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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
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Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Corn Products International, Inc.
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(Name of Registrant as Specified in Its Charter)
N/A
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0-11.
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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CORN PRODUCTS LOG
6500 SOUTH ARCHER AVENUE, BEDFORD PARK, ILLINOIS 60501-1933
March 28, 2000
Dear Stockholder:
Enclosed are the notice of annual meeting of stockholders, proxy statement
and proxy card for this year's annual meeting of stockholders of Corn Products
International, Inc.
The annual meeting will be held solely to vote on each of the matters
described in the proxy statement. We do not expect that any other business will
be transacted. Management of the Company will, however, present a brief report
on the status of our business and respond to stockholder questions.
Please complete and return the enclosed proxy card as soon as possible.
Your vote is important.
Sincerely,
konrad schlatter
Konrad Schlatter
Chairman and
Chief Executive Officer
RECYCLED LOGO
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CORN PRODUCTS INTERNATIONAL, INC.
6500 SOUTH ARCHER AVENUE
BEDFORD PARK, ILLINOIS 60501-1933
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The 2000 annual meeting of stockholders of Corn Products International,
Inc. will be held at the Four Points Hotel by Sheraton, Chicago/O'Hare Airport,
10249 W. Irving Park Road, Schiller Park, Illinois, on Wednesday, May 17, 2000,
at 9:30 a.m., local time, for the following purposes:
1. To elect four Class III directors, each for a term of three years.
2. To consider and act upon the Annual Incentive Plan.
3. To consider and act upon the Performance Plan.
4. To ratify the appointment of KPMG LLP as independent auditors for the
Company for 2000.
5. To transact such other business, if any, that is properly brought
before the meeting and any postponement or adjournment thereof.
March 21, 2000 is the record date for the annual meeting. Only stockholders
of record at the close of business on that date may vote at the meeting. For ten
days before the meeting, a list of stockholders will be available for inspection
during ordinary business hours at our Company headquarters.
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE SIGN, DATE
AND RETURN YOUR PROXY CARD PROMPTLY.
By order of the Board of Directors,
LOGO
Marcia E. Doane
Vice President, General Counsel
and Corporate Secretary
March 28, 2000
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TABLE OF CONTENTS
PAGE
General Information......................................... 1
Board of Directors.......................................... 2
Security Ownership of Certain Beneficial Owners and
Management................................................ 5
Section 16(a) Beneficial Ownership Reporting Compliance..... 6
Stockholder Cumulative Total Return Performance Graph....... 6
Compensation and Nominating Committee Report on Executive
Compensation.............................................. 8
Executive Compensation...................................... 11
Certain Relationships and Related Transactions.............. 14
Matters To Be Acted Upon:
Proposal 1.
Election of Directors..................................... 15
Proposal 2.
Approval of the Annual Incentive Plan..................... 18
Proposal 3.
Approval of the Performance Plan.......................... 20
Proposal 4.
Ratification of Appointment of Auditors................... 22
Other Matters
Stockholder Proposals for 2001 Annual Meeting............... 22
Additional Information...................................... 23
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CORN PRODUCTS INTERNATIONAL, INC.
6500 SOUTH ARCHER AVENUE
BEDFORD PARK, ILLINOIS 60501-1933
PROXY STATEMENT
GENERAL INFORMATION
You have received this proxy statement because the Board of Directors of
Corn Products International, Inc. (the "Company") is asking for your proxy to
vote your shares at the 2000 annual meeting of stockholders which is scheduled
to be held on Wednesday, May 17, 2000 (the "Annual Meeting"). On March 21, 2000,
the record date for the Annual Meeting, 35,202,654 shares of common stock were
issued and outstanding. This proxy statement, the accompanying proxy card and
the 1999 annual report to stockholders were first mailed to stockholders of the
Company on or about March 28, 2000.
WHO MAY VOTE
You may vote at the Annual Meeting if you were a stockholder of record of
the Company's common stock at the close of business on March 21, 2000. You are
entitled to one vote for each share of common stock of the Company that you
owned as of the record date. If you are a participant in the Corn Products
International stock fund of the Company's Retirement Savings Plans or the
Company's automatic dividend reinvestment plan, the proxy represents shares in
your Plan account as well as any other shares of Company common stock held of
record in your name as of March 21, 2000.
HOW TO VOTE
You may vote by proxy at the Annual Meeting or in person. If you vote by
proxy, please sign and date the enclosed proxy card and return it to us in the
envelope provided. Specify your choices on the proxy card. If you return a
signed and dated proxy card but do not specify your choices on it, your shares
will be voted in favor of the proposals. You may revoke your proxy at any time
before it is voted by (i) notifying the Company's Corporate Secretary in
writing, (ii) returning a later-dated, signed proxy card or (iii) voting in
person at the Annual Meeting. Any written notice revoking a proxy should be sent
to Marcia E. Doane, Corporate Secretary, Corn Products International, Inc., 6500
South Archer Avenue, Bedford Park, Illinois 60501-1933.
REQUIRED VOTES
To carry on the business of the Annual Meeting, a quorum of the
stockholders is required. This means that at least a majority of the outstanding
shares eligible to vote must be represented at the Annual Meeting, either by
proxy or in person. If a quorum is present, the director nominees receiving the
most votes will be elected. Other proposals require the favorable vote of a
majority of the votes cast. If you withhold your vote for any or all nominees,
your vote will not count either "for" or "against" the nominee. A vote to
"abstain" on any other proposal will be counted as present for quorum purposes,
but will not be counted as a vote cast "for" such proposal. If you hold your
shares of Company common stock in "street name" and have not returned a signed
proxy card, your broker will have authority to vote your shares but only on
those proposals that are considered discretionary under the applicable New York
Stock Exchange ("NYSE") rules. If your broker does not have such discretion on
any proposals (broker non-votes), your shares will be counted as being present
at the Annual Meeting for quorum purposes, but they will not be counted as votes
cast on such proposals.
SOLICITATION OF PROXIES
The Company has retained D. F. King & Co. Inc., 77 Water Street, New York,
New York, 10005, to assist in the distribution of proxy materials and
solicitation of proxies and will pay them approximately $12,500 plus reasonable
expenses for these services. The Company will pay all costs of soliciting
proxies and will reimburse brokers, banks and other custodians and nominees for
their reasonable expenses for forwarding
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proxy materials to beneficial owners and obtaining their voting instructions. In
addition to this mailing, directors, officers and other employees of the Company
may solicit proxies electronically, personally or by mail or telephone.
BOARD OF DIRECTORS
The business and affairs of the Company is managed by or under the
direction of its Board of Directors (the "Board"). The Board presently consists
of eleven members, eight of whom are outside (non-employee) directors. The Board
is divided into three classes, with one class elected each year for a three-year
term.
In addition to the various committee meetings referred to below, the Board
held eight meetings in 1999. Each director attended at least 75 percent of the
meetings of the Board and the committees of the Board on which he served during
1999 and, as a group, the directors' meeting attendance averaged 95 percent for
the year.
COMMITTEES OF THE BOARD
The AUDIT COMMITTEE is composed entirely of outside, independent directors.
Pursuant to the provisions of its previously adopted charter, this committee
reviews the scope and results of the Company's annual audit, reviews the level
of non-audit services rendered by the independent auditors and recommends
appointment of independent auditors for the ensuing year. This committee also
oversees the procedures for preparing the financial statements for the annual
report to stockholders, accounting policies, internal control systems and
internal auditing procedures and the process by which unaudited quarterly
financial information is compiled and issued. The independent auditors meet
privately with this committee on a regular basis.
The Audit Committee's responsibilities can be summarized by function as
follows:
In relation to the audit process by the independent auditors:
- review the objectives, scope and estimated cost of the annual audit
for the ensuing year;
- inquire into and evaluate factors affecting the auditor's
independence and review the nature and extent of, and approve guidelines
for, the non-audit services rendered by the independent auditors;
- recommend to the Board the appointment of independent auditors for
the ensuing year subject to ratification by the stockholders; and
- meet independently with, and receive periodic reports from, the
independent auditors on the progress of their audit activities, including
audit procedures designed to detect illegal acts.
In relation to internal audit process:
- review the adequacy of the internal audit organization and the scope
of the internal audit activities; and
- review periodic reports of the corporate director of internal audit
on the progress of the internal audit activities.
In relation to internal controls:
- review the adequacy of the Company's system of internal controls;
- review the findings of independent and internal auditors; and
- review any audit matters requiring special attention of the
committee.
In relation to preservation of assets:
- review major risk areas, including foreign exchange exposure and
financial and commodity derivatives, policies governing such risk areas and
the controls in place to minimize exposure to losses, including insurance
coverage; and
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- review policies and practices affecting taxes.
In relation to financial reporting:
- oversee the procedures for preparing the annual as well as quarterly
financial statements, including the Company's accounting policies;
- review the financial disclosures in the annual report to
stockholders and in annual reports to the SEC; and
- review areas of disagreement, if any, between management and
independent auditors.
