DELTA AND PINE LAND COMPANY
ONE COTTON ROW
SCOTT, MISSISSIPPI 38772 USA
(662) 742-4000
December 16, 2002
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of the Stockholders of
Delta and Pine Land Company, which will be held on Wednesday, January 22, 2003,
at 10:00 AM, Central Time, at The Peabody Hotel, 149 Union Avenue, Memphis,
Tennessee. All stockholders of record as of November 29, 2002, are entitled to
vote at the annual meeting.
We appreciate your confidence in the Company and hope you will attend this
Annual Meeting in person.
Whether or not you expect to attend the meeting, please complete, sign, date and
promptly return the enclosed proxy card or vote electronically via the Internet
or by telephone to ensure that your shares will be represented at the meeting.
If you attend the meeting, you may vote in person even if you have sent in your
proxy card or voted via the Internet or by telephone.
Sincerely,
Jon E. M. Jacoby
Chairman of the Board
DELTA AND PINE LAND COMPANY
ONE COTTON ROW
SCOTT, MISSISSIPPI 38772 USA
(662) 742-4000
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD ON JANUARY 22, 2003
To the Stockholders of
Delta and Pine Land Company:
The Annual Meeting of the Stockholders of Delta and Pine Land Company will be
held at The Peabody Hotel, 149 Union Avenue, Memphis, Tennessee on Wednesday,
January 22, 2003, at 10:00 AM, Central Time, for the following purposes:
1. to elect three Class I members to the Board of Directors to
three-year terms expiring at the 2006 Annual Meeting of
Stockholders;
2. to ratify the appointment of the independent auditors for the
fiscal year ending August 31, 2003;
3. to transact such other business as may properly
come before the meeting or any adjournments thereof.
The accompanying Proxy Statement contains further information with respect to
these matters.
The stockholders of record at the close of business on November 29, 2002, are
entitled to notice of and to vote at the Annual Meeting. The list of
stockholders will be available for examination for the 10 days prior to the
meeting at Delta and Pine Land Company's Corporate office, One Cotton Row,
Scott, Mississippi 38772.
Your vote is important. Whether or not you plan to attend the meeting, please
complete, sign, date and promptly return the enclosed proxy using the enclosed
addressed envelope, which requires no postage if mailed within the United
States, or vote electronically via the Internet or by telephone.
BY ORDER OF THE BOARD OF DIRECTORS
Jerome C. Hafter
Secretary
December 16, 2002
2
DELTA AND PINE LAND COMPANY
ONE COTTON ROW
SCOTT, MISSISSIPPI 38772
(662) 742-4000
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
January 22, 2003
This Proxy Statement is furnished in connection with the solicitation of proxies
by the Board of Directors of Delta and Pine Land Company ("D&PL" or the
"Company") from stockholders holding shares of D&PL Common Stock ("Shares") for
use at its Annual Meeting of Stockholders to be held on January 22, 2003, and at
any adjournment or adjournments thereof. To assure adequate representation at
the Annual Meeting, stockholders are requested to promptly sign, date and return
the enclosed proxy or vote electronically via the Internet or by telephone.
Any stockholder giving a proxy has the power to revoke it at any time before it
is voted. Revocation of a proxy is effective upon receipt by the Secretary of
the Company of either: (i) an instrument revoking it or (ii) a duly-executed
proxy bearing a later date. In addition, a stockholder who is present at the
meeting may revoke the stockholder's proxy and vote in person if the stockholder
so desires. Proxies furnished by stockholders pursuant hereto will be voted on
proposals properly introduced at the meeting and in elections; and, if the
person solicited specifies in the proxy a choice with respect to matters to be
acted upon, the Shares will be voted in accordance with such specification. If
no choice is specified, the proxy will be voted FOR approval of the nominees for
directors, FOR the ratification of the appointment of the independent auditors
as described herein and in the discretion of the proxy holders with regard to
such other business as may come before the meeting.
Stockholders of record at the close of business on November 29, 2002 are
entitled to vote at the meeting. The Proxy Statement and the accompanying form
of proxy were mailed on or about December 16, 2002, to all stockholders of
record as of the close of business on that date. The transfer agent,
Computershare Investor Services, LLC, will tabulate the votes received prior to
the meeting. The Secretary of the Company and R.D. Greene, Vice President -
Finance, Treasurer and Assistant Secretary of the Company, will be appointed as
inspectors of the Annual Meeting to count all votes and ballots and perform the
other duties required of inspectors.
The presence at the Annual Meeting, in person or by proxy, of a majority of the
Shares outstanding on November 29, 2002, will constitute a quorum. At that date,
approximately 38,178,439 Shares were outstanding. The affirmative vote of the
holders of a plurality of the Shares that are represented in person or by proxy
at the meeting and entitled to vote is required to approve the election of
directors. All matters other than the election of directors submitted to the
stockholders shall be decided by a majority of the votes cast with respect to
such matters. Each Share is entitled to one vote. The Company's stock is traded
on the New York Stock Exchange under the symbol DLP.
All references herein to a particular year refer to the Company's fiscal year,
which ends or ended on August 31 of the year indicated.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
To the best knowledge of the Company based on information filed with the
Securities and Exchange Commission and the Company's stock records, the
following table sets forth as of October 31, 2002, Shares beneficially owned by
each director, each nominee for director, certain executive officers, any person
owning more than 5% of the Shares individually, others with significant
ownership and by all executive officers and directors as a group.
Name of Beneficial Owner Shares Beneficially Owned
- ---------------------------------------------- ---------------------------------
Amount of
Beneficial Percentage
Ownership of Class
- ---------------------------------------------- ------------------ --------------
Sterling Capital Management (1) 2,093,625 5.5
Stephens Group, Inc. (2) 2,048,487 5.4
Monsanto Company (3) 609,280 1.5
Jon E. M. Jacoby (4) 133,731 *
F. Murray Robinson (5) (12) 113,246 *
W. Thomas Jagodinski (6) (11) 70,211 *
Rudi E. Scheidt (7) 59,112 *
Stanley P. Roth (8) 27,500 *
Nam-Hai Chua (9) 10,666 *
Joseph M. Murphy (10) 698 *
Charles R. Dismuke, Jr. (6) (13) 82,666 *
Earl E. Dykes (6) 67,734 *
James H. Willeke (6) -- --
All Directors and Executive Officers as a Group 732,697 1.9
[19 persons] (14) (15)
* Less than one percent
(1) The mailing address for Sterling Capital Management is 301 S. College
Street, Suite 3200, Charlotte, NC 28202.
(2) Mr. Jacoby, a director of Stephens Group, Inc. ("SGI") and its
subsidiary, Stephens, Inc., owns 133,731 Shares which are not included.
See Note 4 below. The mailing address for Stephens Group, Inc. and
affiliates is 111 Center Street, Little Rock, Arkansas 72201.
(3) Excludes shares obtainable by conversion of Series M Convertible
Preferred Stock. If Monsanto converts pursuant to the terms of the
preferred stock, Monsanto would receive 1,066,667 Shares of Common
Stock which would make its amount of beneficial ownership 1,675,947
Shares, or 4.2%. The mailing address for Monsanto Company is 800 North
Lindbergh Blvd., St. Louis, Missouri 63167.
