UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant X
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Preliminary Proxy Statement
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X Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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DELTA AND PINE LAND COMPANY
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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DELTA AND PINE LAND COMPANY
ONE COTTON ROW
SCOTT, MISSISSIPPI 38772 USA
(662) 742-4000
December 1, 2004
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 Tuesday, January 11, 2005, at
10:00 AM, Central Time, at the Hilton Memphis, 939 Ridgelake Blvd., Memphis,
Tennessee. All stockholders of record as of November 16, 2004, 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,
/s/ Jon E. M. Jacoby
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 11, 2005
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 Hilton Memphis, 939 Ridgelake Blvd., Memphis, Tennessee, on Tuesday,
January 11, 2005, at 10:00 AM, Central Time, for the following purposes:
1. to elect two Class III members to the Board of Directors to
three-year terms expiring at the 2008 Annual Meeting of Stockholders;
2. to ratify the appointment of the independent auditors for the
fiscal year ending August 31, 2005;
3. to adopt the Delta and Pine Land Company 2005 Omnibus Stock Plan;
and
4. to transact such other business as may properly come before the
meeting or any adjournments thereof.
The accompanying Proxy Statement contains further information with respect to
these matters.
The stockholders of record at the close of business on November 16, 2004, 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 immediately
preceding 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
/s/ Jerome C. Hafter
Jerome C. Hafter
Secretary
December 1, 2004
DELTA AND PINE LAND COMPANY
ONE COTTON ROW
SCOTT, MISSISSIPPI 38772
(662) 742-4000
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
January 11, 2005
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 11, 2005, 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, FOR adoption of the Delta and Pine Land Company 2005
Omnibus Stock Plan 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 16, 2004, are
entitled to vote at the meeting. The Proxy Statement and the accompanying form
of proxy were mailed on or about December 1, 2004, 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 Ricky 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 16, 2004, will constitute a quorum. At that date,
approximately 38,579,830 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 ("NYSE") 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, 2004, Shares beneficially owned by
each director, each nominee for director, each named executive officer, 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, LLC (1) 3,655,855 9.5
Westfield Capital Management (2) 2,275,400 5.9
Stephens Group, Inc. (3) 1,070,004 2.8
Monsanto Company (4) 502,620 1.3
Jon E. M. Jacoby (5) 158,731 *
F. Murray Robinson (6) 113,246 *
W. Thomas Jagodinski (7) (12) 76,211 *
Rudi E. Scheidt (8) 62,445 *
Stanley P. Roth (9) 50,833 *
Nam-Hai Chua (10) 10,666 *
Joseph M. Murphy (11) 698 *
Charles R. Dismuke, Jr. (7) (13) 102,000 *
Ricky D. Greene (7) 500 *
William V. Hugie (7) 504 *
Thomas A. Kerby (7) -0- *
All Directors and Executive Officers as a Group 802,228 2.1
[19 persons] (14) (15)
- ------------------------------------------------
* Less than one percent
(1) The mailing address for Sterling Capital Management is 4064 Colony
Road, Suite 300, Charlotte, North Carolina 28211.
(2) The mailing address for Westfield Capital Management is One Financial
Center, Boston, Massachusetts 02111.
(3) Mr. Jacoby, a director of Stephens Group, Inc. ("SGI") and an employee
of its subsidiary, Stephens, Inc., owns 158,731 Shares which are not
included. See Note 5 below. The mailing address for Stephens Group,
Inc. and affiliates is 111 Center Street, Little Rock, Arkansas 72201.
(4) Excludes shares obtainable by conversion of Series M Convertible
Preferred Stock. If Monsanto converts pursuant to the terms of the
preferred stock, Monsanto would receive 1,066,667 Shares of Common
Stock which would make its amount of beneficial ownership 1,569,287
Shares, or 4.1%. The mailing address for Monsanto Company is 800 North
Lindbergh Blvd., St. Louis, Missouri 63167.
(5) Includes the following Shares: 105,437 Shares owned by Jacoby
Enterprises, Inc., as to which Mr. Jacoby has sole power to vote and
sole power of disposition, 20,094 Shares held in an IRA account, 8,200
Shares held by an LLC as to which Mr. Jacoby disclaims beneficial
ownership and 25,000 Shares owned beneficially by Mr. Jacoby. Does not
include Shares owned by SGI, or other of its affiliates, except Jacoby
Enterprises, Inc. In early November, 2004, after the date of this
table, Mr. Jacoby disposed of 100,000 shares owned by Jacoby
Enterprises, Inc. See Note 3 above. The mailing address for Jacoby
Enterprises, Inc., and Mr. Jacoby is 111 Center Street, Little Rock,
Arkansas 72201.
(6) Includes 38,000 shares owned by a Charitable Remainder Unit Trust
("CRUT"). Mr. Robinson disclaims beneficial ownership of shares owned
by the CRUT. The mailing address for Mr. Robinson is 1520 Woodruff
Lane, Bloomington, Indiana 47401.
(7) The mailing address for Messrs. Jagodinski, Dismuke, Greene, Hugie, and
Kerby is One Cotton Row, Scott, Mississippi 38772.
(8) Includes 17,000 Shares owned by the Scheidt Family Foundation and
45,445 Shares owned beneficially by Mr. Scheidt. The mailing address
for Mr. Scheidt is 54 South White Station Road, Memphis, Tennessee
38117.
(9) Includes 27,500 Shares owned by North American Capital Corporation, as
to which Mr. Roth has sole power to vote and sole power of disposition
and 23,333 Shares owned beneficially by Mr. Roth. The mailing address
for Mr. Roth is 510 Broad Hollow Road, Suite 206, Melville, New York
11747.
(10) 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.
(11) 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 200 East 42nd Street, 9th Floor, New York, New York
10017.
(12) Includes 3,555 Shares owned by Mr. Jagodinski's wife. Mr. Jagodinski
disclaims beneficial ownership of Shares owned by his wife.
(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 802,228 Shares shown exclude vested and unvested
options for 99,556 Shares pursuant to the 1993 Delta and Pine Land
Company Stock Option Plan and options for 1,931,764 Shares pursuant to
the 1995 Long-Term Incentive Plan for a total of 2,031,320. These above
option amounts include vested options of 1,261,172 for each individual
listed in the table as follows: Jon E. M. Jacoby, 83,018; F. Murray
Robinson, 130,485; W. Thomas Jagodinski, 270,354; Rudi E. Scheidt,
83,018; Stanley P. Roth, 83,018; Nam-Hai Chua, 83,018; Joseph M.
Murphy, 81,240; Charles R. Dismuke, Jr., 122,667; Ricky D. Greene,
76,000; William V. Hugie, 133,777; Thomas A. Kerby, 114,577.
OFFICERS OF THE COMPANY
Offices Held with Company;
Name (Age) Position (1) Principal Occupation for Past Five Years
- ---------------------- ---------------------- -----------------------------------------------------------
Jon E. M. Jacoby (66) 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. On October 1, 2003, Mr. Jacoby
retired as Vice Chairman of each of these companies. He
remains a director of Stephens Group, Inc. and a consultant
and employee of these companies. Stephens Inc. and Stephens
Group, Inc. are stockholders of D&PL. Mr. Jacoby is a
director of Conn's Inc., Sangamo Bio-Sciences, Eden
Bioscience Corp. and Power-One, Inc. He was a director 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 P. Roth (67) Vice Chairman Mr. Roth is the Chairman of NACC, a private merchant banking
firm. In addition, Mr. Roth serves as the Chairman of
Royal-Pioneer Industries, Inc., and a director of Hollis
Corporation and GPC International Inc. Mr. Roth previously
served as Chairman of GPC International until 2001. In
September 2002, Mr. Roth became a Director of Polaroid
Holding Company. Mr. Roth is a certified public accountant
with both public accounting and private industry
experience. Mr. Roth is not an employee of D&PL and
receives no additional compensation for his role as Vice
Chairman.
F. Murray Robinson (70) Vice Chairman Mr. Robinson served 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. Mr. Robinson
is no longer an employee of D&PL and receives no additional
compensation for his role as Vice Chairman.
W. Thomas Jagodinski (48) President, Chief Mr. Jagodinski has served as President and Chief Executive
Executive Officer Officer and Director since September 2002 and as Executive
and Director 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. Until March 2000, he served as Vice
President - Finance and Treasurer and Assistant
Secretary. From 1991, when he joined D&PL, until
March 2000, Mr. Jagodinski held various positions
with the Company.
Charles R. Dismuke, Jr. (49) Senior Vice President Mr. Dismuke has served as Senior Vice President since 1999.
From 1997 until 1999, he served as Senior Vice President and
as President of Deltapine Seed Division. From 1989 until
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. From 1977,
when he joined D&PL, until 1982, Mr. Dismuke held various
positions with the Company.
Harry B. Collins (63) Vice President- Dr. Collins has served as Vice President - Technology Transfer
Technology Transfer since 1998. From 1985 until 1998, Dr. Collins
served as the Company's Vice President - Research. Prior to
that, Dr. Collins was the senior soybean breeder for the
Company. Dr. Collins has been employed by D&PL since 1974.
Earl E. Dykes (51) Vice President - Mr. Dykes has served as Vice President - Field Production
Field Production since September 2003. From 1997 to August 2003, Mr. Dykes
served as the Company's Vice President - Operations. Prior
to that time, Mr. Dykes served as the General Manager -
Arizona Processing, Inc. (which was acquired by the Company
in 1996). Mr. Dykes was a shareholder of Arizona
Processing, Inc. at the time of the acquisition.
Ken Fearday (52) President - Mr. Fearday has served as President - International Division
International since April 2003. Prior to joining D&PL he served as
Division President of Research Seeds, Inc. from May 2000 until
February 2003. From January 2000 through May 2000 he served as
President of Seed Solutions, a division of Research Seeds, Inc.
From 1992 until 1999 he served as president of Advanta Seeds,
Inc., a wholly owned subsidiary of Advanta USA, Inc.
Ricky D. Greene (34) Vice President - Mr. Greene has served as Vice President - Finance, Treasurer
Finance, Treasurer and Assistant Secretary since June 2002. Previously he
and Assistant served as Vice President - Business Development from
Secretary September 2000 until June 2002. From 1997, when he joined
D&PL, until September 2000, Mr. Greene served as Director of
International Taxation and Finance.
Kater D. Hake (52) Vice President - Dr. Hake has served as Vice President - Technology
Technology Development since May 2001. From 1996 until May 2001, he
Development served as International Division Vice President - Technical
Services. Prior to joining the Company in 1996, Dr.
Hake was Associate Professor with Texas A&M
University and Manager of Cotton Physiology for the
National Cotton Council of America.
William V. Hugie (45) Vice President - Dr. Hugie has served as Vice President - Research since
Research 1998. From 1996 until 1998, he served as Vice President -
New Technologies. From 1988, when he joined D&PL, until
1996, Dr. Hugie held various positions with the Company.
Thomas A. Kerby (60) Vice President - Dr. Kerby has served as Vice President - Technical Services
Technical Services since 1994 and Director - Technical Services from 1993, when
he joined D&PL. Prior to joining the Company, Dr. Kerby
served the cotton industry of California and the University
of California as an Extension Cotton Agronomist.
Donald L. Kimmel (66) Vice President - Mr. Kimmel has served as Vice President - Industry Relations
Industry Relations of D&PL since September 2001. From 1986, when he joined
D&PL, until 2001, he served as Vice President -
Sales and Marketing of D&PL.
Charles V. Michell (42) Vice President Mr. Michell has served as Vice President - Supply Chain
-Supply Chain Management since September 2003. From August 2001 until
Management August 2003, Mr. Michell served as Vice President - Supply
Chain Management, Corporate Quality Assurance and Information
Systems. From April 2000 until August 2001, he served as Vice
President - Supply Chain Management and Information Systems.
From 1998 until April 2000, he served as Vice President -
Information Systems. From 1987, when he joined D&PL, until
1998, Mr. Michell held various positions with the Company.
