UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant X
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Check the appropriate box:
Preliminary Proxy Statement
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--- 14a-6(e)(2))
X Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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DELTA AND PINE LAND COMPANY
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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computed pursuant to Exchange Act Rule 0-11 (Set forth the
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DELTA AND PINE LAND COMPANY
ONE COTTON ROW
SCOTT, MISSISSIPPI 38772 USA
(662) 742-4000
November 29, 2005
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, January 16, 2006, at
10:00 AM, Central Time, at The Madison Hotel, 79 Madison Avenue, Memphis,
Tennessee. All stockholders of record as of November 18, 2005, are entitled to
vote at the Annual Meeting.
We appreciate your confidence in the Company and hope you will attend this
Annual Meeting in person.
Whether or not you expect to attend the meeting, please complete, sign, date and
promptly return the enclosed proxy card or vote electronically via the Internet
or by telephone to ensure that your shares will be represented at the meeting.
If you attend the meeting, you may vote in person even if you have sent in your
proxy card or voted via the Internet or by telephone.
Sincerely,
Jon E. M. Jacoby
Chairman of the Board
DELTA AND PINE LAND COMPANY
ONE COTTON ROW
SCOTT, MISSISSIPPI 38772 USA
(662) 742-4000
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NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD ON JANUARY 16, 2006
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 Madison Hotel, 79 Madison Avenue, Memphis, Tennessee, on Monday,
January 16, 2006, at 10:00 AM, Central Time, for the following purposes:
1. to elect three Class I members to the Board of Directors to three-year terms
expiring at the 2009 Annual Meeting of Stockholders;
2. to ratify the appointment of the independent auditors for the fiscal year
ending August 31, 2006; and
3. to transact such other business as may properly come before the meeting or
any adjournments thereof.
The accompanying Proxy Statement contains further information with respect to
these matters.
The stockholders of record at the close of business on November 18, 2005, 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
Jerome C. Hafter
Secretary
November 29, 2005
DELTA AND PINE LAND COMPANY
ONE COTTON ROW
SCOTT, MISSISSIPPI 38772
(662) 742-4000
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PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
January 16, 2006
This Proxy Statement is furnished in connection with the solicitation of proxies
by the Board of Directors of Delta and Pine Land Company ("D&PL" or the
"Company") from stockholders holding shares of D&PL Common Stock ("Shares") for
use at its Annual Meeting of Stockholders to be held on January 16, 2006, and at
any adjournment or adjournments thereof. To assure adequate representation at
the Annual Meeting, stockholders are requested to promptly sign, date and return
the enclosed proxy or vote electronically via the Internet or by telephone.
Any stockholder giving a proxy has the power to revoke it at any time before it
is voted. Revocation of a proxy is effective upon receipt by the Secretary of
the Company of either: (i) an instrument revoking it or (ii) a duly-executed
proxy bearing a later date. In addition, a stockholder who is present at the
meeting may revoke the stockholder's proxy and vote in person if the stockholder
so desires. Proxies furnished by stockholders pursuant hereto will be voted on
proposals properly introduced at the meeting and in elections; and, if the
person solicited specifies in the proxy a choice with respect to matters to be
acted upon, the Shares will be voted in accordance with such specification. If
no choice is specified, the proxy will be voted FOR approval of the nominees for
directors, FOR the ratification of the appointment of the independent auditors
as described herein, and in the discretion of the proxy holders with regard to
such other business as may come before the meeting.
Stockholders of record at the close of business on November 18, 2005, are
entitled to vote at the meeting. The Proxy Statement and the accompanying form
of proxy were mailed on or about November 29, 2005, to all stockholders of
record as of the close of business on that date. The transfer agent, Illinois
Stock Transfer, will tabulate the votes received prior to the meeting. The
Secretary of the Company and R. D. Greene, Vice President - Finance, Treasurer
and Assistant Secretary of the Company, will be appointed as inspectors of the
Annual Meeting to count all votes and ballots and perform the other duties
required of inspectors.
The presence at the Annual Meeting, in person or by proxy, of a majority of the
Shares outstanding on November 18, 2005, will constitute a quorum. At that date,
approximately 36,044,134 Shares were outstanding. The affirmative vote of the
holders of a plurality of the Shares that are represented in person or by proxy
at the meeting and entitled to vote is required to approve the election of
directors. All matters other than the election of directors submitted to the
stockholders shall be decided by a majority of the votes cast with respect to
such matters. Each Share is entitled to one vote. The Company's stock is traded
on the New York Stock Exchange ("NYSE") under the symbol DLP.
All references herein to a particular year refer to the Company's fiscal year,
which ends or ended on August 31 of the year indicated.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
To the best knowledge of the Company, based on information filed with the
Securities and Exchange Commission and the Company's stock records, the
following table sets forth, as of October 31, 2005, 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 October 31, 2005 or within 60 days thereafter (i.e., December 30,
2005), upon the exercise of options granted by the Company, have been included.
Shares Beneficially Owned
Amount of
Beneficial Percentage
Name of Beneficial Owner Ownership Of Class
------------------------------------------------------- ------------------ --------------
Westfield Capital Management (1) 2,568,190 7.1
Sterling Capital Management, LLC (2) 2,430,642 6.7
Kayne Anderson Rudnick Investment Mgt (3) 2,067,953 5.7
Fidelity Management & Research Co. (4) 2,021,927 5.6
Stephens Group, Inc. (5) 1,070,004 3.0
Jon E. M. Jacoby (6) 171,349 .5
F. Murray Robinson (7) 253,508 .7
W. Thomas Jagodinski (8) (13) 582,684 1.6
Rudi E. Scheidt (9) 175,063 .5
Stanley P. Roth (10) 163,451 .4
Nam-Hai Chua (11) 123,284 .3
Joseph M. Murphy (12) 111,538 .3
Charles R. Dismuke, Jr. (8) (14) 263,052 .7
R. D. Greene (8) (15) 135,112 .4
William V. Hugie (8) (16) 149,888 .4
James H. Willeke (8) (17) 53,920 .1
All Directors and Executive Officers as a Group 2,742,743 7.2
[18 persons] (18)
(1) The mailing address for Westfield Capital Management is One Financial
Center, Boston, Massachusetts 02111.
(2) The mailing address for Sterling Capital Management is 4064 Colony Road,
Suite 300, Charlotte, North Carolina 28211.
(3) The mailing address for Kayne Anderson Rudnick Investment Management LLC is
1800 Avenue of the Stars, # 200, Los Angeles, California 90067.
(4) The mailing address for Fidelity Management & Research Co. is One Federal
Street, Boston, Massachusetts 02109.
(5) Mr. Jacoby, a director of Stephens Group, Inc. ("SGI") and an employee of
its subsidiary, Stephens, Inc., owns 171,349 Shares which are not included. See
Note 6 below. The mailing address for Stephens Group, Inc. and affiliates is 111
Center Street, Little Rock, Arkansas 72201.