Members of the Audit Committee are W. C. Ferguson (Chairman), A. C.
DeCrane, Jr., G. E. Greiner and C. B. Storms. This committee held four meetings
during 1999.
The NYSE requires that audit committees of its listed companies consist of
directors who have no relationship to the respective company that may interfere
with the exercise of their independence from management and the company. A
director who was employed by a former parent or predecessor of a listed company
may serve on the audit committee after three years following the termination of
such employment. However, a board of directors may appoint to the audit
committee one member, who is no longer an employee but would not otherwise be
considered independent because the three-year restriction period has not
elapsed, if it determines in its business judgment that membership on the audit
committee by the individual is required by the best interests of the company and
its stockholders. At its meeting on February 16, 2000, the Board determined that
C. B. Storms, who retired as an executive officer of Bestfoods in June 1997, is
independent of management and that his continued membership on the Audit
Committee during the current year is in the best interests of the Company and
its stockholders because of his special knowledge of the Company's December 1997
spin-off transaction from Bestfoods, his knowledge of the Company's business and
his prior service on the Audit Committee.
The COMPENSATION AND NOMINATING COMMITTEE is composed entirely of outside,
independent directors. This committee oversees the general areas of senior
management compensation, employee benefit plans and the selection and
compensation of directors. Stockholders who wish to recommend a candidate for
consideration by this committee as a nominee for director may do so by writing
to the Corporate Secretary and furnishing a statement of the candidate's
experience and qualifications.
The Compensation and Nominating Committee's responsibilities can be
summarized by function as follows:
In relation to senior management compensation:
- review and approve compensation arrangements for all elected
corporate officers;
- review and approve any arrangements, other than under the terms of
the Company's employee benefit plans and employment or severance
agreements, upon termination or retirement of any elected corporate
officer;
- administer executive incentive compensation plans; and
- review and approve personal benefits and other non-cash compensation
for executives.
In relation to employee benefit plans:
- review employee benefit programs and recommend to the Board
proposals for the adoption, amendment or termination of principal pension
and welfare plans and the appointment of administrative committees for such
plans;
- recommend to the Board the appointment of trustees and investment
managers under employee benefit plans and review their performance;
- review the investment allocation policy for funds contributed to
such plans; and
- review the annual contributions to fund such plans.
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In relation to selection and compensation of directors:
- consider and recommend to the Board candidates for election to the
Board; and
- recommend to the Board the compensation arrangements for outside,
independent directors and administer the Deferred Compensation Plan for
outside, independent directors.
Members of the Compensation and Nominating Committee are R. G. Holder
(Chairman), R. M. Gross and W. S. Norman. This committee held four meetings
during 1999.
The CORPORATE RESPONSIBILITY COMMITTEE is composed entirely of outside
directors. This committee oversees the general areas of corporate governance and
the development and implementation of appropriate Company policies.
The Corporate Responsibility Committee's responsibilities can be summarized
by function as follows:
In relation to corporate governance:
- review the size, structure and organization of the Board and its
committees and the flow of information to and within the Board;
- review the independence of each outside director;
- establish criteria for the evaluation of Board performance and
effectiveness;
- establish performance parameters for directors and review the
performance of incumbent directors;
- review the guidelines for Board tenure; and
- review any other corporate governance matters to ensure that the
Board is fulfilling its responsibilities to the stockholders.
In relation to Company policies:
- review Company policies and performance in relation to the quality
of products and services, customer relations, employee relations, health,
safety and the environment, community relations, compliance with laws,
disclosure of company information, insider trading and business ethics;
- review crisis management organization; and
- review corporate communications programs, including investor
relations.
Members of the Corporate Responsibility Committee are A. C. DeCrane, Jr.
(Chairman), W. C. Ferguson, G. E. Greiner, R. M. Gross, R. G. Holder, B. H.
Kastory, W. S. Norman and C. B. Storms. This committee held four meetings during
1999.
DIRECTOR COMPENSATION AND TENURE
Employee directors do not receive additional compensation for serving as
directors. All directors are reimbursed for Board and committee meeting
expenses. The following table displays the individual components of outside
director compensation:
Annual Board retainer....................................... $ 35,000(1)
Annual retainer for Committee chairman...................... 3,000
Board attendance fee (per meeting).......................... 1,000
Committee attendance fee (per meeting)...................... 1,000
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(1) One half of the retainer is paid in cash and the other half is paid in the
Company's phantom stock units which are mandatorily deferred until
retirement under the Deferred Compensation Plan for Outside Directors. In
addition, a director may choose to defer all or part of the cash portion of
the retainer in the
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Company's phantom stock units. The Company's phantom stock units for each
outside director as of March 1, 2000 are indicated in the middle column of the
Security Ownership Table appearing on page 6.
The Board has a policy that requires each outside director and former chief
executive officer of the Company to retire from the Board at the annual meeting
of stockholders coincident with or next following his 70th birthday. Each
employee director is required to retire from the Board upon his retirement as an
employee or other termination of active employment, whether or not his term has
expired. However, each outside director who was a member of the Board on
November 19, 1997 and the current chief executive officer of the Company may
continue to serve as a director until the annual meeting of stockholders
coincident with or next following his 72nd birthday.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows, as of December 31, 1999, all persons or entities
that the Company knows are beneficial owners of more than five percent of the
Company's issued and outstanding common stock.
NAME AND ADDRESS OF AMOUNT AND NATURE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
------------------- -------------------- ----------------
FMR Corp................................................ 3,157,642(1) 8.478%
82 Devonshire Street
Boston, Massachusetts
02109-3614
Capital Group International, Inc........................ 2,707,930(2) 7.3%
11100 Santa Monica Boulevard
Los Angeles, California
90025-3384
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(1) The ownership information disclosed above is based on a Schedule 13G/A
report dated February 14, 2000 that FMR Corp., an investment advisor, filed
with the Securities and Exchange Commission (the "SEC"). Through its
subsidiaries, Fidelity Management & Research Company and Fidelity Management
Trust Company, FMR Corp. has sole voting power as to 662,438 of such shares
and sole dispositive power as to 3,157,642 shares.
(2) The ownership information disclosed above is based on a Schedule 13G report
dated February 10, 2000 that Capital Group International, Inc., an
investment advisor, filed with the SEC. Its California state-chartered trust
company subsidiary, Capital Guardian Trust Company, has sole voting power as
to 2,024,130 of such shares and sole dispositive power as to 2,707,930
shares. Capital Group International, Inc. and Capital Guardian Trust Company
each disclaim beneficial ownership of all such shares that either of them
may be deemed to have as a result of the subsidiary bank's serving as the
investment manager of various institutional accounts.
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The following table shows the ownership of Company common stock (including
derivatives thereof), as of March 1, 2000, of each director, each named
executive officer and all directors and executive officers as a group.
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
-----------------------------------------
NAME OUTSTANDING SHARES SHARES UNDERLYING PERCENT
OF OF COMPANY PHANTOM SHARES UNDERLYING OF
BENEFICIAL OWNER COMMON STOCK(1) STOCK UNITS(2) STOCK OPTIONS(3) CLASS(4)
---------------- ------------------ ----------------- ----------------- --------
I. Aranguren-Castiello......... 1,845,000 875 -- 5.2%
A. C. DeCrane, Jr.............. 2,125 2,357 -- *
W. C. Ferguson................. 8,796 2,588 -- *
G. E. Greiner.................. 8,000 1,215 -- *
R. M. Gross.................... 2,000 1,215 -- *
R. G. Holder................... 4,500 2,588 -- *
B. H. Kastory.................. 6,862 1,192 -- *
W. S. Norman................... 2,752 2,383 -- *
E. J. Northacker............... 6,450 9,047 85,346 *
M. R. Pyatt.................... 19,802 651 50,686 *
J. W. Ripley................... 22,953 687 58,775 *
K. Schlatter................... 127,677 11,025 222,573 *
S. C. Scott.................... 63,254 6,185 153,986 *
C. B. Storms................... 22,991 2,383 -- *
All directors and executive
officers as a group (21
persons)..................... 2,258,411 45,832 735,388 8.4%
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(1) Includes shares of Company common stock held individually, jointly with
others, in the name of an immediate family member or under trust for the
benefit of the named individual. Unless otherwise noted, the nature of
beneficial ownership is sole voting and/or investment power. Fractional
amounts have been rounded to the nearest whole share.
(2) Includes shares of Company common stock that are represented by deferred
phantom stock units of the Company credited to the accounts of the directors
and certain executive officers. The directors and executive officers have no
voting or investment power over the Company's phantom stock units.
(3) Includes shares of Company common stock that may be acquired within 60 days
of March 1, 2000 through the exercise of stock options granted by the
Company.
(4) The total for any individual, except I. Aranguren-Castiello, is less than
1.0%, and the total for the group is 8.4% of the issued and outstanding
shares of the Company's common stock. The applicable percentage of ownership
is based on a total of 35,344,354 shares of the Company's common stock
issued and outstanding as of March 1, 2000.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "1934
Act"), requires the Company's directors and executive officers to file timely
reports of holdings and transactions in the Company's common stock (including
derivatives thereof) with the SEC. Based on a review of the forms filed on
behalf of the Company's directors and executive officers and other information,
including written representations that no annual SEC Form 5 report was required,
the Company believes that during 1999 all of its directors and executive
officers complied with the applicable filing requirements.