Ann J. Shackelford (46) Vice President - Ms. Shackelford has served as Vice President - Corporate
Corporate Services Services since 1997. Ms. Shackelford has been employed by
D&PL since 1994 and has held various positions in
the Company.
James H. Willeke (60) Vice President - Mr. Willeke has served as Vice President - Sales and
Sales and Marketing Marketing since 1999. From 1997 until 1999, he served as
Senior Vice President and as President - Paymaster
Division. Prior to joining the Company, he served as
President - Hartz Seed, a subsidiary of Monsanto Company.
Jerome C. Hafter (59) Secretary Mr. Hafter has served as Secretary of D&PL since 1993. From
1976 until September 2001, Mr. Hafter was a partner in Lake
Tindall, LLP, D&PL 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
general counsel.
(1) All biography information is provided as of December 1, 2004
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 III Directors
were elected at the April 25, 2002 Annual Meeting to serve a term expiring at
this 2005 Annual Meeting. Class I Directors were elected at the January 22, 2003
Annual Meeting to serve a term expiring at the 2006 Annual Meeting. Class II
Directors were elected at the January 15, 2004 Annual Meeting to serve a term
expiring at the 2007 Annual Meeting.
The Board of Directors proposes the re-election of the two Class III Directors
listed below:
Name
(Year First Elected Offices Held with the Company;
a Director) Principal Occupation for Past Five Years
- ------------------- ------------------------------------------------------------
CLASS III
Jon E. M. Jacoby See the description of Mr. Jacoby's positions with the
(1992) Company and principal occupation under "Officers of the
Company".
F. Murray Robinson See the description of Mr. Robinson's positions with the
(2000) Company and principal occupation under "Officers of the
Company".
Continuing Directors
- --------------------
CLASS I
Nam-Hai Chua Dr. Chua is the Andrew W. Mellon Professor and Head of the
(1993) Plant 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 been a consultant to Pioneer
Hi-Bred International, Inc., a DuPont (NYSE:DD) subsidiary,
for several years. Dr. Chua is 60 years of age.
W.Thomas Jagodinski See the description of Mr. Jagodinski's positions with the
(2002) Company and principal occupation under "Officers of the
Company". Mr. Jagodinski was named a Class I director of the
Company effective September 1, 2002, and was elected as a
Class I Director at the 2003 Annual Meeting.
Stanley P. Roth See the description of Mr. Roth's positions with the Company
(1988) and principal occupation under "Officers of the Company".
CLASS II
Joseph M. Murphy Since February 1993, Mr. Murphy has been the Chairman of
(1992) Country Bank, New York, New York. Mr. Murphy has been a
certified public accountant since 1961, certified in both
New York and New Jersey. Prior to his affiliation with
Country Bank, Mr. Murphy practiced public accountancy for
public and private companies for nine years, and then
participated as an investment banker, investor, officer and
director in the purchase, management and sale of numerous
domestic and international public and private businesses for
over 17 years. Mr. Murphy also has extensive service as a
trustee of several substantial non-profit foundations and
institutions. Mr. Murphy is 69 years of age.
Rudi E. Scheidt Since 1990, Mr. Scheidt has been a private investor. From
(1993) 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 was
Director Emeritus of National Commerce Financial
Corporation, a bank holding company, headquartered in
Memphis, Tennessee until December 2002. Mr. Scheidt is 79
years of age.
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 NYSE rules.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION OF
EACH OF THE INDIVIDUALS LISTED AS CLASS III DIRECTORS.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Appointment of Auditors
KPMG LLP audited D&PL's annual financial statements for the fiscal year ended
August 31, 2004. Representatives of KPMG will be present at the meeting to
respond to appropriate questions and to make a statement if they so desire.
The Audit Committee is solely responsible for appointing the independent
registered public accounting firm to be the Company's independent outside
auditors for the fiscal year ending August 31, 2005. Although the Company is not
legally required to seek stockholder approval of its outside auditor, the Board
of Directors believes that it is in the best interest of the Company and a
matter of good corporate governance to do so.
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
2005, but has not yet made a selection. Therefore, at this time stockholders 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.
Audit Fees
Aggregate fees paid or payable to the Company's independent registered public
accounting firm relating to the audit of the 2004 and 2003 consolidated
financial statements and the fees for other professional services billed during
the periods from September 1 to August 31, 2004 and 2003 are as follows:
Type of Fees 2004 2003
------------ -------- --------
Audit Fees (1) $213,000 $180,000
Audit-Related Fees (2) 88,000 31,000
Tax Fees (3) 16,000 2,000
All Other Fees (4) 47,000 0
-------- ---------
Total $364,000 $213,000
======== ========
(1) Represents the aggregate fees paid or payable by the Company to KPMG
LLP for professional services rendered for the audit of the Company's
annual consolidated financial statements and for the reviews of the
consolidated financial statements included in the Company's Form 10-Q
filings for each fiscal quarter.
(2) Represents the aggregate fees billed to the Company by KPMG LLP for
assurance and related services that are reasonably related to the
performance of the audit and review of the Company's financial
statements that are not already reported in Audit Fees. These services
include benefit plan audits and attestation services that are required
by statute or regulation.
(3) Represents the aggregate fees billed to the Company by KPMG LLP for
professional services relating to tax compliance, tax advice and
expatriate tax services.
(4) Includes fees paid for due diligence relating to an international
project.
Auditor Independence
The Audit Committee has considered whether the provision of the above noted
services is compatible with maintaining the independent auditor's independence
and has determined that the provision of such services has not adversely
affected the independent auditor's independence.
Policy on Audit Committee Pre-Approval
As part of its duties, the Audit Committee is required to pre-approve audit and
non-audit services performed by the independent auditor in order to assure that
the provision of such services does not impair the independent auditor's
independence. The policy generally provides for the Audit Committee to
pre-approve services in the defined categories of audit services, audit-related
services, tax services and all other services, up to specified amounts, and sets
requirements for specific case-by-case pre-approval of discrete projects that
are not otherwise pre-approved or services over the pre-approved amounts.
Pre-approval may be given as part of the Audit Committee's approval of the scope
of the engagement of the independent auditor or on an individual basis. The
pre-approval of services may be delegated to one or more of the Audit
Committee's members, but the decision must be presented to the full Audit
Committee at its next scheduled meeting. The policy prohibits retention of the
independent auditor to perform the prohibited non-audit functions defined in
Section 201 of the Sarbanes-Oxley Act of 2002 or the rules of the Securities and
Exchange Commission, and also considers whether proposed services are compatible
with the independence of the independent auditor. None of the Audit Committee's
pre-approval requirements were waived in fiscal 2004.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THIS RATIFICATION
OF APPOINTMENT OF INDEPENDENT AUDITORS.
PROPOSAL NO. 3
Adoption of the 2005 Omnibus Stock Plan
In late November 2004, the Company's Board of Directors adopted, subject to
stockholder approval, the Delta and Pine Land Company 2005 Omnibus Stock Plan,
referred to below as the "Plan". The purpose of the Plan is to further growth
and profitability of D&PL by increasing incentives and encouraging share
ownership on the part of D&PL employees, independent contractors, and members of
the Board. The actual number of individuals who will receive awards cannot be
determined in advance because the Compensation Committee ("Committee") has the
discretion to select the participants. The Plan provides the grant of (a)
incentive stock options as defined in the Internal Revenue Code of 1986, as
amended (the "Code"), (b) non-qualified stock options, (c) restricted stock, and
(d) restricted stock units, collectively referred to herein as "Awards".
Summary Description of the Plan
The following is a brief summary of the Plan, a copy of which is attached as
Appendix A to this proxy statement. The following summary is qualified in its
entirety by reference to the Plan.
Administration
The Plan is to be administered by the Committee of the Board of Directors. The
Committee shall consist of not less than two directors. The members of the
Committee shall be appointed from time to time by, and serve at the pleasure of,
the Board. It is intended that each member of the Committee shall qualify as (a)
a "non-employee director" under Rule 16b-3 of the Securities Exchange Act of
1934, as amended, (b) an "outside director" under section 162(m) of the Code and
(c) an independent director under the rules of the NYSE. If it is later
determined that one or more members of the Committee do not so qualify, actions
taken by the Committee prior to such determination shall be valid despite such
failure to qualify.
It will be the duty of the Committee to administer the Plan in accordance with
the Plan's provisions. The Committee shall have all powers and discretion
necessary or appropriate to administer the Plan and to control its operation,
including, but not limited to, the power to (a) determine which employees,
independent contractors and directors shall be eligible to receive Awards and to
grant Awards, (b) prescribe the form, amount, timing and other terms and
conditions of each Award, (c) interpret the Plan and the Awards, (d) adopt such
procedures as it deems necessary or appropriate to permit participation in the
Plan by eligible employees, independent contractors and directors, (e) adopt
such rules as it deems necessary or appropriate for the administration,
interpretation and application of the Plan, and (f) interpret, amend or revoke
any such procedures or rules. A majority of the Committee shall constitute a
quorum. The acts of the Committee shall be either (i) acts of a majority of the
members of the Committee present at any meeting at which a quorum is present or
(ii) acts approved in writing by all of the members of the Committee without a
meeting.
The Committee, in its sole discretion and on such terms and conditions as it may
provide, may delegate all or any part of its authority and powers under the Plan
to one or more member(s) of the Board and/or officers of D&PL: provided,
however, that the Committee may not delegate its authority or power with respect
to (a) any officer of the Company with regard to the selection for participation
in this Plan of an officer or other person subject to Section 16 of the
Securities Exchange Act of 1934, as amended, or decisions concerning the timing,
pricing or amount of an award to such an officer or person or (b) any Award that
is intended to satisfy the requirements applicable to "qualified
performance-based compensation" under section 162(m) of the Code.
Shares Subject to the Plan
Up to 4,500,000 shares, subject to adjustments as described below, shall be
available for grants of awards under the Plan. The maximum number of Shares
which may be issued for Awards of restricted stock and restricted stock units is
2,100,000 Shares. As of November 15, 2004, a total of 1,135,331 shares of Common
Stock remained available for grant under the Company's 1995 Amended and Restated
Long Term Incentive Compensation Plan ("1995 Plan"). The maximum number of
Shares with respect to which shares of restricted stock, restricted stock units,
options or a combination thereof may be granted during any year to any person
shall be 250,000 Shares, subject to adjustment as described below.
To the extent that Shares subject to an outstanding option or other Award are
not issued or delivered by reason of the expiration, cancellation, forfeiture or
other termination of such Award or by reason of the delivery or withholding of
Shares to pay all or a portion of the exercise price of an Award (if any) or to
satisfy all or a portion of the tax withholding obligations relating to an
Award, then such Shares shall again be available under this Plan.
In the event of any merger, reorganization, consolidation, recapitalization,
liquidation, stock dividend, split-up, share combination, or other similar
change in the corporate structure of D&PL affecting the Shares, the Committee
may adjust the number, class and series of D&PL's securities or the securities
of any successor corporation available under the Plan, the number, class, series
and purchase price of securities subject to outstanding Awards, and the
numerical limit described above in such manner as the Committee in its sole
discretion shall determine to be appropriate to prevent the dilution or
diminution of such Awards. If any such adjustment would result in a fractional
security being (a) available under the Plan, such fractional security shall be
disregarded, or (b) subject to an outstanding Award under the Plan, D&PL shall
pay the holder of such Award, in connection with the first vesting, exercise or
settlement of such Award in whole or in part occurring after such adjustment, an
amount in cash determined by multiplying (i) the fraction of such security
(rounded to the nearest hundredth) by (ii) the excess, if any, of (A) the fair
market value on the vesting, exercise or settlement date over (B) the exercise
price or base price, if any, of such Award.
Shares under the 1995 Plan will remain available for grants even after the
adoption of the Plan, and therefore Shares available under the Plan will be in
addition to shares available under the 1995 Plan.