(6) 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 25,000 Shares owned
beneficially by Mr. Jacoby. Also includes 112,618 shares of common stock
issuable upon exercise of stock options vested as of October 31, 2005, or within
60 days thereafter. Does not include Shares owned by SGI, or other of its
affiliates, except Jacoby Enterprises, Inc. See Note 5 above. The mailing
address for Jacoby Enterprises, Inc., and Mr. Jacoby is 111 Center Street,
Little Rock, Arkansas 72201.
(7) Includes 38,000 Shares owned by a Charitable Remainder Unit Trust ("CRUT")
and 58,446 Shares owned beneficially by Mr. Robinson. Mr. Robinson disclaims
beneficial ownership of Shares owned by the CRUT. Also includes 157,062 shares
of common stock issuable upon exercise of stock options vested as of October 31,
2005, or within 60 days thereafter. The mailing address for Mr. Robinson is 1520
Woodruff Lane, Bloomington, Indiana 47401.
(8) The mailing address for Messrs. Jagodinski, Dismuke, Greene, Hugie, and
Kerby is One Cotton Row, Scott, Mississippi 38772.
(9) Includes 17,000 Shares owned by the Scheidt Family Foundation and 45,445
Shares owned beneficially by Mr. Scheidt. Also includes 112,618 shares of common
stock issuable upon exercise of stock options vested as of October 31, 2005, or
within 60 days thereafter. The mailing address for Mr. Scheidt is 54 South White
Station Road, Memphis, Tennessee 38117.
(10) Includes 27,500 Shares owned by North American Capital Corporation, as to
which Mr. Roth has sole power to vote and sole power of disposition and 23,333
Shares owned beneficially by Mr. Roth. Also includes 112,618 shares of common
stock issuable upon exercise of stock options vested as of October 31, 2005, or
within 60 days thereafter. The mailing address for Mr. Roth is 510 Broad Hollow
Road, Suite 206, Melville, New York 11747.
(11) Includes 10,666 Shares owned by Dr. Chua's wife. Dr. Chua disclaims
beneficial ownership of these Shares. Also includes 112,618 shares of common
stock issuable upon exercise of stock options vested as of October 31, 2005, 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.
(12) Includes 698 Shares owned by Mr. Murphy's wife. Mr. Murphy disclaims
beneficial ownership of Shares owned by his wife. Also includes 110,840 shares
of common stock issuable upon exercise of stock options vested as of October 31,
2005, or within 60 days thereafter. The mailing address for Mr. Murphy is 200
East 42nd Street, 9th Floor, New York, New York 10017.
(13) Includes 3,555 Shares owned by Mr. Jagodinski's wife and 83,323 Shares
owned beneficially by Mr. Jagodinski. Mr. Jagodinski disclaims beneficial
ownership of Shares owned by his wife. Also includes 474,302 shares of common
stock issuable upon exercise of stock options vested as of October 31, 2005, or
within 60 days thereafter, and 21,504 shares of restricted stock.
(14) Includes 30,000 Shares owned by Mr. Dismuke's wife and 72,000 Shares owned
beneficially by Mr. Dismuke. Mr. Dismuke disclaims beneficial ownership of
Shares owned by his wife. Also includes 150,812 shares of common stock issuable
upon exercise of stock options vested as of October 31, 2005, or within 60 days
thereafter, and 10,240 shares of restricted stock.
(15) Includes 500 Shares owned beneficially by Mr. Greene. Also includes 126,702
shares of common stock issuable upon exercise of stock options vested as of
October 31, 2005, or within 60 days thereafter, and 7,910 shares of restricted
stock.
(16) Includes 497 Shares owned beneficially by Mr. Hugie. Also includes 145,046
shares of common stock issuable upon exercise of stock options vested as of
October 31, 2005, or within 60 days thereafter, and 4,345 shares of restricted
stock.
(17) Includes 51,823 shares of common stock issuable upon exercise of stock
options vested as of October 31, 2005, or within 60 days thereafter, and 2,097
shares of restricted stock.
(18) Includes 2,051,029 shares of common stock issuable upon exercise of stock
options vested as of October 31, 2005, or within 60 days thereafter, and 70,641
shares of restricted stock.
OFFICERS OF THE COMPANY
Offices Held with Company;
Name (Age) Position (1) Principal Occupation for Past Five Years
------------------------- ------------------- --------------------------------------------------------------------
W. Thomas Jagodinski (49) President, Chief Mr. Jagodinski has served as President and Chief Executive Officer and
Executive Officer Director since September 2002 and as Executive Vice President from
and Director 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. (50) Senior Vice President Mr. Dismuke has served as Senior Vice President since 1999. From 1997
until 1999, he served as Senior Vice President and as President of
Deltapine Seed Division. From 1989 until 1997, he served as Vice
President - Operations. Mr. Dismuke was a General Manager of one of
the Company's subsidiaries, Greenfield Seed Company, from 1982 until
1989. From 1977, when he joined D&PL, until 1982, Mr. Dismuke held
various positions with the Company.
Harry B. Collins (64) Vice President- Dr. Collins has served as Vice President - Technology Transfer since
Technology Transfer 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 (52) Vice President - Mr. Dykes has served as Vice President - Field Production since
Field Production September 2003. From 1997 to August 2003, Mr. Dykes served as the
Company's Vice President - Operations. Prior to that time, Mr. Dykes
served as the General Manager - Arizona Processing, Inc. (which was
acquired by the Company in 1996). Mr. Dykes was a shareholder of
Arizona Processing, Inc. at the time of the acquisition.
Ken Fearday (52) Vice President - Mr. Fearday has served as Vice President - International since April
International 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.
R. D. Greene (35) Vice President - Mr. Greene has served as Vice President - Finance, Treasurer and
Finance, Treasurer Assistant Secretary since June 2002. Previously he served as Vice
and Assistant President - Business Development from September 2000 until June 2002.
Secretary From 1997, when he joined D&PL, until September 2000, Mr. Greene
served as Director of International Taxation and Finance.
Kater D. Hake (53) Vice President - Dr. Hake has served as Vice President - Technology Development since
Technology Development 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 (46) Vice President - Dr. Hugie has served as Vice President - Research since 1998. From
Research 1996 until 1998, he served as Vice President - New Technologies. From
1988, when he joined D&PL, until 1996, Dr. Hugie held various
positions with the Company.
Thomas A. Kerby (61) Vice President - Dr. Kerby has served as Vice President - Technical Services since 1994
Technical Services and Director - Technical Services from 1993, when he joined D&PL.
Prior to joining the Company, Dr. Kerby served the cotton industry of
California and the University of California as an Extension Cotton
Agronomist.
Charles V. Michell (43) Vice President - Mr. Michell has served as Vice President - Operations since September
Operations 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 (47) Vice President - Ms. Shackelford has served as Vice President - Corporate Services
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 (61) Vice President - Mr. Willeke has served as Vice President - Sales and Marketing since
Sales and Marketing 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 (60) Secretary Mr. Hafter has served as Secretary of D&PL since 1993. From 1976 until
September 2001, Mr. Hafter was a partner in Lake Tindall, LLP, D&PL
general counsel, where he had performed legal services for D&PL since
1983, and from October 1, 2001, he has been a partner of Phelps
Dunbar, LLP, now D&PL general counsel.
