $ $ SARs(#) Payouts $
------------------ ------ ------ -------- ------------ -------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Claude B. Owen, Jr. 1998 468,750 0 0 40,000 0 119,570
Chairman of the Board, 1997 450,000 400,050 0 40,000 0 119,869
Chief Executive Officer 1996 405,000 303,750 0 33,000 0 33,969
and Director
Albert C. Monk III 1998 376,750 30,199(3) 0 30,000 0 73,920
President and Director 1997 367,000 338,007 0 30,000 0 75,582
1996 355,000 266,250 0 25,500 0 5,958
Brian J. Harker 1998 261,250 0 0 18,000 0 52,518
Executive Vice President 1997 235,750 159,995 51,253 16,000 0 52,078
and Chief Financial Officer 1996 180,000 81,000 0 9,000 0 4,500
Richard D. O'Reilly 1998 161,250 0 0 9,500 0 33,535
Senior Vice President - 1997 156,000 83,304 0 9,000 0 33,770
Human Resources 1996 140,000 63,000 0 0 0 2,660
________________
(1) None of the named executive officers received other annual compensation with an aggregate
value in excess of $50,000 or 10 percent of the total of combined salary and bonus for
fiscal year 1998.
(2) Includes contributions to the Company's 401(k) Plans and Profit Sharing Plans, accruals
in the Dibrell Deferred Compensation Plan and premiums in the Pension Equalization Plan
("PEP") and Supplemental Executive Retirement Plan ("SERP") for fiscal years 1998,
1997 and 1996 as follows:
</TABLE>
<TABLE>
<CAPTION>
Corporate
Match
401(k) Deferred PEP/SERP
Fiscal Plans Comp. Premiums Total
Name Year $ $ $ $
------------------ ------ ------ -------- ------------ --------
<S> <C> <C> <C> <C> <C>
Claude B. Owen, Jr. 1998 3,200 12,144 104,226 119,570
1997 3,200 12,144 104,525 119,869
1996 6,000 12,144 15,825 33,969
Albert C. Monk III 1998 3,200 0 70,720 73,920
1997 3,242 0 72,340 75,582
1996 5,958 0 0 5,958
Brian J. Harker 1998 3,200 0 49,318 52,518
1997 2,800 0 49,278 52,078
1996 4,500 0 0 4,500
Richard D. O'Reilly 1998 3,200 0 30,335 33,535
1997 3,020 0 30,750 33,770
1996 2,660 0 0 2,660
(3) The bonus paid to Mr. Albert C. Monk III was paid pursuant to his employment agreement
even though no bonuses were paid in fiscal year 1998 under the Cash Bonus Plan.
- -8-
<PAGE>
Stock Option Grants
The following table contains information concerning the grant
of options made during fiscal year 1998 under the Company's Omnibus
Stock Incentive Plan.
</TABLE>
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Grant Date
Present
Individual Grants Value
------------------------------------------------------ ----------
% of Total ($/SH) Black-
Options Exercise Scholes
# Options/SAR Granted to or Base Expiration Pricing
Granted (1) Employees Price Date Valuation(2)
-------------- ---------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Claude B. Owen, Jr. 40,000 8.9 $22.31 8/21/07 $402,800
Albert C. Monk III 30,000 6.7 $22.31 8/21/07 $302,100
Brian J. Harker 18,000 4.0 $22.31 8/21/07 $181,260
Richard D. O'Reilly 9,500 2.1 $22.31 8/21/07 $ 95,665
__________________
(1) All option grants consisted of incentive and nonqualified stock options. These grants become
exercisable on August 21, 2000.
(2) The exercise price was set at the closing price of DIMON Common Stock on the date of the grant.
Utilizing the Black-Scholes valuation method, a value of $10.07 per share was determined.
The Black-Scholes Model is a complicated mathematical formula widely used to value exchange
traded options. However, stock options granted under the plan differ from exchange traded
options in three key respects: the options are long-term, nontransferable and subject to
vesting restrictions, while exchange traded options are short-term and can be exercised or
sold immediately in a liquid market. In applying the Black-Scholes pricing model, the
Company has assumed an option term of ten years, an annual dividend yield for the Company's
Common Stock of 2.7 percent, a riskless rate of return of 6.49 percent and a stock price
volatility of .31 (based on the variance of return for the Common Stock over the sixty
trading days prior to June 30, 1997). No adjustment has been made to reflect the non-
transferability of options granted under the plan. Consequently, because the Black-Scholes
Model is adapted to value the options set forth in the table and is assumption based, it
may not accurately determine the grant date present value. The actual value, if any, an
optionee will realize will depend on the excess of the market value of the Common Stock
over the exercise price on the date the option is exercised.