Stock Options
Subject to the provisions of the Plan, options may be granted at such times, and
subject to such terms and conditions, as determined by the Committee in its sole
discretion. An Award of options may include incentive stock options,
non-qualified stock options, or a combination thereof; provided, that no option
shall be granted more than ten years after the date this Plan is adopted by the
Board.
Each option shall be evidenced by an agreement that shall specify the exercise
price, the expiration date, the number of Shares to which the option pertains,
any conditions to the exercise of all or a portion of the option, and such other
terms and conditions as the Committee, in its discretion, shall determine. The
agreement pertaining to an option shall designate such option as an incentive
stock option or a non-qualified stock option. Notwithstanding any such
designation, to the extent required by the provision of the Code such options
shall constitute non-qualified stock options. For purposes of the preceding
sentence, incentive stock options shall be taken into account in the order in
which they are granted. No agreement for an Award shall provide any compensation
deferral feature, other than the ability to exercise the option at a future
date.
The exercise price with respect to Shares subject to an option shall be
determined by the Committee in its sole discretion. In the case of a
non-qualified stock option, the Committee shall determine the exercise price
which may not be less than one hundred percent (100%) of the fair market value
of a Share on the date on which it is granted.
Each option shall terminate not later than the expiration date specified in the
agreement pertaining to such option; provided, however, that the expiration date
with respect to any stock option shall not be later than the tenth anniversary
of its grant date and the expiration date with respect to an incentive stock
option granted to certain employees and directors owning more than ten percent
of the voting power of all of the Company's classes of stock shall not be later
than the fifth anniversary of its grant date.
Subject to the expiration provisions described above, options granted under the
Plan shall be exercisable at such times, and shall be subject to such
restrictions and conditions, as the Committee shall determine in its sole
discretion. After an option is granted, the Committee, in its sole discretion,
may accelerate the exercisability of the option. The exercise of an option is
contingent upon payment by the optionee of the amount sufficient to pay all
taxes required to be withheld by any governmental agency. Such payment may be in
any form approved by the Committee.
Options shall be exercised by the delivery of a written notice of exercise to
the Secretary of D&PL (or its designee), setting forth the number of Shares with
respect to which the option is to be exercised, accompanied by full payment of
the exercise price with respect to each such Share. The exercise price shall be
payable to D&PL in full in cash or its equivalent. The Committee, in its sole
discretion, also may permit exercise (a) by tendering previously acquired Shares
which have been held by the optionee for at least six months having an aggregate
fair market value at the time of exercise equal to the aggregate exercise price
of the Shares with respect to which the option is to be exercised, or (b) by any
other means which the Committee, in its sole discretion, determines to both
provide legal consideration for the Shares, and to be consistent with the
purposes of the Plan. As soon as practicable after receipt of a written
notification of exercise and full payment for the Shares with respect to which
the option is exercised, DPL shall deliver to the plan participant Share
certificates (which may be in book entry form) for such Shares with respect to
which the option is exercised.
The Committee may impose such restrictions on any Shares acquired pursuant to
the exercise of an option as it may deem advisable, including, but not limited
to, restrictions related to applicable Federal securities laws, the requirements
of any national securities exchange or system upon which Shares are then listed
or traded, or any "blue sky" or state securities laws. The Committee may, in its
sole discretion, permit assignment of Shares of restricted stock and/or
non-qualified stock options to an immediate family member of a plan participant
or a qualified charitable organization designated by a plan participant.
Stock Awards
Subject to the provisions of the Plan, Awards of restricted stock or restricted
stock units (collectively, "Stock Awards") may be granted at such times, and
subject to such terms and conditions, as determined by the Committee in its sole
discretion; provided, however, that no Stock Award shall be granted,
administered or modified in a manner which would result in an additional tax
under Code Section 409A(a)(1)(B)(i)(II), and any nonconforming provision,
administration or modification shall be void ab initio. Each Stock Award shall
be evidenced by an agreement that shall specify the number of Shares granted,
the price, if any, to be paid for the Shares and the Period of Restriction (as
defined in the Plan) applicable to a Stock Award and such other terms and
conditions as the Committee, in its sole discretion, shall determine.
Shares subject to an Award of restricted stock may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated during a Period of
Restriction. During the Period of Restriction, an Award of restricted stock may
be registered in the holder's name or a nominee's name at the discretion of D&PL
and may bear a legend as described below. Unless the Committee determines
otherwise, Shares of restricted stock shall be held by D&PL as escrow agent
during the applicable Period of Restriction, together with stock powers or other
instruments of assignment (including a power of attorney), each endorsed in
blank with a guarantee of signature if deemed necessary or appropriate by D&PL,
which would permit transfer to D&PL of all or a portion of the Shares subject to
the Award of restricted stock in the event such Award is forfeited in whole or
part.
The Committee, in its discretion, may legend the certificates representing
restricted stock during the Period of Restriction to give appropriate notice of
such restrictions. For example, the Committee may determine that some or all
certificates representing Shares of Restricted Stock shall bear the following
legend: "The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is subject
to certain restrictions on transfer as set forth in the Delta and Pine Land
Company ("D&PL") 2005 Omnibus Stock Plan (the "Plan"), and in a Restricted Stock
Agreement (as defined by the Plan). A copy of the Plan and such Restricted Stock
Agreement may be obtained from the Secretary of D&PL."
Shares of restricted stock covered by an Award of restricted stock made under
the Plan shall be released from escrow as soon as practicable after the
termination of the Period of Restriction and, subject to D&PL's right to require
payment of any taxes, a certificate or certificates evidencing ownership of the
requisite number of Shares shall be delivered to the plan participant. In the
case of any Award which is subject to Code Section 409A, under no circumstances
may the vesting or other material restrictions associated with such Award be
removed or modified in a manner which would result in an acceleration of any
benefit, right or feature of such Stock Award, within the contemplation of
Section 409A.
During the Period of Restriction, plan participants holding Shares of restricted
stock granted under the plan may exercise full voting rights with respect to
those Shares, unless otherwise provided in the Award agreement. In addition,
during the Period of Restriction, plan participants holding Shares of restricted
stock shall be entitled to receive all dividends and other distributions paid
with respect to such Shares unless otherwise provided in the Award agreement. If
any such dividends or distributions are paid in Shares, the Shares shall be
deposited with D&PL and shall be subject to the same restrictions on
transferability and forfeitability as the Shares of restricted stock with
respect to which they were paid.
On the date set forth in the Award agreement, Stock Awards for which
restrictions have not lapsed shall revert to D&PL and again shall become
available for Awards under the Plan.
Any Award from the Plan which is subject to Code Section 409A is intended to
conform with such Code Section in a manner which avoids any increase in tax or
interest rates pursuant thereto. Without limitation of the foregoing, no such
Award shall provide for or permit a distribution of compensation other than upon
a separation from service, disability, death, a specified time or pursuant to a
fixed schedule, a "change in control", or an unforeseeable emergency, each as
contemplated by Code Section 409A. In the case of any distribution to a
"specified employee" under such Section, based on a separation from service, in
no event shall such distribution be made earlier than six (6) months after the
separation from service. Any election of an individual to defer the receipt of
compensation may be made only by the end of the year prior to the year in which
the compensation is earned, or at such other time as may be provided in Treasury
Regulations; provided that in an individual's initial year of eligibility a
deferral election may be made within 30 days after the initial date of
eligibility; further provided that performance-based compensation earned over a
period of at least 12 months may be deferred under an election made at least 6
months before the end of the period. No provision of any such award shall permit
any acceleration of benefits under circumstances proscribed by Section 409A.
Changes in the time or form of payment may be permitted only under circumstances
which would not subject the holder of any Award to taxation pursuant to Code
Section 409A.
Miscellaneous
A plan participant or transferee from a plan participant shall forfeit all
unexercised, unearned and/or unpaid Awards, both vested and non-vested,
including without limitation Awards earned or vested but not yet paid or
exercised, all unpaid dividends and dividend equivalents, and all interest, if
any accrued on the foregoing, if (i) in the opinion of the Committee (whose
determination shall be final, exclusive and binding) the grantee without the
written consent of D&PL engages directly or indirectly in any manner or capacity
as principal, agent, partner, officer, director, employee or otherwise in any
business or activity competitive with the business conducted by D&PL or any of
its affiliates; or (ii) the grantee performs any act or engages in any activity
which in the opinion of the Chief Executive Officer (whose determination shall
be final, exclusive and binding) is inimical to the best interests of D&PL.
Nothing in the Plan shall interfere with or limit in any way the right of D&PL
to terminate any plan participant's employment or service at any time, with or
without cause. Unless otherwise determined by the Committee with respect to an
Award other than an incentive stock option, no Award granted under the Plan may
be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will, by the laws of descent and distribution. The Committee may
in its discretion permit a transfer of an Award to a member of the participant's
family, a trust established by the participant, including a charitable trust, or
such other person or entity as the Committee may determine. All rights with
respect to an Award granted to a plan participant shall be available during his
or her lifetime only to the plan participant and may be exercised only by the
plan participant or the plan participant's legal representative.
In the event of a "change in control" in connection with which the holders of
Shares receive shares of common stock that are registered under section 12 of
the Securities Exchange Act of 1934, as amended, there shall be substituted for
each Share available under the Plan, whether or not then subject to an
outstanding Award, the number and class of shares into which each outstanding
Share shall be converted pursuant to such "change in control". In the event of
any such substitution, the exercise price per share in the case of an option
shall be appropriately adjusted by the Committee (whose determination shall be
final, binding and conclusive), such adjustments to be made in the case of
outstanding options without an increase in the aggregate exercise price or base
price, respectively. In the event of a "change in control" in connection with
which the holders of Shares receive consideration other than shares of common
stock that are registered under Section 12 of the Securities Exchange Act of
1934, as amended, each outstanding Award shall be surrendered to D&PL by the
holder thereof, and each such Award shall immediately be cancelled by D&PL, and
the holder shall receive, within ten days of the occurrence of a "change in
control", a cash payment from D&PL in an amount that the Committee, in its sole
discretion, in good faith determines to be the equivalent value of such award on
the date of the "change in control".
The Board, in its sole discretion, may amend, suspend or terminate the Plan, or
any part thereof, at any time and for any reason, subject to any requirement of
stockholder approval required by applicable law, rule or regulation, including
section 422 of the Code, section 162(m) of the Code and (c) the rules of the
NYSE. No termination of the Plan shall be the basis for distribution of any
deferred compensation which is subject to Code Section 409A. The amendment,
suspension or termination of the Plan shall not, without the consent of the plan
participant, alter or impair any rights or obligations under any Award
theretofore granted to such plan participant. No Award may be granted during any
period of suspension or after termination of the Plan.
The Plan shall, subject certain limitations set forth in the Plan, terminate ten
years after adoption, unless earlier terminated by the Board. The termination of
the Plan shall not affect Awards made prior to the termination of the Plan.
Certain Federal Income Tax Consequences of the Plan
Tax consequences to D&PL and plan participants receiving awards vary with the
type of award. Generally, a plan participant does not recognize income, and D&PL
cannot take a deduction, upon the grant of an incentive stock option, a
non-qualified stock option or a restricted share. When a plan participant
exercises an incentive stock option, he does not have taxable income (except
that the alternative minimum tax may apply). When a plan participant exercises a
non-qualified stock option or the restrictions on a restricted share lapse, the
plan participant generally recognizes ordinary income equal to the difference
between the exercise price and fair market value of the common stock acquired.
Stock Options. If a plan participant sells Shares acquired by exercising an
incentive stock option within two years from the grant date and one year from
the exercise date, the plan participant must generally recognize ordinary income
equal to the difference between (i) the fair market value of the Shares at the
exercise date (or, if less, the amount realized when the plan participant
disposes of the Shares), and (ii) the exercise price. Otherwise, a plan
participant's disposition of Shares acquired by exercising an option (including
an incentive stock option for which the holding periods are met) generally will
result in short term or long term capital gain or loss equal to the difference
between the sale price and the plan participant's tax basis in the Shares. The
tax basis generally is the exercise price plus any amount previously recognized
as ordinary income in connection with the option exercise.