------------------------------ ---------------------- --------------------------------------------------------------
(1) All biography information is provided as of November 29, 2005
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The number of directors is established by the Board of Directors and is
currently set at seven. The Company's Restated Certificate of Incorporation and
By-Laws provide that the Board of Directors shall be divided into three classes
(Class I, Class II, and Class III), with each class containing one-third, or as
close to one-third as possible, of the total number of directors. Directors are
elected at each annual meeting to succeed those directors whose terms then
expire. Directors serve for terms of three years and until their successors have
been duly elected. The directors chosen to succeed those whose terms are
expiring are of the same class as the director they succeed. Class I Directors
were elected at the January 22, 2003 Annual Meeting to serve a term expiring at
the 2006 Annual Meeting. Class II Directors were elected at the January 15, 2004
Annual Meeting to serve a term expiring at the 2007 Annual Meeting. Class III
Directors were elected at the January 11, 2005 Annual Meeting to serve a term
expiring at the 2008 Annual Meeting.
The Board of Directors proposes the re-election of the three Class I Directors
listed below:
Name Offices Held with the Company;
(Year First Elected a Director) Principal Occupation for Past Five Years
---------------------------------------------- ---------------------------------------------------------------------
CLASS I
Nam-Hai Chua (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 61 years of age.
W. Thomas Jagodinski (2002) See the description of Mr. Jagodinski's positions with the Company and
principal occupation under "Officers of the Company". Mr. Jagodinski
was named a Class I Director of the Company effective September 1,
2002, and was elected as a Class I Director at the 2003 Annual
Meeting.
Stanley P. Roth (1988) Mr. Roth has been the 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 68 years of age.
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 70 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 80 years of age.
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. He remains a director of Stephens Group, Inc.
and a consultant and employee of these companies. Stephens Inc. and
Stephens Group, Inc. are stockholders of D&PL. Mr. Jacoby is a
director of Conn's Inc., Sangamo Bio-Sciences, Eden Bioscience Corp.
and Power-One, Inc. He also serves on the audit committee of Sangamo
Bio-Sciences. He was a director of Beverly Enterprises, Inc. until May
24, 2001. Mr. Jacoby is 67 years of age.
F. Murray Robinson (2000) Mr. Robinson has been the 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 71 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 I DIRECTORS.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Appointment of Auditors
KPMG LLP audited D&PL's annual financial statements for the fiscal year ended
August 31, 2005 and its internal control over financial reporting as of August
31, 2005. 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, 2006. 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
2006, 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 2005 and 2004 consolidated
financial statements and the fees for other professional services billed during
the periods from September 1 to August 31, 2005 and 2004 are as follows:
Type of Fees 2005 2004
------------ ---- ----
Audit Fees (1) $589,000 $213,000
Audit-Related Fees (2) 49,000 88,000
Tax Fees (3) 9,000 16,000
All Other Fees (4) 25,000 47,000
-------- --------
Total $672,000 $364,000
======== ========
(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
(2005 only) and for the reviews of the consolidated financial statements
included in the Company's Form 10-Q filings for each fiscal quarter.
(2) Represents the aggregate fees billed to the Company by KPMG LLP for
assurance and related services that are reasonably related to the performance of
the audit and review of the Company's financial statements that are not already
reported in Audit Fees. These services include benefit plan audits and
attestation services that are required by statute or regulation.
(3) Represents the aggregate fees billed to the Company by KPMG LLP for
professional services relating to tax compliance, tax advice and expatriate tax
services.
(4) Includes fees paid for due diligence relating to an international project.
Auditor Independence
The Audit Committee has considered whether the provision of the above noted
services is compatible with maintaining the independent auditor's independence
and has determined that the provision of such services has not adversely
affected the independent auditor's independence.
Policy on Audit Committee Pre-Approval
As part of its duties, the Audit Committee is required to pre-approve audit and
non-audit services performed by the independent auditor in order to assure that
the provision of such services does not impair the independent auditor's
independence. The policy generally provides for the Audit Committee to
pre-approve services in the defined categories of audit services, audit-related
services, tax services and all other services, up to specified amounts, and sets
requirements for specific case-by-case pre-approval of discrete projects that
are not otherwise pre-approved or services over the pre-approved amounts.
Pre-approval may be given as part of the Audit Committee's approval of the scope
of the engagement of the independent auditor or on an individual basis. The
pre-approval of services may be delegated to one or more of the Audit
Committee's members, but the decision must be presented to the full Audit
Committee at its next scheduled meeting. The policy prohibits retention of the
independent auditor to perform the prohibited non-audit functions defined in
Section 201 of the Sarbanes-Oxley Act of 2002 or the rules of the Securities and
Exchange Commission, and also considers whether proposed services are compatible
with the independence of the independent auditor. None of the Audit Committee's
pre-approval requirements were waived in fiscal 2005.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THIS RATIFICATION
OF APPOINTMENT OF INDEPENDENT AUDITORS.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
Board Meetings and Attendance of Directors
The Board of Directors had 11 meetings in fiscal 2005. 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
11, 2005. 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. In May 2005, each non-employee Director was granted
options for 12,000 shares and 4,000 restricted stock units under the 2005
Omnibus Stock Plan.
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.
(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.
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. At
each meeting of the Board, the Board determines which Director shall preside
over the executive session without management to take place at the next
scheduled meeting of the Board. At such time, the Board 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 upon request to R. D. Greene, Vice President - Finance and
Treasurer, Delta and Pine Land Company, One Cotton Row, Scott, Mississippi
38772, or via email at ricky.d.greene@deltaandpine.com.
Code of Business Conduct and Ethics
The Company has a Code of Business Conduct and Ethics that applies to all
Company employees, including its Chief Executive Officer, Chief Financial
Officer/Principal Accounting Officer, as well as members of the Board of
Directors. The Code of Business Conduct and Ethics is available free of charge
on the Company's website at www.deltaandpine.com in the Corporate Governance
section under About D&PL or upon request to R. D. Greene, Vice President -
Finance and Treasurer, Delta and Pine Land Company, One Cotton Row, Scott,
Mississippi 38772, or via email at ricky.d.greene@deltaandpine.com.
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. Roth, Murphy, and Scheidt. Each
of the committee members is independent as defined by the NYSE Listing
Standards. The Audit Committee met eleven times during fiscal 2005. The
Committee:
|X| reviewed with the independent registered public accountants the scope of the
audit, the auditors' fees and related matters;
|X| received the annual comments from the independent registered public
accountants on accounting procedures and systems of control;
|X| reviewed with the independent registered public accountants any questions,
comments or suggestions they may have had relating to D&PL's internal controls,
accounting practices or procedures or those of D&PL's subsidiaries;
|X| reviewed with management and the independent registered public accountants
D&PL's quarterly financial statements as required and have reviewed year end
financial statements along with any material changes in accounting principles or
practices used in preparing the statements prior to the filing of a report on
Form 10-K or 10-Q with the SEC and have recommended the inclusion of the audited
financial statements in the report on Form 10-K. This review included the items
required by SAS 61 as in effect at that time in the case of the quarterly
statements;
|X| received from the independent registered public accountants the report
required by Independence Standards Board Standard No. 1 as in effect at that
time and discussed it with the independent registered public accountants;
|X| reviewed, as needed, the adequacy of the systems of internal controls and
accounting practices of D&PL and its subsidiaries regarding accounting trends
and developments; and
|X| reviewed compliance with laws, regulations, and internal procedures, and
contingent liabilities and risks that may be material to D&PL.
