UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
SCHEDULE
14A
(RULE
14A-101)
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant To Section 14(a) of
the
Securities Exchange Act Of 1934
Check
the
appropriate box:
| o |
Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|
| o |
Definitive
Additional Materials
|
| o |
Soliciting
Material Pursuant to Rule 14a-11(c) or
Rule 14a-12
|
DELTA
AND PINE LAND COMPANY
(Name
of
Registrant as Specified in Its Charter)
(Name
of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
| x |
No
fee required.
|
| o |
Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
|
| 1. |
Title
of each class of securities to which transaction
applies:
|
| 2. |
Aggregate
number of securities to which transaction
applies:
|
| 3. |
Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was
determined):
|
| 4. |
Proposed
maximum aggregate value of
transaction:
|
| 5. |
Total
fee paid:
|
| o |
Fee
paid previously with preliminary
materials:
|
o
Check
box if any part of the fee
is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the date of its
filing.
| 1. |
Amount
Previously Paid:
|
| 2. |
Form,
Schedule or Registration Statement
No.:
|
| 3. |
Filing
Party:
|
| 4. |
Date
Filed:
|
DELTA
AND PINE LAND COMPANY
ONE
COTTON ROW
SCOTT,
MISSISSIPPI 38772 USA
(662)
742-4000
December
29, 2006
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 Monday, February 19, 2007, at 10:00
AM,
Central Time, at the Memphis Marriott East, 2625 Thousand Oaks Blvd., Memphis,
Tennessee. All stockholders of record as of December 21, 2006, 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.
Please
note this meeting represents the regular Annual Meeting of the Stockholders
of
Delta and Pine Land Company. The Special Meeting of the Stockholders of Delta
and Pine Land Company regarding the approval of the Monsanto Transaction was
held on December 21, 2006.
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
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||
|
Jon
E. M. Jacoby
Chairman
of the Board
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||
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 FEBRUARY 19, 2007
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 Memphis Marriott East, 2625 Thousand Oaks Drive, Memphis, Tennessee,
on
Monday, February 19, 2007, at 10:00 AM, Central Time, for the following
purposes:
| 1. |
to
elect two Class II members to the Board of Directors to three-year
terms
expiring at the 2010 Annual
Meeting of Stockholders;
|
|
2.
|
to
ratify the appointment of the independent auditors for the fiscal
year
ending August 31, 2007; and
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| 3. |
to
transact such other business as may properly come before the meeting
or
any adjournments thereof.
|
The
accompanying Proxy Statement contains further information with respect to these
matters.
The
stockholders of record at the close of business on December 21, 2006, 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
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|
/s/
Jerome C. Hafter
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||
|
Jerome
C. Hafter
Secretary
|
||
December
29, 2006
DELTA
AND PINE LAND COMPANY
ONE
COTTON ROW
SCOTT,
MISSISSIPPI 38772
(662)
742-4000
PROXY
STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
February
19, 2007
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 at the Memphis Marriott
East, 2625 Thousand Oaks Drive, Memphis, Tennessee, on Monday, February 19,
2007, and at any adjournment or adjournments thereof. To assure adequate
representation at the Annual Meeting, stockholders are requested to promptly
sign, date and return the enclosed proxy or vote electronically via the Internet
or by telephone.
Any
stockholder giving a proxy has the power to revoke it at any time before it
is
voted. Revocation of a proxy is effective upon receipt by the Secretary of
the
Company of either: (i) an instrument revoking it or (ii) a duly-executed proxy
bearing a later date. In addition, a stockholder who is present at the meeting
may revoke the stockholder’s proxy and vote in person if the stockholder so
desires. Proxies furnished by stockholders pursuant hereto will be voted on
proposals properly introduced at the meeting and in elections; and, if the
person solicited specifies in the proxy a choice with respect to matters to
be
acted upon, the Shares will be voted in accordance with such specification.
If
no choice is specified, the proxy will be voted FOR
approval
of the nominees for directors, FOR the
ratification of the appointment of the independent auditors as described herein,
and in the discretion of the proxy holders with regard to such other business
as
may come before the meeting. Brokers who hold shares for the accounts of their
clients may vote these shares either as directed by their clients or in their
own discretion as permitted by the exchange or other organization of which
they
are members. Brokers will have discretionary authority to vote on the proposal
for the election of directors.
Stockholders
of record at the close of business on December 21, 2006, are entitled to vote
at
the meeting. The Proxy Statement and the accompanying form of proxy were mailed
on or about December 29, 2006, to all stockholders of record as of the close
of
business on December 21, 2006. The transfer agent, Illinois Stock Transfer,
will
tabulate the votes received prior to the meeting. The Secretary of the Company
and, Vice President - Chief Financial Officer 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 December 21, 2006, will constitute a quorum. At that
date,
approximately 36,497,132 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.
1
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 November 30, 2006, 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.
A
person’s beneficial ownership of common stock is determined in accordance with
the rules and regulations of the Securities and Exchange Commission. Except
as
indicated elsewhere in the footnotes to this table, the persons named in the
table have sole voting power and investment power with respect to the Shares
they beneficially own. In addition to the Shares held by each individual, shares
of restricted stock and shares of common stock that such person has the right
to
acquire as of November 30, 2006 or within 60 days thereafter (i.e., January
29,
2007), upon the exercise of options granted by the Company, have been included.
|
Shares
Beneficially Owned
|
|||||||
|
Name
of Beneficial Owner
|
Amount
of
Beneficial
Ownership
|
|
Percentage
Of
Class (1)
|
||||
|
Alson
Capital Partners LLC (2)
|
2,115,600
|
5.8
|
|||||
|
W.T.
Jagodinski (3)
(4)
|
515,651
|
1.4
|
|||||
|
Charles
R. Dismuke (3)
(5)
|
210,052
|
0.6
|
|||||
|
Stanley
P. Roth (6)
|
166,154
|
0.5
|
|||||
|
F.
Murray Robinson (7)
|
165,709
|
0.5
|
|||||
|
Jon
E. M. Jacoby (8)
|
165,163
|
0.5
|
|||||
|
Rudi
E. Scheidt (9)
|
145,766
|
0.4
|
|||||
|
Nam-Hai
Chua (10)
|
125,987
|
0.3
|
|||||
|
Joseph
M. Murphy (11)
|
114,241
|
0.3
|
|||||
|
R.