D&PL's tax deduction generally equals the amount the plan participant recognizes
as ordinary income. D&PL is not entitled to a tax deduction for amounts
recognized by a plan participant as capital gain. Accordingly, D&PL cannot take
a tax deduction with respect to an incentive stock option if the plan
participant holds the Shares for the incentive stock option holding periods
before disposing of the Shares.
Stock Awards. An Award of restricted stock is subject to a "substantial risk of
forfeiture" within the meaning of Code Section 83 to the extent the award will
be forfeited if the vesting conditions stated in the Award are not satisfied. As
a result, the plan participant will not recognize ordinary income at the grant
date of the award of restricted stock. Instead, the plan participant will
recognize ordinary income on the date when the stock is no longer subject to a
substantial risk of forfeiture, or when the stock becomes transferable, if
earlier. The plan participant's ordinary income equals the difference between
the amount paid for the stock, if any, and the fair market value of the stock on
the date it is no longer subject to forfeiture.
The plan participant may accelerate his or her recognition of ordinary income,
if any, and begin his or her capital gains holding period for an Award of
restricted stock by filing an Code Section 83(b) election. In that event, the
ordinary income recognized, if any, is the difference between the amount paid
for the stock, if any, and the fair market value of the stock on the award date,
and the capital gain holding period commences on that date. The ordinary income
recognized by an employee will be subject to tax withholding by D&PL. Unless
limited by Code section 162(m), D&PL may take a deduction in the same amount as
and at the time the employee recognizes ordinary income. The plan participant
also is subject to capital gains treatment on the subsequent sale of any common
stock acquired through an Award of restricted stock. For this purpose, the plan
participant's basis in the common stock is its fair market value at the time the
restricted share becomes vested (or is granted, if an Code section 83(b)
election is made).
Section 162(m) Limits. Code section 162(m) generally disallows a public
company's tax deduction for compensation paid in excess of $1,000,000 in any tax
year to its chief executive officer and the four other highest-paid executive
officers. However, compensation that qualifies as "performance-based
compensation" is excluded from this limitation and is deductible. D&PL intends
that performance units and options granted (a) with an exercise price equal to
or greater than 100% of fair market value of the underlying Shares at the grant
date, and (b) to employees whom the Compensation Committee expects to be named
executive officers when a deduction arises in connection with the awards, will
qualify as "performance-based compensation" so that these awards will not be
subject to the section 162(m) deduction limitations. Section 162(m) imposes
specific requirements on certain performance awards, and the Plan directs the
Plan Administrator to comply with these requirements.
The discussion above is only a summary of the Plan and does not fully describe
the Plan nor its income tax consequences. The tax summary also does not address
the effects of other federal taxes or taxes imposed under state, local or
foreign tax laws. This summary does not discuss the tax effects of deferred
compensation which is subject to Code Section 409A but which does not conform
with the requirements of that section. Under certain circumstances, Code Section
409A results in an additional income tax equal to 20% of the amount includable
in income, as well as increased interest payments. Plan participants are urged
to consult a tax advisor as to their individual tax consequences. D&PL also
encourages plan participants to read the Plan itself, which is attached as an
exhibit to this proxy statement. The terms of the Plan control over this
summary.
The Plan is not intended to be a "qualified plan" under Code section 401(a).
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ADOPTION OF THE
2005 OMNIBUS STOCK PLAN.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
Board Meetings and Attendance of Directors
The Board of Directors had 12 meetings in fiscal 2004. 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. All members
of the Board of Directors attended the Annual Meeting of Stockholders on January
15, 2004. The Company did not have a Nominating Committee at the end of fiscal
2004. Directors are expected to attend Board Meetings and meetings of committees
on which they serve, and to spend the time needed and meet as frequently as
necessary to properly discharge their responsibilities with due care.
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. In addition, each member of the Audit Committee receives $10,000 per
year. Under the 1995 Long-Term Incentive Plan, as amended, each new director of
the Company is granted options for 62,222 shares. In addition, each director is
granted options for an additional 2,666 shares in each of the second through
sixth year each director serves as such.
Director Independence
As permitted by the rules of the NYSE, the Board has adopted categorical
standards to assist it in making determinations of director independence. These
standards incorporate, and are consistent with, the definition of "independent"
contained in the NYSE listing rules.
At least a majority of the Board shall consist of Independent Directors (as
defined below). No director may contemporaneously serve as a consultant or
service provider to the Company. To find that a director is "Independent," the
Board must affirmatively determine, after considering all relevant facts and
circumstances, that the director has no material relationship with the Company
either directly or as a partner, shareholder or officer of an organization
(whether or not for-profit) that has a relationship with the Company. When
assessing the materiality of a director's relationship with the Company, the
Board should consider the issue not merely from the standpoint of the director,
but also from that of persons or organizations with which the director has an
affiliation. Material relationships can include commercial, industrial, banking,
consulting, legal, accounting, charitable and familial relationships, among
others. However, because the concern is independence from management, ownership
of even a significant amount of stock, by itself, is not a bar to independence.
A director who the Board affirmatively determines has no material relationship
with the Company that may impact the director's independence from management is
considered an "Independent Director." In addition:
(i) A director who is an employee, or whose immediate family member is an
executive officer, of the Company is not independent until three years
after the end of the employment relationship. However, employment as an
interim Chairman or Chief Executive Officer shall not disqualify a director
from being considered independent following that employment.
(ii) A director who receives, or whose immediate family member receives,
more than $100,000 per year in direct compensation from the Company, other
than director and committee fees and pension or other forms of deferred
compensation for prior service that is not contingent in any way on
continued service, and other than compensation received by a director for
former service as interim Chairman or interim Chief Executive Officer, is
not independent until three years after the person ceases to receive more
than $100,000 per year in such compensation; provided, however, that
compensation received by a director for former service as an interim
Chairman or Chief Executive Officer, and compensation received by an
immediate family member for service as a non-executive employee of the
Company, need not be considered in determining independence under this
test.
(iii) A director who is affiliated with or employed by, or whose immediate
family member is affiliated with or employed in a professional capacity by
a present or former internal or external auditor of the Company, is not
independent until three years after the end of either the affiliation or
the employment or auditing relationship.
(iv) A director who is employed, or whose immediate family member is
employed, as an executive officer of another company where any of the
Company's present executives serves on the other company's compensation
committee is not independent until three years after the end of such
service or the employment relationship.
(v) A director who is an executive officer or an employee, or whose
immediate family member is an executive officer, of another company that
makes payments to, or receives payments from, the Company for property or
services in an amount which, in any single fiscal year, exceeds the greater
of $1 million, or 2% of the other company's consolidated gross revenues, is
not independent until three years after falling below such threshold. Any
relationship below such threshold shall not preclude the director's
independence. In applying this standard, both the payments and the
consolidated gross revenues to be measured shall be those reported in the
last completed fiscal year. The three-year look-back provision for this
standard applies solely to the financial relationship between the Company
and the director or immediate family member's current employer, and former
employment of the director or immediate family member need not be
considered. In addition, while charitable organizations are not considered
companies for purposes of this standard, the Company must disclose in the
annual proxy statement any charitable contributions made by the Company to
any charitable organization in which a director serves as an executive
officer if, within the preceding three years, contributions in any single
fiscal year exceeded the greater of $1 million, or 2% of the charity's
consolidated gross revenues. Any Company donations to any charitable
organization in which a director serves as an executive officer or director
shall not preclude the director's independence if the aggregate amount of
contributions in any single fiscal year does not exceed the lesser of
$100,000 or 2% of the charitable organization's consolidated gross
revenues.
For purposes of subsections (i) through (v) above, "immediate family member"
shall have the meaning as set forth from time to time in the NYSE Listed Company
Manual. In applying the three-year look-back provisions, the Company need not
consider individuals who are no longer immediate family members as a result of
legal separation or divorce, or those who have died or become incapacitated.
In addition, a director's beneficial ownership of less than 5% of the Company's
outstanding common stock shall be deemed immaterial and shall not be deemed to
impair the director's independence. No relationship between a director and a
beneficial owner of less than 10% of the Company's outstanding common stock
shall be deemed material or to impair the director's independence.
Information pursuant to which the analysis and determination of director
independence shall be made will be derived from the following sources:
1. Director and Officer Questionnaires;
2. Interviews with nominees (oral or written);
3. Summaries of relevant information about the nominees prepared by management
based on information generally available; and
4. Other information properly available to the Board of Directors.
The Board has determined that, other than F. Murray Robinson, each of the
non-employee directors of the Company, Jon E. M. Jacoby, Stanley P. Roth, Joseph
M. Murphy, Rudi E. Scheidt and Nam-Hai Chua, meets these standards and is
independent. In addition, all Board committee members meet the applicable
independence requirements of the NYSE and applicable law.
Executive Sessions of Non-Management Directors
The Company's independent Directors will meet separately in executive session
without employee Directors or representatives of management at least twice each
fiscal year in accordance with the Company's Corporate Governance Guidelines. At
each meeting of the Board, the Board shall determine which Director shall
preside over the executive session without management to take place at the next
scheduled meeting of the Board. At such time, the Board will also designate an
alternate Director to preside over such executive session. Any Director
designated to preside over an executive session without management shall be one
who is deemed an "Independent Director" under the Company's Categorical
Standards for Determining Director Independence.
Stockholder Communications with the Board of Directors
Stockholder or other interested party communications with the Board of Directors
should be addressed to "Chairman of the Nominating/Corporate Governance
Committee, c/o Directors' Assistant, One Cotton Row, Scott, Mississippi, 38772."
Electronic communications should be sent to Directors@deltaandpine.com. All
communications so received will be opened by the Directors' Assistant for the
sole purpose of determining whether the contents represent a message to our
directors. Contents that are not in the nature of advertising, promotions of a
product or service, or patently offensive material will be forwarded promptly to
the Chairman of the Nominating/Corporate Governance Committee.
Corporate Governance Guidelines
The Board of Directors of the Company adopted the Corporate Governance
Guidelines to assist the Board in the exercise of its responsibilities. The
Company's Corporate Governance Guidelines are available free of charge on the
Company's website at www.deltaandpine.com under Investor Relations or upon
request to Ricky 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.
Code of Business Conduct and Ethics
The Company has a Code of Business Conduct and Ethics that applies to all
Company employees, including its Chief Executive Officer, Chief Financial
Officer/Principal Accounting Officer, as well as members of the Board of
Directors. The Code of Business Conduct and Ethics is available free of charge
on the Company's website at www.deltaandpine.com under Investor Relations or
upon request to Ricky 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.
Committees of the Board
The Board of Directors has an Executive Committee, an Audit Committee, a
Compensation Committee and a Nominating and Corporate Governance 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 2004. 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 the NYSE Listing Standards.
The Audit Committee met four times during fiscal 2004. The Committee:
|X| reviewed with the independent registered public accountants the scope of
the audit, the auditors' fees and related matters;
|X| received the annual comments from the independent registered public
accountants on accounting procedures and systems of control;
|X| reviewed with the independent registered public accountants 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 registered public accountants
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 registered public accountants the report
required by Independence Standards Board Standard No. 1 as in effect at
that time and discussed it with the independent registered public
accountants;
|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 D&PL 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, 2004.
The Board of Directors has determined that in its judgment, Joseph M. Murphy
qualifies as an audit committee financial expert in accordance with the
applicable rules and regulations of the SEC. Mr. Murphy is "independent" as
defined by the NYSE Listing Standards.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee has met and held discussions with management and the
Company's independent registered public accountants and has reviewed and
discussed the Company's audited consolidated financial statements with
management and the Company's independent registered public accountants.
The Audit Committee has also discussed with the Company's independent registered
public accountants 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 registered public accountants have also provided the
Audit Committee with the written disclosures 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
registered public accountants 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, 2004, for filing with the Securities and
Exchange Commission.