</TABLE>
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<PAGE>
Option/SAR Exercises and Fiscal Year-End Option/SAR Value Table
The following table sets forth information with respect to the
named executive officers concerning the exercise of options during
fiscal year 1998 and unexercised options and Stock Appreciation
Rights ("SARs") held by them on June 30, 1998.
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Value
<TABLE>
<CAPTION>
Number of Value of
Unexercised Unexercised
Options & SARs In-the-Money
at Fiscal Options & SARs
Year End at Fiscal Year End
Shares Acquired Value Exercisable/ Exercisable/
on Exercise Realized Unexercisable (2) Unexercisable (1)(2)
--------------- -------- ----------------- --------------------
<S> <C> <C> <C> <C>
Claude B. Owen, Jr. 10,000(3) $141,250 80,630/113,000 $0/$0
Albert C. Monk III 0 0 0/ 85,500 $0/$0
Brian Harker 0 0 35,000/ 43,000 $0/$0
Richard D. O'Reilly 0 0 0/ 18,500 $0/$0
__________________
(1) At year end June 30, 1998, the closing price of the Company's Common Stock as quoted on
the New York Stock Exchange was $11.25.
(2) The options represented as unexercisable could not be exercised by the named executive on
June 30, 1998, and future exercisability is dependent upon the named executive remaining
in the employ of the Company until the vesting date, which is up to three years from the
grant date, subject to acceleration for retirement, death or total disability.
(3) Represents SARs exercised in fiscal year 1998 which had been awarded in fiscal year 1995.
</TABLE>
Employment and Consulting Agreements
Prior to the Reorganization, Dibrell and a subsidiary of Monk-
Austin entered into employment agreements with Messrs. Owen, Albert
C. Monk III, Harker, Hines, Robert T. Monk, Jr. and Dibrell. The
Company agreed to honor these agreements following the
Reorganization. The agreements with Messrs. Owen and Dibrell
provide for their employment until November 1, 1999, and the
agreement with Mr. Albert C. Monk III provides for his employment
until June 30, 1999. Mr. Harker's agreement was subsequently
amended effective October 1, 1996 to provide for employment until
September 30, 1999. Both Messrs. Hines and Robert T. Monk, Jr.
retired from the Company effective July 1, 1996, and June 30, 1997,
respectively. Under their employment agreements, Mr. Hines is
entitled to receive an annual retirement benefit of $180,000
through 2008 and Mr. Robert Monk, Jr. is entitled to receive an
annual retirement benefit of $136,750 through 2007. All of the
agreements may be terminated early in certain circumstances and are
renewable for successive one-year terms. Under the agreements,
Messrs. Owen, Albert C. Monk III, Harker and Dibrell are entitled
to annual base salaries of $391,800, $380,000, $250,000 and
$155,000, respectively, subject to increases to reflect cost of
living adjustments, and are eligible for cash bonuses under the
Company's Cash Bonus Plan. The agreements also provide for (a) an
annual supplemental retirement benefit equal to 50 percent of the
executive officer's average base salary for a period of up to ten
years upon termination of the agreements for reasons other than
death, disability or cause (for Messrs. Owen and Dibrell reduced by
amounts payable to them under the Pension Equalization Plan (the
"PEP")); (b) an annual death benefit equal to 25 percent of the
executive officer's average base salary payable to a beneficiary
designated by such executive for a period of up to five years; and
(c) annual disability payments, for Messrs. Owen, Harker and
Dibrell, under the Long-Term Disability Plan and, for Mr. Albert C.
Monk III, equal to 50 percent of his average base salary for a
period of up to ten years. The agreements further provide that
from the time of termination of such executive's employment (other
than by virtue of death or for cause) until his death, each
executive will be entitled to participate in any group health plan
or program provided by the Company at the time of termination, and
- -10-
<PAGE>
the Company must use its best efforts to provide each such
executive with an individual health insurance policy if such
executive is unable to participate in such plan. The agreements
may be terminated by the Company for cause and by the executive
officers for "Good Reason," generally related to a failure by the
Board to elect the officer to a responsible executive position,
material modifications of the officer's duties, functions and
responsibilities or breach of the agreement by the Company. In the
event of termination of employment by the Company other than for
cause, by such executive for Good Reason or upon the expiration of
the agreement, each agreement provides that the executive officer
will be entitled to receive a special severance benefit for a
period of one year after the time of termination equal to a maximum
of his base salary and bonus for the employment year just
completed. The agreements further provide for the reimbursement by
the Company of reasonable business expenses. The Company is
obligated to pay any additional amounts for any taxes the executive
officers would have to pay with respect to any parachute payments
under Section 280G of the Internal Revenue Code of 1986, as
amended.