The D&PL Board of Directors has adopted a written charter for the Audit
Committee which is attached as Appendix A. 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, 2005.
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, 2005, for filing with the Securities and
Exchange Commission.
Stanley P. Roth
Joseph M. Murphy
Rudi E. Scheidt
Compensation Committee (Compensation Committee Interlocks and Insider
Participation)
The members of the Compensation Committee are Messrs. Jacoby and Murphy. The
Company is not aware of any information which would be required to be disclosed
as compensation committee interlocks or insider participation in compensation
decisions. The Compensation Committee met three times during 2005. The
Compensation Committee reviews and approves annual compensation, including
bonuses, for senior management of the Company and administers the Company's 1993
Stock Option Plan, as amended, the 1995 Long-Term Incentive Plan, as amended,
and the 2005 Omnibus Stock Plan, including the grant of options and restricted
stock 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.
A bonus pool is created annually based on a specified percentage of pre-tax,
pre-bonus, and pre-pension earnings. Under the Company's incentive bonus
program, the total of bonuses paid in any year is limited to the lower of two
limitations: (1) the bonus pool reduced by pension costs and (2) the sum of all
performance-based maximum individual awards. The Chief Executive Officer can
reduce, but may not increase, the overall bonus pool from the amount calculated
using the pre-established formula. The Compensation Committee, upon the
recommendation of the Chief Executive Officer, may also adjust the size of the
bonus pool. All positions eligible for bonus are placed in one of five
categories that govern the maximum bonus available as a percentage of the
mid-point of the position's salary range. These five categories include: (1)
Chief Executive Officer and Senior Vice President, (2) other executive officers,
(3) senior managers, (4) middle managers and (5) all other bonus-eligible
positions. This maximum is based on the potential impact on the Company's profit
of the job's responsibilities.
Each executive officer's bonus is based on his performance and achievement
against individual goals as described for merit salary increase review.
Performance is expressed as a percentage which, when multiplied by the maximum
bonus available for that job, results in an adjusted performance-based maximum
individual award for that year. All bonus awards to eligible employees are
calculated in this manner, and actual awards are effectively the pro rata share
of the available bonus pool or the performance-based maximum. 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, 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, 2005, W. Thomas Jagodinski was
employed by D&PL as President, Chief Executive Officer and Director. Mr.
Jagodinski's salary was based on his contribution to the Company. He was
entitled to merit salary increases. These merit increases were determined in
accordance with the procedures and guidelines described above. For fiscal 2005,
Mr. Jagodinski's base salary was $348,000 with a bonus of $420,000. The
Compensation Committee approved Mr. Jagodinski's bonus based on his achievement
with respect to the earnings goal and related financial targets for the Company.
Other factors in the Compensation Committee's decision were Mr. Jagodinski's
leadership in developing corporate growth strategies, developing international
business opportunities, his contribution made in developing the market for
biotechnology-enhanced seed, the launch of new products and the execution of
certain strategic transactions.
Compensation Committee
Jon E. M. Jacoby
Joseph M. Murphy
Technology Committee
The members of the Technology Committee are Messrs. Chua, Robinson and
Jagodinski. Mr. Robinson was named a member of the Committee in October 2005.
This Committee met four times during 2005. 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. Mr.
Robinson was named a member of the Committee in October 2005. The Nominating and
Corporate Governance Committee met once during 2005.
The Nominating Committee identifies candidates for nominees based upon both its
criteria for evaluation and the candidate's previous service on the Board.
Additionally, the Nominating Committee may use the services of a search company
in identifying nominees. Although the Nominating Committee has not determined
specific minimum qualifications for its nominees, it evaluates candidates that
it has identified based upon:
o character, personal and professional ethics, integrity and values;
o executive level business experience and acumen;
o relevant business experience or knowledge (although preference may be shown
for experience in or knowledge of the cotton industry, agribusiness, molecular
biology or plant sciences, it is not a prerequisite);
o skills and expertise necessary to make significant contributions to the
Company, its Board and its stockholders;
o business judgment;
o availability and willingness to serve on the Board;
o independence requirements of the NYSE;
o potential conflicts of interest with the Company or its stockholders taken as
a whole; and
o accomplishment within the candidate's own field.
The Nominating Committee has adopted a policy with regard to considering a
stockholder's nominee. To submit a nominee for consideration, a stockholder must
provide the Nominating Committee:
o proof of the stockholder's eligibility to submit proposals in accordance with
Rule 14a-8(b) of the Exchange Act of 1934, as amended;
o a complete description of the candidate's qualifications, experience and
background; and
o the candidate's signed consent to serve on the Board.
In general, the Nominating Committee will evaluate a candidate identified by a
stockholder using the same standards as it uses for candidates it identifies.
Before recommending a stockholder's candidate, the Nominating Committee may
also:
o consider whether the stockholder candidate will significantly add to the range
of talents, skills and expertise of the Board;
o conduct appropriate verifications of the background of the candidate; and
o interview the candidate or ask the candidate for additional information.
The Nominating Committee has full discretion not to include a stockholder's
candidate in its recommendation of nominees to the Board. If the Nominating
Committee does not recommend a stockholder's candidate to the Board, it will not
make public the reason or reasons for its decision.
Board Committee Charters
The charters for the Company's Audit Committee, Compensation Committee, and
Nominating and Corporate Governance Committee are available free of charge on
the Company's website at www.deltaandpine.com in the Corporate Governance
section under About D&PL or upon request to R. D. Greene, Vice President -
Finance and Treasurer, Delta and Pine Land Company, One Cotton Row, Scott,
Mississippi 38772, or via email at ricky.d.greene@deltaandpine.com.
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, 2000, and the
reinvestment of dividends.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG DELTA AND PINE LAND COMPANY, THE NASDAQ/AMEX/NYSE INDEX
AND THE S & P SUPERCAP AGRICULTURAL PRODUCTS INDEX
Cumulative Total Return
----------------------------------------------------------------
8/00 8/01 8/02 8/03 8/04 8/05
DELTA AND PINE LAND COMPANY 100.00 83.20 75.74 104.88 109.05 112.11
NASDAQ/AMEX/NYSE 100.00 77.60 70.07 80.11 126.54 184.57
S & P SUPERCAP AGRICULTURAL PRODUCTS 100.00 147.95 135.31 158.89 189.47 254.56
* $100 invested on 8/31/00 in stock or index-
including reinvestment of dividends.
Fiscal year ending August 31.
EXECUTIVE COMPENSATION
Following are compensation related tables and information as required by the
Securities and Exchange Commission reflecting executive compensation for the
fiscal year ended August 31, 2005.