Stanley P. Roth
Joseph M. Murphy
Rudi E. Scheidt
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 information which would be required to be disclosed
as compensation committee interlocks or insider participation in compensation
decisions. The Compensation Committee met once during fiscal 2004. 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 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 periodically. 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. 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.
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, adjusts as
appropriate 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
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, 2004, W. Thomas Jagodinski was
employed by D&PL as President, Chief Executive Officer and Director. Mr.
Jagodinski'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 2004,
Mr. Jagodinski's base salary was $336,000 with a bonus of $215,000. The
Compensation Committee approved Mr. Jagodinski's bonus based on his achievement
with respect to the earnings goal and related financial targets for the Company.
Other factors in the Compensation Committee's decision were Mr. Jagodinski's
leadership in developing corporate growth strategies, developing international
business opportunities, his contribution made in developing the market for
biotechnology-enhanced seed, the launch of new products and the execution of
certain strategic transactions.
Compensation Committee
Jon E. M. Jacoby
Joseph M. Murphy
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee (the "Nominating Committee"),
which was formed after the close of the Company's latest fiscal year, recommends
nominees for election to the Board by the stockholders at the annual meeting and
makes recommendations to the Board of Directors regarding corporate governance
matters and practices. The Nominating Committee operates in accordance with its
charter and is composed of Messrs. Jacoby and Murphy, each of whom meets the
independence requirements of the NYSE.
The Nominating Committee identifies candidates for nominees based upon both its
criteria for evaluation and the candidate's previous service on the Board.
Additionally, the Nominating Committee may use the services of a search company
in identifying nominees. Although the Nominating Committee has not determined
specific minimum qualifications for its nominees, it evaluates candidates that
it has identified based upon:
o character, personal and professional ethics, integrity and values;
o executive level business experience and acumen;
o relevant business experience or knowledge (although preference may be
shown for experience in or knowledge of the cotton industry, agribusiness
or plant sciences, it is not a prerequisite);
o skills and expertise necessary to make significant contributions to the
Company, its Board and its stockholders;
o business judgment;
o availability and willingness to serve on the Board;
o independence requirements of the NYSE;
o potential conflicts of interest with the Company or its stockholders
taken as a whole; and
o accomplishment within the candidate's own field.
The Nominating Committee has adopted a policy with regard to considering a
stockholder's nominee. To submit a nominee for consideration, a stockholder must
provide the Nominating Committee:
o proof of the stockholder's eligibility to submit proposals in accordance
with Rule 14a-8(b) of the Exchange Act of 1934, as amended;
o a complete description of the candidate's qualifications, experience and
background; and
o the candidate's signed consent to serve on the Board.
In general, the Nominating Committee will evaluate a candidate identified by a
stockholder using the same standards as it uses for candidates it identifies.
Before recommending a stockholder's candidate, the Nominating Committee may
also:
o consider whether the stockholder candidate will significantly add to the
range of talents, skills and expertise of the Board;
o conduct appropriate verifications of the background of the candidate; and
o interview the candidate or ask the candidate for additional information.
The Nominating Committee has full discretion not to include a stockholder's
candidate in its recommendation of nominees to the Board. If the Nominating
Committee does not recommend a stockholder's candidate to the Board, it will not
make public the reason or reasons for its decision.
Board Committee Charters
The charters for the Company's Audit Committee, Compensation Committee, and
Nominating and Corporate Governance Committee are available free of charge on
the Company's website at www.deltaandpine.com under Investor Relations or upon
request to Ricky 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.
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, 1999, and the
reinvestment of dividends.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG DELTA AND PINE LAND COMPANY, THE NASDAQ/AMEX/NYSE INDEX
AND THE S&P SUPERCAP AGRICULTURAL PRODUCTS INDEX
Cumulative Total Return
---------------------------------------------------------------------
8/99 8/00 8/01 8/02 8/03 8/04
DELTA AND PINE LAND COMPANY 100.00 86.79 72.21 65.73 91.03 94.64
NASDAQ/AMEX/NYSE 100.00 137.72 104.66 81.05 91.91 109.40
S & P SUPERCAP AGRICULTURAL PRODUCTS 100.00 74.69 111.27 101.77 119.50 142.50
* $100 invested on 8/31/99 in stock or index-including reinvestment of dividends. Fiscal year ending August 31.
EXECUTIVE COMPENSATION
Following are compensation related tables and information as required by the
Securities and Exchange Commission reflecting executive compensation for the
fiscal year ended August 31, 2004.
Annual Compensation
The following table sets forth certain information regarding compensation paid
to, or accrued for, the Company's Chief Executive Officer and the Company's four
other most highly-compensated executive officers (the "Named Officers") during
the year ended August 31, 2004:
Summary Compensation Table
--------------------------
Long- Term
Annual Compensation Compensation
------------------------------------------- ------------
Securities
Name and Other Annual Underlying All Other
Principal Position Year Salary($) Bonus($) Compensation($)(4) Options(1) Compensation($)
- ------------------ ---- --------- -------- ------------------ ---------- ---------------
W. Thomas Jagodinski 2004 336,000 215,000 1,000 2,666 44,000 (2)
President and 2003 320,000 185,000 1,000 64,888 44,000 (2)
CEO (3) 2002 245,000 145,000 1,400 125,000 --
Charles R. Dismuke, Jr. 2004 256,000 120,000 2,500 -- --
Senior Vice President 2003 240,000 100,000 1,600 -- --
2002 220,000 75,000 2,000 -- --
Ricky D. Greene 2004 206,000 105,000 1,000 -- --
Vice President - 2003 190,000 75,000 800 -- --
Finance, Treasurer 2002 148,800 50,000 1,200 100,000 --
& Asst. Secretary
William V. Hugie 2004 186,000 55,000 800 -- --
Vice President - 2003 177,000 45,000 900 -- --
Research 2002 165,000 35,000 1,000 -- --
Tom Kerby 2004 194,000 50,000 3,200 -- --
Vice President - 2003 185,000 45,000 2,800 -- --
Technical Services 2002 178,500 35,000 3,200 -- --
(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 a company automobile,
group term life insurance, and/or taxable fringe benefits.
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, in 1997, 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 35,332 Shares
under the 1995 Plan in 2004. 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 2004:
Option Grants in Fiscal 2004
----------------------------
Number of Percentage of Total Potential Realized Value at
Securities Options Granted Assumed Annual Rates of Stock
Underlying to Employees In Exercise Expiration Price Appreciation of Option
Name Options Fiscal Year Price Date Term (1)
- ----------------------- ------------ ------------------ ------------ ------------ ---------------- ------------
5% 10%
---------------- ------------
W. Thomas Jagodinski(2) 2,666 7.545% 25.495 1/15/14 $42,746 $108,326
(1) The dollar amount under these columns are the result of calculations at
5% and 10% rates arbitrarily set by the Securities and Exchange
Commission and, therefore, are not intended to forecast possible future
appreciation, if any, of the Company's stock price. Any actual gain on
exercise of options is dependent on the future performance of the
Company's stock.
(2) Automatic grant resulting from service as a director.
Options Exercised in Last Fiscal Year
The following table sets forth certain information concerning stock option
exercises during 2004 and unexercised options held as of August 31, 2004 for
each of the Named Officers:
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Gain Options at the In-The-Money Options at
Acquired Realized Fiscal Year End The Fiscal Year End (1) (2)
on on --------------- ---------------------------
Exercise Exercise Exercisable Unexercisable Exercisable Unexercisable
-------- -------- ----------- ------------- ----------- -------------
W. Thomas Jagodinski 26,312 $ 545,537 257,910 156,977 $1,371,150 $1,017,912
Charles R. Dismuke 53,333 1,093,730 122,667 20,000 823,310 123,240
Ricky D. Greene -- -- 71,000 81,000 446,230 524,680
William V. Hugie -- -- 133,777 9,000 340,238 72,260
Thomas A. Kerby 27,333 587,187 114,577 4,200 1,240,567 32,276
(1) Based on $25.24 per Share, the August 31, 2004, market value as calculated
by averaging the High and Low as quoted by the NYSE.
(2) Computation excludes "out-of-the-money" options for the following number of
shares: 55,999 Shares for Mr. Jagodinski and 80,000 Shares for Dr. Hugie.
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 21and completed one year of eligibile 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 3,705 4,941 6,176 6,273 6,371
$ 50,000 9,555 12,741 15,926 16,836 17,746
$ 75,000 15,405 20,541 25,676 27,398 29,121
$100,000 21,255 28,341 35,426 37,961 40,496
$150,000 32,955 43,941 54,926 59,086 63,246
$200,000 44,655 59,541 74,426 80,211 85,996
$250,000 44,889 59,853 74,816 80,633 86,451
$300,000 44,889 59,853 74,816 80,633 86,451
$400,000 44,889 59,853 74,816 80,633 86,451
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
2004. In addition, such amounts reflect the 2004 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, 2004, the most recent Pension Plan
valuation date, are as follows:
Years of Credited Average Plan
Name Service Compensation
- --------------------------------- ------------------------- ------------------
W. Thomas Jagodinski 12 $191,333
Charles R. Dismuke, Jr. 27 192,067
Ricky D. Greene 7 139,817
William V. Hugie 15 158,533
Thomas A. Kerby 10 171,667
Defined Contribution Plan
Effective April 1, 1994, the Company established a defined contribution plan
under the rules of Internal Revenue Code Section 401(k) (the "401(k) Plan"). The
401(k) Plan covers substantially all full-time employees. Eligible employees of
the Company and its domestic subsidiaries, who have both attained age 21 and
completed one year of service, may participate in the 401(k) Plan. A participant
may elect to contribute up to 80% of his or her eligible earnings to the 401(k)
Plan, subject to certain limitations under the Internal Revenue Code. The 401(k)
Plan allows the Company to match a maximum of six percent of eligible employee
contributions. As of August 31, 2004, 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 stockholders 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, 2004, options for 5,265,027 Shares have been
granted under the 1995 Plan, of which 1,285,358 have been forfeited, leaving
available for grant 1,140,331 shares.
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 Series M Convertible Non-Voting Preferred Stock has certain
registration rights associated with the Common Stock into which the Preferred
Stock is convertible. The holder has not converted the Preferred Stock as of the
proxy record date.
Cotton Biotechnology Research Contracts
DeltaMax Cotton LLC, a limited liability company jointly owned with Verdia,
Inc.("Verdia"), a wholly owned indirect subsidiary of DuPont, and the Company,
in October 2002 entered into collaborative research agreements with Temasek Life
Sciences Laboratory ("TLL"), an organization organized under the laws of
Singapore, and in February 2004 and November 2004 the Company entered into
license agreements for technology owned by TLL which is used in the development
of cotton products. Dr. Nam-Hai Chua, a director of the Company, was the Chief
Scientific Advisor of Temasek Capital from April 2001 to March 2003 and was
appointed to be Corporate Advisor to Temasek Holdings from April 2003 through
March 2005, and has advised TLL since April 2004. Temasek Holdings is the parent
company of TLL and Temasek Capital. The value of the TLL agreements with
DeltaMax and the Company exceeds $60,000; however, the agreements are not
material, as defined by the Securities and Exchange Commission. The agreements
also are not material for Temasek, and according to Dr. Chua he did not advise
TLL on those agreements and he derives no particular or direct benefit from the
agreements. Dr. Chua recuses himself from any discussion and vote regarding
DeltaMax's and the Company's agreements with TLL.
In addition, Dr. Chua has been a paid consultant to Pioneer Hi-Bred
International, Inc., a DuPont subsidiary, for several years and continues in
this capacity. DuPont acquired Verdia in July 2004. Dr. Chua did not consult
with Pioneer/Dupont regarding this acquisition and he recuses himself from any
discussion and vote regarding DeltaMax.
Consulting Agreement
In February 2004, 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
stockholder of D&PL. The value of the contract exceeds $60,000; however, the
contract is not material, as defined by the Securities and Exchange Commission.