D. Greene (3)
(12)
|
112,712
|
0.3
|
|||||
|
William
V. Hugie (3)
(13)
|
69,896
|
0.2
|
|||||
|
James
H. Willeke (3)
(14)
|
19,418
|
0.1
|
|||||
|
All
Directors and Executive Officers as a Group
[20
persons] (15)
|
2,245,485
|
5.9
|
|||||
| (1) |
Based
on 36,473,176 Shares outstanding on November 30,
2006.
|
| (2) |
The
mailing address for Alson Capital Partners LLC is 810 7th
Ave Floor 39, New York, New York
10019.
|
|
(3)
|
The
mailing address for Messrs. Jagodinski, Dismuke, Greene, Willeke
and Hugie
is One Cotton Row,
Scott,
Mississippi 38772.
|
|
(4)
|
Includes
8,605 Shares owned beneficially by Mr. Jagodinski, and also includes
494,144 shares of common stock issuable upon exercise of stock
options
vested as of November 30, 2006, or within 60 days thereafter,
and 12,902
shares of restricted
stock.
|
|
(5)
|
Includes
53,096 Shares owned beneficially by Mr. Dismuke, and also includes
150,812
shares of common stock issuable upon exercise of stock options
vested as
of November 30, 2006, or within 60 days thereafter, and 6,144 shares
of
restricted stock.
|
2
| (6) |
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 24,969
Shares owned beneficially by Mr. Roth. Also includes 113,685
shares of
common stock issuable upon exercise of stock options vested
as of November
30, 2006, or within 60 days thereafter. The mailing address
for Mr. Roth
is 510 Broad Hollow Road, Suite 206, Melville, New York
11747.
|
| (7) |
Includes
38,000
Shares owned by a Charitable Remainder Unit Trust (“CRUT”) as to which Mr.
Robinson disclaims beneficial ownership, and 105,316 Shares
owned
beneficially by Mr. Robinson. Also includes 22,393 shares of
common stock
issuable upon exercise of stock options vested as of November
30, 2006, or
within 60 days thereafter. The mailing address for Mr. Robinson
is 1520
Woodruff Lane, Bloomington, Indiana
47401.
|
|
(8)
|
Includes
the following shares: 5,437 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 26,636 Shares
owned
beneficially by Mr. Jacoby. Also includes 104,796 shares of common
stock
issuable upon exercise of stock options vested as of November
30, 2006, or
within 60 days thereafter. The mailing address for Jacoby Enterprises,
Inc., and Mr. Jacoby is 111 Center Street, Little Rock, Arkansas
72201.
|
|
(9)
|
Includes
32,081 Shares owned beneficially by Mr. Scheidt. Also includes
113,685
shares of common stock issuable upon exercise of stock options
vested as
of November 30, 2006, or within 60 days thereafter. The mailing
address
for Mr. Scheidt is 54 South White Station Road, Memphis, Tennessee
38117.
|
|
(10)
|
Includes
10,666 Shares owned by Dr. Chua’s wife as to which Dr. Chua disclaims
beneficial ownership, and 1,636 Shares owned beneficially by
Dr. Chua.
Also includes 113,685 shares of common stock issuable upon
exercise of
stock options vested as of November 30, 2006, or within 60
days
thereafter. 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)
|
Includes
698 Shares owned by Mr. Murphy’s wife as to which Mr. Murphy disclaims
beneficial ownership, and 1,636 Shares owned beneficially by
Mr. Murphy.
Also includes 111,907 shares of common stock issuable upon
exercise of
stock options vested as of November 30, 2006, or within 60
days
thereafter. The mailing address for Mr. Murphy is 200 East
42nd
Street, 9th
Floor, New York, New York 10017.
|
|
(12)
|
Includes
3,664 Shares owned beneficially by Mr. Greene. Also includes 102,302
shares of common stock issuable upon exercise of stock options
vested as
of November 30, 2006, or within 60 days thereafter, and 6,746 shares
of
restricted stock.
|
|
(13)
|
Includes
2,243 Shares owned beneficially by Mr. Hugie. Also includes 65,046
shares
of common stock issuable upon exercise of stock options vested
as of
November 30, 2006, or within 60 days thereafter, and 2,607 shares
of
restricted stock.
|
|
(14)
|
Includes
839 Shares owned beneficially by Mr. Willeke. Also includes
17,321 shares
of common stock issuable upon exercise of stock options vested
as of
November 30, 2006, or within 60 days thereafter, and 1,258
shares of
restricted stock.
|
|
(15)
|
Includes
1,669,289 shares of common stock issuable upon exercise of
stock options
vested as of November 30, 2006, or within 60 days thereafter,
and 50,803
shares of restricted stock.
|
3
OFFICERS
OF THE COMPANY
|
Name
(Age)
|
Position
(1)
|
Offices
Held with Company;
Principal
Occupation for Past Five Years
|
||
|
W.
Thomas Jagodinski (50)
|
President,
Chief Executive Officer and Director
|
Mr.
Jagodinski has served as President and Chief Executive Officer
and
Director since September 2002 and as Executive Vice President from
June
2002 through August 2002. From September 2000 until June 2002,
he served
as Senior Vice President, Chief Financial Officer, Treasurer and
Assistant
Secretary and from March 2000 until September 2000 he served as
Senior
Vice President-Finance, Treasurer and Assistant Secretary. 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. (51)
|
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.
|
||
|
R.
D. Greene (36)
|
Senior
Vice President - International and Corporate Development
|
Mr.
Greene has served as Senior Vice President - International and
Corporate
Development since November 2005. Previously he served as Vice President
-
Finance, Treasurer and Assistant Secretary from June 2002 until
November
2005. From September 2000 until June 2002, he served as Vice President
-
Business Development and from 1997, when he joined D&PL, until
September 2000, Mr. Greene served as Director of International
Taxation
and Finance.
|
||
|
David
W. Albers (48)
|
Vice
President - Technical Services
|
Dr.
Albers has served as Vice President - Technical Services since
August
2006. From August 1999 to July 2006, he served as Regional Technical
Services Director. From February 1996 to August 1999, Dr. Albers
served as
Vice President - Agronomic Services, Paymaster Division. From 1994
to
1996, he was Product Development Manager at Hartz Seed, a subsidiary
of
Monsanto Company. Previously he served as Assistant Professor of
Agronomy
and Extension Cotton Specialist at University of Missouri from
1991 to
1994, and Area Extension Specialist from 1987 to
1991.
|
4
|
Kenneth
M. Avery (40)
|
Vice
President - Chief Financial Officer and Assistant
Secretary
|
Mr.
Avery has served as Vice President - Chief Financial Officer and
Assistant
Secretary since October 2006. Previously he served as Vice President
Finance, Treasurer and Assistant Secretary from December 7, 2005.
Prior to
joining the Company in December 2005, he served as Vice President
-
Controller for Eagle Materials, Inc. Mr. Avery served in the audit
division of Arthur Andersen from July 1990 to May 2002, being promoted
to
partner in 2001.
|
||
|
Harry
B. Collins (65)
|
Vice
President -Technology Transfer
|
Dr.
Collins has served as Vice President -
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 (53)
|
Vice
President - Field Production
|
Mr.
Dykes has served as Vice President - 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 (53)
|
Vice
President - International
|
Mr.
Fearday has served as Vice President - International since April
2003.