STOCKHOLDER CUMULATIVE TOTAL RETURN PERFORMANCE GRAPH
The following graph compares cumulative total return to stockholders (stock
price appreciation or depreciation plus reinvested dividends) on the Company's
common stock with the cumulative total return of the S&P Small Cap Basic
Materials Index and the Russell 2000 Index. The S&P Small Cap Basic Materials
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Index is one of Standard & Poor's industry specific stock indices. As of
December 31, 1999, the S&P Small Cap Basic Materials Index included the common
stock of 32 small companies in the following industries: Agricultural Products,
Aluminum, Chemicals (Diversified and Specialty), Construction (Cement and
Aggregates), Containers and Packaging (Paper), Gold and Precious Metals Mining,
Iron and Steel, Paper and Forest Products. The Russell 2000 Index is a
comprehensive common stock price index representing equity investments in
certain smaller companies. The Russell 2000 Index is value weighted and includes
only publicly traded common stocks belonging to corporations domiciled in the
U.S. and its territories. It measures the performance of the 2,000 smallest
companies in the Russell 3000 Index, which comprises approximately 98% of the
total U.S. equity market. The graph assumes that:
- you made one-time $100 investments in the Company's common stock and
in market capital base-weighted amounts apportioned among all the companies
whose equity securities constitute each of the other two named indices, in
each case made as of the market close on December 11, 1997 (the date on
which the Company's common stock began trading on the NYSE), and
- all dividends were automatically reinvested in additional shares of
the same class of equity securities constituting such investments at the
frequency with which dividends were paid on such securities during the
applicable time frame. Please note that the Company began paying dividends
on October 23, 1998.
PERFORMANCE GRAPH
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG THE COMPANY, THE
STANDARD & POOR'S SMALL CAP BASIC MATERIALS INDEX AND THE RUSSELL 2000
INDEX FOR THE PERIOD FROM DECEMBER 11, 1997 TO DECEMBER 31, 1999 (1)
PERFORMANCE GRAPH
S&P SMALL CAP BASIC
CORN PRODUCTS INTERNATIONAL RUSSELL 2000 MATERIALS
--------------------------- ------------ -------------------
12/11/97 100.00 100.00 100.00
12/31/97 102.79 102.90 103.42
12/31/98 105.35 99.35 108.58
12/31/99 114.99 118.85 109.54
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12/11/97 12/31/97 12/31/98 12/31/99
-------------------------------------------------------------------
Corn Products International $ 100.00 $ 102.79 $ 105.35 $ 114.99
-------------------------------------------------------------------
Russell 2000 $ 100.00 $ 102.90 $ 99.35 $ 118.85
-------------------------------------------------------------------
S&P Small Cap Basic Materials $ 100.00 $ 103.42 $ 108.58 $ 109.54
-------------------------------------------------------------------
(1) Source: Standard & Poor's Compustat Custom Products Division, a
Division of The McGraw-Hill Companies.
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COMPENSATION AND NOMINATING COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation and Nominating Committee of the Board of Directors (the
"Committee") is composed entirely of outside, independent directors. The
Committee approves compensation policy for the Company and administers the
executive compensation program for the Company's senior management, including
its twelve officers.
Prior to the spin-off of the Company by Bestfoods, the Company's executives
named in the Summary Compensation Table were employees of Bestfoods.
Compensation paid to those individuals for services performed prior to January
1, 1998, was determined solely by Bestfoods.
The Company utilizes the services of an independent consulting firm to
provide information on base salary levels, annual incentive levels and long-term
incentives for a broad group of companies and for a group of companies in
related industries of similar size and for which compensation information is
available (the "Survey Group"). Based on this comparative pay data, and the
compensation-related objectives that the Company wishes to foster, the Committee
implements an executive compensation program that it considers appropriate for
the Company. A description of that program follows.
COMPENSATION PHILOSOPHY
The objectives of the Company's compensation programs, including executive
compensation, are to:
- Focus, align and motivate management on the objectives of the
corporation and enhance shareholder value.
- Permit the Company to retain and attract outstanding and talented
executives who are focused on the interests of the Company's shareholders.
- Provide executives with significant opportunity and risk by
targeting their base salaries at a discount to market and their incentive
opportunities at a premium to market.
- Reinforce pay for performance beliefs by aligning the distribution
of compensation programs with results. Adjustments to base salary and the
award of incentives are provided based on the achievement of tangible
measurable results.
The key components of the Company's executive compensation program are base
salary, annual incentive compensation, and long-term incentives. The intention
is to maintain base salaries for the executives named in the Summary
Compensation Table and other officers at 10% less than the 50th percentile of
companies in the Survey Group while providing the opportunity to earn increased
variable compensation. An officer's salary depends upon level of responsibility,
individual performance and time in position. Annual incentive targets are
currently established to deliver approximately 20% above the 50th percentile
annual total cash compensation (base pay plus annual incentive) of the Survey
Group, for the attainment of predetermined performance targets. Long-term
incentive compensation is targeted at the 50th percentile of the Survey Group.
Long and short-term incentives for other management personnel are targeted at
the 50th percentile of the Survey Group. Periodically, the Company's executive
compensation targets will be compared against market data to assure alignment
with market conditions and the Company's compensation philosophy.
ANNUAL INCENTIVE PROGRAM
The Annual Incentive Program ("AIP") for all management level employees
provides for awards to be determined and paid after the end of the year being
measured. Payment of annual incentives is based on the achievement of
performance targets that are established at the beginning of each year. Each AIP
participant's annual incentive is calculated according to the achievement of
corporate, business unit and individual performance results. The Committee
approved annual incentive payments based on 1999 results for the officers and
AIP eligible employees in accordance with this program. Payments for 1999
results for each of the named executive officers are indicated in the Annual
Incentive column of the Summary Compensation Table on page 11. Incentive
payments for 1997 were made by Bestfoods for results prior to the spin-off.
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LONG-TERM INCENTIVES
The Company's long-term incentive program for its officers and selected
senior executives consists of non-qualified stock options and cash. The combined
value is targeted at the 50th percentile long-term incentive compensation of the
Survey Group. Non-qualified stock options are awarded under the Company's 1998
Stock Incentive Plan while the cash portion is awarded under the Performance
Plan, which is described herein. Non-qualified stock options awarded to officers
and selected senior executives have a ten-year term and vest 50% per year at the
end of years one and two. Options awards for each of the named executive
officers are identified in the Option Grants Table on page 12.
Other management personnel are awarded non-qualified stock options. The
number of options awarded is based on an individual's salary grade and
performance. These options also have a ten-year term and vest 50% per year at
the end of years one and two.
The Performance Plan (the "Plan") has been established to provide long-term
cash incentives. The Plan is designed to provide the opportunity to achieve
competitive long-term incentives for the attainment of long-term performance
targets. For 1999, the performance target is the Company's total shareholder
return compared to the total shareholder return of companies in the S&P Small
Cap Basic Materials Index. This index is utilized for comparison because the
Company is included in this index. The Company represents an important
percentage of this index's total market capitalization and the number of
companies in this index makes percentile comparisons meaningful. The Committee
reviews the performance measures under this Plan and may establish new measures
as necessary or appropriate. The Plan provides for contingent long-term cash
incentive awards to be earned based on the achievement of predetermined targets
for relative stock price performance over a three-year period. Up to one-third
of the cash incentive award can be earned in year one (based upon performance
for that year), up to two-thirds for year two (based on the cumulative
performance over the two-year period) and up to 100% for year three (based on
the cumulative performance over the three-year period). Cash earned and vested
in years one and two cannot together exceed the cash incentive that can
potentially be earned at the 100% target level for the entire three-year period.
However, the opportunity exists to double the total cash incentive award if the
Company's cumulative three-year performance is at the maximum level. Cash
amounts vest as they are earned but are not payable until after the end of year
three. The contingent cash awards that were granted to each of the named
executive officers in January 1999 are identified in the Long-Term Incentive
Plans Table on page 13.
STOCK OPTIONS AND RESTRICTED STOCK GRANTS
During 1999, the Committee awarded 142,000 non-qualified stock options to
12 Company officers and 13,500 restricted stock grants to 2 Company officers.
The option award amounts were established utilizing 50th percentile competitive
market data of the Survey Group. In addition 271,000 stock options and 37,020
restricted stock grants were granted in 1999 to another 153 management level
employees. These options have an exercise price equal to the fair market value
of a share of Company common stock on the grant date. The size of the grants was
based upon the level of responsibility and individual performance. The total
number of non-qualified stock options and restricted stock grants awarded in
1999 was 463,520 or 13.2% of the shares authorized for distribution under the
Company's 1998 Stock Incentive Plan.