(4) Includes the following Shares: 113,637 Shares owned by Jacoby
Enterprises, Inc., as to which Mr. Jacoby has sole power to vote and
sole power of disposition and 20,094 Shares owned beneficially by Mr.
Jacoby. Does not include Shares owned by SGI, or other of its
affiliates, except Jacoby Enterprises, Inc. See Note 2 above. The
mailing address for Jacoby Enterprises, Inc., and Mr. Jacoby is 111
Center Street, Little Rock, Arkansas 72201.
(5) The mailing address for Mr. Robinson is 1520 Woodruff Lane,
Bloomington, Indiana 47401. (6) The mailing address for Messrs.
Jagodinski, Dismuke, Dykes, and Willeke is One Cotton Row,
Scott, Mississippi 38772.
(7) The mailing address for Mr. Scheidt is 54 South White Station Road,
Memphis, Tennessee 38117.
(8) These Shares are owned by North American Capital Corporation, as to
which Mr. Roth has sole power to vote and sole power of disposition.
The mailing address for Mr. Roth is 510 Broad Hollow Road, Suite 206,
Melville, New York 11747.
(9) The shares indicated are owned by Dr. Chua's wife. Dr. Chua disclaims
beneficial ownership of these Shares. The mailing address for Dr. Chua
is c/o Laboratory of Plant Molecular Biology, Rockefeller University,
1230 York Avenue, New York, New York 10021-6399.
(10) The Shares indicated are owned by Mr. Murphy's wife. Mr. Murphy
disclaims beneficial ownership of these Shares. The mailing address for
Mr. Murphy is 2687 North Ocean Boulevard, Boca Raton, Florida 33431.
(11) Includes 3,555 Shares owned by Mr. Jagodinski's wife. Mr. Jagodinski
disclaims beneficial ownership of Shares owned by his wife.
(12) Includes 38,000 shares owned by a Charitable Remainder Unit Trust
("CRUT"). Mr. Robinson disclaims beneficial ownership of shares owned
by the CRUT.
(13) Includes 17,666 shares owned by Mr. Dismuke's wife. Mr. Dismuke
disclaims beneficial ownership of Shares owned by his wife.
(14) Includes the following Shares: 698 Shares owned by the wife of Joseph
M. Murphy; 3,555 Shares owned by the wife of Mr. Jagodinski; 10,666
Shares owned by the wife of Dr. Chua; 38,000 Shares owned by the
Robinson CRUT; and 17,666 Shares owned by the wife of Mr. Dismuke
(15) As a group, the 732,697 Shares shown exclude vested and unvested
options for 439,699 Shares pursuant to the 1993 Delta and Pine Land
Company Stock Option Plan and options for 1,957,543 Shares pursuant to
the 1995 Long-Term Incentive Plan for a total of 2,397,242. These above
option amounts include vested options of 896,035 for each individual
listed in the table as follows: W. Thomas Jagodinski, 166,444; F.
Murray Robinson, 102,932; Jon E. M. Jacoby, 99,554; Stanley P. Roth,
99,554; Rudi E. Scheidt, 99,554; Nam-Hai Chua, 79,554; Joseph M.
Murphy, 44,443; Charles R. Dismuke, Jr., 136,000; James H.Wileke,
63,000; Earl E. Dykes, 5,000.
OFFICERS OF THE COMPANY
Offices Held with Company;
Name (Age) Position (1) Principal Occupation for Past Five Years
- -- ----------- -- ------------- -- ----------------------------------------
Jon E. M. Jacoby (63) Chairman of the Board Mr. Jacoby has been employed by Stephens, Inc. and Stephens
Group, Inc., companies that engage in investment banking
activities, since 1963 and is presently a director and
officer for each of these companies. Stephens Inc. and
Stephens Group, Inc. are stockholders of D&PL. Mr. Jacoby is
a director of Sangamo Bio-sciences, Eden Bioscience Corp.
and Power-One, Inc. He was a director of American Classic
Voyages Co. until he resigned on June 30, 1997 and of
Beverly Enterprises, Inc. until May 24, 2001. Mr. Jacoby is
not an employee of D&PL and receives no additional
compensation for his role as Chairman of the Board.
Stanley Roth (65) Vice Chairman Mr. Roth controls and has been the Chairman of NACC, a
private merchant banking firm, since 1976. Since 1988, Mr.
Roth has served as the Chairman of Royal-Pioneer Industries,
Inc., and a director of Hollis Corporation. Mr. Roth became
the Vice Chairman of CPG International, Inc., in 1990 and
the Chairman of GPC International, Inc., its successor
corporation, in 1994. In 2001, Mr. Roth relinquished the
Chairmanship of GPC International, Inc. but continues to
serve as a director. In September 2002, Mr. Roth became a
Director of Polaroid Holding Company. Mr. Roth is not an
employee of D&PL and receives no additional compensation for
his role as Vice Chairman.
F. Murray Robinson (67) Vice Chairman Mr. Robinson served D&PL as Chief Executive Officer and Vice
Chairman from October 2000 until August 2002. Prior to his
first retirement from D&PL in April 1999, Mr. Robinson had
been employed by D&PL, serving as Executive Vice President
from December 1998 until April 1999 and President and COO
from February 1989 until December 1998 and Executive Vice
President from April 1988 until February 1989. From 1981
through 1988, Mr. Robinson served in various capacities for
Agrigenetics Corporation, an agribusiness company with
various seed divisions and biotechnology plant operations.
Mr. Robinson is no longer an employee of D&PL and receives
no additional compensation for his role as Vice Chairman.
W. Thomas Jagodinski (46) President, Chief Mr. Jagodinski has served as President, Chief
Executive Officer Executive Officer, and Director since September 2002 and as
and Director Executive Vice President from June 2002 through August
2002. From September 2000 until June 2002, he
served as Senior Vice President, Chief Financial
Officer, Treasurer and Assistant Secretary and
from March 2000 until September 2000 he served
as Senior Vice President-Finance, Treasurer and Assistant
Secretary. From February 1993 until March 2000, he
served as Vice President - Finance and Treasurer and
Assistant Secretary. From May 1992 until February
1993, he served as Treasurer and Chief
Financial Officer. From October 1991 to May 1992,
Mr. Jagodinski served as the Director of Corporate
Accounting and Financial Reporting and Income
Taxes. Prior to joining the Company, Mr.
Jagodinski was employed by Arthur Andersen LLP in
various capacities.
Charles R. Dismuke, Jr. (47) Senior Vice President Mr. Dismuke has served as Senior Vice President since August
1999. From January 1997 until August 1999, he served as
Senior Vice President and as President of Deltapine Seed
Division. From October 1989 until January 1997, he served
as Vice President-Operations. Mr. Dismuke was a General
Manager of one of the Company's subsidiaries, Greenfield
Seed Company, from 1982 until 1989. Mr. Dismuke has been
employed by D&PL or one of its subsidiaries since June 1977.