Prior to joining D&PL he served as 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 through 1999 he served as President of Advanta Seeds,
Inc., a
wholly owned subsidiary of Advanta USA, Inc.
|
||
|
Kater
D. Hake (54)
|
Vice
President - Technology Development
|
Dr.
Hake has served as Vice President - Technology Development since
May 2001.
From 1996 until May 2001, he served as International Division Vice
President - Technical Services. Prior to joining the Company in
1996, Dr.
Hake was an Associate Professor with Texas A&M University and Manager
of Cotton Physiology for the National Cotton Council of
America.
|
||
|
William
V. Hugie (47)
|
Vice
President - Research
|
Dr.
Hugie has served as Vice President - Research since 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.
|
5
|
Thomas
A. Kerby (62)
|
Vice
President - Special Projects
|
Dr.
Kerby has served as Vice President - Special Projects since August
2006.
From 1994 until August 2006, he served as Vice President - Technical
Services. From 1993, when he joined D&PL, to 1994, he served as
Director - Technical Services. Prior to joining the Company,
Dr. Kerby
served the cotton industry of California and the University of
California
as an Extension Cotton Agronomist.
|
||
|
Charles
V. Michell, Jr. (44)
|
Vice
President -Operations
|
Mr.
Michell has served as Vice President - Operations since September
2003.
From August 2001 until 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 (48)
|
Vice
President - Corporate Services
|
Ms.
Shackelford has served as Vice President - Corporate Services since
1997.
Ms. Shackelford has been employed by D&PL since 1994 and has held
various positions in the Company.
|
||
|
James
H. Willeke (62)
|
Vice
President - Sales and Marketing
|
Mr.
Willeke has served as Vice President - Sales and 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 (61)
|
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 since 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 29, 2006.
6
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 II Directors
were elected at the January 15, 2004 Annual Meeting to serve a term expiring
at
the 2007 Annual Meeting. Class III Directors were elected at the January 11,
2005 Annual Meeting to serve a term expiring at the 2008 Annual Meeting. Class
I
Directors were elected at the January 16, 2006 Annual Meeting to serve a term
expiring at the 2009 Annual Meeting.
The
Board
of Directors proposes the re-election of the two Class II Directors listed
below:
|
Name
(Year
First Elected a Director)
|
Offices
Held with the Company;
Principal
Occupation for Past Five Years
|
|
|
CLASS
II
|
||
|
Joseph
M. Murphy (1992)
|
Since February 1993, Mr. Murphy has been the Chairman of 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 71 years of age. | |
| Rudi E. Scheidt (1993) |
Since
1990, Mr. Scheidt has been a private investor. From 1973 to 1989,
he
served as President of Hohenberg Bros. Co., a worldwide cotton merchant,
headquartered in Memphis, Tennessee, and as its Chairman during 1990.
Mr.
Scheidt was Director Emeritus of National Commerce Financial Corporation,
a bank holding company, headquartered in Memphis, Tennessee until
December
2002. Mr. Scheidt also has extensive service as a trustee of several
substantial non-profit foundations and institutions. Mr. Scheidt
is 81
years of age.
|
7
|
CLASS
III
|
|
|
Jon
E. M. Jacoby (1992)
|
Mr. Jacoby has been the non-executive Chairman of the Company since September 2000 and 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. Mr. Jacoby is presently the Vice Chairman and Senior Principal of the Stephens Group, LLC, a private equity firm founded by Witt Stephens, Jr. and Elizabeth Stephens Campbell. Stephens Inc. and Stephens Group, Inc. are stockholders of D&PL. Mr. Jacoby is a director of Eden Bioscience Corp. and Power-One, Inc. He was a director of Beverly Enterprises, Inc. until May 24, 2001. Mr. Jacoby is 68 years of age. |
|
F.
Murray Robinson (2000)
|
Mr. Robinson has been a non-executive Vice Chairman of the Company since September 2002 and 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 72 years of age. |
|
CLASS
I
|
|
|
Nam-Hai
Chua (1993)
|
Dr.
Chua is the Andrew W. Mellon Professor and Head of the 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 62 years of
age.
|
8
|
W.
Thomas Jagodinski (2002)
|
See
the description of Mr. Jagodinski’s positions with the Company and
principal occupation under “Officers of the Company”.
|
|
Stanley P. Roth (1988)
|
Mr.
Roth has been a non-executive Vice-Chairman of the Company since
September
2000 and is the Chairman of North American Capital Corporation, a
private
merchant banking firm. In addition, Mr. Roth serves as the Chairman
of
Royal-Pioneer Industries, Inc., now Stamit, and a director of Hollis
Corporation and GPC International Inc. Mr. Roth previously served
as
Chairman of GPC International until 2001. From September 2002 until
April
2005, Mr. Roth served as a director of Polaroid Holding Company and
as a
member of their audit committee. Mr. Roth is a certified public accountant
with both public accounting and private industry experience. Mr.
Roth is
69 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,
Robinson, 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 II
DIRECTORS.
9
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, 2006 and its internal control over financial reporting as of August 31,
2006. 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, 2007. 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 2007, 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 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 2006 and 2005 consolidated financial
statements and the fees for other professional services billed during the
periods from September 1 to August 31, 2006 and 2005 are as
follows:
|
Type
of Fees
|
2006
|
2005
|
||||||
|
Audit
Fees (1)
|
$
|
524,500
|
$
|
589,000
|
||||
|
Audit-Related
Fees (2)
|
11,000
|
49,000
|
||||||
|
Tax
Fees (3)
|
10,000
|
9,000
|
||||||
|
All
Other Fees (4)
|
55,000
|
25,000
|
||||||
|
Total
|
$
|
600,500
|
$
|
672,000
|
||||
| (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 internal control over financial
reporting 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 the same international project
in
2006 and 2005.
|
10
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
2006.
THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THIS RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS.
11
THE
BOARD
OF DIRECTORS AND ITS COMMITTEES
Board
Meetings and Attendance of Directors
The
Board
of Directors had 10 meetings in fiscal 2006. 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 16,
2006. 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 non-employee member of the Audit Committee,
Nominating and Corporate Governance Committee, Technology Committee, and
Compensation Committee receives $10,000 for serving on each committee of the
Board of Directors, up to a maximum of $20,000 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. On May 18, 2005, under the 2006 Omnibus Stock Plan,
each non-employee director was granted options for 12,000 shares and 4,000
Restricted Stock Units. The Restricted Stock Units earn dividends payable in
the
form of additional Restricted Stock Units if dividends are paid on Delta and
Pine Land Stock during the term of the agreement. During fiscal 2006, each
non-employee director earned 57 additional Restricted Stock Units.
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 interim 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 interim 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.
|
12
| (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 each of the non-employee directors of the Company, Jon
E. M.
Jacoby, F. Murray Robinson, Stanley P. Roth, Joseph M. Murphy, Rudi E. Scheidt
and Nam-Hai Chua, meets these standards and is independent. In addition, all
non-employee Board committee members meet the applicable independence
requirements of the NYSE and applicable law.