Effective April 1, 1997, the Company entered into a consulting
agreement with Mr. Taberer pursuant to which he will receive an
annual fee of $370,000 through October 2000. The Company has
suspended payments to Mr. Taberer under this agreement pending
resolution of the Company's lawsuit against Mr. Taberer.
Retirement Plan
Effective July 1, 1996, the Retirement Plan was converted to
the DIMON Incorporated Cash Balance Plan (the "Cash Balance
Plan"). Benefits that were accrued prior to July 1, 1996, under
the Retirement Plan are converted to a lump sum actuarial
equivalent. The Cash Balance Plan includes all full-time active
U.S. employees of DIMON and its subsidiaries. Benefits under the
Cash Balance Plan are determined by age and years of credited
service. Benefits are payable as a lump sum or on an annuity
basis.
Under the Cash Balance Plan each participant has an account
balance which represents his or her benefit under the Cash Balance
Plan. The participant's initial account balance equals the present
value of his or her benefit earned through June 30, 1996, under the
Retirement Plan. Benefit accruals earned after June 30, 1996, are
credited annually to the participant's account and are comprised of
the sum of two components: Retirement Credit and Interest Credit.
The following table summarizes the annual Retirement Credit
provided to participants in the Cash Balance Plan.
<TABLE>
<CAPTION>
Combined
Age and Years Annual Retirement
of Service Credit
------------- -------------------
<S> <C>
<40 3.5% of annual earnings
40-49 4.0% of annual earnings
50-59 5.0% of annual earnings
60-69 6.0% of annual earnings
70-79 7.0% of annual earnings
>80 8.0% of annual earnings
</TABLE>
All of the individuals named in the Summary Compensation Table
are participants in the Cash Balance Plan. As of July 1, 1998,
Messrs. Harker's, Monk's, O'Reilly's and Owen's age and credited
service equaled 56, 96, 52 and 80, respectively. The estimated
annual benefits from the Cash Balance Plan for Messrs. Harker,
Monk, O'Reilly and Owen, assuming a four percent annual salary
increase, are $38,135, $16,317, $23,171 and $84,825, respectively.
The Interest Credits are equal to the annual interest rate
times the participant's account balance at the end of the previous
year. The interest rate, which is equal to a yield on one year
Treasury bills, is computed at the beginning of the plan year and
is used throughout the plan year. The annual interest rate credit
for calendar year 1998 is 6.11 percent.
Benefits earned under the Cash Balance Plan are vested after
five years of service. The Cash Balance Plan limits the pay that
is used in determining the annual Retirement Credit. The limit is
$160,000 for calendar year 1998. A limit is also imposed on the
- -11-
<PAGE>
amount of benefit payable to the participant from the Cash Balance
Plan.
Benefits under the Cash Balance Plan are payable upon normal
retirement (age 65), vested termination or death. A participant
may elect to commence benefit payments on the first day of the
month that is coincident with or next following the earlier of his
or her 55th birthday or the first anniversary of separation of
employment. The benefits are payable in the form of a contingent
annuity, level annuity or lump sum which are all actuarially
equivalent.
Excess Benefit Plan
The Company maintains an excess benefit plan that provides
individuals who participate in the Cash Balance Plan the difference
between the benefits they could potentially accrue under the Cash
Balance Plan considering total compensation and the benefits
actually paid as limited by regulations imposed by the Internal
Revenue Code. Employees meeting the eligibility requirements of
the Cash Balance Plan and who are selected by management may
participate in this plan. Such benefits are not funded and are
expensed by the Company as paid.
Pension Equalization Plan
The PEP was established to pay selected employees unreduced
early retirement benefits coordinated with benefit payments under
DIMON's defined benefit plans. Under the PEP, some participants
receive a benefit that, when added to their defined benefit plans,
provides them with unreduced benefits if they retire on or after
age 55 (with credit to 65) with 30 years of service. For other
participants, the unreduced benefits are available if they retire
on or after age 60 (with credit to 65) with 25 years of service.
An unreduced benefit is payable to Mr. Owen and certain other
participants if they retire on or after age 54 (with credit to 65)
with 24 years of service; provided the sum of their age and years
of service (which will not be less than the service to be completed
during the initial term of their employment agreements) is at least
82. The PEP also provides individual account-based benefits to
employees determined by the Company in its full discretion in
amounts likewise determined. In all cases, a participant's
benefits are not fully vested until that participant satisfies a
"vesting contribution" provision (satisfaction can include a direct
contribution, an indirect contribution, a waiver by the Company,
any combination of the foregoing, or other measures satisfactory to
the Company) in the PEP. All benefits are funded through a trust
arrangement. The PEP also allows the Company to provide "back-up"
benefits to ensure benefit payments (but not to duplicate benefit
payments) under other nonqualified retirement plans.