EXECUTIVE STOCK OWNERSHIP TARGETS
The Committee has established stock ownership targets for the officers of
the Company. The ownership targets for the officer group are based on multiples
of each individual's base salary. For purposes of these targets, "ownership" is
defined as stock directly owned, restricted stock grants and the stock
equivalents of deferred accounts referred to in footnote 2 to the Security
Ownership Table on page 6. "Ownership" excludes unexercised stock options.
Officers are expected to attain their ownership targets within three to five
years from the time the established targets became applicable. The ownership
target for the Chief Executive Officer is five times base salary. Currently, he
owns stock equivalent in value to approximately 5 times his base salary.
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COMPENSATION FOR 1999
In fulfilling its responsibility to oversee the performance of the Chief
Executive Officer and other officers, the Board has adopted the following
practices:
- At the beginning of each year, the Board, meeting in executive
session, reviews the performance of the Company and the performance of the
officer group.
- In the absence of the Chief Executive Officer, the outside directors
review his performance including: his leadership in the development and
implementation of strategies, leadership pertaining to business execution,
the development of a succession plan and his ability to maintain an
organization which represents the highest ethical standards and corporate
governance practices.
Actions concerning executive compensation at the beginning of 1999 were
based on the Company's strong financial recovery. In 1998, Earnings Per Share
and operating income improved fourfold and the balance sheet showed strength
with a debt/capitalization ratio of 27.7%. In 1999, Earnings Per Share increased
by 73% and operating income improved by 93% and the debt/capitalization ratio
remained strong at 27.8% even though the Company invested $271 million in
capital expenditures and acquisitions. Also in 1999, management was successful
in increasing profit margins, completing accretive acquisitions and managing the
effect of currency fluctuations and other macro-economic difficulties
successfully.
Based on these results, and the Committee's consideration of the Chief
Executive Officer's time in position, salary relative to the Company's salary
grade midpoint and individual performance, the Committee approved an annualized
increase of 11%, effective February 1, 1999, for Mr. Schlatter, adjusting his
annual base salary compensation to $560,000.
The Committee awarded Mr. Schlatter an annual cash incentive award of
$500,000 based on the effectiveness of his leadership and in recognition for the
results of 1999 that were achieved despite a highly competitive environment in
the US market and significant economic pressures in the Company's South American
markets. Annual incentive awards to the other named executive officers were
based on their contributions to the corporate, business unit and individual
performance. These awards are shown in the Bonus column of the Summary
Compensation Table on page 11.
The Committee granted Mr. Schlatter 45,000 non-qualified stock options in
January 1999. The amount of the award was established according to competitive
market data and the Company's long-term incentive program described above.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Committee intends to comply with the requirements of Section 162(m) of
the Internal Revenue Code of 1986, as amended (the "Code"), with respect to
options, annual incentives and long-term incentive plans in order to avoid
losing the tax deduction for compensation in excess of $1,000,000 paid to one or
more of the executive officers named on the Summary Compensation Table. The
Committee expects that the Company will not lose any tax deductions due to this
rule in 2000, subject to the approval by the stockholders of the two
compensation plan proposals to be acted upon at the Annual Meeting.
COMPENSATION AND NOMINATING COMMITTEE
R. G. HOLDER, CHAIRMAN
R. M. GROSS
W. S. NORMAN
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EXECUTIVE COMPENSATION
The following table summarizes the compensation awarded or paid to the
chief executive officer and each of the four other most highly compensated
executive officers of the Company (collectively, the "named executive officers")
during each of the last three fiscal years. The Company began operating as an
independent, publicly held company on January 1, 1998, as a result of its
spin-off from Bestfoods (formerly "CPC International Inc.") effective on that
date. For all compensation in 1997 and for the Long-Term Incentive Payouts in
both 1998 and 1999, the compensation shown in this table was paid by Bestfoods
(or its subsidiaries) for services rendered to Bestfoods and its subsidiaries
prior to the spin-off. The Company paid all other compensation.
- --------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE (1)
- --------------------------------------------------------------------------------
ANNUAL
COMPENSATION LONG-TERM COMPENSATION
----------------- ----------------------------------------
AWARDS PAYOUTS
----------------------- --------------
RESTRICTED SECURITIES LONG-TERM ALL OTHER
SALARY BONUS STOCK UNDERLYING INCENTIVE COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) AWARDS ($) OPTIONS # PAYOUTS ($)(2) ($)(3)
- --------------------------- ---- ------- ------- ---------- ---------- -------------- ------------
K. Schlatter.............. 1999 550,000 500,000 -- 45,000 74,482
Chairman and Chief 1998 500,000 175,000 -- 166,000 107,904
Executive Officer 1997 435,000 150,000 -- 13,500 1,103,047 106,908
S. C. Scott............... 1999 398,333 255,000 -- 23,000 45,205
President and Chief 1998 375,000 110,000 -- 118,000 68,540
Operating Officer 1997 305,000 35,000 -- 13,500 735,398 64,255
E. J. Northacker.......... 1999 270,000 144,000 -- 10,000 35,606
former Vice President 1998 270,000 52,000 -- 60,000 44,326
and President, 1997 245,000 50,000 -- 8,000 571,988 51,894
Latin American Division
M. R. Pyatt............... 1999 227,500 205,000 218,750(4) 10,000 -- 30,232
Executive Vice President, 1998 210,000 50,000 -- 47,000 -- 30,872
North American Division 1997 185,417 15,000 -- -- -- 16,299
J. W. Ripley.............. 1999 262,500 154,000 -- 11,000 34,507
Vice President - Finance 1998 248,333 66,000 -- 53,000 45,093
and Chief Financial Officer 1997 217,500 72,000 -- 5,000 -- 41,809
- ---------------
(1) For 1997, Bestfoods (or its subsidiaries) paid the compensation shown in
this table for services rendered to Bestfoods and its subsidiaries prior to
the spin-off.
(2) For the long-term incentive cycles ending in each of 1998 and 1999,
respectively, Long-Term Incentive Payouts were paid by Bestfoods (or its
subsidiaries) for services rendered to Bestfoods and its subsidiaries prior
to the spin-off as follows: K. Schlatter, $660,620 and $660,620; S. C.
Scott, $587,378 and $587,378; E. J. Northacker, $381,024 and $381,024; and
J. W. Ripley, $140,026 and $140,026.
(3) Includes the following for 1999:
a. Matching contributions to defined contribution plans as follows: K.
Schlatter, $9,600; S. C. Scott, $9,413; E. J. Northacker, $8,520; M.
R. Pyatt, $9,600; and J. W. Ripley, $9,600.
b. Value of premiums paid by the Company under the Executive Life
Insurance Plan as follows: K. Schlatter, $64,882; S. C. Scott,
$33,933; E. J. Northacker, $24,887; M. R. Pyatt, $20,632; and J. W.
Ripley, $24,093.
c. For S. C. Scott, $1,859; E. J. Northacker, $2,199; and J. W. Ripley,
$814 of above-market interest at the rate credited to all
participants in a deferred compensation plan, pursuant to which all
or a portion of annual bonus may be deferred and credited to an
interest bearing account and paid over a fifteen-year period
following retirement.
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(4) Represents the value of 7,000 shares of Restricted Stock of the Company on
the date of the award. As of December 31, 1999, the value of these shares of
Restricted Stock was $229,250. Restrictions lapse on one-third of the shares
awarded on each of the second, fourth and fifth anniversaries of the date of
the award. Dividends are paid on the shares of Restricted Stock of the
Company at the rate paid to all stockholders.
STOCK OPTION GRANTS
The following table contains information relating to the Company's stock
options granted to the named executive officers in 1999. All option grants were
made at the fair market value of the Company's common stock on the date of the
grants. No stock appreciation rights were awarded either singly or in tandem
with the granted options.
- --------------------------------------------------------------------------------
OPTION GRANTS IN 1998
- --------------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR OPTION
INDIVIDUAL GRANTS TERM(1)
- ------------------------------------------------------------------------------ ------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES IN PRICE EXPIRATION 0% 5% 10%
NAME GRANTED(#)(2) 1998 ($/SHARE) DATE ($) ($) ($)
---- ------------- ------------- --------- ---------- ---- ---------- ----------
K. Schlatter......... 45,000 10.90 26.875 1/20/09 0 760,569 1,927,432
S. C. Scott.......... 23,000 5.57 26.875 1/20/09 0 388,735 985,132
E. J. Northacker..... 10,000 2.42 26.875 1/20/09 0 169,015 428,318
M. R. Pyatt.......... 10,000 2.42 26.875 1/20/09 0 169,015 428,318
J. W. Ripley......... 11,000 2.66 26.875 1/20/09 0 185,917 471,150
- ---------------
(1) The amounts shown under these columns are calculated at 0% and at the 5% and
10% rates set by the SEC and are not intended to forecast future
appreciation of the Company's common stock price.
STOCK OPTION EXERCISES
The following table contains information concerning the exercise of the
Company's stock options by each of the named executive officers in 1999 and the
value of unexercised stock options held by each of them at the end of 1999.