Annual Compensation
The following table sets forth certain information regarding compensation paid
to, or accrued for, the Company's Chief Executive Officer and the Company's four
other most highly-compensated executive officers (the "Named Officers") during
the year ended August 31, 2005:
Summary Compensation Table
--------------------------
Annual Compensation Long Term Compensation
------------------------------------------- ---------------------------
Restricted Securities
Name and Other Annual Stock Underlying All Other
Principal Position Year Salary($) Bonus($) Compensation($)(1) Awards($)(2) Options(#) Compensation($)
------------------ ---- --------- -------- ------------------ ------------- ---------- ---------------
W. Thomas Jagodinski 2005 348,000 420,000 2,000 568,351 151,307 (3) 44,000 (5)
President and 2004 336,000 215,000 1,000 -- 2,666 (4) 44,000 (5)
CEO 2003 320,000 185,000 1,000 -- 64,888 (4) 44,000 (5)
Charles R. Dismuke, Jr. 2005 265,000 235,000 3,800 270,643 70,812 (3) --
Senior Vice President 2004 256,000 120,000 2,500 -- -- --
2003 240,000 100,000 1,600 -- -- --
R. D. Greene 2005 213,000 210,000 1,700 209,061 54,702 (3) --
Vice President - 2004 206,000 105,000 1,000 -- -- --
Finance, Treasurer 2003 190,000 75,000 800 -- -- --
& Asst. Secretary
William V. Hugie 2005 193,000 92,000 1,200 114,838 30,046 (3) --
Vice President - 2004 186,000 55,000 800 -- -- --
Research 2003 177,000 45,000 900 -- -- --
James H. Willeke 2005 203,000 83,000 2,800 55,404 31,823 (3) --
Vice President - 2004 197,000 40,000 1,900 -- -- --
Sales and Marketing 2003 196,000 30,000 1,900 -- -- --
(1) These amounts include items such as personal use of a company automobile,
group term life insurance, 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; 4,345 shares for
William V. Hugie; 2,097 shares for James H. Willeke. Restricted Stock
granted in 2005 vest as follows: 40% of the shares shall vest on May 19,
2006, 30% of the shares shall vest on May 18, 2007 and the remaining 30% of
the shares shall vest on May 18, 2008.
(3) Stock Options granted in 2005 vested 100% on July 2, 2005.
(4) Options granted in 2003 and 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.
Employment Contracts and Change-In-Control Arrangements
Mr. Jagodinski is employed pursuant to an employment agreement effective
September 1, 1997, which provided for an annual base salary of $150,000 subject
to upward adjustment plus bonus, the amount of which is determined in accordance
with the bonus program described herein, plus insurance and other fringe
benefits. The agreement is automatically extended each day so that at any given
date, the time remaining under the contract will be for an additional two year
period. The contract may be terminated, except as a result of a change in
control or in anticipation of a change in control, upon three months written
notice. The employment agreement includes provisions pursuant to which Mr.
Jagodinski will receive, in the event of the termination of his employment due
to a change in control or in anticipation of a change in control, an amount that
in effect is equal to two times his highest salary and bonus paid during any of
the previous five calendar years plus a continuation for 24 months of his
insurance and fringe benefits. Mr. Jagodinski's agreement provides him the right
to surrender his stock options to the Company and receive cash in lieu of stock,
plus provides for certain tax protection payments of amounts paid to him under
this plan. Pursuant to the terms of this agreement, Mr. Jagodinski shall not
compete with the Company for one year upon his termination in the event of a
change in control.
Option Grants in Last Fiscal Year
The only options exercisable into securities of the Company are those
outstanding under the 1993 Stock Option Plan (the "1993 Plan"), the 1995
Long-Term Incentive Plan (the "1995 Plan") and the 2005 Omnibus Stock Plan (the
"2005 Plan"). The 1993 Plan has not been available for further grants since 1996
and as of August 31, 2005, all officers had exercised all remaining options
under the 1993 Plan. The Company granted options for 1,096,841 Shares under the
1995 Plan and 73,704 under the 2005 Plan in 2005. All options granted prior to
2005 under the 1993 Plan and 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. The options that were granted during 2005
under the 1995 Plan and 2005 Plan vested 45 days after grant date and expire
seven years from the date of grant. The majority of stock options granted in
2005 were granted at prices in excess of the 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 2005:
Option Grants in 2005
Percentage of Potential Realized Value at
Number of Total Options Assumed Annual Rates of Stock
Securities Granted Price Appreciation of Option
Underlying to Employees In Exercise Expiration Term (1)
Name Options Fiscal Year Price Date 5% 10%
------------------------ ------------- ------------------ ----------------- -------------- ---------------- ----------------
W. Thomas Jagodinski (2) 2,666 .23% 28.24 1/11/15 $ 47,348 $ 119,989
W. Thomas Jagodinski 67,765 5.79% 26.31 5/18/12 $725,818 $ 1,691,465
W. Thomas Jagodinski 24,662 2.11% 27.56 5/18/12 $233,323 $ 584,754
W. Thomas Jagodinski 26,936 2.30% 28.81 5/18/12 $221,166 $ 605,003
W. Thomas Jagodinski 29,341 2.51% 30.06 5/18/12 $204,237 $ 622,345
Charles R. Dismuke, Jr. 32,269 2.76% 26.31 5/18/12 $345,627 $ 805,458
Charles R. Dismuke, Jr. 11,744 1.00% 27.56 5/18/12 $111,108 $ 278,459
Charles R. Dismuke, Jr. 12,827 1.10% 28.81 5/18/12 $105,320 $ 288,104
Charles R. Dismuke, Jr. 13,972 1.19% 30.06 5/18/12 $ 97,256 $ 296,357
R. D. Greene 24,928 2.13% 26.31 5/18/12 $266,999 $ 622,221
R. D. Greene 9,072 .78% 27.56 5/18/12 $ 85,828 $ 215,104
R. D. Greene 9,909 .85% 28.81 5/18/12 $ 81,361 $ 222,564
R. D. Greene 10,793 .92% 30.06 5/18/12 $ 75,128 $ 228,928
William V. Hugie 13,692 1.17% 26.31 5/18/12 $146,652 $ 341,763
William V. Hugie 4,983 .43% 27.56 5/18/12 $ 47,143 $ 118,151
William V. Hugie 5,443 .47% 28.81 5/18/12 $ 44,691 $ 122,254
William V. Hugie 5,928 .51% 30.06 5/18/12 $ 41,264 $ 125,737
James H. Willeke 14,502 1.24% 26.31 5/18/12 $155,328 $ 361,981
James H. Willeke 5,278 .45% 27.56 5/18/12 $ 49,934 $ 125,145
James H. Willeke 5,764 .49% 28.81 5/18/12 $ 47,327 $ 129,464
James H. Willeke 6,279 .54% 30.06 5/18/12 $ 43,707 $ 133,182
(1) The dollar amount under these columns are the result of calculations at 5%
and 10% rates arbitrarily set by the Securities and Exchange Commission and,
therefore, are not intended to forecast possible future appreciation, if any, of
the Company's stock price. Any actual gain on exercise of options is dependent
on the future performance of the Company's stock.
(2) Automatic grant resulting from service as a director.