Harry B. Collins (61) Vice Dr. Collins has served as Vice President-Technology Transfer
President-Technology since April 1998. From 1985 until April 1998, Dr. Collins
Transfer served as the Company's Vice President-Research. Prior to
that, Dr. Collins was the senior soybean breeder for the
Company. Dr. Collins has been employed by D&PL since 1974.
Earl E. Dykes (48) Vice Mr. Dykes has served as Vice-President - Operations since
President-Operations February 1997. Prior to that time, Mr. Dykes served as the
General Manager - Arizona Processing, Inc. (which was
acquired by the Company in May 1996 as the result of the
Sure Grow merger). Mr. Dykes was a shareholder of Arizona
Processing, Inc. at the time of acquisition.
Ricky D. Greene (32) Vice Mr. Greene has served as Vice President - Finance, Treasurer
President-Finance, and Assistant Secretary since June 2002. Previously, he
Treasurer and served as Vice President-Business Development from September
Assistant Secretary 2000 until June 2002. From May 1997 until September 2000,
Mr. Greene served as Director of International Taxation and
Finance. Prior to joining the Company, Mr. Greene was
employed by Arthur Andersen LLP in various capacities.
Kater D. Hake (50) Vice Dr. Hake has served as Vice President - Technology
President-Technology Development since May 2001. From September 1996 until May
Development 2001, he served as International Division Vice President -
Technical Services. Prior to joining the company, Dr. Hake
was Associate Professor with Texas A&M University, Manager
of Cotton Physiology for the National Cotton Council of
America and Extension Farm Advisor with the University of
California.
William V. Hugie (43) Vice President- Dr. Hugie has served as Vice President-Research since
Research September 1998. From September 1996 until September 1998,
he served as Vice President-New Technologies. From August
1994 until September 1996, he served as a Project
Leader of the Transgenic Cotton Breeding Program,
and from December 1988 until August 1994, he
served as a Project Leader of the Sorghum Breeding
Program. Prior to joining the Company, Dr. Hugie was
employed by Funk Seed International from 1986 to 1988.
Thomas A. Kerby (58) Vice Dr. Kerby has served as Vice President-Technical Services
President-Technical since September 1994 and Director - Technical Services from
Services November 1993, when he joined D&PL, until September 1994.
Prior to joining the Company, Dr. Kerby served
the cotton industry of California and the University of
California as Extension Cotton Agronomist from 1981
through November 1993.
Donald L. Kimmel (63) Vice Mr. Kimmel has served as Vice President-Industry Relations
President-Industry of D&PL since September 2001, and prior to that time, as
Relations Vice President-Sales and Marketing of D&PL since 1986. From
1985 to 1986, Mr. Kimmel served as D&PL Marketing Manager.
Charles V. Michell (39) Vice Mr. Michell has served as Vice President-Supply Chain
President-Supply Management, Corporate Quality Assurance, and Information
Chain Management, Systems since August 2001. From April 2000 until August
Corporate Quality 2001, he served as Vice President-Supply Chain Management
Assurance, and and Information Systems. From October 1998 until April
Information Systems 2000, he served as Vice President - Information Systems, and
prior to that time, as Corporate Director-Information
Systems and Telecommunications since March 1995. He joined
the Company in 1987 as Manager of Information Systems.
Prior to joining the Company, Mr. Michell was Manager of
Computer Operations at St. Dominic Jackson Memorial Hospital
and he was self-employed as an Information Technology
Consultant.
Ann J. Shackelford (44) Vice Ms. Shackelford has served as Vice President - Corporate
President-Corporate Services since September 1997 and, until that time, as
Services Director of New Business Product Development since January
1997. From October 1994 until January 1997, she
served as Legal Coordinator. Prior to
joining the Company, Ms. Shackelford was involved
in private business.
James H. Willeke (58) Vice President- Mr. Willeke has served as Vice President - Sales and
Sales and Marketing Marketing since August 1999. From January 1997 until August
1999, he served as Senior Vice President and as
President-Paymaster Division. From 1987 until
1996, he served as President - Hartz Seed, a
subsidiary of Monsanto Company. From 1982 to
1987, he directed Lynks, a subsidiary of Mycogen
Seeds, as General Manager.
Jerome C. Hafter (57) Secretary Mr. Hafter has served as Secretary of D&PL since July 1993,
and he served as Assistant Secretary from April 1990 until
July 1993. From 1976 until September 30, 2001, Mr. Hafter
was a partner in Lake Tindall, LLP, D&PL's general counsel
where he had performed legal services for D&PL since 1983,
and from October 1, 2001, he has been a partner of Phelps
Dunbar, LLP, now D&PL's general counsel.
(1) All biography information is provided as of December 9, 2002
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The number of directors is established by the Board of Directors and is
currently set at seven. The Company's Restated Certificate of Incorporation and
By-Laws provide that the Board of Directors shall be divided into three classes
(Class I, Class II, and Class III), with each class containing one-third, or as
close to one-third as possible, of the total number of directors. Directors are
elected at each annual meeting to succeed those directors whose terms then
expire. Directors serve for terms of three years and until their successors have
been duly elected. The directors chosen to succeed those whose terms are
expiring are of the same class as the director they succeed. Class I Directors
were elected at the December 29, 2000 Annual Meeting to serve a term expiring at
the 2003 Annual Meeting, except for W.T. Jagodinski who was named a Class I
Director effective September 1, 2002. Class II Directors were elected at the
June 20, 2001 Annual Meeting to serve a term expiring at the 2004 Annual
Meeting. Class III Directors were elected at the April 25, 2002 Annual Meeting
to serve a term expiring at the 2005 Annual Meeting.
The Board of Directors proposes the re-election of the three Class I Directors
listed below:
Name Offices Held with the Company;
(Year First Elected a Director) Principal Occupation for Past Five Years
- ---------------------------------------------- ---------------------------------------------------------------------
CLASS I
Nam-Hai Chua Dr. Chua is the Andrew W. Mellon Professor and Head of the Plant
(1993) Molecular Biology Laboratory of Rockefeller University, New York,
New York, and has been with the University for over 20 years. In
addition, Dr. Chua served as the Chairman of the Management Board
of Directors of the Institute of Molecular Agrobiology ("IMA") in
Singapore until September 2000, Deputy Chairman from that time
until September 2001, and as the Chairman of the Board of IMAGEN
Holdings Pte. Ltd, an affiliate of IMA until August 2001. Dr.
Chua was also a member of the Board of Directors of DNAP
Holdings (formerly DNA Plant Technology Corporation), until he
resigned in 1998 and BioInnovations of America (an
entity owned by the Government of Singapore, which invests in
United States biotechnology companies) until he resigned in
2000. Dr. Chua also acted as a scientific consultant to Monsanto
Company for matters relating to plant biology through 1995. Dr.
Chua has acted as a consultant to D&PL since 1991 and received no
consulting fees in 2002. Dr. Chua is 58 years of age.
W. Thomas Jagodinski (2002) See the description of Mr. Jagodinski's offices with the Company
and principal occupation under "Officers of the Company". Mr.