13
Executive
Sessions of Non-Management Directors
The
Company’s independent Directors meet separately in executive session without the
employee Director or representatives of management at least twice each fiscal
year in accordance with the Company’s Corporate Governance Guidelines. The Board
determines which Director shall preside over the executive session without
management . At such time, the Board also designates an alternate Director
to
preside over such executive session. Any Director designated to preside over
an
executive session without management is 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 in
the
Corporate
Governance
section
under About
D&PL
or by
contacting Assistant Secretary, Delta and Pine Land Company, One Cotton Row,
Scott, Mississippi 38772.
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,
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 in
the
Corporate
Governance
section
under About
D&PL
or by
contacting Assistant Secretary, Delta and Pine Land Company, One Cotton Row,
Scott, Mississippi 38772. The Company will post any changes to the Code of
Business Conduct and Ethics on its website.
Committees
of the Board
The
Board
of Directors has an Audit Committee, Compensation Committee, Technology
Committee and Nominating and Corporate Governance Committee. Committee members
are elected by and serve at the discretion of the Board of
Directors.
Audit
Committee
The
members of the Audit Committee are Messrs. Murphy, Roth, Robinson and Scheidt.
Each of the committee members is independent as defined by the NYSE Listing
Standards. The Audit Committee met nine times during fiscal 2006. The
Committee:
|
·
|
reviewed
with the independent registered public accountants the scope of the
audit,
the auditors’ fees and related
matters;
|
|
·
|
received
the annual comments from the independent registered public accountants
on
accounting procedures and systems of
control;
|
|
·
|
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;
|
|
·
|
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;
|
14
|
·
|
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;
|
|
·
|
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; and
|
|
·
|
reviewed
compliance with laws, regulations, and internal procedures, and contingent
liabilities and risks that may be material to
D&PL.
|
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, 2006.
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, 2006, for filing with the Securities and
Exchange Commission.
| Stanley P. Roth | ||
| Joseph M. Murphy | ||
| Rudi E. Scheidt | ||
|
F.
Murray Robinson
|
15
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 five times during 2006. The
Compensation Committee reviews and approves annual compensation, including
bonuses, for senior management of the Company and administers the Company’s 1995
Long-Term Incentive Plan, as amended, and the 2005 Omnibus Stock Plan, including
the grant of options, restricted stock or restricted stock units 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 management, 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.
16
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 Presidents, (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 or her 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. 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
and
the other executive officers.
Stock
Awards
Awards
of
stock options and restricted stock for each executive officer and other key
employees are recommended by the Chief Executive Officer and must be approved
by
the Compensation Committee and are granted at the sole discretion of the
Committee. Based on an assessment of competitive factors and advice from
independent compensation consultants, 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, 2006, 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. 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. In August 2006, the Company also entered into
additional compensation arrangements with various officers of the Company as
described in the Executive Compensation section, including Mr. Jagodinski,
in
order to induce the executive to remain in our employ and to ensure his or
her
continued dedication and efforts without undue concern for his or her personal
financial and employment security.
| Compensation Committee | ||
| |
|
|
| Jon E. M. Jacoby | ||
| Joseph M. Murphy | ||
17
Technology
Committee
The
members of the Technology Committee are Messrs. Chua, Robinson and Jagodinski.
This Committee met once
during 2006.
The
Technology Committee reviews and monitors the Company’s research and scientific
initiatives in areas such as technological programs, molecular biology, and
agricultural biotechnology. The Technology Committee also investigates
significant emerging plant science and technology issues.
Nominating
and Corporate Governance Committee
The
Nominating and Corporate Governance Committee (the “Nominating Committee”)
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, Murphy, and
Robinson, each of whom meets the independence requirements of the NYSE. The
Nominating and Corporate Governance Committee met two times during
2006.
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:
| · |
character,
personal and professional ethics, integrity and
values;
|
| · |
executive
level business experience and
acumen;
|
| · |
relevant
business experience or knowledge (although preference may be shown
for
experience in or knowledge of the cotton industry, agribusiness,
molecular
biology or plant sciences, it is not a
prerequisite);
|
| · |
skills
and expertise necessary to make significant contributions to the
Company,
its Board and its stockholders;
|
| · |
business
judgment;
|
| · |
availability
and willingness to serve on the
Board;
|
| · |
independence
requirements of the NYSE;
|
| · |
potential
conflicts of interest with the Company or its stockholders taken
as a
whole; and
|
| · |
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:
| · |
proof
of the stockholder’s eligibility to submit proposals in accordance with
Rule 14a-8(b) of the Exchange Act of 1934, as
amended;
|
| · |
a
complete description of the candidate’s qualifications, experience and
background; and
|
| · |
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:
| · |
consider
whether the stockholder candidate will significantly add to the range
of
talents, skills and expertise of the
Board;
|
| · |
conduct
appropriate verifications of the background of the candidate;
and
|
| · |
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.
18
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
in
the
Corporate
Governance
section
under About
D&PL
or by
contacting Assistant Secretary, Delta and Pine Land Company, One Cotton Row,
Scott, Mississippi 38772.
19
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 $100 invested on August 31, 2001,
and the reinvestment of dividends.
20
EXECUTIVE
COMPENSATION
Following
are compensation related tables and information as required by the Securities
and Exchange Commission reflecting executive compensation for the fiscal year
ended August 31, 2006.
Annual
Compensation
The
following table sets forth certain information regarding compensation paid
to,
or accrued for, the Company’s Chief Executive Officer and the Company’s four
other most highly-compensated executive officers (the “Named Officers”) during
the year ended August 31, 2006:
Summary
Compensation Table
|
Annual
Compensation
|
Long
-Term Compensation
|
|||||||||||||||||||||
|
Name
and
Principal Position |
Year
|
Salary($)
|
Bonus($)
|
Other
Annual
Compensation($) (1) |
Restricted
Stock Awards($) (2) |
Securities
Underlying Options |
All
Other
Compensation($) (5) |
|||||||||||||||
|
W.
Thomas Jagodinski
|
2006
|
400,000
|
500,000
|
4,000
|
—
|
2,666
|
(4)
|
45,000
|
||||||||||||||
|
President
and
|
2005
|
348,000
|
420,000
|
2,000
|
568,351
|
151,307
|
(3)
|
44,000
|
||||||||||||||
|
CEO
|
2004
|
336,000
|
215,000
|
1,000
|
—
|
2,666
|
(4)
|
44,000
|
||||||||||||||
|
Charles
R. Dismuke, Jr.
|
2006
|
305,000
|
270,000
|
5,300
|
—
|
—
|
—
|
|||||||||||||||
|
Senior
Vice President
|
2005
|
265,000
|
235,000
|
3,800
|
270,643
|
70,812
|
(3)
|
—
|
||||||||||||||
|
2004
|
256,000
|
120,000
|
2,500
|
—
|
—
|
—
|
||||||||||||||||
|
R.