The contract is also not material 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 and derives no
particular or direct benefit from 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 2004, 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, as amended) have been filed.
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 2006 Annual Meeting should be received by the Company no later
than August 3, 2005. With regard to stockholder proposals not included in the
Company's proxy statement but which a stockholder wishes to be brought before
the 2005 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: Ricky 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, or by accessing our
website at www.deltaandpine.com under Investor Relations.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Jerome C. Hafter
Jerome C. Hafter
Secretary
APPENDIX A
DELTA AND PINE LAND COMPANY
2005 OMNIBUS STOCK PLAN
ARTICLE 1.
EFFECTIVE DATE AND PURPOSE
1.1 Effective Date. The Plan is effective as the Delta and Pine Land Company
("DPL") 2005 Omnibus Stock Plan as of ____________, 200__.
1.2 Purpose of the Plan. The Plan is intended to further the growth and
profitability of DPL by increasing incentives and encouraging Share ownership on
the part of DPL's Employees, Independent Contractors and Members of the Board.
The Plan is intended to permit the grant of Awards that constitute Incentive
Stock Options as defined in the Code, Non-Qualified Stock Options, Restricted
Stock and RSUs.
ARTICLE 2.
DEFINITIONS
The following words and phrases shall have the following meaning unless a
different meaning is plainly required by the context:
2.1 "1934 Act" means the Securities Exchange Act of 1934, as amended. Reference
to a specific section of the 1934 Act or regulation thereunder shall include
such section or regulation, any valid regulation promulgated under such section,
and any comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation.
2.2 "Affiliate" means any corporation or any other entity (including, but not
limited to, partnerships and joint ventures) fifty percent (50%) or more owned
by DPL.
2.3 "Award" means, individually or collectively, a grant under the Plan of
Non-Qualified Stock Options, Incentive Stock Options, Restricted Stock or
Restricted Stock Units.
2.4 "Award Agreement" means the written agreement setting forth the terms and
conditions applicable to an Award.
2.5 "Board" means DPL's Board of Directors.
2.6 "Change in Control" shall, in the case of Awards which are not subject to
Code Section 409A, have the same meaning as defined in individual Award
Agreements. In the case of any Award which is subject to Section 409A of the
Code, such term shall have the meaning contemplated by such Code Section, and
shall be construed and applied accordingly.
2.7 "Charitable Organization" means an organization described in Code Section
170(c)(2), 2055(a) or 2522(a), or any successor thereto.
2.8 "Code" means the Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code or regulation thereunder shall include such section
or regulation, any valid regulation promulgated thereunder, and any comparable
provision of any future legislation or regulation amending, supplementing or
superseding such section or regulation.
2.9 "Committee" means the Compensation Committee of the Board appointed
(pursuant to Section 3.1) to administer the Plan.
2.10 "Employee" means a common-law employee of DPL, its subsidiaries, or an
Affiliate designated by the Board or the Committee (collectively "an Employer").
"Employee" does not include an individual who is not contemporaneously
classified as an Employee for purposes of an Employer's payroll system. In the
event any such individual is reclassified as an Employee for any purpose,
including, without limitation, any government agency or as a result of any
private lawsuit, action, or administrative proceeding, such individual will,
notwithstanding such reclassification, remain ineligible for participation
hereunder and will not be considered an Employee for purposes of this Plan. In
addition to and not in derogation of the foregoing, the exclusive means for an
individual who is not contemporaneously classified as an Employee of an Employer
on an Employer's payroll system to become eligible to participate in this Plan
is through an amendment to this Plan which specifically renders such individual
eligible for participation hereunder.
2.11 "Exercise Price" means the price at which a Share subject to an Option may
be purchased pursuant to the exercise of the Option.
2.12 "Fair Market Value" means, except as otherwise specified in a particular
Award Agreement, (a) in the case of Shares that are traded on an established
national or regional securities exchange, the closing transaction price of such
a Share as reported by such exchange on the date as of which such value is being
determined or, if there shall be no reported transaction for such date, on the
next preceding date for which a transaction was reported, (b) in the case of
Shares that are not traded on an established securities exchange, the average of
the bid and ask prices for such a Share, where quoted for such Shares, or (c) if
Fair Market Value cannot be determined under clause (a) or clause (b) above, or
if the Committee determines in its sole discretion that the Shares are too
thinly traded for Fair Market Value to be determined pursuant to clause (a) or
clause (b), the value as determined by the Committee, in its sole discretion, on
a good faith basis.
2.13 "Grant Date" means the date that the Award is granted.
2.14 "Immediate Family" means only (i) a person who, at the time of a transfer,
is the Participant's spouse or natural or adoptive lineal ancestors or
descendants, (ii) a trust for the exclusive benefit of the Participant or one or
more Immediate Family member(s) or Charitable Organization(s), or (iii) a
partnership, corporation, limited liability company or other entity owned
exclusively by the Participant or one or more Immediate Family member(s) or
Charitable Organization(s).
2.15 "Incentive Stock Option" means an Option that is designated as an Incentive
Stock Option and is intended by the Committee to meet the requirements of
section 422 of the Code.
2.16 "Independent Contractor" means a person employed by DPL for a specific
task, study or project who is not an "Employee."
2.17 "Member of the Board" means a duly elected and incumbent director of DPL.
2.18 "Non-Qualified Stock Option" means an Option that is not an Incentive Stock
Option.
2.19 "Option" means an option to purchase Shares which is granted by the
Committee pursuant to Article 5.
2.20 "Participant" means an Employee, Independent Contractor or Member of the
Board to whom an Award has been granted and remains outstanding.
2.21 "Performance Goals" means the objectives for DPL and/or its Affiliate(s),
or Participant that may be established by the Committee for a performance cycle
with respect to any performance-based Awards contingently granted under the
Plan. The Performance Goals for Awards that are intended to constitute
"performance-based" compensation within the meaning of Section 162(m) of the
Code shall be based on one or more of the following criteria: revenue, earnings
per Share, net income per Share, Share price, pre-tax profits, net earnings, net
income, operating income, cash flow, earnings before interest, taxes,
depreciation and amortization, sales, total stockholder return relative to
assets, total stockholder return relative to peers, financial returns
(including, without limitation, return on assets, return on equity and return on
investment), cost reduction targets, customer satisfaction, customer growth,
employee satisfaction, gross margin, revenue growth, new contract win, or any
combination of the foregoing.
2.22 "Period of Restriction" means the period during which Restricted Stock or
an RSU is subject to forfeiture and/or restrictions on transferability.
2.23 "Plan" means this DPL 2005 Omnibus Stock Plan, as set forth in this
instrument and as hereafter amended from time to time.
2.24 "Restricted Stock" means a Stock Award under which the Shares are subject
to forfeiture should the Participant not be employed by DPL or a Member of the
Board on the date or dates specified in the Stock Award or should the
performance goals, if any, specified in the Stock Award not be met.
2.25 "RSU" or "Restricted Stock Unit" means a Stock Award subject to a period or
periods of time after which the Participant will receive Shares if the
conditions contained in such award have been met.
2.26 "Rule 16b-3" means Rule 16b-3 promulgated under the 1934 Act, as amended,
and any future regulation amending, supplementing or superseding such
regulation.
2.27 "Share" means DPL's Common Stock, par value $0.10 per share or any security
issued by DPL or any successor in exchange or in substitution therefor.
2.28 "Stock Award" means an Award of Restricted Stock or an RSU.
2.29 "Ten Percent Holder" means an Employee or Member of the Board (together
with persons whose stock ownership is attributed to the Employee or Member of
the Board pursuant to section 424(d) of the Code) who, at the time an Option is
granted, owns stock representing more than ten percent of the voting power of
all classes of stock of DPL.
ARTICLE 3.
ADMINISTRATION
3.1 The Committee. The Plan shall be administered by the Committee. The
Committee shall consist of not less than two Members of the Board. The members
of the Committee shall be appointed from time to time by, and serve at the
pleasure of, the Board. It is intended that each member of the Committee shall
qualify as (a) a "non-employee director" under Rule 16b-3 of the 1934 Act, (b)
an "outside director" under section 162(m) of the Code and (c) an independent
director under the rules of the New York Stock Exchange. If it is later
determined that one or more members of the Committee do not so qualify, actions
taken by the Committee prior to such determination shall be valid despite such
failure to qualify.
3.2 Authority and Action of the Committee. It shall be the duty of the Committee
to administer the Plan in accordance with the Plan's provisions. The Committee
shall have all powers and discretion necessary or appropriate to administer the
Plan and to control its operation, including, but not limited to, the power to
(a) determine which Employees, Independent Contractors and Members of the Board
shall be eligible to receive Awards and to grant Awards, (b) prescribe the form,
amount, timing and other terms and conditions of each Award, (c) interpret the
Plan and the Award Agreements, (d) adopt such procedures as it deems necessary
or appropriate to permit participation in the Plan by eligible Employees,
Independent Contractors and Members of the Board, (e) adopt such rules as it
deems necessary or appropriate for the administration, interpretation and
application of the Plan, and (f) interpret, amend or revoke any such procedures
or rules. A majority of the Committee shall constitute a quorum. The acts of the
Committee shall be either (i) acts of a majority of the members of the Committee
present at any meeting at which a quorum is present or (ii) acts approved in
writing by all of the members of the Committee without a meeting.
3.3 Delegation by the Committee. The Committee, in its sole discretion and on
such terms and conditions as it may provide, may delegate all or any part of its
authority and powers under the Plan to one or more Member(s) of the Board and/or
officers of DPL; provided, however, that the Committee may not delegate its
authority or power with respect to (a) any officer of the Company with regard to
the selection for participation in this Plan of an officer or other person
subject to Section 16 of the 1934 Act or decisions concerning the timing,
pricing or amount of an award to such an officer or person or (b) any Award that
is intended to satisfy the requirements applicable to "qualified
performance-based compensation" under section 162(m) of the Code.
3.4 Decisions Binding. All determinations, decisions and interpretations by the
Committee, the Board, and any delegate of the Committee pursuant to the
provisions of the Plan shall be final, conclusive, and binding on all persons,
and shall be given the maximum deference permitted by law.
3.5 Restrictions on Incentive Stock Options. Incentive Stock Options may not be
granted more than 10 years from the date the Plan is adopted or the date the
Plan is approved by DPL's shareholders, whichever is earlier. Incentive Stock
Options are not transferable, except by will or the laws of descent. If this
Plan is not approved within 12 months before or after the Effective Date, no
further Incentive Stock Options may be granted and any previously granted shall
remain valid but be deemed to be Non-Qualified Stock Options.
3.6 The Committee shall have the authority to grant Awards under this Plan that
are contingent upon the achievement of Performance Goals. Performance Goals may
be absolute or relative (to prior performance of DPL or or its Affiliate(s) or
to the performance of one or more other entities or external indices) and may be
expressed in terms of a progression within a specified range.
ARTICLE 4.
SHARES SUBJECT TO THE PLAN
4.1 Number of Shares. Subject to adjustment as provided in Section 4.3, four and
one-half million (4,500,000) Shares shall be available for grants of Awards
under the Plan. The maximum number of Shares which may be issued as Restricted
Stock or Restricted Stock Units shall be two million, one hundred thousand
(2,100,000) Shares. The maximum number of Shares with respect to which
Restricted Stock, RSUs, Options or a combination thereof may be granted during
any year to any person shall be two hundred fifty thousand (250,000), subject to
adjustment as provided in Section 4.3. Not by way of limitation, any or all of
such authorized shares may be granted as a result of Incentive Stock Options.
Shares awarded under the Plan may be either authorized but unissued Shares,
authorized and issued Shares reacquired and held as treasury Shares or a
combination thereof.
4.2 Lapsed Awards. To the extent that Shares subject to an outstanding Option or
other Award are not issued or delivered by reason of the expiration,
cancellation, forfeiture or other termination of such Award or by reason of the
delivery or withholding of Shares to pay all or a portion of the Exercise Price
of an Award, if any, or to satisfy all or a portion of the tax withholding
obligations relating to an Award, then such Shares shall again be available
under this Plan.