Jagodinski was named a Class I director of the Company effective
September 1, 2002.
Stanley P. Roth (1988) See the description of Mr. Roth's offices with the
Company and principal occupation under "Officers of the Company".
Continuing Directors
CLASS II
Joseph M. Murphy (1992)
Since February 1993, Mr. Murphy has been the Chairman of Country
Bank, New York, New York. Mr. Murphy is 67 years of age.
Rudi E. Scheidt (1993) Since 1990, Mr. Scheidt has been a private investor. From 1973 to
1989, he served as President of Hohenberg Bros. Co., a worldwide
cotton merchant, headquartered in Memphis, Tennessee, and as its
Chairman during 1990. Mr. Scheidt is Director Emeritus of National
Commerce Financial Corporation, a bank holding company,
headquartered in Memphis, Tennessee. Mr. Scheidt is 77 years of
age.
CLASS III
Jon E. M. Jacoby (1992) See the description of Mr. Jacoby's offices with the Company and
principal occupation under "Officers of the Company".
F. Murray Robinson (2000) See the description of Mr. Robinson's offices with the Company and
principal occupation under "Officers of the Company".
The Board of Directors has considered the independence of each of its
non-employee directors, and has determined that each of Messrs. Chua, Jacoby,
Murphy, Roth, and Scheidt is "independent", as defined under current New York
Stock Exchange rules and under rules proposed to the Securities and Exchange
Commission by the New York Stock Exchange.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION OF
EACH OF THE INDIVIDUALS LISTED AS CLASS I DIRECTORS.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Appointment of Auditors
KPMG LLP audited Delta and Pine Land's annual financial statements for the
fiscal year ended August 31, 2002. Representatives of KPMG will be present at
the meeting to respond to appropriate questions and to make a statement if they
so desire.
As a result of recent legislation, the Audit Committee will be solely
responsible for appointing the public accounting firm to be the Company's
independent outside auditors for the fiscal year ending August 31, 2003, subject
only to notice of the selection to the Board of Directors. There is no legal
requirement that shareholder approval of the appointment be obtained; however,
the Company believes that it is a matter of good corporate governance to seek
shareholder ratification.
At the time of publication of this Proxy Statement, the Audit Committee has
commenced a process for the selection of the Company's outside auditors for
2003, but has not yet made a selection. Therefore, at this time shareholders are
being asked to ratify the appointment of KPMG LLP as such auditors. However,
such ratification is subject to the right of the Audit Committee to actually
appoint a different auditing firm of comparable stature in the accounting
profession, either before or after the annual meeting (and notwithstanding the
affirmative vote of a majority of shares in favor of this proposal), as the
Audit Committee may determine to do in the exercise of its business judgment.
Change of Auditors During Fiscal Year
In May 2002, D&PL dismissed its independent auditors, Arthur Andersen LLP, and
engaged the services of KPMG as its new independent auditors. The change in
auditors became effective on May 15, 2002, following the completion by Arthur
Andersen of its review of the financial statements of D&PL for the fiscal
quarter ended February 28, 2002.
During the two most recent fiscal years and through May 14, 2002, D&PL did not
consult KPMG with respect to the application of accounting principles to a
specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the consolidated financial statements of D&PL,
or any other matters of reportable events as set forth in Items 304(a)(2)(i) and
(ii) of Regulation S-K.
Arthur Andersen issued an unqualified opinion on the consolidated financial
statements of D&PL as of and for the years ended August 31, 2001 and 2000. To
the knowledge of management, during the fiscal years ended August 31, 2001 and
2000 and in the subsequent period through the date of dismissal, there were no
disagreements with Arthur Andersen on any matters of accounting principles or
practices, financial statements disclosure, or auditing scope and procedures
which, if not resolved to the satisfaction of Arthur Andersen, would have caused
it to make reference to the matter in connection with their report on the
financial statements. Additionally, during such periods there were no reportable
events as defined in Item 304(a)(1)(v) of Regulation S-K.
The ratification of the appointment of the Company's independent auditors as
described above requires the affirmative vote by a majority of the shares cast
with respect to such matters present at the meeting in person or by proxy and
entitled to vote.
KPMG billed Delta and Pine Land Company the following fees for services provided
during fiscal year 2002:
o Audit Fees: The aggregate fees for professional services rendered for
the audit of D&PL's fiscal year 2002 annual financial statements and
review of D&PL's Form 10-Q reports were $160,000.
o Audit-Related Fees: The aggregate fees for professional services
rendered during fiscal 2002 related to statutory foreign and
stand-alone subsidiary audits and audits of employee benefit plans were
$20,000.
o Financial Information Systems Design and Implementation Fees: $0
o All Other Fees: The aggregate fees for all other non-audit services
were $0 .
D&PL's Audit Committee has considered whether KPMG's provision of any non-audit
services to D&PL would be compatible with maintaining KPMG's independence.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THIS RATIFICATION
OF APPOINTMENT OF INDEPENDENT AUDITORS.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
Board Meetings and Attendance of Directors
The Board of Directors had 12 meetings in fiscal 2002. All Directors attended at
least 75% of the aggregate of (i) the total number of meetings of the Board of
Directors held while they were members, and (ii) the total number of meetings
held by all Committees of the Board on which they served as members. The Company
did not have a Nominating Committee in 2002.
Director's Compensation
Each Director receives an annual fee of $40,000 and an attendance fee of $1,000
for each meeting of the Board of Directors attended. Directors are reimbursed
for actual expenses incurred in connection with attending Board or Committee
meetings. Under the 1995 Long-Term Incentive Plan, as amended, each new director
of the Company will be granted options for 62,222 shares (on a post-split
basis). In addition, each director will be granted options for an additional
2,666 shares in each of the second through sixth years each director serves as
such. At the March 30, 2000 Annual Meeting, the Board of Directors agreed to
grant options to each Director for 80,000 shares of the Company's Common Stock.
Committees of the Board
The Board of Directors has an Executive Committee, an Audit Committee and a
Compensation Committee. Officers are elected by and serve at the discretion of
the Board of Directors.
Executive Committee
The members of the Executive Committee are Messrs. Jacoby, Murphy and Roth. This
Committee did not meet during 2002. During the intervals between meetings of the
Board of Directors, the Executive Committee has and may exercise all of the
powers and authority of the Board of Directors, except as limited by law and
except for the power to change the membership or to fill vacancies in the Board
or said Committee. Action taken by the Executive Committee is reported to the
Board of Directors at its first meeting following such action.