The following table sets forth, as of June 30, 1998, the
estimated annual benefits payable as a straight life annuity under
the PEP upon retirement at age 65 after specified years of Credited
Service, as defined in the PEP. In the event of early retirement
prior to age 65 the following benefits are subject to reduction.
<TABLE>
<CAPTION>
Final Estimated Annual Benefits Payable at Retirement
Average
Earnings
$ Years of Credited Service
--------- -----------------------------------------------------
10 Yrs. 20 Yrs. 30 Yrs. 40 Yrs.
$ $ $ $
-------- -------- -------- --------
<S> <C> <C> <C> <C>
180,000 19,800 39,600 59,400 79,200
220,000 24,200 48,400 72,600 96,800
260,000 28,600 57,200 85,800 114,400
300,000 33,000 66,000 99,000 132,000
360,000 39,600 79,200 118,800 158,400
400,000 44,000 88,000 132,000 176,000
500,000 55,000 110,000 165,000 220,000
600,000 66,000 132,000 198,000 264,000
700,000 77,000 154,000 231,100 308,000
800,000 88,000 176,000 264,000 352,000
</TABLE>
- -12-
<PAGE>
The PEP's normal retirement allowance is stated with reference
to the Participant's Final Average Earnings. A Participant's
"Final Average Earnings" are one-fifth of his or her Annual
Earnings during the highest consecutive five-year period within the
immediately preceding ten-year period. The term "Annual Earnings"
includes all cash remuneration paid to a Participant other than
commissions, specified foreign service earnings, and amounts
realized under the Omnibus Stock Incentive Plan. Annual Earnings
are the calendar year equivalent of salary and bonus shown in the
Summary Compensation Table. The Participant's normal retirement
allowance is 1.10 percent of his or her Final Average Earnings
multiplied by Credited Service.
As of June 30, 1998, Mr. Owen had 27 years of Credited Service
under the PEP. Messrs. Harker, Albert C. Monk III and O'Reilly
were not participants in the PEP as of June 30, 1998
Supplemental Executive Retirement Plan (SERP)
Effective January 1, 1997, the Executive Compensation Committee
recommended and the Board of Directors approved the establishment
of the SERP.
The SERP provides an annual retirement benefit equal to 50
percent of the participant's final average fiscal year cash
compensation. The final average fiscal year cash compensation is
the average of the three highest years cash compensation during the
last ten preceding fiscal years. The benefit is payable in the
form of a life annuity. The SERP also provides that, upon death, a
life annuity equal to 50 percent of the participant's benefit will
be payable to the surviving spouse. Participants can elect lesser
forms of benefits to provide a higher surviving spouse's benefit.
Benefits under the SERP do not vest until the participant reaches
age 60 and has 20 years of service. Benefits from the SERP are
offset by all other Company funded benefits which include the Cash
Balance Plan, the PEP, the Profit Sharing Plan or benefits provided
under an employment agreement.
As of June 30, 1998, all executive officers were participants in
the SERP. As of June 30, 1998, the final average fiscal year
salaries for Mr. Owen, Harker, Monk, and O'Reilly were $675,850,
$305,998, $577,735, and $201,185, respectively.
Executive Compensation Committee Report on Compensation
Compensation Philosophy and Programs
DIMON's Executive Compensation Committee (the Committee) is
comprised of four outside Directors whose role is to oversee the
development and management of total compensation levels and
programs for the Company's executive officers. The Committee met
three times during the 1998 fiscal year.
The Committee's principal objectives in fulfilling its role for
DIMON include:
@ Enhance the Company's ability to attract, motivate, and
retain highly qualified and knowledgeable executives who are
critical to the long-term success of DIMON.
@ Establish and maintain executive compensation levels and
programs that are fully competitive with comparable
organizations.
@ Develop and maintain executive compensation programs which
encourage higher levels of job performance through the use
of performance-based short- and long-term incentives.
@ Reinforce management's commitment to enhance shareholder
value by aligning the interests of key executives with those
of the Company's shareholders.
In achieving the above objectives, the Committee reviews extensive
survey information on pay levels and compensation practices
compiled with the help of an independent consultant. The
comparison group for competitive compensation information includes
- -13-
<PAGE>
the peer companies in the proxy performance graph (as listed
below), as well as a broader group of companies with operating
characteristics and revenues similar to DIMON. The Committee
strives to provide a direct compensation package to DIMON
executives that is fully competitive with the average total pay
packages for the comparison group. The direct compensation package
for DIMON's executive officers includes base salary, annual bonus
payments, and long-term incentives, primarily in the form of stock
option grants.