Options Exercised in Last Fiscal Year
The following table sets forth certain information concerning stock option
exercises during 2005 and unexercised options held as of August 31, 2005 for
each of the Named Officers:
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
Number of Securities
Underlying
Unexercised
Options at the Value of Unexercised
Shares Gains Fiscal Year End In-The-Money Options at
Acquired Realized --------------- the Fiscal Year End (1) (2)
on on ---------------------------
Exercise Exercise Exercisable Unexercisable Exercisable Unexercisable
------------- ----------- -------------- ---------------- ----------------- -------------------
W. Thomas Jagodinski 10,667 $151,578 461,857 93,733 $1,682,835 $594,549
Charles R. Dismuke, Jr. 62,667 792,112 150,812 -- 459,600 --
R. D. Greene 35,000 359,456 121,702 50,000 430,535 331,750
William V. Hugie 27,777 234,777 145,046 -- 282,375 --
James H. Willeke 55,000 677,717 51,823 -- 114,900 --
(1) Based on $25.365 per Share, the August 31, 2005 market value as calculated
by averaging the High and Low as quoted by the NYSE.
(2) Computation excludes "out-of-the-money" options for the following number of
shares: 202,570 shares for W. Thomas Jagodinski; 70,812 shares for Charles R.
Dismuke, Jr.; 54,702 shares for R. D. Greene; 110,046 shares for William V.
Hugie; and 31,823 shares for James H. Willeke.
Compensation Pursuant to Plans
Pension Plan
The Company maintains a noncontributory defined benefit plan (the "Pension
Plan") that covers substantially all full-time employees, including the Named
Officers. All employees of the Company and its domestic subsidiaries, who have
both attained age 21 and completed one year of 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.
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 $ 3,591 $ 4,788 $ 5,985 $ 6,044 $ 6,103
$ 50,000 9,441 12,588 15,735 16,606 17,478
$ 75,000 15,291 20,388 25,485 27,169 28,853
$100,000 21,141 28,188 35,235 37,731 40,228
$150,000 32,841 43,788 54,735 58,856 62,978
$200,000 44,541 59,388 74,235 79,981 85,728
$250,000 45,243 60,324 75,405 81,249 87,093
$300,000 45,243 60,324 75,405 81,249 87,093
$400,000 45,243 60,324 75,405 81,249 87,093
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
2005. In addition, such amounts reflect the 2005 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, 2005, the most recent Pension Plan
valuation date, are as follows:
Years of Credited Average Plan
Name Service Compensation
---------------------------- ------------------------- ------------------
W. Thomas Jagodinski 13 $198,667
Charles R. Dismuke, Jr. 28 198,497
R. D. Greene 8 161,483
William V. Hugie 16 169,200
James H. Willeke 9 190,040
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, 2005, the Company has elected not to match such
contributions.
Long Term Incentive Plans
The Company maintains three 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 1993, the Company adopted the
1993 Plan, but no more options were granted under the plan effective with the
adoption of the 1995 Plan. In 1995, the Company's Board of Directors adopted the
1995 Plan which the stockholders ratified at the 1996 Annual Meeting. In 2000,
the 1995 Plan was amended and restated eliminating the ability of the Board of
Directors to award stock appreciation rights, restricted Shares of Common Stock
and performance unit credits. Pursuant to the amended and restated 1995 Plan,
the Board of Directors may award stock options to officers, key employees and
directors. Under the amended and restated 1995 Plan, 5,120,000 Shares are
authorized for grant, which is an increase from the original 2,560,000 Shares.
As of August 31, 2005, options for 6,289,868 Shares have been granted under the
1995 Plan, of which 1,313,248 have been forfeited and in some cases reissued
pursuant to the Plan provisions leaving available for grant 143,380 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, 2005, options for 145,704 shares have been granted under the
2005 Plan, leaving available for grant 2,254,296. In addition, 167,748 shares of
restricted stock and restricted stock units had been awarded, leaving 1,932,252
shares available for awards.
Under the 1993 and 1995 Plans, 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 of the
Company's common stock on the date of the grant.
The awards of restricted shares and restricted stock units under the 2005 Plan
made during 2005 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.
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 2005, all required events of its officers, directors and
10% stockholders to the Securities and Exchange Commission of their ownership
and changes in ownership of Shares (as required pursuant to Section 16(a) of the
Securities Exchange Act of 1934, as amended) have been filed.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows of no
matters that will be presented for consideration at the Annual Meeting other
than those mentioned in this Proxy Statement. If any other matters are properly
brought before the Annual Meeting, it is intended that the persons named in the
proxy will act in respect thereof in accordance with their best judgment.
SOLICITATION OF PROXIES AND COST THEREOF
The expense of soliciting proxies and the cost of preparing, assembling and
mailing material in connection with the solicitation of proxies will be paid by
the Company. In addition to the use of mails, certain directors, officers or
employees of the Company and its subsidiaries, who receive no compensation for
their services other than their regular salaries, may solicit proxies. The
Company will reimburse brokerage firms, nominees, custodians and fiduciaries for
their reasonable out-of-pocket expenses for forwarding proxy materials to
beneficial owners and seeking instruction with respect thereto.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be included in the proxy statement and
presented at the 2007 Annual Meeting should be received by the Company no later
than August 1, 2006. With regard to stockholder proposals not included in the
Company's proxy statement but which a stockholder wishes to be brought before
the 2006 Annual Meeting, the Company's bylaws establish an advance notice
procedure which requires that the Company receive notice of such a proposal by
not less than 60 days nor more than 90 days prior to the date of the Annual
Meeting; provided, however, that in the event that less than 70 days notice or
prior public disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be received not later
than the close of business on the 10th day following the day on which such
notice of the date of the Annual Meeting was mailed or such public disclosure
was made. In addition to the above requirements as to timeliness, the proposals
must meet certain eligibility requirements of the Securities and Exchange
Commission.
ANNUAL REPORT AND FINANCIAL STATEMENTS
Stockholders may obtain a copy of the Company's Annual Report on Form 10-K, as
filed with the Securities and Exchange Commission, without charge (except for
exhibits), by contacting: R. D. Greene, Vice President - Finance and Treasurer,
Delta and Pine Land Company, One Cotton Row, Scott, Mississippi 38772, or via
email at ricky.d.greene@deltaandpine.com, or by accessing our website at
www.deltaandpine.com under Media & News.
BY ORDER OF THE BOARD OF DIRECTORS
Jerome C. Hafter
Secretary
APPENDIX A
DELTA AND PINE LAND COMPANY
AUDIT COMMITTEE CHARTER
Purpose
The Audit Committee (the "Committee") shall provide assistance to the Board of
Directors (the "Board") of Delta and Pine Land Company (the "Company") in
fulfilling their oversight responsibilities to the shareholders, potential
shareholders, the investment community, and others relating to the Company's
financial statements and the financial reporting process, the systems of
internal control, the internal audit function, the qualifications, independence,
and performance of the Company's independent auditor, the annual independent
audit of the Company's financial statements, and the legal compliance and
ethical business conduct programs as established by management and the Board. In
doing so, it is the responsibility of the Committee to see that free and open
communications are maintained between the Committee and the independent
auditors, the internal audit function, and management of the Company.