Audit Committee
The members of the Audit Committee are Messrs. Roth, Murphy and Scheidt. Each of
the committee members is independent as defined by 303.01(B)(2)(a) and (3) of
the New York Stock Exchange Listing Standards. The Audit Committee met two times
during fiscal 2002 and again in November 2002 and is considering the annual
appointment of D&PL's independent auditors for 2003, subject to notice to the
Board and ratification by the shareholders as described above in this Proxy
Statement. The Committee:
|X| reviewed with the independent auditors the scope of the audit, the
auditors' fees and related matters;
|X| received the annual comments from the independent auditors on
accounting procedures and systems of control;
|X| reviewed with the independent auditors any questions, comments or
suggestions they may have had relating to D&PL's internal controls,
accounting practices or procedures or those of D&PL's subsidiaries;
|X| reviewed with management and the independent auditors D&PL's quarterly
financial statements as required and have reviewed year end financial
statements along with any material changes in accounting principles or
practices used in preparing the statements prior to the filing of a report
on Form 10-K or 10-Q with the SEC and have recommended the inclusion of the
audited financial statements in the report on Form 10-K. This review
included the items required by SAS 61 as in effect at that time in the case
of the quarterly statements.
|X| received from the independent auditors the report required by Independence
Standards Board Standard No. 1 as in effect at that time and discussed it
with the independent auditors;
|X| reviewed, as needed, the adequacy of the systems of internal controls and
accounting practices of D&PL and its subsidiaries regarding accounting
trends and developments;
|X| reviewed compliance with laws, regulations, and internal procedures, and
contingent liabilities and risks that may be material to D&PL.
The Delta and Pine Land Company Board of Directors has adopted a written charter
for the Audit Committee. The Audit Committee hereby reports that the Audit
Committee and the Company have complied with the Audit Committee Charter with
respect to the fiscal year ended August 31, 2002.
For the fiscal year ended August 31, 2002, the Audit Committee recommended the
appointment of the public accounting firm to be D&PL's independent auditors,
subject to approval by the Board and the shareholders. In connection with the
fiscal year which will end August 31, 2003, the Audit Committee anticipates that
it will have recommended to the Board a new charter for the Audit Committee
which will meet the new requirements under the Sarbanes-Oxley Act of 2002 and
new rules expected to be promulgated by the Securities and Exchange Commission
(thereunder and upon the recommendation of the New York Stock Exchange). Under
that new charter, it is anticipated that the Audit Committee will itself make
the annual appointment of the public accounting firm to be D&PL's independent
auditors for fiscal 2003, subject to notice of the selection to the Board and
ratification by the shareholders as described above in this Proxy Statement.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee has met and held discussions with management and the
Company's independent auditors and has reviewed and discussed the Company's
audited consolidated financial statements with management and the Company's
independent auditors.
The Audit Committee has also discussed with the Company's independent auditors
the matters required to be discussed by Statement on Auditing Standards No. 61
(Codification of Statements on Auditing Standards), which includes, among other
items, matters related to the conduct of the audit of the Company's financial
statements.
The Company's independent auditors have also provided the Audit Committee with
the written disclosures and the letter required by Independence Standards Board
Standard No. 1 (which relates to the auditors' independence from the Company)
and the Audit Committee has discussed with the Company's independent auditors
that firm's independence.
Based upon the review and discussions referred to above, the Audit Committee
recommended to the Company's Board of Directors that the audited consolidated
financial statements be included in the Company's Annual Report on Form 10-K for
the fiscal year ended August 31, 2002 for filing with the Securities and
Exchange Commission.
Jon E. M. Jacoby
Joseph M. Murphy
Stanley P. Roth
Compensation Committee (Compensation Committee Interlocks and Insider
Participation)
The members of the Compensation Committee are Messrs. Jacoby and Murphy. The
Company is not aware of any conflicts of interests which might be required to be
disclosed. The Compensation Committee met two times during fiscal 2002. The
Compensation Committee reviews and approves annual compensation, including
bonuses, for senior management of the Company and administers the Company's 1993
Stock Option Plan, as amended, and the 1995 Long-Term Incentive Plan, as
amended, including the grant of options under each plan.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee is composed entirely of independent, outside
directors. The Compensation Committee is responsible for reviewing and approving
the compensation of the Chief Executive Officer and the other executive officers
of the Company and reviewing and approving stock-based awards when recommended,
including stock options, for each executive officer.
The Company's policy is to pay cash compensation (salary and bonus) in
sufficient amounts so that the Company's officers receive compensation that is
competitive with that paid by other companies of similar size within the seed
industry, after considering cost-of-living factors such as location, as well as
providing long-term incentives based on the performance of the Company. The
long-term incentives are designed to attract and retain key executives by
providing rewards for outstanding performance relative to peer companies. The
Company has followed this policy since 1989.
Salary and Bonus
Salary ranges of executive officers are based on a written job responsibility
measurement system created by an independent, outside salary consultant. This
system is adjusted annually. This system applies to all employees of the
Company, and not just to the executive officers. Each position within the
Company has an established salary range based on skill level and experience
required to perform the duties, along with the position's level of importance to
overall Company operations. Individual salary ranges are established at levels
that provide internal equity, as well as competitiveness with similar positions
in other companies with similar businesses. Merit salary increases are
determined annually based on job performance and current salary level within the
salary range set for that position. Each executive officer's performance review
includes achievement against an established set of management responsibilities,
as well as specific individual objectives. Objectives relate to the business
function of that respective officer and may include financial performance
objectives (i.e., achievement of budget goals), as well as other objectives
relating to the individual's particular role in the Company (i.e., market share
goals, unit cost improvement, plant safety record, new product introductions,
etc.). The objectives of each executive officer are set by the Chief Executive
Officer. Each executive officer's performance is rated by the Chief Executive
Officer and the Compensation Committee. Non-merit increases are a function of
inflation and, as a result, in recent years have been modest.
The method of salary measurement described above also applies to the Chief
Executive Officer. Objectives for the Chief Executive Officer are set by the
Board of Directors. The salary of the Chief Executive Officer is discussed by
the Chief Executive Officer with the Compensation Committee. Based on such
discussions and the salary ranges and objectives discussed above, the
Compensation Committee determines the Chief Executive Officer's compensation.
A bonus pool is created annually based on a specified percentage of pre-tax,
pre-bonus, and pre-pension earnings. Under the Company's incentive bonus
program, the total of bonuses paid in any year is limited to the lower of two
limitations: (1) the bonus pool reduced by pension costs and (2) the sum of all
performance-based maximum individual awards. The Chief Executive Officer can
reduce, but may not increase, the overall bonus pool from the amount calculated
using the pre-established formula. The Compensation Committee, upon the
recommendation of the Chief Executive Officer, may also adjust the size of the
bonus pool. All positions eligible for bonus are placed in one of five
categories that govern the maximum bonus available as a percentage of the
mid-point of the position's salary range. These five categories include: (1)
Chief Executive Officer and Senior Vice President, (2) other executive officers,
(3) senior managers, (4) middle managers and (5) all other bonus-eligible
positions. This maximum is based on the potential impact on the Company's profit
of the job's responsibilities. For fiscal year 2002, the Chief Executive Officer
reduced the bonus pool by one-half since the company did not achieve earnings
targets established at the start of the year.
Each executive officer's bonus is based on his performance and achievement
against individual goals as described for merit salary increase review.
Performance is expressed as a percentage which, when multiplied by the maximum
bonus available for that job, results in an adjusted performance-based maximum
individual award for that year. All bonus awards to eligible employees are
calculated in this manner, and actual awards are effectively the pro rata share
of the available bonus pool or the performance-based maximum, whichever is less.