Section 162(m) of the Internal Revenue Code, as amended, ("the
Code"), restricts the deductibility, for federal income tax
purposes, of annual compensation paid to the chief executive
officer and each of the four other most highly compensated
executive officers to the extent that such compensation exceeds $1
million or does not qualify as "performance-based" as defined
under the Code. In this regard, the Committee's objective is to
obtain the fullest compensation deduction possible while preserving
needed flexibility in recognizing and rewarding desired
performance. All compensation provided to executive officers in
fiscal 1998 is believed to be fully deductible.
Base Salary - The base salary levels for executive officers, other
than the CEO, are established by the Committee upon recommendations
from the CEO and reflect comparable salaries for similar positions
in the comparison group described above. The Committee determines
CEO base salary using similar competitive salary information.
Because DIMON places substantial emphasis on performance-driven pay
delivered through short- and long-term incentives, base salary
ranges are established such that the range maximum is equivalent to
the average salary of the broader comparison group. Base salaries
are adjusted periodically, based on competitive market changes,
individual and corporate performance, modifications in job
responsibilities, and the executive's position within his or her
respective salary range.
Annual Bonus - DIMON's Cash Bonus Plan ( the "Plan") allows the
Committee to provide direct financial incentives in the form of
annual cash bonuses to executive officers and other employees upon
the achievement of predetermined performance objectives. At the
beginning of each fiscal year, the Committee establishes a
threshold, goal, and "stretch" bonus payment for key employees,
with the limitation expressed as a percentage of base salary. The
Plan provides for a maximum award of up to 100 percent of base
salary for the CEO and President and reduced maximum potential
awards to other executives and key employees. Awards under the
plan are based on fiscal year pretax return on beginning
shareholders' equity compared to a pre-established target level.
Long-Term Incentives - The Committee administers the DIMON Omnibus
Stock Incentive Plan as the principal mechanism to provide long-
term incentives to executives, officers, and key employees. The
Plan permits the Committee to grant options to purchase shares of
the Company's stock, to grant tandem stock options and stock
appreciation rights ("SARs'), to grant stand-alone stock
appreciation rights ("SARs"), to award shares of restricted stock,
or award performance unit shares to executives, officers, and other
key employees. Historically, the Company has utilized stock
options as its primary long-term financial incentive. Options are
generally granted at 100 percent of the fair market value on the
date of grant, expire ten years from the date of grant, and vest at
the end of a three-year period. The Committee's primary objective
in granting stock options and other long-term stock-based
incentives is to allow key employees to participate in the success
of the Company through stock ownership, to provide a strong and
direct link between employee compensation and the interests of
shareholders, and to encourage recipients to focus on the long-term
performance of the Company.
Compensation Actions in Fiscal 1998
During Fiscal 1998, the Committee reviewed the CEO's base salary
versus the comparison company group and increased his base salary
by 5.5 percent, from $450,000 to $475,000. The adjusted salary was
determined following a comprehensive review of the base salaries
paid to chief executive officers within DIMON's comparator groups,
as described above, as well as a review of Mr. Owen's individual
performance. This increase was within the range applicable to
other DIMON executives and pursuant to the cost-of-living
adjustment in Mr. Owen's employment agreement.
- -14-
<PAGE>
The annual bonuses for DIMON executives were determined by the
Company's actual pretax return on equity versus a preset target.
During Fiscal 1998, the Company did not meet the minimum goal;
therefore, no bonuses were paid.
As a long-term incentive, Mr. Owen was granted an option to
purchase 40,000 shares of common stock under the DIMON Omnibus
Stock Incentive Plan during Fiscal 1998. The option shares were
issued at the fair market value of DIMON's Common Stock on the date
of grant. The annual grant was determined by the Committee in
accordance with past practice based on its understanding of
competitive levels of long-term incentive opportunities provided to
CEOs in the compensation comparison group, as well as to provide an
appropriate long-term incentive opportunity to Mr. Owen for his
leadership role in the Company.
In summary, the Committee believes the total direct compensation
program for DIMON's executive officers effectively serves to
accomplish its objectives as stated above on behalf of shareholders
and executive employees.