Composition and Qualifications
The Committee shall consist of at least three members. The members and the
chairperson of the Committee shall be appointed by the Board, upon the
recommendation of the Nominating and Corporate Governance Committee, and may be
replaced by the Board. Committee members shall not simultaneously serve on the
audit committees of more than two other public companies, unless the Board
determines that such simultaneous service would not impair the ability of such
member to effectively serve on the Committee, and such determination is
disclosed as required by law.
The members of the Committee shall meet the independence, experience, and any
other requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the rules and regulations of the Securities and Exchange
Commission (the "Commission"), and the rules and regulations of the New York
Stock Exchange. If one member of the Committee is not an "audit committee
financial expert" as defined by the Commission, then that fact shall be
disclosed as required by the Commission.
Meetings
The Committee shall meet in person or via teleconference as often as it
determines is necessary, but at least four (4) times per year. The Committee
shall meet with the independent auditor at least quarterly. The Committee shall
meet periodically with management, the independent auditor, and the head of the
internal audit function in separate executive sessions. The Committee may
request any officer or employee of the Company or the Company's independent
auditor or outside counsel to attend any meeting of the Committee or to meet
with any of its members or advisors. The Committee shall prepare each year an
annual calendar for meetings of the Committee, setting forth the number of
meetings, meeting dates and duration, and the anticipated meeting agenda. The
Committee chairperson will entertain modifications to the anticipated agenda
from members of the Committee, management and the independent auditors, and
cause the revised agenda to be disseminated prior to each meeting. The Committee
shall keep minutes of each of its meetings to properly document the discharge of
its responsibilities and shall provide the Board with a report of each Committee
meeting at the Board's next regularly scheduled meeting, especially of items of
concern to the Committee.
Authority and Responsibilities
The Committee shall have the sole authority to appoint or replace the
independent auditor. The independent auditor shall report directly to, and be
accountable to, the Committee. The Committee shall be directly responsible for
the compensation and oversight of the work of the independent auditor (including
the resolution of disagreements between management and the independent auditor
regarding financial reporting) for the purpose of preparing or issuing an audit
report or related work.
The Committee shall pre-approve all audit services and permitted non-audit
services (including the fees and terms thereof) to be performed for the Company
by its independent auditor, subject to the de minimis exceptions for non-audit
services described in Section 10A(i)(1)(B) of the Exchange Act which are
approved by the Committee prior to the completion of the audit, pursuant to the
Company's Pre-Approval Policy.
The Committee shall have the authority, to the extent that it deems necessary or
appropriate to carry out its duties, to retain independent legal, accounting or
other advisors. The Company shall provide for appropriate funding, as determined
by the Committee, for the payment of compensation to any accounting firm engaged
for the purpose of performing audit, review or other attest services for the
Company, to any advisors employed by the Committee, and for the ordinary
administrative expenses of the Committee that are necessary or appropriate in
carrying out its duties.
In addition, the Committee, to the extent that it deems necessary or
appropriate, shall:
Oversight of Financial Statements and Related Disclosures
1. Review and consider with management and the independent auditor the Company's
major financial risk exposures and the steps that management has taken to
monitor and control such exposures, including the Company's risk assessment and
risk management policies and guidelines.
2. Prior to the commencement of the audit of the Company's annual financial
statements, review and consider with management and the independent auditor the
scope, schedule, and staffing of the audit, and any new accounting and reporting
pronouncements that affect the Company.
3. Prior to the filing of the Company's quarterly report on Form 10-Q, review
and consider with management and the independent auditor the Company's quarterly
financial statements (including the results of the independent auditor's review
of the financial statements) and the Company's disclosures in the "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
("MD&A") section of the quarterly report.
4. Prior to the filing of the Company's annual report on Form 10-K (or the
dissemination of its annual report to stockholders containing the Company's
audited annual financial statements, whichever is earlier):
(a) review and consider with management and the independent auditor
the Company's audited annual financial statements (including the
results of the independent auditor's audit of the financial
statements) and the Company's disclosures in the MD&A section of the
annual report;
(b) recommend to the Board whether the audited annual financial
statements should be included in the annual report; and (c) review and
discuss with management (including the senior individual responsible
for the Company's internal audit function) and the independent auditor
the Company's internal controls report and the independent auditor's
attestation of the report.
5. As required by the rules of the Commission, prepare the report of the
Committee to be included in the Company's annual proxy statement, including
disclosures of pre-approval policies and auditors' fees, and cause this Charter
to be included in the proxy statement periodically.
6. Review and consider with the independent auditor all matters required to be
communicated to the Committee under generally accepted auditing standards,
including the judgments of the independent auditor with respect to the quality,
not just the acceptability, of the Company's accounting principles and
underlying estimates in the financial statements.
7. Review and consider with management and the independent auditor the
significant financial reporting issues and judgments made in connection with the
preparation of the Company's financial statements, including any significant
changes in the Company's selection or application of accounting principles, any
major issues as to the adequacy of the Company's internal controls, and any
special steps adopted in light of material internal control deficiencies or
weaknesses.
8. Review and consider with management and the independent auditor the reports
from the independent auditor covering:
(a) critical accounting policies and practices to be used;
(b) alternative treatments of financial information within generally
accepted accounting principles ("GAAP") for policies and practices
related to material items that have been discussed with management,
including the ramifications of the use of such alternative disclosures
and treatments and the treatment preferred by the independent auditor;
and
(c) other material written communications between the independent
auditor, the Committee, and management, including any engagement
letter, independence letter, management representation letter,
schedule of unadjusted audit differences, listing of adjustments and
reclassifications not recorded, management letter, or report on
observations and recommendations on internal controls, and the
Company's response to any such letter or report.
9. Review with the independent auditor and the internal audit function any
problems or difficulties encountered in the course of their audit work,
including any restrictions on the scope of activities or access to requested
information, any changes required in the planned scope of the internal or
external audit, any attempt by management to improperly influence the
independent auditor, and any significant disagreements with management over the
application of accounting principles, the basis for management's accounting
estimates and the disclosures in the financial statements.
10. Review and consider with the independent auditor any material communications
between the audit engagement team and the independent auditor's national office
regarding auditing or accounting issues presented by the engagement.
11. Review and consider with management and the independent auditors the
Company's disclosure controls and procedures and its internal controls and
procedures for financial reporting, including the conclusions of the Company's
chief executive officer and chief financial officer regarding the effectiveness
of both sets of controls and procedures reached as part of their certification
process for the quarterly report on Form 10-Q and the annual report on Form
10-K, and their evaluation process.
12. Review and consider with management and the independent auditors (a) any
significant deficiencies and material weaknesses in the design or operation of
the Company's internal controls and procedures for financial reporting and (b)
any fraud (whether or not material) that involves management or other employees
who have a significant role in the Company's internal controls and procedures
for financial reporting, in each case as disclosed to the Committee by the
Company's chief executive officer and chief financial officer as part of their
certification process for the quarterly report on Form 10-Q and the annual
report on Form 10-K.
13. Review and consider with management and the independent auditors in advance
of the Company's earnings press releases.