Thus, the bonus of each executive officer is dependent on the achievement of the
Company's earnings and the level of performance of each officer against
established performance criteria and personal objectives.
The bonus for the Chief Executive Officer is similarly set, based on the
individual's job performance. The Chief Executive Officer recommends his bonus
to the Compensation Committee. The Compensation Committee reviews and approves
the bonus amounts for the Chief Executive Officer, the other executive officers
and senior management.
Stock Awards
Awards of stock options for each executive officer and other key employees must
first be approved by the Compensation Committee and are granted at the sole
discretion of the Committee. Based on an assessment of competitive factors, the
Compensation Committee determines a suitable award that provides an incentive
for both performance and employee retention purposes.
Chief Executive Officer's Compensation
During the Company's fiscal year ended August 31, 2002, F. Murray Robinson was
employed by D&PL as President, Chief Executive Officer and Vice Chairman. Mr.
Robinson's salary was based on his contribution to the Company. He was entitled
to merit salary increases. These merit increases were determined in accordance
with the procedures and guidelines described above. For fiscal 2002, Mr.
Robinson's base salary was $205,000 with a bonus of $60,000. The Compensation
Committee approved Mr. Robinson's bonus based on his achievement with respect to
the targeted earnings goal for the Company. Other factors in the Compensation
Committee's decision were Mr. Robinson's leadership in developing corporate
growth strategies, developing international business opportunities and his
contribution made in developing the market for biotechnology-enhanced seed.
Compensation Committee
Jon E. M. Jacoby
Joseph M. Murphy
PERFORMANCE OF DELTA AND PINE LAND COMPANY SHARES
The Company's Shares were first publicly traded on June 29, 1993. The following
table shows a comparison of cumulative total return to stockholders for D&PL
Common Stock, the NYSE/AMEX/NASDAQ Market Index and the S&P Supercap Agriculture
Products Index. The table assumes $100 invested on August 31, 1997, and the
reinvestment of dividends.
Cumulative Total Return
-----------------------------------------------------------------
8/97 8/98 8/99 8/00 8/01 8/02
DELTA AND PINE LAND COMPANY 100.00 156.30 103.45 89.79 74.70 68.00
S & P SUPERCAP AGRICULTURAL PRODUCTS 100.00 80.07 73.57 54.95 81.86 74.87
NYSE/AMEX/NASDAQ STOCK MARKET (U.S.) 100.00 102.70 142.70 173.20 128.40 107.50
Copyright 2002 Standard & Poor's, a division of The McGraw-Hill Companies,
Inc. All rights reserved.
www.researchdatagroup.com/S&P.htm
EXECUTIVE COMPENSATION
F. Murray Robinson was employed by D&PL as Chief Executive Officer and Vice
Chairman from October 2000 until August 2002 and as President, CEO and Vice
Chairman from October 2001 until August 2002. Prior to his first retirement from
D&PL in April 1999, Mr. Robinson had been employed by D&PL serving as Executive
Vice President from December 1998 until April 1999 and President and COO from
February 1989 until December 1998. Following are compensation related tables and
information as required by the Securities and Exchange Commission reflecting
executive compensation for the fiscal year ended August 31, 2002.
Annual Compensation
The following table sets forth certain information regarding compensation paid
to, or accrued for, the Company's Chief Executive Officer and the Company's four
other most highly-compensated executive officers (the "Named Officers") during
the year ended August 31, 2002:
Summary Compensation Table
Long- Term
Annual Compensation Compensation
Securities
Name and Other Annual Underlying All Other
Principal Position Year Salary($) Bonus($) Compensation($)(4) Options(1) Compensation($)
- ------------------ ---- --------- -------- ------------------ ---------- ---------------
F. Murray Robinson 2002 205,000 60,000 3,200 2,666 44,000(2)
Chief Executive Officer 2001 187,900 155,000 2,700 64,888 50,600(2)
2000 -- -- -- -- --
W. Thomas Jagodinski 2002 245,000 145,000 1,400 125,000 --
Executive Vice 2001 205,000 215,000 2,100 -- --
President (3) 2000 180,000 200,000 2,000 137,000 --
Charles R. Dismuke, Jr. 2002 220,000 75,000 2,000 -- --
Senior Vice President 2001 204,000 135,000 2,000 -- --
2000 179,000 115,000 2,300 100,000 --
James H. Willeke 2002 195,600 30,000 4,800 -- 37,500(5)
Vice President-Sales 2001 180,600 80,000 6,400 -- --
and Marketing 2000 170,600 65,000 7,200 20,000 --
Earl E. Dykes 2002 185,000 35,000 1,600 25,000 --
Vice President- 2001 178,000 70,000 2,400 -- --
Operations 2000 170,000 60,000 3,300 -- --
(1) All stock options reflected on a post-split basis.
(2) Director's and attendance fees for serving as a director of the Company.
(3) Mr. Jagodinski became the President and Chief Executive Officer effective
September 1, 2002. He was Chief Financial Officer and Senior Vice President
from September 2001 until May 2002 and Executive Vice President from June
2002 until August 2002.
(4) These amounts include items such as personal use of company automobile,
group term life insurance, and/or taxable fringe benefits.
(5) Relocation expenses.
Employment Contracts and Change-In-Control Arrangements
Mr. Jagodinski is employed pursuant to an employment agreement effective
September 1, 1997 which provided for an annual base salary of $150,000 subject
to upward adjustment plus bonus, the amount of which is determined in accordance
with the bonus program described herein, plus insurance and other fringe
benefits. The agreement is automatically extended each day so that at any given
date, the time remaining under the contract will be for an additional two year
period. The contract may be terminated, except as a result of a change in
control or in anticipation of a change in control, upon three months written
notice. The employment agreement includes provisions pursuant to which Mr.
Jagodinski will receive, in the event of the termination of his employment due
to a change in control or in anticipation of a change in control, an amount that
in effect is equal to two times his highest salary and bonus paid during any of
the previous five calendar years plus a continuation for 24 months of his
insurance and fringe benefits. Mr. Jagodinski's agreement provides him the right
to surrender his stock options to the Company and receive cash in lieu of stock,
plus provides for certain tax protection payments of amounts paid to him under
this plan. In addition, Mr. Jagodinski was granted an option for 53,333 shares
of common stock at $28.04 per share. Pursuant to the terms of this agreement,
Mr. Jagodinski shall not compete with the Company for one year upon his
termination in the event of a change in control.
Option Grants in Last Fiscal Year
The only options exercisable into securities of the Company are those
outstanding under the 1993 Stock Option Plan (the "1993 Plan") and the 1995
Long-Term Incentive Plan (the "1995 Plan"). The 1993 Plan has not been available
for further grants since 1996. The Company granted options for 682,496 Shares
under the 1995 Plan in 2002. All options granted under both plans vest 20% per
annum commencing on the first day of the second and each succeeding year
following each grant and expire ten years from the date of grant.