Executive Compensation Committee:
N. A. Scher - Chairman
R. S. Dickson
J. E. Johnson, Jr.
J. L. Lanier, Jr.
Compensation Committee Interlocks and Insider Participation
None of the Executive Compensation Committee members listed
above are an officer or employee or former officer or employee of
the Company or any of its subsidiaries. None of the Company's
executive officers serve on the board of any entity of which any
Executive Compensation Committee member is an executive officer or
director or on the compensation committee of the board of any
entity, one of whose executive officers serves as a director of the
Company. None of the Executive Compensation Committee members are
an officer, director or significant shareholder of any entity,
which had any significant transactions with the Company.
Performance Graph
The following graph compares the cumulative total return for
the Common Stock from April 3, 1995, the first trading date
following the reorganization, to June 30, 1998, to the total
returns for the S&P 500 Index, the S & P Small Cap 600 Index and an
index of peer companies selected by the Company for the same
period. Companies in the peer group are as follows: Standard
Commercial Corporation and Universal Corporation. The graph
assumes an investment of $100 in Common Stock and in each index as
of April 3, 1995, and that all dividends are reinvested.
(GRAPH PICTURED ON ORIGINAL DESCRIBED AS FOLLOWS)
<TABLE>
<CAPTION>
COMPARISON OF 39 MONTH CUMULATIVE TOTAL RETURN
AMONG DIMON INCORPORATED, THE S & P 500 INDEX,
THE S & P SMALLCAP 600 INDEX AND A PEER GROUP
(PERFORMANCE GRAPH)
4/3/95 6/95 6/96 6/97 6/98
------ ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
DIMON INCORPORATED $100 $114 $129 $193 $ 85
PEER GROUP 100 107 128 174 141
S & P 500 100 110 138 186 242
S & P SMALLCAP 600 100 110 138 168 201
</TABLE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires
that the Company's directors and executive officers, and persons
who own more than 10 percent of a registered class of the Company's
equity securities, file with the Securities and Exchange Commission
initial reports of ownership and reports of change in ownership of
Common Stock and other equity securities of the Company. The same
persons are also required to furnish the Company with copies of all
Section 16(a) forms that they file.
To the Company's knowledge, based solely on review of the
copies of such reports furnished to the Company, and written
- -15-
<PAGE>
representations that no other reports were required, during the
fiscal year ended June 30, 1998, all Section 16(a) filing
requirements applicable to its executive officers, directors and
greater than 10 percent beneficial owners were met.
Legal Proceedings
As a part of the purchase price adjustment and indemnification
process provided for in the purchase agreements relating to the
Company's April 1997 acquisition of Intabex Holdings Worldwide S.A.
on September 22, 1998, the Company filed an action in the United
States District Court for the Southern District of New York (Docket
No. 98CIV.6732) seeking an order with respect to the Company's
claims for set-off against $90 million of its 6 1/4 percent
Convertible Subordinated Debentures which were set aside to secure
claims relating to the acquisition, confirmation of the Company's
contractual rights under the purchase agreements and related damages
totaling $110 million. The action asks relief against the former
shareholders of Intabex, including Folium, Inc., a corporation
controlled by a British Virgin Islands trust of which
Mr. A. C. B. Taberer is a potential beneficiary, Tabacalera S.A.
and Leaf Management Investments, Ltd., as well as
Mr. A. C. B. Taberer, Paul Taberer and Charles Taberer, individually.
During the pendancy of this action, Mr. A. C. B. Taberer will not
participate in the deliberations of the Company's Board of Directors
with respect to this and related matters.
APPROVAL OF AUDITORS
(Proposal 2)
The Board of Directors, upon recommendation of the Audit
Committee, has designated PricewaterhouseCoopers, formerly Price
Waterhouse LLP, independent accountants, as auditors for the
Company for the fiscal year ending June 30, 1999, subject to
approval of the holders of a majority of the shares of Common Stock
voting on this proposal. A representative of the auditors will be
present at the annual meeting with an opportunity to make a
statement and will be available to respond to appropriate questions
relating to the fiscal year 1998 audit of the Company's financial
statements.
Although shareholder approval of this action is not required
under applicable law, the Board believes it is in the best
interests of the shareholders of the Company to afford them a vote
on this matter. Should the designation not be so approved, the
Board intends to reconsider its action in light of this result. It
is intended that proxies will be voted FOR approval unless
instructions to the contrary are given in the proxy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF
AUDITORS.
APPROVAL OF THE 1998 DIMON INCORPORATED
DIRECTORS' STOCK OPTION PLAN
(Proposal 3)
The Board is asking that the shareholders approve the DIMON
Incorporated Directors' Stock Option Plan (the "Directors' Plan"),
adopted by the Board on August 28, 1998, subject to the approval of
the shareholders. The Directors' Plan allows for the grant of
Common Stock, performance shares and options to purchase shares of
Common Stock from the Company. The Director's Plan will become
effective January 1, 1999 and replace the Non-Employee Director's
Stock Option Plan.