- --------------------------------------------------------------------------------
AGGREGATED OPTION EXERCISES IN 1999 AND OPTION VALUES AT DECEMBER 31, 1999
- --------------------------------------------------------------------------------
NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
DECEMBER 31, 1999(#) DECEMBER 31, 1999($)(2)
--------------------- -----------------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
ON EXERCISE(#) REALIZED($)(1) UNEXERCISABLE UNEXERCISABLE
--------------- -------------- --------------------- -----------------------
K. Schlatter................ 1,534 7,993 154,740/155,667 1,241,875/312,792
S. C. Scott................. -- -- 103,153/101,667 784,057/169,542
E. J. Northacker............ -- -- 60,346/ 50,000 507,488/ 76,250
M. R. Pyatt................. -- -- 30,019/ 41,334 154,422/ 72,459
J. W. Ripley................ -- -- 35,608/ 46,334 192,198/ 80,084
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- ---------------
(1) Amounts shown are based on the difference between the market value of the
Company's common stock on the date of exercise and the exercise price.
(2) Amounts shown are based on the difference between the closing price of the
Company's common stock on December 31, 1999 ($ 32.75) and the exercise
price.
LONG-TERM INCENTIVES
The Company's long-term incentive program for its officers and selected
senior executives consists of both non-qualified stock options and cash awards.
The combined value of the awards for each program participant is targeted at the
50th percentile long-term compensation of the Survey Group referenced in the
Compensation and Nominating Committee Report on Executive Compensation.
Non-qualified stock options are awarded under the Company's 1998 Stock Incentive
Plan while the cash portion is awarded under the Company's Performance Plan.
Option awards for each of the named executive officers are identified in the
Option Grants Table appearing on page 12. A detailed explanation of the cash
award portion of the long-term incentive program is contained in the Long-Term
Incentives section of the Compensation and Nominating Committee Report on
Executive Compensation that appears beginning on page 8. The following table
contains information relating to the Company's long-term incentive plan cash
awards made to the named executive officers in 1999.
- --------------------------------------------------------------------------------
LONG-TERM INCENTIVE PLANS - AWARDS IN 1999
- --------------------------------------------------------------------------------
ESTIMATED FUTURE PAYOUTS
NUMBER OF PERFORMANCE OR UNDER NON-STOCK PRICE-BASED PLANS
SHARES, UNITS OTHER PERIOD UNTIL -------------------------------------
OR OTHER MATURATION OR THRESHOLD TARGET MAXIMUM
NAME RIGHTS (#)(1) PAYOUT ($) ($) ($)
---- ------------- ------------------ --------- ------- ---------
K. Schlatter -- 1/1/99 - 12/31/01 236,618 579,000 1,158,000
S. C. Scott -- 1/1/99 - 12/31/01 120,557 295,000 590,000
E. J. Northacker -- 1/1/99 - 12/31/01 51,083 125,000 250,000
M. R. Pyatt -- 1/1/99 - 12/31/01 51,083 125,000 250,000
J. W. Ripley -- 1/1/99 - 12/31/01 59,257 145,000 290,000
- ---------------
(1) All awards made under the Company's Performance Plan are cash only and,
therefore, the reference to number of shares, units or other rights is not
applicable.
PENSION PLANS
The Company has a "cash balance" defined benefit pension plan which is a
tax-qualified plan within the meaning of Section 401(a) of the Code and which is
applicable to its U. S. salaried employees, including the named executive
officers. Accounts of participants in the plan accrue monthly interest credits
using a rate equal to a specified amount above the interest rate on short-term
Treasury notes. The value of a participant's account at retirement is paid out
either as a life or a joint and survivor annuity or in an optional form, such as
a lump sum. The Company also has a non-qualified supplemental retirement plan,
which provides benefits in addition to those payable under the qualified plan.
As of March 21, 2000, estimated annual combined benefits at age 65 for each of
the named executive officers under the qualified and supplemental plans are as
follows: K. Schlatter, $339,615; S. C. Scott, $271,422; E. J. Northacker,
$194,482; M. R. Pyatt, $88,361; and J. W. Ripley, $182,644.
DEFERRED STOCK UNIT PLAN
The Company's Deferred Stock Unit Plan allows the outside directors and
certain senior management employees to defer, in the form of the Company's
phantom stock units, all or part of their respective Board retainers or their
annual bonuses received for services rendered to Bestfoods and its subsidiaries
prior to the spin-off. The Company's phantom stock units credited to the
accounts of the named executive officers as of December 31, 1999 are indicated
in the middle column of the Security Ownership Table appearing on page 6.
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SPECIAL AGREEMENTS
The Company has a severance agreement with each of the named executive
officers. Each of the severance agreements provides for a lump sum payment equal
to three times the sum of the annual salary and bonus paid in the prior year and
the continuation of medical and insurance plans for a three-year period, if the
respective individual's employment is terminated, whether involuntarily other
than for cause or voluntarily for good reason, within two years after a change
of control of the Company. Each of the severance agreements also provides that
the amount of excise tax, if any, under the Code to be paid by the individual
upon receipt of a lump sum payment shall be reimbursed by the Company.
In order to assure continuity in the management of the Company's
international operations, the Company has an employment agreement with E. J.
Northacker, for a term that expired on January 31, 2000, which provides for
salary continuation for a period not to exceed one year following that date plus
continuation in certain benefit plans during the period of salary continuation.
Mr. Northacker retired effective as of January 31, 2000.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
A. C. DeCrane, Jr., W. C. Ferguson, R. G. Holder and W. S. Norman are also
directors of Bestfoods and B. H. Kastory is an executive officer of Bestfoods.
The Company and Bestfoods, or their respective local affiliates, are parties to
several agreements under which various selected corn-refining products are
purchased by Bestfoods or certain of its affiliates. These purchases are made
either pursuant to the extended master supply agreement existing between the
Company and Bestfoods at prices based generally at prevailing market conditions
or in accordance with separate agreements recently negotiated and entered into
by their respective local country affiliates. The terms of these agreements
range up to five years in some cases, with pricing and other conditions having
been negotiated separately by the respective affiliate's management in each
individual country. During 1999, the Company's total sales of products to
Bestfoods under the master supply agreement amounted to approximately $128
million.
I. Aranguren-Castiello is Chairman and Chief Executive Officer of
Arancia-Corn Products, S.A. de C.V. In January 2000, the Company acquired an
additional 10.9% indirect interest in Arancia-Corn Products from companies
controlled by Mr. Aranguren-Castiello and his family, bringing the Company's
total interest in Arancia-Corn Products to 90.0%. The Company paid approximately
$38 million plus 78,794 shares of Company common stock for the additional
interest. The Company also has an option to acquire, and companies controlled by
Mr. Aranguren-Castiello have an option to require the Company to acquire, the
remaining 10.0% interest in Arancia-Corn Products, at any time after June 2,
2000 but before December 31, 2003, for approximately $35 million plus interest
from December 2, 1998. A portion of that purchase price may be paid in shares of
the Company's common stock at the election of the Company. In connection with
these purchases and certain previously consummated purchases of interests in
Arancia-Corn Products, a company controlled by Mr. Aranguren-Castiello and his
family is also entitled to receive earnout payments in 2000, 2001 and 2002.
These earnout payments, in total, will not exceed $15 million and will not be
less than $9 million. In addition, the Company has agreed to nominate Mr.
Aranguren-Castiello, or a qualified nominee designated by his family, to the
Board as long as his family continues to hold at least 70.0% of their original
holdings of Company common stock received in the initial acquisition and such
holdings represent at least 2.5% of the total outstanding shares of the
Company's common stock. During 1999, the Company had $1.885 million in sales to
Arancia-Corn Products and paid to Arancia-Corn Products $3.233 million for goods
purchased by the Company. In the same period, the Company billed Arancia-Corn
Products approximately $964,000 for various engineering services, equipment
sales, container rentals and other charges, all in the ordinary course of
business. In connection with his service as Chairman and Chief Executive Officer
of Arancia-Corn Products, Mr. Aranguren-Castiello is paid an annual salary of
$486,000 plus bonuses, based on company and individual performance. He also
receives certain other benefits that are usual and customary in Mexico,
including holiday/vacation pay and incidental expenses. The incidental expenses
total approximately $21,000.
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MATTERS TO BE ACTED UPON
PROPOSAL 1. ELECTION OF DIRECTORS
The terms of four Class III directors are expiring at the Annual Meeting.
These four directors are nominated for reelection to hold office for a
three-year term expiring in 2003.
All of the nominees for election have consented to being named in this
proxy statement and to serve if elected. If, for any reason, any of the nominees
should not be a candidate for election at the Annual Meeting, the proxies will
be voted for substitute nominees designated by the Board unless it has reduced
its membership prior to the Annual Meeting. The Board does not anticipate that
any of the nominees will be unavailable to serve if elected. The nominees and
the directors continuing in office will normally hold office until the annual
meeting of stockholders in the year indicated on this and the following pages.