The following table sets forth certain information concerning stock options
granted during fiscal 2002:
Option Grants in Fiscal 2002
Percentage of
Number of Total Options Potential Realized Value at
Securities Granted Assumed Annual Rates of Stock
Underlying to Employees In Price Appreciation of Option
Name Options Fiscal Year Exercise Price Expiration Term (1)
- ---- ------- ----------- -------------- ----------- --------
Date 0% 5% 10%
---- ----- --- ---
F. Murray 2,666 0.39% $ 18.97 4/25/12 -- $ 32,000 $ 81,000
Robinson
W. Thomas 125,000 18.32% $ 18.95 5/30/12 -- 1,490,000 3,775,000
Jagodinski
Earl E. 25,000 3.66% $ 17.85 10/15/11 -- 281,000 711,000
Dykes
(1) The dollar amount under these columns are the result of calculations at 5%
and 10% rates arbitrarily set by the Securities and Exchange Commission
and, therefore, are not intended to forecast possible future appreciation,
if any, of the Company's stock price. Any actual gain on exercise of
options is dependent on the future performance of the Company's stock.
Options Exercised in Last Fiscal Year
The following table sets forth certain information concerning stock option
exercises during 2002 and unexercised options held as of August 31, 2002 for
each of the Named Officers:
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
Number of Securities
Underlying Unexercised Options Value of Unexercised
at the In-The-Money Options at
Fiscal Year End the Fiscal Year End (1) (2)
--------------- ---------------------------
Shares Gain
Acquired Realized
on on
Exercise Exercise Exercisable Unexercisable Exercisable Unexercisable
- ---------------------------- ------------ ----------- -------------- ----------------- -------------- -----------------
F. Murray Robinson -- -- 90,488 54,576 $ - $ -
W. Thomas Jagodinski -- -- 166,444 207,200 468,089 47,988
Charles R. Dismuke, Jr. -- -- 136,000 60,000 865,431 15,480
James H. Willeke -- -- 63,000 12,000 136,950 -
Earl E. Dykes -- -- - 25,000 - 8,750
(1) Based on $18.20 per Share, the August 30, 2002, closing value as quoted by
the New York Stock Exchange.
(2) Computation excludes "out-of-the-money" options for the following number of
shares: 145,064 shares for Mr. Robinson, 274,666 shares for Mr. Jagodinski,
104,889 shares for Mr. Dismuke; and 20,000 shares for Mr. Willeke.
Compensation Pursuant to Plans
Pension Plan
The Company maintains a noncontributory defined benefit plan (the "Pension
Plan") that covers substantially all full-time employees, including the Named
Officers. All employees of the Company and its domestic subsidiaries, who have
both attained age 21 and completed one year of eligibility service, are eligible
to participate in the Pension Plan. The Pension Plan provides a normal
retirement benefit (if employment terminates on or after age 65) equal to the
sum of: (i) 22.75% of average compensation (the average of the participant's
five highest consecutive calendar years of earnings, including overtime but
excluding bonuses) reduced by 1/25th for each year of credited service less than
25 at normal retirement; and (ii) 22.75% of average compensation exceeding the
greater of one-half of average social security covered compensation and $10,000,
reduced by 1/35th for each year of credited service less than 35 at normal
retirement.
The following table shows the estimated benefits payable in the form of a
single-life annuity upon retirement in specified average compensation and years
of credited service classifications:
Pension Plan Table
Years of Credited Service
Compensation 15 20 25 30 35
- ------------ -- -- -- -- --
$ 25,000 3,927 5,236 6,545 6,717 6,888
$ 50,000 9,777 13,036 16,295 17,279 18,263
$ 75,000 15,627 20,836 26,045 27,842 29,638
$100,000 21,477 28,636 35,795 38,404 41,013
$150,000 33,177 44,236 55,295 59,529 63,763
$200,000 44,877 59,836 74,795 80,654 86,513
$250,000 44,877 59,836 74,795 80,654 86,513
$300,000 44,877 59,836 74,795 80,654 86,513
$400,000 44,877 59,836 74,795 80,654 86,513
The above estimated annual benefits were calculated by the actuary for the
Pension Plan. Benefit amounts shown are the annual pension benefits payable in
the form of a single-life annuity for an individual attaining the age of 65 in
2002. In addition, such amounts reflect the 2002 maximum compensation limitation
under the Internal Revenue Code of 1986, as amended, and are not subject to any
deduction for social security or other amounts.
The estimated years of credited service and eligible average compensation for
each of the Named Officers as of January 1, 2002, the most recent Pension Plan
valuation date, are as follows:
---------------------------- ------------------------- ------------------
Years of Credited Average Plan
Name Service Compensation
---------------------------- ------------------------- ------------------
F. Murray Robinson 12 $171,667
W. Thomas Jagodinski 10 170,750
Charles R. Dismuke, Jr. 25 178,275
James H. Willeke 6 168,267
Earl E. Dykes 6 160,933
Supplemental Executive Retirement Plan
The Company adopted a Supplemental Executive Retirement Plan ("SERP"), which
became effective January 1, 1992, and covers certain management personnel,
including certain of the Named Officers. The SERP provides for payments to
participants in the form of a single-life annuity, or as otherwise provided by
the SERP commencing at age 65 or the participant's postponed retirement date.
The following table sets forth the scheduled estimated annual benefits expected
to be paid pursuant to the SERP to the Named Officers who are currently
participants:
Name Annual Cash Benefit
F. Murray Robinson.......................... $27,000
The SERP also provides that on the death of an active employee, the Company will
pay a death benefit to the participant's surviving spouse equal to the actuarial
equivalent of the participant's accrued benefit, which is based upon the
participant's years of service with the Company and the years of service the
participant would have had at age 65, if employment had continued. If a
participant's employment with the Company is terminated prior to age 65 for
reasons other than death, then the participant shall be paid a vested percentage
of his accrued benefit equal to the participant's annual cash benefit above
multiplied by a fraction (not greater than one), the numerator of which is the
participant's years of service as of the date of termination of employment and
the denominator of which is the participant's projected years of service as of
age 65, if employment had not terminated.
Each participant's vested percentage in the SERP is determined as follows:
Number of Years of Service Vested Percentage
1 but less than 2.................................... 20%
2 but less than 3.................................... 40%
3 but less than 4.................................... 60%
4 but less than 5.................................... 80%
5 or more............................................ 100%
Under the terms of the SERP, the Company may discontinue additional eligibility
and planned payments under the SERP at any time. The Named Officer noted above
is fully vested in the SERP.
Defined Contribution Plan
Effective April 1, 1994, the Company established a defined contribution plan
under the rules of Internal Revenue Code Section 401(k) (the "401(k) Plan"). The
401(k) Plan covers substantially all full-time employees. Eligible employees of
the Company and its domestic subsidiaries, who have both attained age 21 and
completed one year of service, may participate in the 401(k) Plan. Prior to
January 1, 2001, a participant could elect to contribute up to 18% of his or her
eligible earnings to the 401(k) Plan. However, effective January 1, 2001, a
participant may elect to contribute up to 25% of his or her eligible earnings to
the 401(k) Plan. The 401(k) Plan allows the Company to match a maximum of six
percent of eligible employee contributions. As of August 31, 2002, the Company
has elected not to match such contributions.