D. Greene
|
2006
|
255,000
|
250,000
|
1,800
|
47,120
|
13,000
|
(4)
|
—
|
||||||||||||||
|
Senior
Vice President -
|
2005
|
213,000
|
210,000
|
1,700
|
209,061
|
54,702
|
(3)
|
—
|
||||||||||||||
|
International
and
|
2004
|
206,000
|
105,000
|
1,000
|
—
|
—
|
—
|
|||||||||||||||
|
Corporate
Development
|
||||||||||||||||||||||
|
James
H. Willeke
|
2006
|
210,000
|
95,000
|
3,100
|
—
|
—
|
—
|
|||||||||||||||
|
Vice
President -
|
2005
|
203,000
|
83,000
|
2,800
|
55,424
|
31,823
|
(3)
|
—
|
||||||||||||||
|
Sales
and Marketing
|
2004
|
197,000
|
40,000
|
1,900
|
—
|
—
|
—
|
|||||||||||||||
|
William
V. Hugie
|
2006
|
200,000
|
105,000
|
1,100
|
—
|
—
|
—
|
|||||||||||||||
|
2005
|
193,000
|
92,000
|
1,200
|
114,838
|
30,046
|
(3)
|
—
|
|||||||||||||||
|
Research
|
2004
|
186,000
|
55,000
|
800
|
—
|
—
|
—
|
|||||||||||||||
| (1) |
These
amounts include items such as personal use of a company automobile,
group
term life insurance, moving expenses and/or taxable fringe
benefits.
|
|
(2)
|
On
May 18, 2005, the named officers were granted the following Restricted
Stock Awards: 21,504 shares for W. Thomas Jagodinski; 10,240 shares
for
Charles R. Dismuke, Jr.; 7,910 shares for R. D. Greene; 2,097 shares
for
James H. Willeke; and 4,345 shares for William V. Hugie. The closing
price
on May 18, 2005 was $26.43. On November 30, 2005, R.D. Greene was
granted
a Restricted Stock Award of 2,000 shares. The closing price on
November
30, 2005 as quoted by the NYSE was $23.56. Restricted Stock vest
as
follows: 40% of the shares vest on the day following the first
anniversary
date, 30% of the shares vest on the second anniversary date, and
the
remaining 30% of the shares vest on the third anniversary
date.
|
|
(3)
|
Stock
Options granted on May 18, 2005 vested 100% on July 2,
2005.
|
|
(4)
|
Options
granted in fiscal 2006 and fiscal 2004 vest 20% per annum commencing
on
the first day of the second and each succeeding year following
grant
date.
|
|
(5)
|
Director’s
and attendance fees for serving as a Director of the
Company.
|
21
Employment
Contracts and Change-In-Control Arrangements
We
have
entered into agreements with each of our executive officers that provide for
the
continuation of certain payments and benefits in order to induce the executive
to remain in our employ, and to ensure his or her continued dedication and
efforts without undue concern for his or her personal financial and employment
security.
Mr.
Jagodinski
On
August
25, 2006, we entered into an amended and restated employment agreement with
W.T.
Jagodinski, our President and Chief Executive Officer, which we refer to as
the
Amended Employment Agreement. The Amended Employment Agreement supersedes Mr.
Jagodinski’s prior restated employment agreement, dated September 1, 1997 and
modified on January 14, 1998, which we refer to as the Prior Employment
Agreement. The Amended Employment Agreement provides that if Mr. Jagodinski
is
employed by us at the time of a change in control or has been terminated by
us
in anticipation of a change in control, as those terms are defined in the
Amended Employment Agreement, then upon a change in control, Mr. Jagodinski
will
be entitled to receive (1) an amount equal to earned but unpaid base salary
plus
a pro rata portion of his highest bonus earned in any of the five prior fiscal
years, (2) an amount equal to three times base salary (determined at the time
of
the change in control) plus his highest bonus earned in any of the five prior
fiscal years, (3) an amount equal to 20% of the sum of base salary (determined
at the time of the change in control) plus his highest bonus earned in any
of
the five prior fiscal years for purposes of obtaining accounting services,
(4)
the value of the excess of Mr. Jagodinski’s benefit under our retirement plan if
he were to be credited with an additional three years of service and his actual
benefit at the time of the change in control, (5) continuation of health and
welfare benefits at our cost (in addition to the right to COBRA coverage) for
36
months following the date of the change in control, (6) continued use of a
company-provided cellular phone, secretarial assistance, voice mailbox, mail
drop service, laptop computer, email account and vehicle and continued coverage
under directors and officers liability insurance policy, for 36 months after
the
change in control and (7) the right to a cash payment in lieu of receiving
shares of our common stock for exercisable options that Mr. Jagodinski is
required to surrender.
Mr.
Jagodinski is entitled to receive a gross-up payment for any income or
employment taxes owed with respect to any payments or benefits received upon a
change in control such that the amount he retains after-tax is equal to the
amount he would have retained had no income or employment tax applied. Under
the
Amended Employment Agreement, the income and employment tax gross-up applies
to
all payments and benefits except payment of earned but unpaid base salary and
pro rata bonus and the payment of three times base salary plus his highest
bonus
earned in any of the five prior fiscal years. The Amended Employment Agreement
provides that Mr. Jagodinski is also entitled to receive a gross-up payment
with
respect to any excise taxes under Section 4999 of the Internal Revenue Code
of
1986, as amended, which we refer to herein as the Code, incurred with respect
to
any payments or benefits received from us such that the amount he retains
after-tax is equal to the after-tax amount he would have retained had no excise
tax applied.
In
order
to comply with Section 409A of the Code, all amounts payable under the Amended
Employment Agreement before January 1, 2007 will not be paid earlier than the
first business day after December 31, 2006.
The
Amended Employment Agreement provides that upon his termination of employment
for any reason on or following a change in control or in anticipation of a
change in control, Mr. Jagodinski will not compete against us for a period
of 18
months from the date of termination of employment. For purposes of the
non-competition covenant of the Amended Employment Agreement, Mr. Jagodinski
may
not engage or participate in, assist or have an interest in, whether as an
officer, director, partner, owner, employee or otherwise, the operation,
management or conduct of any business or enterprise that engages in the
cottonseed breeding, production and marketing process in the same geographical
area with any line of business in which we are now engaged.
Mr.