The Board believes that the Directors' Plan will benefit the
Company by helping to recruit and retain directors with ability and
initiative and will better associate the interests of directors
with those of the Company and its shareholders. The more
significant features of the Directors' Plan are described below.
Administration
The Executive Committee of the Board will administer the
Directors' Plan, except that all awards granted under the
Directors' Plan must be approved by the Board. The Executive
- -16-
<PAGE>
Committee will have the authority to grant options and make stock
awards and performance share awards upon such terms (not
inconsistent with the terms of the Directors' Plan) as the
Committee considers appropriate, subject to the approval of the
Board. In addition, the Executive Committee will have all other
administrative authority regarding the Directors' Plan, which will
include prescribing the form of agreements evidencing the awards
(subject to Board approval), adopting, amending and rescinding
administrative rules and regulations for the Directors' Plan and
making all other administrative determinations regarding the
Directors' Plan.
Eligibility
Any director who is not an employee of the Company (or any
subsidiary) and any person who provides services to the Company (or
any subsidiary) in a capacity other than as an employee is eligible
to participate in the Directors' Plan if the Executive Committee,
with the approval of the Board, determines that such person has
contributed significantly or can be expected to contribute
significantly to the profits or growth of the Company. The Company
is not able to estimate the number of individuals that will be
selected to participate in the Directors' Plan or the type or size
of awards that will be granted.
Awards
Options. A stock option entitles the holder to purchase
shares of Common Stock from the Company at the option price. The
option price will be fixed by the Executive Committee and approved
by the Board at the time the option is granted, but the price
cannot be less than the fair market value of the Common Stock on
the day the option is granted. The option price may be paid in
cash or, if the option agreement allows, with shares of Common
Stock or a combination of cash and Common Stock. Options may be
exercised at the times and subject to any conditions as may be
prescribed by the option agreement. The maximum period in which an
option may be exercised will be fixed at the time the option is
granted but cannot exceed ten years. Options generally will be
nontransferable except by will or the laws of descent and
distribution, except that, if permitted by the option agreement, an
option may be transferred without consideration to members of the
holder's immediate family, a family trust or a family partnership
or as permitted under Rule 16b-3 of the Securities Exchange Act of
1934, as in effect from time to time.
Stock Awards. The Directors' Plan also permits the grant of
shares of Common Stock. A stock award may be nontransferable or
subject to forfeiture or both until any conditions imposed by the
Executive Committee and approved by the Board are satisfied. A
stock award also may be issued in full or partial settlement of
obligations under a deferred compensation plan.
Performance Shares. Performance shares are awards, stated
with reference to a specified number of shares of Common Stock,
that entitle the holder to receive a payment for each specified
share equal to the fair market value of the Common Stock on the
date of payment. The Executive Committee, on the date of the
award, subject to the approval of the Board, may prescribe that the
performance shares or portion thereof will be earned only upon the
satisfaction of such criteria as may be prescribed by the Executive
Committee and approved by the Board. In the discretion of the
Executive Committee, subject to the approval of the Board, the
amount payable when performance shares are earned may be settled in
cash, by the issuance of a stock award or a combination of cash and
a stock award.
Share Authorization
Under the Directors' Plan, a maximum of 70,000 shares of
Common Stock may be issued upon the exercise of options and the
grant of stock awards. That limitation will be adjusted, as the
Board determines is appropriate, in the event of a change in the
- -17-
<PAGE>
number of outstanding shares of Common Stock by reason of a stock
dividend, stock split, combination, reclassification,
recapitalization, or other similar event. The terms of outstanding
awards also may be adjusted by the Board to reflect such changes.
Amendment and Termination
No option or stock may be awarded under the Directors' Plan
after November 30, 2008. The Board may, without further action by
the shareholders, terminate or suspend the Directors' Plan in whole
or in part. The Board also may amend the Directors' Plan except
that it may not increase the number of shares of Common Stock that
may be issued under the Directors' Plan (other than an adjustment
described above) or change the class of individuals who are
eligible to participate in the Directors' Plan without first
obtaining shareholder approval.
Federal Tax Consequences
The Company has been advised by counsel regarding the federal
income tax consequences of the Directors' Plan. No income will be
recognized by a director at the time an option is granted.
Generally, the exercise of an option will be a taxable event
requiring the holder to recognize, as ordinary income, the
difference between the fair market value of the Common Stock and
the option price.
Income will be recognized as a result of the grant of a stock
award when the shares first become transferable or are no longer
subject to a substantial risk of forfeiture. At that time, the
holder would recognize income equal to the fair market value of the
Common Stock.