4.3 Adjustments in Awards and Authorized Shares. In the event of any merger,
reorganization, consolidation, recapitalization, liquidation, stock dividend,
split-up, share combination, or other similar change in the corporate structure
of DPL affecting the Shares, the Committee may adjust the number, class and
series of DPL's securities or the securities of any successor corporation
available under the Plan, the number, class, series and purchase price of
securities subject to outstanding Awards, and the numerical limit of Section 4.1
in such manner as the Committee in its sole discretion shall determine to be
appropriate to prevent the dilution or diminution of such Awards. If any such
adjustment would result in a fractional security being (a) available under this
Plan, such fractional security shall be disregarded, or (b) subject to an
outstanding Award under this Plan, DPL shall pay the holder of such Award, in
connection with the first vesting, exercise or settlement of such Award in whole
or in part occurring after such adjustment, an amount in cash determined by
multiplying (i) the fraction of such security (rounded to the nearest hundredth)
by (ii) the excess, if any, of (A) the Fair Market Value on the vesting,
exercise or settlement date over (B) the Exercise Price or Base Price, if any,
of such Award.
ARTICLE 5.
STOCK OPTIONS
5.1 Grant of Options. Subject to the provisions of the Plan, Options may be
granted to such Participants at such times, and subject to such terms and
conditions, as determined by the Committee in its sole discretion. An Award of
Options may include Incentive Stock Options, Non-Qualified Stock Options, or a
combination thereof; provided, that no Option shall be granted more than ten
years after the date this Plan is adopted by the Board.
5.2 Award Agreement. Each Option shall be evidenced by an Award Agreement that
shall specify the Exercise Price, the expiration date of the Option, the number
of Shares to which the Option pertains, any conditions to the exercise of all or
a portion of the Option, and such other terms and conditions as the Committee,
in its discretion, shall determine. The Award Agreement pertaining to an Option
shall designate such Option as an Incentive Stock Option or a Non-Qualified
Stock Option. Notwithstanding any such designation, to the extent that the
aggregate Fair Market Value (determined as of the Grant Date) of Shares with
respect to which Options designated as Incentive Stock Options are exercisable
for the first time by a Participant during any calendar year (under this Plan or
any other plan of DPL, or any parent or subsidiary as defined in section 424 of
the Code) exceeds the amount established by the Code, such Options shall
constitute Non-Qualified Stock Options. For purposes of the preceding sentence,
Incentive Stock Options shall be taken into account in the order in which they
are granted. No Agreement shall provide any compensation deferral feature, other
than the ability to exercise the Option at a future date.
5.3 Exercise Price. Subject to the other provisions of this Section, the
Exercise Price with respect to Shares subject to an Option shall be determined
by the Committee in its sole discretion.
5.3.1 Non-Qualified Stock Options. In the case of a Non-Qualified Stock Option,
the Committee shall determine the Exercise Price which may not be less than one
hundred percent (100%) of the Fair Market Value of a Share on the Grant Date.
5.3.2 Incentive Stock Options. The Committee may grant Options under the Plan
that are intended to be ISOs. All or any portion of the shares authorized for
use under the Plan may be issued as ISO shares. Such ISOs shall comply with the
requirements of Section 422 of the Code (or any successor section thereto), as
well as Treasury Regulations and other binding guidance issued thereunder. In
furtherance of this intent, and not by way of limitation:
(i) All ISOs shall be written, whether on paper or in electronic
form.
(ii) All or any portion of the shares authorized for use under the
Plan may be issued as ISO shares.
(iii) Each share of stock will be treated separately for purposes of
applying the ISO rules.
(iv) No ISO may be granted to any individual who is not, at the
time of grant, an employee of the Company or a related
corporation, within the contemplation of Section 422(b) of the
Code. An ISO may only be granted for a reason connected with such
employment. If an ISO is assumed or a new ISO is substituted
under circumstances permitted under Treas. Reg. 1.424-1(a), the
optionee must be an employee (or a former employee within the
prior 3 month period) of the corporation assuming or substituting
the ISO, or a related corporation with respect to same. For this
purpose, the employment relationship will be treated as
continuing to exist during a military leave, sick leave or other
bona fide leave of absence of up to 3 months, or for such longer
period as the individual's right to reemployment is provided by
statute or contract. In the absence of any such right, the
employment relationship is deemed to terminate on the day after
such 3 month period, at which time the 3 month maximum exercise
period will begin. If an individual satisfies these employment
requirements, and if the option provides for exercise by the
individual's estate, or for exercise by an heir as a result of
distribution of the ISO from the estate, then the estate or heir,
as applicable may exercise the ISO within such period following
the former employee's death as may be permitted by applicable
Treasury Regulations, but in no event longer than one year from
such date of death. In the event of the disability of an
optionee, an ISO may be exercised for so long as the individual's
employment relationship continues, and thereafter for such period
as may be permitted by applicable Treasury Regulations, but in no
event longer than one year from the date the individual's right
to reemployment by statute or contract ceases.
(v) No ISO may be granted at an Option Price which is less than the
Fair Market Value of a Share on the date the ISO is granted.
Fair Market Value may be determined for this purpose under any
reasonable valuation method.
(vi) No ISO may be granted to the extent that the aggregate Fair
Market Value at grant of the stock with respect to which the ISO
is first exercisable in any calendar year (under all plans of the
Company or any parent or subsidiary thereof) exceeds $100,000.
For this purpose, Options shall be taken into account in the
order granted. To the extent any grant exceeds such limit, such
grant shall be made, and in any event treated for all purposes,
as a Non-Qualified Stock Option. If an Option is intended to be
an ISO, and if for any reason such Option (or portion thereof)
shall not qualify as an ISO, then, to the extent of such
nonqualification, such Option (or portion thereof) shall be
regarded as a Non-Qualified Stock Option granted under the Plan;
provided that such Option (or portion thereof) otherwise complies
with the Plan's requirements relating to Non-Qualified Stock
Options.
(vii) No ISO may be granted to any Participant who at the time of
such grant, owns more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or
of any Subsidiary, unless (A) the Option Price for such ISO is at
least 110% of the Fair Market Value of a Share on the date the
ISO is granted, and (B) the date on which such ISO terminates is
a date not later than the day preceding the fifth anniversary of
the date on which the ISO is granted. For purposes of
administration of the ISO provisions of the Plan, Fair Market
Value shall be determined without regard to any restriction other
than a restriction which, by its terms, will never lapse.
(viii)An ISO may be granted only under an Option which is not
transferable other than by will or the laws of descent and
distribution, nor which is exercisable during the grantee's
lifetime other than by the grantee. No ISO will be granted
unless, by its terms, it is to be treated as an ISO. No ISO may
be granted unless this Plan is approved by the shareholders of
the Company within twelve months before or after the Plan is
adopted by the Board.
(ix) No ISO may be granted after an amendment to the Plan which
increases the number of shares which may be issued under Options
or which changes the employees or classes of employees eligible
to receive Options unless such amendment is approved by the
shareholders of the Company.
(x) Any Participant who disposes of Shares acquired upon the
exercise of an ISO either (A) within two years after the date of
grant of such ISO or (B) within one year after the transfer of
such Shares to the Participant, shall notify the Company of such
disposition and of the amount realized upon such disposition.
(xi) In no event shall any member of the Committee, the Company
or any of its affiliates (or their respective employees, officers
or directors) have any liability to any participant (or any other
person) due to the failure of an Option to qualify for any reason
as an ISO.
5.4 Expiration Dates. Each Option shall terminate not later than the expiration
date specified in the Award Agreement pertaining to such Option; provided,
however, that the expiration date with respect to an Option shall not be later
than the tenth anniversary of its Grant Date and the expiration date with
respect to an Incentive Stock Option granted to a Ten Percent Holder shall not
be later than the fifth anniversary of its Grant Date.
5.5 Exercisability of Options. Options granted under the Plan shall be
exercisable at such times, and shall be subject to such restrictions and
conditions, as the Committee shall determine in its sole discretion. After an
Option is granted, the Committee, in its sole discretion, may accelerate the
Exercisability of the Option. The exercise of an Option is contingent upon
payment by the Optionee of the amount sufficient to pay all taxes required to be
withheld by any governmental agency. Such payment may be in any form approved by
the Committee.
5.6 Method of Exercise. Options shall be exercised by the Participant's delivery
of a written notice of exercise to the Secretary of DPL (or its designee),
setting forth the number of Shares with respect to which the Option is to be
exercised, accompanied by full payment of the Exercise Price with respect to
each such Share. The Exercise Price shall be payable to DPL in full in cash or
its equivalent. The Committee, in its sole discretion, also may permit exercise
(a) by tendering previously acquired Shares which have been held by the Optionee
for at least six months having an aggregate Fair Market Value at the time of
exercise equal to the aggregate Exercise Price of the Shares with respect to
which the Option is to be exercised, or (b) by any other means which the
Committee, in its sole discretion, determines to both provide legal
consideration for the Shares, and to be consistent with the purposes of the
Plan. As soon as practicable after receipt of a written notification of exercise
and full payment for the Shares with respect to which the Option is exercised,
DPL shall deliver to the Participant Share certificates (which may be in book
entry form) for such Shares with respect to which the Option is exercised.
5.7 Restrictions on Share Transferability. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option as it
may deem advisable, including, but not limited to, restrictions related to
applicable Federal securities laws, the requirements of any national securities
exchange or system upon which Shares are then listed or traded, or any blue sky
or state securities laws. In general, Shares of Restricted Stock and
Non-Qualified Stock Options are generally subject to the restrictions on
transfer, etc. set forth in Section 6.3. However, the Committee may, in its sole
discretion, permit assignment of Restricted Stock and/or Non-Qualified Stock
Options to the Participant's Immediate Family or to a Charitable Organization.
ARTICLE 6.
STOCK AWARDS
6.1 Grant of Stock Awards. Subject to the provisions of the Plan, Stock Awards
may be granted to such Participants at such times, and subject to such terms and
conditions, as determined by the Committee in its sole discretion; provided,
however, that no Stock Award shall be granted, administered or modified in a
manner which would result in an additional tax under Code Section
409A(a)(1)(B)(i)(II), and any nonconforming provision, administration or
modification shall be void ab initio.
6.2 Stock Award Agreement. Each Stock Award shall be evidenced by an Award
Agreement that shall specify the number of Shares granted, the price, if any, to
be paid for the Shares and the Period of Restriction applicable to a Restricted
Stock Award or RSU Award and such other terms and conditions as the Committee,
in its sole discretion, shall determine.
6.3 Transferability/Share Certificates. Shares subject to an Award of Restricted
Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated during a Period of Restriction. During the Period of Restriction, a
Restricted Stock Award may be registered in the holder's name or a nominee's
name at the discretion of DPL and may bear a legend as described in Section
7.4.2. Unless the Committee determines otherwise, Shares of Restricted Stock
shall be held by DPL as escrow agent during the applicable Period of
Restriction, together with stock powers or other instruments of assignment
(including a power of attorney), each endorsed in blank with a guarantee of
signature if deemed necessary or appropriate by DPL, which would permit transfer
to DPL of all or a portion of the Shares subject to the Restricted Stock Award
in the event such Award is forfeited in whole or part.
6.4 Other Restrictions. The Committee, in its sole discretion, may impose such
other restrictions on Shares subject to an Award of Restricted Stock as it may
deem advisable or appropriate.
6.4.1 General Restrictions. The Committee may set restrictions based upon
applicable federal or state securities laws, or any other basis determined by
the Committee in its discretion.