Greene
On
August
24, 2006, we entered into a severance protection agreement with R.D. Greene,
that provides that, if Mr. Greene is employed by us at the time of a change
in
control (as that term is defined in the agreement) or has been terminated by
us
in anticipation of a change in control, then upon a change in control, he will
be entitled to receive (1) a lump sum payment equal to (a) earned but unpaid
base salary plus a pro rata portion of his highest bonus earned in any of the
five prior fiscal years, (b) three times base salary (determined at the time
of
the change in control) plus his highest bonus earned in any of the five prior
fiscal years, (c) 30% of the sum of base salary (determined at the time of
the
change in control) plus his highest bonus earned in any of the five prior fiscal
years for purposes of obtaining accounting services, (d) the value of the excess
of his benefit under our retirement plan if he were to be credited with an
additional three years of service and his actual benefit at the time of the
change in control, and (2) for 36 months following the date of the change in
control, (a) continuation of health and welfare benefits, at our cost (in
addition to the right to COBRA coverage) and (b) continued use of
company-provided secretarial assistance, voice mailbox, laptop computer, email
account, mail drop service and vehicle.
22
Under
the
severance protection agreement, Mr. Greene is entitled to receive a gross-up
payment for any income or employment taxes owed with respect to the payment
made
with respect to his obtaining accounting services such that the amount he
retains after-tax is equal to the amount he would have retained had no income
or
employment tax applied. The severance protection agreement provides that Mr.
Greene is entitled to receive a gross-up payment with respect to any excise
taxes under Section 4999 of the Code incurred with respect to any payments
or
benefits received from us such that the amount he retains after-tax is equal
to
the after-tax amount he would have retained had no excise tax
applied.
Upon
termination of employment for any reason on or following a change in control
or
in anticipation of a change in control, the severance protection agreement
provides that Mr. Greene agrees not to compete against us for 18 months from
the
date of termination of employment. For purposes of this non-competition
covenant, Mr. Greene may not engage or participate in, assist or have an
interest in, whether as an officer, director, partner, owner, employee or
otherwise, the operation, management or conduct of any business or enterprise
that engages in the cottonseed breeding, production and marketing process in
the
same geographical area with any line of business in which we are now engaged
unless his new job duties do not require or allow him to directly engage in
activities that would violate those prohibitions and he does not violate his
contractual confidentiality obligations to our company.
Messrs.
Dismuke and Hugie
On
August
21 and 24, 2006, we entered into a severance protection agreement with each
of
Charles Dismuke, Jr. and William Hugie, respectively, that provides that, if
within 24 months of a change in control (as that term is defined in the
agreement), the respective executive’s employment is terminated by us without
“cause” and other than due to “disability” or death, or by the executive for
“good reason” (as those terms are defined in the agreement) or during the 30 day
period following the first anniversary of the change in control, the respective
executive will be entitled to receive (1) a lump sum payment equal to (a) earned
but unpaid base salary plus a pro rata portion of his highest bonus earned
in
any of the five prior fiscal years, (b) three times base salary (determined
at
the time of the change in control or, if greater, the date of termination of
employment) plus his highest bonus earned in any of the five prior fiscal years,
(c) $30,000 for purposes of obtaining outplacement services and (d) the value
of
the excess of the respective executive’s benefit under our retirement plan if he
were to be credited with an additional three years of service and his actual
benefit at the time of the termination, and (2) for 36 months following the
date
of termination of employment, (a) continuation of health and welfare benefits,
at our cost (in addition to the right to COBRA coverage) and (b) continued
use
of company-provided secretarial assistance, voice mailbox, laptop computer,
email account, mail drop service and vehicle.
The
severance protection agreements provide that Messrs. Dismuke and Hugie are
each
entitled to receive a gross-up payment with respect to any excise taxes under
Section 4999 of the Code incurred with respect to any payments or benefits
received from us such that the amount such executive retains after-tax is equal
to the after-tax amount each would have retained had no excise tax
applied.
If
Mr.
Dismuke or Mr. Hugie qualifies as a “specified employee” under Section 409A of
the Code, payments made to the respective executive under the applicable
severance protection agreement may be delayed for six months from the date
of
termination of employment.
If,
during the term of the applicable severance protection agreement and within
24
months of a change in control, Mr. Dismuke’s or Mr. Hugie’s employment is
terminated by us for disability, due to death or by the executive for other
than
good reason and other than during the thirty-day period following the first
anniversary of the change in control, the respective executive will receive
earned but unpaid base salary plus a pro rata portion of his highest bonus
earned in any of the five prior fiscal years. If either executive is terminated
by us for cause, such executive will only be entitled to earned but unpaid
base
salary.
23
Upon
termination of employment for any reason on or following a change in control
or
in anticipation of a change in control, the severance protection agreements
provide that each respective executive agrees not to compete against us for
18
months from the date of termination of employment. For purposes of the
non-competition covenant of the severance protection agreements, the respective
executive may not engage or participate in, assist or have an interest in,
whether as an officer, director, partner, owner, employee or otherwise, the
operation, management or conduct of any business or enterprise that engages
in
the cottonseed breeding, production and marketing process in the same
geographical area with any line of business in which we are now engaged unless
his new job duties do not require or allow him to directly engage in activities
that would violate those prohibitions and he does not violate his contractual
confidentiality obligations to our company.
Mr.
Willeke
On
August
24, 2006, we entered into a severance protection agreement with Mr. James H.
Willeke that provides that, if within 24 months of a change in control (as
that
term is defined in the agreement), his employment is terminated by us without
“cause” and other than due to “disability” or death, or by Mr. Willeke for “good
reason” (as those terms are defined in the agreement) or during the 30 day
period following the first anniversary of the change in control, he will be
entitled to receive (1) a lump sum payment equal to (a) earned but unpaid base
salary plus a pro rata portion of his highest bonus earned in any of the five
prior fiscal years, (b) one and one-half times the sum of base salary
(determined at the time of the change in control or, if greater, the date of
termination of employment) and his highest bonus earned in any of the five
prior
fiscal years, (c) $30,000 for purposes of obtaining accounting services and
(d)
the value of the excess of his benefits under our retirement plan if he were
to
be credited with an additional one and one-half years of service and his actual
benefit at the time of termination, and (2) continuation of health and welfare
benefits, at our cost for 24 months following the date of the termination (in
addition to the right to COBRA coverage) and continued use of a company-provided
vehicle for 18 months following the date of the termination.
The
severance protection agreement provides that he is entitled to receive a
gross-up payment with respect to any excise taxes under Section 4999 of the
Code
incurred with respect to any payments or benefits received from us such that
the
he retains after-tax is equal to the after-tax amount he would have retained
had
no excise tax applied.
If
he
qualifies as a “specified employee” under Section 409A of the Code, payments
made to him under the applicable severance protection agreement may be delayed
for six months after the termination of employment.
If,
during the term of the applicable severance protection agreement and within
24
months of a change in control, the employment of Mr. Willeke is terminated
by us
for disability, due to death or by the executive for other than good reason
and
other than during the 30 day period following the first anniversary of the
change in control, he will receive earned but unpaid base salary plus a pro
rata
portion of his highest bonus earned in any of the five prior fiscal years.