Income will be recognized when performance shares are settled.
At that time the holder would recognize income equal to any cash
paid and the fair market value of any Common Stock issued in
settlement of the award.
Generally, the Company will be entitled to claim a federal
income tax deduction upon the exercise of a stock option or the
vesting of a stock award or settlement of performance shares. The
amount of the deduction is equal to the ordinary income recognized
by the holder.
For approval, the Directors' Plan must be approved by the
holders of a majority of the shares of Common Stock represented at
the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE DIRECTORS'
STOCK OPTION PLAN.
SHAREHOLDERS' PROPOSALS AND NOMINATIONS
Under the rules and regulations of the Securities and Exchange
Commission, any proposal that a shareholder intends to present at
the next Annual Meeting must be received by the Company at its
principal office in Danville, Virginia, on or before July 6, 1999,
if the shareholder desires it to be considered for inclusion in the
Company's Proxy Statement and form of proxy relating to that
meeting.
For the 1999 annual meeting, nominations must be delivered or
mailed to the Secretary not earlier than August 30, 1999, and not
later than September 24, 1999. To the extent known to the
nominating shareholder, notifications must include: (i) each
nominee's name, age and address; (ii) each nominee's principal
occupation; (iii) each nominee's qualifications to serve as a
director; (iv) the name and address of the notifying shareholder;
and (v) the number of shares owned by the notifying shareholder.
The Nominating Committee will thereafter make its recommendation to
- -18-
<PAGE>
the Board of Directors, and the Board of Directors will make its
determination, as to whether such candidate should be nominated.
Nominations not made in accordance with these procedures, and votes
cast for any such nominee, will be disregarded.
OTHER MATTERS
On this date, the Company is not aware of any matters to be
presented for action at the meeting other than as stated in this
notice. However, if any other matters requiring a vote of
shareholders are properly presented to the meeting, it is intended
that proxies in the accompanying form will be voted on such other
matters in accordance with the judgment of the persons voting such
proxies.
ANNUAL REPORT
The annual report, including consolidated financial statements
of the Company and its subsidiaries for the fiscal year ended June
30, 1998, is being mailed to shareholders with this Proxy
Statement.
By Order of the Board of Directors
/s/ J. O. HUNNICUTT III
Secretary
October 13, 1998
- -19-
<PAGE>
DIMON INCORPORATED PROXY
512 Bridge Street
P. O. Box 681
Danville, Virginia 24543
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Mr. James E. Johnson, Jr.,
Mr. Robert T. Monk, Jr., Mr. William R. Slee or any one of them, with
full power of substitution in each, proxies (and if the undersigned is a
proxy, substitute proxies) to vote all shares of stock in DIMON
Incorporated, which the undersigned is entitled to vote, at the annual
meeting of shareholders of said Company to be held November 13, 1998, at
10:00 A.M., at the principal office of the Company at 512 Bridge Street,
Danville, Virginia, and at any and all adjournments thereof:
1. ELECTION OF DIRECTORS (mark only one box)
__FOR all nominees listed below (except as marked to the contrary below)
__WITHHOLD AUTHORITY to vote for all nominees listed below
Nominees: R. Stuart Dickson, Albert C. Monk III, Claude B. Owen, Jr.
and Norman A. Scher
INSTRUCTION: To withhold authority to vote for any individual nominee
print that nominee's name in the space provided below.
____________________________________________________________________________
2. __FOR __AGAINST __ABSTAIN the approval of PricewaterhouseCoopers LLP
as auditors as proposed in the Proxy Statement.
____________________________________________________________________________
3. __FOR __AGAINST __ABSTAIN the approval of the adoption of the 1998
DIMON Incorporated Directors' Stock Option Plan as proposed in the Proxy
Statement.
The Board recommends a vote "FOR" the foregoing proposals.
Please sign and date on reverse side.
____________________________________________________________________________
4. In their discretion, the proxies are authorized to vote upon such
other business and matters incident to the conduct of the meeting as may
properly come before the meeting.
This proxy when properly executed and delivered will be voted in
the manner directed herein by the undersigned shareholder. If no
direction is made, this proxy will be voted "FOR" the election of all
Directors, "FOR" the approval of Auditors and "FOR" the approval of the
1998 DIMON Incorporated Directors' Stock Option Plan
Dated _________________, 1998 ____________________________________________
SHAREHOLDER'S SIGNATURE
Please sign exactly as the name appears
on this card. Only one of several joint
owners need sign. Fiduciaries and
Corporate Officers should give full title.
Please mark, sign, date and return the proxy card promptly using the
enclosed envelope.