Incentive Plans
The Company maintains two incentive plans that compensate key employees and
directors through the grant of options to buy shares of Common Stock. In 1993,
the Company adopted the 1993 Plan, but no more options were granted under the
plan effective with the adoption of the 1995 Plan. In 1995, the Company's Board
of Directors adopted the 1995 Plan which the shareholders ratified at the 1996
Annual Meeting. In 2000, the 1995 Plan was amended and restated eliminating the
ability of the Board of Directors to award stock appreciation rights, restricted
Shares of Common Stock and performance unit credits. Pursuant to the amended and
restated 1995 Plan, the Board of Directors may award stock options to officers,
key employees and directors. Under the amended and restated 1995 Plan, 5,120,000
Shares are authorized for grant, which is an increase from the original
2,560,000 Shares. As of August 31, 2002, options for 4,971,141 Shares have been
granted under the 1995 Plan, leaving available for grant 1,281,394 Shares,
including 1,132,535 Shares that have been forfeited and are available for
re-grant.
Under both plans, all stock options granted vest at a rate of 20% per annum
commencing on the first day of the second and each succeeding year following
each grant and expire ten years from the date of grant. Shares subject to
options and awards under the 1995 Plan which expire unexercised are available
for new option grants and awards. The number of shares available for grant under
the 1993 Plan and upon forfeitures of options outstanding thereunder has been
reduced to zero, and no further option grants are being made under this plan.
CERTAIN TRANSACTIONS
Registration Rights
The holder of the convertible Series M Non-Voting Preferred Stock has certain
registration rights associated with the Common Stock into which the Preferred
Stock is convertible. The Preferred Stock is convertible into Common Stock
beginning upon the seventh anniversary of the date on which it was issued
(February 2, 1996) or the occurrence of certain specified events, whichever
occurs first.
Cotton Biotechnology Research Contracts
The Company had a research contract with the Institute of Molecular Agrobiology
("IMA") until June 2002. Dr. Nam-Hai Chua, a director of the Company, was the
Deputy Chairman of the Management Board of Directors of IMA, until September
2001. The value of the contract exceeds $60,000, however, the contract is not a
material contract, as defined by the Securities and Exchange Commission. The
contract is also not a material contract for IMA, and according to Dr. Chua he
derives no particular or direct benefit from the contract.
DeltaMax Cotton LLC, a limited liability company jointly owned with Verdia,
Inc., a wholly owned subsidiary of Maxygen, Inc., and the Company entered into a
research agreement with Temasek Life Sciences Laboratory ("TLL"), a
not-for-profit organization organized under the laws of Singapore, for
collaboration on research in October 2002. Dr. Nam-Hai Chua, a director of the
Company, is an advisor to a different subsidiary of the parent company of TLL.
The value of the contract exceeds $60,000, however, the contract is not a
material contract, as defined by the Securities and Exchange Commission. The
contract also is not a material contract for TLL, and according to Dr. Chua he
derives no particular or direct benefit from the contract.
Consulting Agreement
In November 2001, the Company entered into a consulting agreement with
Stephens Inc., an investment bank, for the evaluation of certain technology
transactions . Jon E. M. Jacoby, Chairman of the Board of the Company, is a
director of Stephens Group, Inc. and its subsidiary, Stephens Inc. Stephens
Group, Inc. is a shareholder of D&PL. The value of the contract exceeds $60,000,
however, the contract is not a material contract, as defined by the Securities
and Exchange Commission. The contract is also not a material contract for
Stephens Inc., or material to Mr. Jacoby in relation to his compensation from
Stephens Group, Inc. Mr. Jacoby recused himself from any discussion and vote
regarding this agreement. The Company may utilize the services of Stephens
affiliates for this and other investment banking functions in the future.
Future Transactions with Affiliates and Advances
The Company requires that any transactions between the Company and persons or
entities affiliated with officers, directors, employees or stockholders of the
Company be on terms no less favorable to the Company than could be obtained in
an arm's-length transaction with an unaffiliated party. Such transactions will
also be subjected to approval by a majority of the independent directors of the
Company. The Board of Directors has adopted resolutions prohibiting advances
without its approval, except for ordinary business and travel advances in
accordance with the Company's policy.
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely on review of the copies of reporting forms furnished to the
Company, or written representations that no forms were required, the Company
believes that during fiscal 2002, all required events of its officers, directors
and 10% stockholders to the Securities and Exchange Commission of their
ownership and changes in ownership of Shares (as required pursuant to Section
16(a) of the Securities Exchange Act of 1934) have been filed, except that the
following individuals filed the following number of late reports with respect to
the following number of transactions: One Form 5 for Mr. Scheidt relating to
shares donated to a family foundation to which Mr. Scheidt has indirect
beneficial ownership and one Form 5 for Dr. Chua relating to shares which were
transferred from the name of Dr. Chua's spouse as the custodian to an account in
the name of a minor child who is now an adult.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows of no
matters that will be presented for consideration at the Annual Meeting other
than those mentioned in this Proxy Statement. If any other matters are properly
brought before the Annual Meeting, it is intended that the persons named in the
proxy will act in respect thereof in accordance with their best judgment.
SOLICITATION OF PROXIES AND COST THEREOF
The expense of soliciting proxies and the cost of preparing, assembling and
mailing material in connection with the solicitation of proxies will be paid by
the Company. In addition to the use of mails, certain directors, officers or
employees of the Company and its subsidiaries, who receive no compensation for
their services other than their regular salaries, may solicit proxies. The
Company will reimburse brokerage firms, nominees, custodians and fiduciaries for
their reasonable out-of-pocket expenses for forwarding proxy materials to
beneficial owners and seeking instruction with respect thereto.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be included in the proxy statement and
presented at the 2004 Annual Meeting should be received by the Company no later
than August 20, 2003. With regard to stockholder proposals not included in the
Company's proxy statement but which a stockholder wishes to be brought before
the 2003 Annual Meeting, the Company's bylaws establish an advance notice
procedure which requires that the Company receive notice of such a proposal by
not less than 60 days nor more than 90 days prior to the date of the Annual
Meeting; provided, however, that in the event that less than 70 days notice or
prior public disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be received not later
than the close of business on the 10th day following the day on which such
notice of the date of the Annual Meeting was mailed or such public disclosure
was made. In addition to the above requirements as to timeliness, the proposals
must meet certain eligibility requirements of the Securities and Exchange
Commission.
ANNUAL REPORT AND FINANCIAL STATEMENTS
Stockholders may obtain a copy of the Company's annual report on Form 10-K,
as filed with the Securities and Exchange Commission, without charge (except for
exhibits), by contacting: R. D. Greene, Vice President - Finance and Treasurer,
Delta and Pine Land Company, One Cotton Row, Scott, Mississippi 38772 or via
email at ricky.d.greene@deltaandpine.com.
BY ORDER OF THE BOARD OF DIRECTORS
Jerome C. Hafter
Secretary