If he
is terminated by us for cause, he will only be entitled to earned but unpaid
base salary.
24
Option
Grants in Last Fiscal Year
The
only
options exercisable into securities of the Company are those outstanding under
the 1995 Long-Term Incentive Plan (the “1995 Plan”) and the 2005 Omnibus Stock
Plan (the “2005 Plan”). The Company granted options for 2,666 Shares under the
1995 Plan and 97,074 Shares under the 2005 Plan in 2006. All options granted
in
2006 under the 1995 Plan 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. Stock options granted in 2006 under the 2005 Plan vest 20%
per annum commencing on the first day of the second and each succeeding year
following each grant and expire seven years from the date of the grant. The
stock options granted in 2006 were granted at fair market value of the Company’s
common stock at the time of grant.
The
following table sets forth certain information concerning stock options granted
during 2006:
Option
Grants in 2006
|
Potential
Realized Value at
Assumed
Annual Rates of Stock
Price
Appreciation of Option
Term
(1)
|
|||||||||||||||||||
|
Name
|
Number
of
Securities
Underlying
Options
|
Percentage
of
Total
Options
Granted
to
Employees In
Fiscal
Year
|
Exercise
Price
|
Expiration
Date
|
5%
|
10%
|
|||||||||||||
|
W.
Thomas Jagodinski (2)
|
2,666
|
2.67
|
%
|
22.505
|
1/17/16
|
$
|
37,754
|
$
|
95,656
|
||||||||||
|
R.
D. Greene
|
13,000
|
13.03
|
%
|
23.600
|
11/30/12
|
$
|
124,807
|
$
|
290,940
|
||||||||||
| (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.
|
25
Options
Exercised in Last Fiscal Year
The
following table sets forth certain information concerning stock option exercises
during 2006 and unexercised options held as of August 31, 2006 for each of
the
Named Officers:
Aggregated
Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
|
(1)
|
Based
on $40.505 per Share, the August 31, 2006 market value as calculated
by
averaging the High and Low as quoted by the
NYSE.
|
Compensation
Pursuant to Plans
Pension
Plan
The
Company maintains a noncontributory defined benefit plan (the “Pension Plan”)
that covers substantially all full-time employees, including the Named Officers.
All employees of the Company and its domestic subsidiaries, who have both
attained age 21 and completed one year of eligible 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.
26
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
|
$
|
3,470
|
$
|
4,627
|
$
|
5,784
|
$
|
5,803
|
$
|
5,822
|
||||||
|
$
50,000
|
9,320
|
12,427
|
15,534
|
16,365
|
17,197
|
|||||||||||
|
$
75,000
|
15,170
|
20,227
|
25,284
|
26,928
|
28,572
|
|||||||||||
|
$100,000
|
21,020
|
28,027
|
35,034
|
37,490
|
39,947
|
|||||||||||
|
$150,000
|
32,720
|
43,627
|
54,534
|
58,615
|
62,697
|
|||||||||||
|
$200,000
|
44,420
|
59,227
|
74,034
|
79,740
|
85,447
|
|||||||||||
|
$250,000
|
46,058
|
61,411
|
76,764
|
82,698
|
88,632
|
|||||||||||
|
$300,000
|
46,058
|
61,411
|
76,764
|
82,698
|
88,632
|
|||||||||||
|
$400,000
|
46,058
|
61,411
|
76,764
|
82,698
|
88,632
|
|||||||||||
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 2006. In
addition, such amounts reflect the 2006 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, 2006, the most recent Pension Plan
valuation date, are as follows:
|
Name
|
Years
of Credited
Service |
Average
Plan
ompensation
|
|||||
|
W.
Thomas Jagodinski
|
14
|
$
|
203,000
|
||||
|
Charles
R. Dismuke, Jr.
|
29
|
203,000
|
|||||
|
R.
D. Greene
|
9
|
181,150
|
|||||
|
William
V. Hugie
|
17
|
|
178,467
|
||||
|
James
H. Willeke
|
10
|
196,320
|
|||||
Defined
Contribution Plan
The
Company maintains 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, 2006, the Company has elected not to match
such
contributions.
27
Long
-Term Incentive Plans
The
Company maintains two long-term incentive plans, all of which compensate key
employees and directors through the grant of options to buy shares of Common
Stock. In addition, the 2005 Plan allows the Company to award restricted stock
and restricted stock units to participants. 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, 2006, options for 6,292,534 Shares
have been granted under the 1995 Plan,
of which
1,339,048 have been forfeited and in some cases reissued pursuant to the Plan
provisions leaving available for grant 166,514 shares.
In
November 2004, the Company’s Board of Director’s adopted the 2005 Plan which the
stockholders ratified at the 2005 Annual Meeting. Pursuant to the 2005 Plan,
the
Board of Directors may award a total of 2,400,000 stock options and a maximum
of
2,100,000 shares of restricted stock and/or restricted stock units. As of August
31, 2006, options for 242,778 shares have been granted under the 2005 Plan,
leaving available for grant 2,157,222. In addition, 180,212 shares of restricted
stock and restricted stock units had been awarded of which 4,078 have been
forfeited, leaving 1,923,866 shares available for awards.
Under
the
1995 Plan, all stock options granted prior to the May 18, 2005 grant 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. On May 18, 2005, 1,105,213 stock options were granted under the 1995
and
2005 Plans which fully vested 45 days after grant date (July 2, 2005) and which
have a seven year expiration. A portion of the May 18, 2005 grant included
options granted with an exercise price equal to the fair market value of the
Company’s common stock at the time of grant. However, the majority of options
granted at this time were issued with exercise prices of $27.56, $28.81, and
$30.06, which was in excess of the fair market value ($26.31) of the Company’s
common stock on the date of the grant.
Grants
made under the 1995 plan in fiscal 2006 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. Grants made under the
2005 Plan in fiscal 2006 vest at the same rate, but expire seven years from
the
date of grant.
All
awards of restricted stock and restricted stock units under the 2005 Plan vest
at a rate of 40% on the day following the one year anniversary from the date
of
grant and 30% on the second and third anniversaries of the grant date. Shares
subject to grants and awards under the 2005 Plan which have expired, been
cancelled, forfeited or terminated may again be made available for grant under
the 2005 Plan.
Pursuant
to the Merger Agreement executed with Monsanto, we are precluded from future
issuances of our own shares except our Board of Directors has authorized the
issuance of approximately 155,000 shares of Restricted Stock or Restricted
Stock
Units to our directors, officers and key employees in accordance with the
provisions of the 2005 Omnibus Stock Plan. These shares of Restricted Stock
and
Restricted Stock Units, if issued, will vest over a three year period. However,
at the effective time of the merger, those shares of Restricted Stock and
Restricted Stock Units will become immediately vested and will be converted
into
the right to receive $42.00 per share in cash without interest and less any
applicable withholding tax. If the merger does not close, these instruments
will
vest 40% one day following the first anniversary of their issuance, 30% on
the
second anniversary of their issuance and the remaining 30% on the third
anniversary of their issuance.