- --------------------------------------------------------------------------------
CLASS III NOMINEES FOR THREE-YEAR TERMS EXPIRING IN 2003
- --------------------------------------------------------------------------------
IGNACIO ARANGUREN-CASTIELLO
Age-- 69
Director since 1997
CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF ARANCIA CORN-PRODUCTS, S.A. DE C.V.
Mr. Aranguren-Castiello is Chairman and Chief Executive Officer of Arancia-Corn
Products, S.A. de C.V., a corporation formed in November 1994 by the combination
of the Mexican operations of the Corn Refining Business of Bestfoods with
Arancia Industrial, S.A. de C.V., a Mexican company controlled by Mr.
Aranguren-Castiello and his family. In a transaction which was consummated on
December 2, 1998, Corn Products International, Inc. acquired control of
Arancia-Corn Products, S.A. de C.V. and entered into certain agreements
providing for the acquisition of the remaining interest in the joint venture in
a series of transactions to occur over the next several years. Mr.
Aranguren-Castiello has been Chairman and Chief Executive Officer of Arancia
Industrial, S.A. de C.V. and its subsidiaries since the late 1970's. He is also
a director of Aranal, S.A. de C.V., Grupo Canada, S.A. de C.V. and Club de
Industriales de Jalisco, A.C.
- --------------------------------------------------------------------------------
RONALD M. GROSS
Age-- 66
Director since 1998
Member of the Compensation and Nominating and Corporate Responsibility
Committees
CHAIRMAN EMERITUS, FORMER CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF RAYONIER, INC.
Mr. Gross is Chairman Emeritus, former Chairman and Chief Executive Officer of
Rayonier, Inc., a global supplier of specialty pulps, timber and wood products.
He had been Chairman and Chief Executive Officer from 1994, when Rayonier was
spun off from ITT Corporation, until December 31, 1998. Previously, he served as
President, Chief Operating Officer and a director of ITT Rayonier Inc. from 1978
to 1981, and in addition, became Chief Executive Officer in 1981 and Chairman
from 1984 until 1994. He is also a director of Rayonier, Inc., the Pittston
Company and Fundacion Chile.
- --------------------------------------------------------------------------------
WILLIAM S. NORMAN
Age-- 61
Director since 1997
Member of the Compensation and Nominating and Corporate Responsibility
Committees
PRESIDENT AND CHIEF EXECUTIVE OFFICER OF THE TRAVEL INDUSTRY ASSOCIATION OF
AMERICA
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Mr. Norman has been President and Chief Executive Officer of the Travel Industry
Association of America since 1994. Previously, he served as Executive Vice
President of the National Railroad Passenger Corporation (AMTRAK) from 1987 to
1994. He is also a director of Bestfoods, Travel Industry Association of
America, The An-Bryce Foundation, U.S. Navy Memorial Foundation, International
Consortium for Research on the Health Effects of Radiation and the Logistics
Management Institute. He is also a member of the Board of Trustees of West
Virginia Wesleyan College and the Board of Visitors of the American University's
Kogod College of Business Administration.
- --------------------------------------------------------------------------------
CLIFFORD B. STORMS
Age-- 67
Director since 1997
Member of the Audit and Corporate Responsibility Committees
PRIVATE ATTORNEY
Mr. Storms was Senior Vice President (since 1988) and General Counsel (since
1975) of Bestfoods, a global producer of consumer food products, until his
retirement in June 1997. He is a director of Atlantic Legal Foundation, Inc. and
the Transportation Association of Greenwich, a member of the Executive Committee
of the Yale Law School Association, a past President of the Association of
General Counsel, and a member of the Panel of Arbitrators of the American
Arbitration Association Large Complex Case Program, the Alternate Dispute
Resolution Panel of the Center for Public Resources, the Association of the Bar
of the City of New York and the American Bar Association.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE NOMINEES FOR CLASS III
DIRECTORS.
- --------------------------------------------------------------------------------
CLASS I DIRECTORS CONTINUING IN OFFICE UNTIL 2001
- --------------------------------------------------------------------------------
WILLIAM C. FERGUSON
Age-- 69
Director since 1997
Chairman of the Audit Committee and member of the Corporate Responsibility
Committee
FORMER CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF NYNEX CORPORATION
Mr. Ferguson retired as Chairman of NYNEX Corporation, a provider of
telecommunication services, in 1995 and as Chief Executive Officer in 1994.
Prior thereto, Mr. Ferguson served as Vice Chairman of NYNEX from 1987 to 1989.
He is also a director of Bestfoods and EIRCOM and serves on the Advisory Board
of Greenwich Street Capital Partners. Mr. Ferguson is a trustee and former
Chairman of the Board of Trustees of Albion College.
- --------------------------------------------------------------------------------
BERNARD H. KASTORY
Age -- 54
Director since 1997
Member of the Corporate Responsibility Committee
SENIOR VICE PRESIDENT - ASIA, LATIN AMERICA AND BAKING OPERATIONS OF BESTFOODS
Mr. Kastory was appointed to his present position with Bestfoods, a global
producer of consumer food products, in March 1997. Previously he served as
Chairman and Chief Executive Officer of Bestfoods' Baking Business from 1995
until 1997, and prior thereto he served as President of its Corn Refining
Business and as a
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Vice President of Bestfoods since 1992. Mr. Kastory has held various technical,
financial and general management positions in Bestfoods, which he joined in
1967.
- --------------------------------------------------------------------------------
SAMUEL C. SCOTT
Age -- 55
Director since 1997
PRESIDENT AND CHIEF OPERATING OFFICER OF THE COMPANY
Prior to becoming the President and Chief Operating Officer of the Company in
1997, Mr. Scott was President of Bestfoods' worldwide Corn Refining Business
from 1995 to 1997 and President of its North American Corn Refining Business
from 1989 to 1997. He was elected a Vice President of Bestfoods in 1991. He is
also a director of Motorola, Inc., Reynolds Metals Company and Russell Reynolds
Associates.
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CLASS II DIRECTORS CONTINUING IN OFFICE UNTIL 2002
- --------------------------------------------------------------------------------
ALFRED C. DECRANE, JR.
Age -- 68
Director since 1997
Chairman of the Corporate Responsibility Committee and member of the Audit
Committee
FORMER CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF TEXACO INC.
Mr. DeCrane retired in 1996 as Chairman and Chief Executive Officer of Texaco
Inc., a manufacturer of gasoline and other petroleum-based products. He was
elected President of Texaco in 1983, Chairman of the Board in 1987 and Chief
Executive Officer in 1993. He is also a director of Bestfoods, CIGNA
Corporation, Harris Corporation, U.S. Global Leaders Growth Fund, Ltd. and
Co-Chairman of the United States -- Saudi Arabian Business Council. Mr. DeCrane
is also a member of the Morgan Stanley International Advisory Board and the
Board of Trustees of the University of Notre Dame.
- --------------------------------------------------------------------------------
GUENTHER E. GREINER
Age -- 61
Director since 1998
Member of the Audit and Corporate Responsibility Committees
PRESIDENT OF INTERNATIONAL CORPORATE CONSULTANCY LLC
Mr. Greiner formed International Corporate Consultancy LLC, a global
finance-consulting firm, upon his retirement from Citicorp/Citibank, N.A. in
April 1998. He joined Citibank Germany in 1965 and was appointed a vice
president in 1974. After successive assignments in Europe, North America, Africa
and the Middle East, he became an executive vice president of the World
Corporate Group in 1989 and senior group executive and executive vice president
of Citibank's Global Relationship Bank in 1995. He is also a director of
Ermenegildo Zegna, Electric Lightwave and IFIL-Finanziaria di Participazione. In
addition, he is a director of the New York Philharmonic, German American Chamber
of Commerce (New York) and AICG -- The John Hopkins University.
- --------------------------------------------------------------------------------
RICHARD G. HOLDER
Age -- 68
Director since 1997
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Chairman of the Compensation and Nominating Committee and member of the
Corporate
Responsibility Committee
FORMER CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF REYNOLDS METALS COMPANY
Mr. Holder retired in 1996 as Chairman and Chief Executive Officer of Reynolds
Metals Company, a manufacturer and processor of metal products. Previously, he
served as President and Chief Operating Officer of Reynolds Metals from 1988
until 1992. He is also a director of Bestfoods and Universal Corp. Mr. Holder is
a director of the Virginia Economic Development Partnership, the Science Museum
and past Chairman of the Greater Richmond Chamber of Commerce.
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KONRAD SCHLATTER
Age -- 64
Director since 1997
CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF THE COMPANY
Prior to becoming the Chairman and Chief Executive Officer of the Company in
1997, Mr. Schlatter served as Senior Vice President of Bestfoods from 1990 to
1997 and also as its Chief Financial Officer from 1993 to 1997.