6.4.2 Legend on Certificates. The Committee, in its discretion, may legend the
certificates representing Restricted Stock during the Period of Restriction to
give appropriate notice of such restrictions. For example, the Committee may
determine that some or all certificates representing Shares of Restricted Stock
shall bear the following legend: "The sale or other transfer of the shares of
stock represented by this certificate, whether voluntary, involuntary, or by
operation of law, is subject to certain restrictions on transfer as set forth in
the Delta and Pine Land Company 2005 Omnibus Stock Plan (the "Plan"), and in a
Restricted Stock Agreement (as defined by the Plan). A copy of the Plan and such
Restricted Stock Agreement may be obtained from the Secretary of DPL."
6.5 Removal of Restrictions. Shares of Restricted Stock covered by a Restricted
Stock Award made under the Plan shall be released from escrow as soon as
practicable after the termination of the Period of Restriction and, subject to
DPL's right to require payment of any taxes, a certificate or certificates
evidencing ownership of the requisite number of Shares shall be delivered to the
Participant. In the case of any Award which is subject to Code Section 409A,
under no circumstances may the vesting or other material restrictions associated
with such Award be removed or modified in a manner which would result in an
acceleration of any benefit, right or feature of such Stock Award, within the
contemplation of Section 409A.
6.6 Voting Rights. During the Period of Restriction, Participants holding Shares
of Restricted Stock granted hereunder may exercise full voting rights with
respect to those Shares, unless otherwise provided in the Award Agreement.
6.7 Dividends and Other Distributions. During the Period of Restriction,
Participants holding Shares of Restricted Stock shall be entitled to receive all
dividends and other distributions paid with respect to such Shares unless
otherwise provided in the Award Agreement. If any such dividends or
distributions are paid in Shares, the Shares shall be deposited with DPL and
shall be subject to the same restrictions on transferability and forfeitability
as the Shares of Restricted Stock with respect to which they were paid.
6.8 Return of Restricted Stock to Company. On the date set forth in the Award
Agreement, the Restricted Stock or RSUs for which restrictions have not lapsed
shall revert to DPL and again shall become available for Awards under the Plan.
6.9 Code Section 409A. Notwithstanding any other provision of this Plan, any
Award from the Plan which is subject to Code Section 409A is intended to conform
with such Code Section in a manner which avoids any increase in tax or interest
rates pursuant thereto. Without limitation of the foregoing, no such Award shall
provide for or permit a distribution of compensation other than upon a
separation from service, disability, death, a specified time or pursuant to a
fixed schedule, a Change in Control, or an unforeseeable emergency, each as
contemplated by Code Section 409A. In the case of any distribution to a
"specified employee" under such Section, based on a separation from service, in
no event shall such distribution be made earlier than six (6) months after the
separation from service. Any election of an individual to defer the receipt of
compensation may be made only by the end of the year prior to the year in which
the compensation is earned, or at such other time as may be provided in Treasury
Regulations; provided that in an individual's initial year of eligibility a
deferral election may be made within 30 days after the initial date of
eligibility; further provided that performance-based compensation earned over a
period of at least 12 months may be deferred under an election made at least 6
months before the end of the period. No provision of any such award shall permit
any acceleration of benefits under circumstances proscribed by Section 409A.
Changes in the time or form of payment may be permitted only under circumstances
which would not subject the holder of any Award to taxation pursuant to Code
Section 409A.
ARTICLE 7.
MISCELLANEOUS
7.1 No Effect on Employment or Service. Nothing in the Plan shall interfere with
or limit in any way the right of DPL to terminate any Participant's employment
or service at any time, with or without cause. For purposes of the Plan,
transfer of employment of a Participant between DPL and any one of its
Affiliates (or between Affiliates) shall not be deemed either a separation from
service or a termination of employment. Employment with DPL and Affiliates is on
an at-will basis only.
7.2 Participation. No Participant shall have the right to be selected to receive
an Award under this Plan, or, having been so selected, to be selected to receive
a future Award.
7.3 Indemnification. Each person who is or shall have been a member of the
Committee, or of the Board, shall be indemnified and held harmless by DPL
against and from (a) any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by him or her in connection with or resulting from
any claim, action, suit, or proceeding to which he or she may be a party or in
which he or she may be involved by reason of any good faith action taken or good
faith failure to act under the Plan or any Award Agreement, and (b) from any and
all amounts paid by him or her in settlement thereof, with DPL's approval, or
paid by him or her in satisfaction of any judgment in any such claim, action,
suit, or proceeding against him or her, provided he or she shall give DPL an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf. The foregoing right
of indemnification shall not be exclusive of any other rights of indemnification
to which such persons may be entitled under DPL's Certificate of Incorporation
or By-Laws, by contract, as a matter of law, or otherwise, or under any power
that DPL may have to indemnify them or hold them harmless.
7.4 Successors. All obligations of DPL under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to DPL, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation or otherwise, of all or substantially all of the business
or assets of DPL.
7.5 Beneficiary Designations. Subject to the restrictions in section 8.6 below,
a Participant under the Plan may name a beneficiary or beneficiaries to whom any
vested but unpaid Award shall be paid in the event of the Participant's death.
For purposes of this section, a beneficiary may include a designated trust
having as its primary beneficiary a family member of a Participant. Each such
designation shall revoke all prior designations by the Participant and shall be
effective only if given in a form and manner acceptable to the Committee. In the
absence of any such designation, any vested benefits remaining unpaid at the
Participant's death shall be paid to the Participant's estate and, subject to
the terms of the Plan and of the applicable Award Agreement, any unexercised
vested Award may be exercised by the administrator or executor of the
Participant's estate.
7.6 Nontransferability of Awards. Unless otherwise determined by the Committee
with respect to an Award other than an Incentive Stock Option, no Award granted
under the Plan may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will, by the laws of descent and
distribution. The Committee may in its discretion permit a transfer of an Award
to a member of the Participant's Immediate Family or to a Charitable
Organization. Except as may be so permitted, all rights with respect to an Award
granted to a Participant shall be available during his or her lifetime only to
the Participant and may be exercised only by the Participant or the
Participant's legal representative.
7.7 No Rights as Stockholder. Except to the limited extent provided in Sections
7.6 and 7.7, no Participant (nor any beneficiary) shall have any of the rights
or privileges of a stockholder of DPL with respect to any Shares issuable
pursuant to an Award (or exercise thereof), unless and until certificates
representing such Shares shall have been issued, recorded on the records of DPL
or its transfer agents or registrars, and delivered to the Participant (or
beneficiary).
7.8 Withholding Requirements. Prior to the delivery of any Shares or cash
pursuant to an Award (or exercise thereof), DPL shall have the power and the
right to deduct or withhold, or require a Participant to remit to DPL, an amount
sufficient to satisfy federal, state, local and foreign taxes (including, but
not limited to, the Participant's FICA and SDI obligations) required to be
withheld with respect to such Award (or exercise thereof).
7.9 Withholding Arrangements. The Committee, in its sole discretion and pursuant
to such procedures as it may specify from time to time, may permit or require a
Participant to satisfy all or part of the tax withholding obligations in
connection with an Award by (a) having DPL withhold otherwise deliverable
Shares, or (b) delivering to DPL already-owned Shares having a Fair Market Value
equal to the amount required to be withheld, provided such Shares have been held
by the Participant for at least six months.
7.10 Restrictions on Shares. Each Award made hereunder shall be subject to the
requirement that if at any time DPL determines that the listing, registration or
qualification of the Shares subject to such Award upon any securities exchange
or under any law, or the consent or approval of any governmental body, or the
taking of any other action is necessary or desirable as a condition of, or in
connection with, the exercise or settlement of such Award or the delivery of
Shares thereunder, such Award shall not be exercised or settled and such Shares
shall not be delivered unless such listing, registration, qualification,
consent, approval or other action shall have been effected or obtained, free of
any conditions not acceptable to DPL. DPL may require that certificates
evidencing shares delivered pursuant to any Award made hereunder bear a legend
indicating that the sale, transfer or other disposition thereof by the holder is
prohibited except in compliance with the Securities Act of 1933, as amended, and
the rules and regulations thereunder.
7.11 Change in Control. (a) Notwithstanding any provision in this Plan or any
Award Agreement, in the event of a Change in Control in connection with which
the holders of Shares receive shares of common stock that are registered under
section 12 of the 1934 Act, there shall be substituted for each Share available
under this Plan, whether or not then subject to an outstanding Award, the number
and class of shares into which each outstanding Share shall be converted
pursuant to such Change in Control. In the event of any such substitution, the
Exercise Price per share in the case of an Option shall be appropriately
adjusted by the Committee (whose determination shall be final, binding and
conclusive), such adjustments to be made in the case of outstanding Options
without an increase in the aggregate Exercise Price. (b) Notwithstanding any
provision in this Plan or any Award Agreement, in the event of a Change in
Control in connection with which the holders of Shares receive consideration
other than shares of common stock that are registered under Section 12 of the
1934 Act, each outstanding Award shall be surrendered to DPL by the holder
thereof, and each such Award shall immediately be cancelled by DPL, and the
holder shall receive, within ten days of the occurrence of a Change in Control,
a cash payment from DPL in an amount that the Committee, in its sole discretion,
in good faith determines to be the equivalent value of such award on the date of
the Change in Control.
7.12 Non-Competition Requirement. Notwithstanding any other provision of this
Plan or the terms of any Award under the Plan, a Participant or transferee from
a Participant shall forfeit all unexercised, unearned and/or unpaid Awards, both
vested and non-vested, including without limitation Awards earned or vested but
not yet paid or exercised, all unpaid dividends and dividend equivalents, and
all interest , if any accrued on the foregoing, if (i) in the opinion of the
Committee (whose determination shall be final, exclusive and binding) the
grantee without the written consent of DPL engages directly or indirectly in any
manner or capacity as principal, agent, partner, officer, director, employee or
otherwise in any business or activity competitive with the business conducted by
DPL or any of its Affiliates; or (ii) the grantee performs any act or engages in
any activity which in the opinion of the Chief Executive Officer (whose
determination shall be final, exclusive and binding) is inimical to the best
interests of DPL.
ARTICLE 8.
AMENDMENT, TERMINATION AND DURATION
8.1 Amendment, Suspension or Termination. The Board, in its sole discretion, may
amend, suspend or terminate the Plan, or any part thereof, at any time and for
any reason, subject to any requirement of stockholder approval required by
applicable law, rule or regulation, including section 422 of the Code, section
162(m) of the Code and (c) the rules of the New York Stock Exchange. No
termination of the Plan shall be the basis for distribution of any deferred
compensation which is subject to Code Section 409A. The amendment, suspension or
termination of the Plan shall not, without the consent of the Participant, alter
or impair any rights or obligations under any Award theretofore granted to such
Participant. No Award may be granted during any period of suspension or after
termination of the Plan.
8.2 Duration of the Plan. The Plan shall, subject to Section 9.1 (regarding the
Board's right to amend or terminate the Plan), terminate ten years after
adoption, unless earlier terminated by the Board. The termination of the Plan
shall not affect any Awards granted prior to the termination of the Plan.
ARTICLE 9.
LEGAL CONSTRUCTION
9.1 Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
9.2 Severability. In the event any provision of the Plan shall be held illegal
or invalid for any reason, the illegality or invalidity shall not affect the
remaining parts of the Plan and the Plan shall be construed and enforced as if
the illegal or invalid provision had not been included.
9.3 Requirements of Law. The granting of Awards and the issuance of Shares under
the Plan shall be subject to all applicable laws, rules and regulations, and to
such approvals by any governmental agencies or national securities exchanges as
may be required.
9.4 Governing Law. The Plan and all Award Agreements shall be construed in
accordance with and governed by the laws of the State of Delaware, but without
regard to its conflict of law provisions.
9.5 Captions. Captions are provided herein for convenience only, and shall not
serve as a basis for interpretation or construction of the Plan.
9.6 Incentive Stock Options. Should any Option granted under this Plan be
designated an "Incentive Stock Option," but fail, for any reason, to meet the
requirements of the Code for such a designation, then such Option shall be
deemed to be a Non-Qualified Stock Option and shall be valid as such according
to its terms.
Executed as of the day and year first above written.
DELTA AND PINE LAND COMPANY
By:
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Its:
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