28
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. 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 2006, 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.
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 2006, 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, except the following
individual filed the following number of late reports with respect to the
following number of transactions; two Form 4’s for Ann J. Shackelford pertaining
to four transactions involving the sale of stock to which Mrs. Shackelford
disclaims beneficial ownership.
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.
29
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
2008 Annual Meeting should be received by the Company no later than August
31,
2007. With regard to stockholder proposals not included in the Company’s proxy
statement but which a stockholder wishes to be brought before the 2007 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: Assistant Secretary, Delta and Pine Land Company, One Cotton Row,
Scott, Mississippi 38772 or by accessing our website at www.deltaandpine.com
under
Media
& News.
SHAREHOLDERS
SHARING THE SAME ADDRESS
To
reduce
the expenses of delivering duplicate proxy materials, we are taking advantage
of
the Securities and Exchange Commission’s “householding” rules that permit us to
deliver only one set of proxy materials to Stockholders who share the same
address, unless otherwise requested. Any record Stockholder, who shares an
address with another record Stockholder and who has received only one set of
proxy materials, may receive a separate copy of these materials, without charge,
by contacting: Assistant Secretary, Delta and Pine Land Company, One Cotton
Row,
Scott, Mississippi 38772.
|
BY
ORDER OF THE BOARD OF DIRECTORS
|
|||
| /s/ Jerome C. Hafter | |||
|
Jerome
C. Hafter
Secretary
|
30
The
Directors and
Officers of
DELTA
AND PINE LAND COMPANY
cordially
invite
you to attend our
2007
Annual Meeting
of Shareholders
Monday,
February
19, 2007 10:00 a.m.
Memphis
Marriott
East
2625
Thousand Oaks
Drive
Memphis,
TN
|
You
can vote in one of three ways: 1) By Mail, 2) By Internet, 3)
By
Phone.
See
the
reverse side of this sheet for instructions.
IF
YOU ARE
NOT VOTING BY TELEPHONE OR BY INTERNET, COMPLETE BOTH SIDES
OF
PROXY CARD,
DETACH
AND
RETURN IN THE ENCLOSED ENVELOPE TO:
Illinois
Stock Transfer Co.
209
West
Jackson Boulevard, Suite 903
Chicago,
Illinois 60606
|
|
IMPORTANT
Please
complete both sides of the PROXY CARD, sign, date,
detach
and return in the enclosed envelope.
|
DETACH
ATTENDANCE CARD HERE
AND
MAIL WITH PROXY CARD
|
|
This
proxy is solicited on behalf of the Board of Directors. If
not otherwise
specified on the reverse side, this proxy will be voted FOR
all the
director nominees listed,
and FOR the ratification of independent auditors. The undersigned
revokes
all proxies heretofore give to vote at such meeting and all
adjournments
or
postponements.
V
A
O
B
T
O
E
V
R
E
C
N
O
A
N
M
T
E
R
O
H Dated
___________________________________________
L
E
R ________________________________________________
N
E
U
________________________________________________
M
(Please sign here)
B
E
R
Please
sign your name as it appears above. If executed by a corporation,
a duly
authorized officer should sign. Executors, administrators,
attorneys, guardians and trustees should so indicate when signing.
If
shares are held jointly, at least one holder must sign.
|
DELTA
AND PINE LAND COMPANY
If you personally plan to attend the Annual
Meeting of Shareholders, please check the
box below and list names of attendees on
reverse side.
Return this stub in the enclosed envelope
with your completed proxy card.
I/We do plan to attend
the 2007
meeting. o
|
|
TO
VOTE BY MAIL
To
vote by mail, complete both sides, sign and date the proxy card
below.
Detach the card below and return it in the envelope provided.
|
|
TO
VOTE BY INTERNET
Your
Internet vote is quick, confidential and your vote is immediately
submitted. Just follow these easy steps:
1. Read the accompanying Proxy Statement.
2. Visit our Internet voting Site at http://www.illinoisstocktransfer.com
and follow the instructions on the screen.
3. When prompted for your Voter Control Number, enter the number
printed
just above your name on the front of the proxy card.
Please
note that all votes cast by Internet must be completed
and
submitted
prior
to Saturday, February 17, 2007 at 11:59 p.m. Central Time.
Your
Internet vote authorizes the named proxies to vote your shares
to the same
extent as if you marked, signed, dated and returned the proxy
card.
This
is a “secured” web page site. Your software and/or Internet provider must
be “enabled” to access
this site. Please call your software or Internet provider for
further
information if needed.
|
|
If
You Vote By INTERNET, Please Do Not Return Your Proxy Card By
Mail
|
|
TO
VOTE BY TELEPHONE
Your
telephone vote is quick, confidential and immediate. Just follow
these
easy steps:
1. Read the accompanying Proxy Statement.
2. Using a Touch-Tone telephone, call Toll Free 1-800-555-8140
and follow
the instructions.
3. When asked for your Voter Control Number, enter the number
printed just
above your name on the front of the proxy card below.
Please
note that all votes cast by telephone must be completed
and
submitted
prior
to Saturday, February 17, 2007 at 11:59 p.m. Central Time.
Your
telephone vote authorizes the named proxies to vote your shares
to the
same extent as if you marked, signed, dated and returned the
proxy
card.
|
|
If
You Vote By TELEPHONE Please Do Not Return Your Proxy Card By
Mail
|
|
PLEASE
LIST
NAMES
OF PERSONS ATTENDING
_____________________________
_____________________________
_____________________________
_____________________________
|
DELTA
AND PINE LAND COMPANY
REVOCABLE
PROXY
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The
undersigned hereby appoints Jerome C. Hafter and Kenneth M. Avery
as
Proxies, each with the power to appoint his substitute, and hereby
authorizes each of them to
represent and to vote, as designated below, all the shares of
Common Stock
of Delta and Pine Land Company which the undersigned is entitled
to vote
at the Annual Meeting of Shareholders to be held on February
19, 2007 or
any adjournment thereof. If any other business is presented at
the Annual
Meeting, including whether or not to
adjourn the meeting, this proxy will be voted, to the extent
legally
permissable, by those named in this proxy in their best
judgement.
Proposal
1 - Election of Class II Directors with a term ending at the
2010 Annual
Meeting of Stockholders
[
]
For All NomineesListed
Below (except as marked to the contrary below)
[
]
Withhold Authorityto
vote for all nominees below.
(Instructions:
To withhold authority to vote for any individual nominee, strike
a line
through the nominee's name.)
01Joseph
M. Murphy 02Rudi
E. Scheidt
Proposal
2 - To ratify the appointment of the independent auditors for
the fiscal
year ending August 31, 2007
[ ]
For [
]
Against
[
]
Abstain
(to be signed on the other
side)
|