- --------------------------------------------------------------------------------
PROPOSAL 2. APPROVAL OF THE ANNUAL INCENTIVE PLAN
GENERAL
On November 19, 1997, the Board unanimously approved the adoption of the
Company's short-term incentive cash compensation program, which it has
designated the Annual Incentive Plan (the "Annual Incentive Plan"), for selected
officers and other key employees of the Company and its subsidiaries, including
the named executive officers. The Annual Incentive Plan is being submitted to
the stockholders for approval of its material terms in order to enable the
compensation that is paid to each of the named executive officers under the
Annual Incentive Plan to qualify as "qualified performance-based compensation"
eligible for exclusion from the deduction limit under Section 162(m) of the Code
("Section 162(m)").
Section 162(m) generally limits to $1 million the amount that a publicly
held corporation is allowed to deduct each year for the compensation paid to
each of its named executive officers. However, "qualified performance-based
compensation" is not subject to the $1 million deduction limit. To qualify as
qualified performance-based compensation, certain criteria must be satisfied and
the material terms under which the compensation is to be paid, including the
performance goals, must be disclosed to, and approved by a separate majority
vote of, stockholders before the compensation is paid.
DESCRIPTION OF THE ANNUAL INCENTIVE PLAN
Administration.
The Annual Incentive Plan will be administered by the Compensation and
Nominating Committee of the Board (the "Committee") which currently consists of
three directors, each of whom is (i) a "Non-Employee Director" within the
meaning of Rule 16b-3 under the 1934 Act and (ii) an "outside director" within
the meaning of Section 162(m).
Subject to the express provisions of the Annual Incentive Plan, the
Committee has the authority to select officers and other key employees of the
Company, and its subsidiaries, who will receive annual incentive awards and to
determine all of the terms and conditions of each award. All annual incentive
awards are subject to such provisions not inconsistent with the Annual Incentive
Plan, as the Committee shall approve. The Committee also has authority to
prescribe rules and regulations for administering the Annual Incentive Plan
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and to decide questions of interpretation or application of any provision of the
Annual Incentive Plan. Except to the extent prohibited by law, the Committee may
delegate in writing some or all of its power and authority to administer the
Annual Incentive Plan to any person or persons.
Amendment.
The Committee may amend the Annual Incentive Plan at any time, subject to
any requirement of stockholder approval required by applicable law, rule or
regulation.
Annual Incentive Awards.
The Annual Incentive Plan provides for the grant of annual incentive
awards. Each annual incentive award is a right, contingent upon the attainment
of performance measures within a specified performance period, to receive
payment in cash of a specified amount. The maximum amount that may be paid to
any individual under any annual incentive award for any performance period shall
not exceed $2.5 million. The terms relating to the satisfaction of performance
measures in connection with an annual incentive award, or any cancellation or
forfeiture of such award upon termination of employment with the Company,
whether by reason of disability, retirement, death or other termination, shall
be determined by the Committee and communicated to the recipient of an annual
incentive award at the time the award is granted.
Performance Goals.
Under the Annual Incentive Plan, the payment of annual incentive awards
will be subject to the satisfaction of performance objectives established by the
Committee. If the Committee desires that compensation payable pursuant to any
award be "qualified performance-based compensation" within the meaning of
Section 162(m), the applicable performance measures (i) will be established by
the Committee no later than 90 days after the beginning of the performance
period (or such other time designated by the Internal Revenue Service), (ii)
will satisfy all other applicable requirements imposed under Treasury
Regulations promulgated under Section 162(m), including the requirement that
such performance measures be stated in terms of an objective formula or
standard, and (iii) will be based on one or more of the following business
criteria: net sales; pretax income before allocation of corporate overhead and
bonus; budget; cash flow; earnings per share; net income; division, group or
corporate financial goals; return on stockholders' equity; return on assets;
attainment of strategic and operational initiatives; appreciation in and/or
maintenance of the price of the Company's common stock or any other publicly
traded securities of the Company; market share; gross profits; earnings before
interest and taxes; earnings before interest, taxes, depreciation and
amortization; economic value-added models; total return to shareholders;
comparisons with various stock market indices; increase in number of customers;
and/or reductions in costs.
Performance Periods.
A performance period consists of one fiscal year of the Company.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of certain U.S. federal income tax
consequences generally arising with respect to awards under the Annual Incentive
Plan.
A participant receiving an annual incentive award will not recognize
taxable income upon the grant of such award and the Company will not be entitled
to a tax deduction at such time. Upon the payment of an annual incentive award
in cash, the participant will recognize ordinary income in an amount equal to
the cash paid by the Company. This amount is deductible by the Company as
compensation expense, except to the extent the deduction limits of Section
162(m) apply.
NEW ANNUAL INCENTIVE PLAN AWARDS
The following table sets forth the target awards that each of the following
is eligible to receive under the Annual Incentive Plan for fiscal 2000.
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TARGET DOLLAR
NAME AND POSITION VALUE($)
- ------------------------------------------------------------ -------------
K. Schlatter, Chairman and Chief Executive Officer 734,500
S. C. Scott, President and Chief Operating Officer 528,000
E. J. Northacker, former Vice President and President, Latin
American Division -
M. R. Pyatt, Executive Vice President, North American
Division 238,000
J. W. Ripley, Vice President - Finance and Chief Financial
Officer 255,000
All Executive Officers as a Group (12 persons) 3,034,000
All Non-Employee Directors as a Group (0 persons) -
All Employees as a Group (excluding Executive Officers) (375
persons) 4,820,000
THE BOARD RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE ANNUAL INCENTIVE PLAN.
- --------------------------------------------------------------------------------
PROPOSAL 3. APPROVAL OF THE PERFORMANCE PLAN
GENERAL
On November 19, 1997, the Board also unanimously approved the adoption of
the Company's long-term incentive cash compensation program, which it has
designated the Performance Plan (the "Performance Plan"), for selected officers
and other key employees of the Company and its subsidiaries, including the named
executive officers. The Performance Plan is being submitted to stockholders for
approval of the material terms in order to enable the compensation that is paid
to each of the named executive officers under the Performance Plan to qualify as
"qualified performance-based compensation" eligible for exclusion from the
deduction limit under Section 162(m) of the Code ("Section 162(m)").
Section 162(m) generally limits to $1 million the amount that a publicly
held corporation is allowed to deduct each year for the compensation paid to
each of its named executive officers. However, "qualified performance-based
compensation" is not subject to the $1 million deduction limit. To qualify as
qualified performance-based compensation, certain criteria must be satisfied and
the material terms under which the compensation is to be paid, including the
performance goals, must be disclosed to, and approved by a separate majority
vote of, stockholders before the compensation is paid.
DESCRIPTION OF THE PERFORMANCE PLAN
Administration.
The Performance Plan will be administered by the Compensation and
Nominating Committee of Board of Directors (the "Committee") which currently
consists of three directors, each of whom is (i) a "Non-Employee Director"
within the meaning of Rule 16b-3 under the 1934 Act and (ii) an "outside
director" within the meaning of Section 162(m).
Subject to the express provisions of the Performance Plan, the Committee
has the authority to select officers and other key employees of the Company, and
its subsidiaries, who will receive awards and to determine all of the terms and
conditions of each award. All awards are subject to such provisions not
inconsistent with the Performance Plan, as the Committee shall approve. The
Committee also has authority to prescribe rules and regulations for
administering the Performance Plan and to decide questions of interpretation or
application of any provision of the Performance Plan. Except to the extent
prohibited by law, the Committee may delegate in writing some or all of its
power and authority to administer the Performance Plan to any person or persons.
Change of Control.
In the event of certain acquisitions of 15% or more of the Company's common
stock, a change in a majority of the Board, or the consummation of a
reorganization, merger or consolidation or sale or disposition of all or
substantially all of the assets of the Company (unless, among other conditions,
the Company's
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stockholders receive 60% or more of the stock of the surviving company) or the
consummation of complete liquidation or dissolution of the Company, all
outstanding awards under the Performance Plan will be "cashed-out" by the
Company at the greater of (i) 100% of the target award percentage or (ii) the
award percentage based on performance as of the date of the change of control as
if such date were the last day of the performance period.
Amendment.
The Board may amend the Performance Plan at any time, subject to any
requirement of stockholder approval required by applicable law, rule or
regulation and provided that, without the participant's prior written consent,
no amendment may adversely affect any participant with respect to performance
periods that began before the date the amendment is adopted.
Performance Awards.
Each performance award is a right, contingent upon the attainment of
performance measures within a specified performance period, to receive payment
in cash of a specified amount. The maximum amount that may be paid to any
individual under any performance award for any performance period shall not
exceed $2.5 million. The terms relating to the satisfaction of performance
measures in connection with a performance award, or any cancellation or
forfeiture of such performance award upon termination of employment with the
Company, whether by reason of disability, retirement, death or other
termination, shall be determined by the Committee and communicated to the
recipient of a performance award at the time the award is granted.
Performance Goals.
Under the Performance Plan, the payment of performance awards will be
subject to the satisfaction of certain performance objectives. If the Committee
desires that compensation payable pursuant to any award be "qualified
performance-based compensation" within the meaning of Section 162(m), the
performance measures applicable to such award (i) will be established by the
Committee no later than 90 days after the beginning of the performance period
(or such other time designated by the Internal Revenue Service), (ii) will
satisfy all other applicable requirements imposed under Treasury Regulations
promulgated under Section 162(m), including the requirement that such
performance measures be stated in terms of an objective formula or standard, and
(iii) will be based on one or more of the following business criteria: net
sales; pretax income before allocation of corporate overhead and bonus; budget;
cash flow; earnings per share; net income; division, group or corporate
financial goals; return on stockholders' equity; return on assets; attainment of
strategic and operational initiatives; appreciation in and/or maintenance of the
price of the Company's common stock or any other publicly traded securities of
the Company; market share; gross profits; earnings before interest and taxes;
earnings before interest, taxes, depreciation and amortization; economic
value-added models; total return to shareholders; comparisons with various stock
market indices; increase in number of customers; and/or reductions in costs.
Performance Periods.
A performance period consists of three fiscal years of the Company. The
first performance period began January 1, 1999.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of certain U.S. federal income tax
consequences generally arising with respect to awards under the Performance
Plan.
A participant receiving a performance award will not recognize taxable
income upon the grant of such award and the Company will not be entitled to a
tax deduction at such time. Upon the payment of a performance award in cash, the
participant will recognize ordinary income in an amount equal to the cash paid
by the Company. This amount is deductible by the Company as compensation
expense, except to the extent the deduction limits of Section 162(m) apply.
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NEW PERFORMANCE PLAN AWARDS
The following table sets forth the target awards that each of the following
is eligible to receive under the Performance Plan for the three-year performance
period beginning January 1, 1999.
TARGET DOLLAR
NAME AND POSITION VALUE($)
- ------------------------------------------------------------ -------------
K. Schlatter, Chairman and Chief Executive Officer 579,000
S. C. Scott, President and Chief Operating Officer 295,000
E. J. Northacker, former Vice President and President, Latin
American Division 125,000
M. R. Pyatt, Executive Vice President, North American
Division 125,000
J. W. Ripley, Vice President - Finance and Chief Financial
Officer 145,000
All Non-Employee Directors as a Group (0 persons) --
All Employees as a Group (including Executive Officers) (13
persons) 1,832,000
THE BOARD RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE PERFORMANCE PLAN.
- --------------------------------------------------------------------------------
PROPOSAL 4. RATIFICATION OF APPOINTMENT OF AUDITORS
The Board, in accordance with the recommendation of its Audit Committee,
has appointed KPMG LLP ("KPMG") as independent auditors of the Company's
operations in 2000, subject to ratification by the stockholders. The Company has
engaged KPMG as its independent auditors since the spin-off of the Company from
Bestfoods. Representatives of KPMG are expected to attend the Annual Meeting and
will be available to respond to appropriate questions and to make a statement if
they so desire. KPMG also performs certain non-audit services for the Company.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL.
- --------------------------------------------------------------------------------
OTHER MATTERS
We do not know of any other matters or items of business to be presented or
acted upon at the Annual Meeting. If other proposals are properly presented,
each of the persons named in the proxy card is authorized to vote on them using
his or her best judgment.
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Proposals of stockholders that are intended to be presented at the 2001
annual meeting and that a stockholder wishes to be included in the Company's
proxy statement for that meeting, which is expected to be held on or about
Wednesday, May 16, 2001, must comply with certain rules and regulations
promulgated by the SEC. The deadline for submitting any such proposal (which is
otherwise in compliance with those rules and regulations) to the Company for
inclusion in the proxy statement for the 2001 annual meeting of stockholders is
November 28, 2000.
Under the Company's By-laws, a stockholder may present at the 2001 annual
meeting of stockholders any other business, including the nomination of
candidates for director, only if the stockholder has notified the Company's
Corporate Secretary, in writing, of the business or candidates not earlier than
90 days, expected to be about February 15, 2001, and not later than 60 days,
expected to be about March 17, 2001, before the timely disclosed date of the
2001 annual meeting. There are other procedural requirements in the Company's
By-laws pertaining to stockholder nominations and proposals. Any stockholder of
the Company may receive a current copy of the Company's By-laws, without charge,
by writing to the Corporate Secretary.
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ADDITIONAL INFORMATION
If you plan to attend the Annual Meeting, please check the box on your
proxy card and indicate the number of persons who will attend.
The 1999 annual report to stockholders accompanies this proxy statement. If
you receive more than one annual report at your address and you wish to reduce
the number of annual reports you receive, please mark the Discontinue Annual
Report Mailing box in the Special Action area on the accompanying proxy card.
The Company files annual, quarterly and special reports, proxy statements
and other information with the SEC as required. SEC filings are generally
available to the public from commercial document retrieval services and on the
Internet web site maintained by the SEC at www.sec.gov. You may also read and
copy any reports, statements or other information that are filed at the SEC's
public reference rooms in Washington, DC, New York, New York and Chicago,
Illinois. Please call the SEC at 1-800-SEC-0300 for further information on the
public reference rooms. The Company also files certain reports and other
information with the NYSE, on which the Company's common stock is traded. Copies
of such material can be inspected at the offices of the NYSE, 20 Broad Street,
New York, New York 10005.
The SEC allows the Company to "incorporate by reference" information into
this proxy statement, which means that the Company can disclose important
information to you by referring you to another document filed separately with
the SEC. The information incorporated by reference is deemed to be part of this
proxy statement, and information that is filed later by the Company with the SEC
will automatically update and supersede this information. The Company
incorporates by reference the documents listed below and any future filings made
with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the 1934 Act.
THE COMPANY FILINGS (FILE NO. 1-13397) PERIOD
-------------------------------------- ------
Annual Report on Form 10-K.............. Fiscal Year Ended December 31, 1999.
Current Report on Form 8-K.............. Dated August 27, 1999.
You may request a copy of these filings, at no cost, by writing or
telephoning the Corporate Secretary of the Company at the following address or
number:
Corn Products International, Inc.
Attention: Corporate Secretary
6500 South Archer Avenue
Bedford Park, Illinois 60501-1933
Telephone: 708-563-2400.
PLEASE COMPLETE THE ACCOMPANYING PROXY CARD AND MAIL IT IN THE ENCLOSED,
POSTAGE-PAID ENVELOPE AS SOON AS POSSIBLE.
By order of the Board of Directors,
LOGO
Marcia E. Doane
Vice President, General Counsel
and Corporate Secretary
March 28, 2000
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P
R CORN PRODUCTS INTERNATIONAL, INC.
O
X PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
Y THE COMPANY FOR ANNUAL MEETING ON MAY 17, 2000
The undersigned hereby appoints KONRAD SCHLATTER and MARCIA E. DOANE, as
Proxies, each with the power to appoint his or her substitute, and hereby
authorizes each of them to represent and to vote, as designated on the reverse
side hereof, all the shares of common stock of Corn Products International, Inc.
which the undersigned is entitled to vote at the annual meeting of stockholders
to be held at the Four Points Hotel by Sheraton, Chicago/O'Hare Airport, 10249
W. Irving Park Road, Schiller Park, Illinois, on May 17, 2000 at 9:30 a.m.,
local time, and at any postponement or adjournment thereof, and, in their
discretion, upon any other matters which may properly come before the meeting.
Election of four Directors, each (change of address)
for a term of three years.
Nominees:
Ignacio Aranguren-Castiello -------------------------------------
Ronald M. Gross -------------------------------------
William S. Norman -------------------------------------
Clifford B. Storms -------------------------------------
(If you have written in the above
space, please mark the corresponding
box on the reverse side of this card)
RECYCLED LOGO [SEE REVERSE SIDE]
- --------------------------------------------------------------------------------
/\ FOLD AND DETACH HERE /\
IMPORTANT: PLEASE VOTE AND SIGN YOUR
PROXY AND RETURN IT IN THE ENVELOPE PROVIDED
29
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. If no direction is made, this proxy will be voted
FOR Proposals 1, 2, 3 and 4.
- ----------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3 AND 4.
- ----------------------------------------------------------------------------------------------------------------------------------
FOR WITHHELD FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
1. Election of [ ] [ ] 2. Approval of the Annual [ ] [ ] [ ] 4. Appointment of KPMG [ ] [ ] [ ]
Directors Incentive Plan LLP as Independent
(see reverse) Auditors
For, except vote withheld from
the following nominee(s):
3. Approval of the [ ] [ ] [ ]
Performance Plan
- ---------------------------- SPECIAL ACTION
Discontinue Annual Report [ ] Change of [ ]
Mailing for this Account Address on
Reverse Side
Admission Ticket [ ]
Request No. of
Persons
--------
Please date, sign exactly as name appears hereon and
return promptly in the enclosed envelope. When shares
are held by joint tenants, both should sign. When
signing as attorney, executor, administrator, trustee
or guardian, please give full title as such. If a
corporation, please sign in full corporate name by
president or other authorized officer. If a
partnership, please sign in partnership name by
authorized person.
-----------------------------------------------------
-----------------------------------------------------
SIGNATURE (S) DATE
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/\ FOLD AND DETACH HERE /\