14. Review and consider with management and the independent auditors the
Company's disclosure or release of non-GAAP financial measures commonly referred
to as "pro forma" or "adjusted" financial information. The Committee need not
discuss in advance each instance in which the Company discloses or releases
non-GAAP financial measures; rather, the discussion may take the form of a
general discussion of the Company's use of non-GAAP financial measures in its
disclosures and releases.
15. Review and consider with management and the independent auditor the effect
of material off-balance sheet arrangements on the Company's financial
statements.
16. Review and consider with management and the independent auditor any
accounting or other regulatory initiatives, correspondence with governmental or
other regulatory agencies, and published reports that raise issues that may have
a material effect on the Company's financial statements.
17. Review reports of the Company to the Commission and to stockholders with a
view to consistency of non-financial disclosures therein with the Company's
financial statements and financial data.
Oversight of Relationship with Independent Auditor
18. Obtain and review a report from the independent auditor at least annually
regarding (a) the independent auditor's internal quality-control procedures, (b)
any material issues raised by the most recent internal quality-control review or
peer review of the independent auditor, (c) any material issues raised by any
inquiry or investigation by governmental or professional authorities within the
preceding five years respecting one or more independent audits carried out by
the independent auditor, (d) any steps taken to deal with any issues described
in the two preceding clauses, and (e) all relationships between the independent
auditor and the Company.
19. Review the independence of the independent auditor; obtain from the
independent auditor a formal written statement delineating all relationships
between the independent auditor and the Company, consistent with Independence
Standards Board Standard 1; actively engage in a dialogue with the independent
auditor with respect to any disclosed relationships or non-audit services that
may impact the objectivity and independence of the independent auditor; and
otherwise take such actions as are appropriate to oversee the independence of
the independent auditor.
20. Evaluate the qualifications, performance, and independence of the
independent auditor, including considering whether the provision of permitted
non-audit services is compatible with maintaining the auditor's independence. In
making this evaluation, the Committee shall take into account the opinions of
management and the internal auditing staff. The Committee shall present its
conclusions with respect to the independent auditor to the Board.
21. Review and evaluate the lead partner and other members of the independent
auditor's audit engagement team.
22. Ensure that the lead, concurring, and other audit partners are rotated off
the independent auditor's audit engagement team as necessary to assure the
independence of the independent auditor. Consider rotating the independent
auditor on a regular basis in order to assure continuing auditor independence.
23. Recommend to the Board a policy for the Company's hiring of employees or
former employees of the independent auditor who participated in any capacity in
the audit of the Company to assure the independence of the independent auditor,
and monitor compliance with that policy.
24. Discuss with the independent auditor material issues on which the national
office of the independent auditor was consulted by the Company's audit team.
Oversight of Internal Auditing Function
25. Review and consider with management and the independent auditor whether the
Company should create a separate internal auditing department.
26. Review and consider with management, the independent auditor, and the head
of the internal auditing function the scope of the internal audits and the
qualifications and adequacy of personnel performing the internal auditing
function.
27. Review the appointment and replacement of the head of the internal auditing
function.
28. Review the reports to management prepared by the internal auditing function
and management's responses to such reports, or summaries of such reports and
responses prepared by personnel performing the internal auditing function.
29. Evaluate the performance of the Company's internal auditing function,
including its effectiveness and cost.
Oversight of Compliance with Legal Requirements and Business Conduct Policies
30. Inquire of management, the independent auditor and the internal audit
function whether there has been (a) any legal matter that may have a material
effect on the Company's financial statements, (b) any instance of material
non-compliance with applicable legal requirements, or (c) any instance of
material non-compliance with the Company's
business conduct policies, and review
and consider any such matter with the Company's counsel or counsel selected by
the Committee.
31. Obtain from the independent auditor its assurance that Section 10A(b) of the
Exchange Act has not been implicated.
32. Establish procedures for (a) the receipt, retention, and treatment of
complaints received by the Company from any source regarding accounting,
internal accounting controls, or auditing matters, and (b) the confidential,
anonymous submission by Company employees of their concerns regarding
questionable accounting or auditing matters. The procedures shall provide for
communicating to all employees of the Company the ability to, and method for,
reporting such complaints to management of the Company, or to the Committee if
the reporting person so desires.
33. Advise the Board with respect to the Company's policies and procedures
regarding compliance with applicable laws and regulations relating to business
conduct and with the Company's Code of Business Conduct and Ethics, and monitor
complaints with respect thereto, all as they relate to accounting, financial
reporting and auditing matters.
34. Regardless of the dollar amount thereof, review and approve all related
party transactions, as contemplated in Item 404(a) of Regulation S-K, review
executive perquisites and reimbursement expenses, along with related policies
and procedures.
35. Discuss with management and the independent auditor any correspondence with
regulators or government agencies and any published reports that raise material
issues regarding the Company's financial statements or accounting policies.
36. Discuss with the Company's counsel legal matters that may have a material
impact on the financial statements or the Company's compliance policies and
internal controls.
Miscellaneous Responsibilities
37. Inquire of management, the independent auditor and the internal audit
function as to the adequacy of the Company's financial staff (both as to number
and competence), and recommend any desired or necessary changes to the Board and
to management.
38. Review and reassess on an annual basis the independence and qualifications
of the members of the Committee, the adequacy of this Charter, and the
performance and effectiveness of the Committee, and recommend any proposed
changes to the Board for approval.
39. Investigate any other financial areas deserving of special attention by the
Committee.
Limitation of Audit Committee's Role
While the Committee has the authority, powers, and responsibilities set forth in
this Charter, it is not the duty of the Committee to plan or conduct audits or
to determine that the Company's financial statements and disclosures are
complete and accurate and are in accordance with GAAP and applicable legal,
accounting, and other requirements. These are the responsibilities of the
Company's management and the independent auditor.
The Directors and Officers of
DELTA AND PINE LAND COMPANY
cordially invite you to attend our
2006 Annual Meeting of Shareholders
Monday, January 16, 2006 10:00 a.m.
The Madison Hotel
79 Madison Avenue
Memphis, TN
You can vote in one of three ways: 1) By Mail, 2) By Phone, 3) By Internet.
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
DETACH PROXY 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, 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
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T O
E V
R E
C N
O A
N M
T E
R
O H
L E Dated
R ----------------------- If you personally plan to attend the Special
N E Meeting of Shareholders, please check the
U ----------------------- box below and list names of attendees on
M reverse side.
B -----------------------
E (Please sign here)
R
Return this stub in the enclosed envelope
with your completed proxy card.
I/We do plan to attend
the 2006 meeting. _____
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.
-------------------------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 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 Thursday, January 12, 2006 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
-------------------------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 Thursday, January 12, 2006 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
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PLEASE LIST DELTA AND PINE LAND COMPANY
NAMES OF PERSONS ATTENDING REVOCABLE PROXY
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-------------------------- THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Jerome C. Hafter and R.D. Greene 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 January 16, 2006 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.
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Proposal 1 - Election of Class I Directors with a term ending at the
2009 Annual Meeting of Stockholders
For All Nominees Listed Below (except as marked to the contrary below)
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Withhold Authority to vote for all nominees below.
--- (Instructions: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name.)
01 Dr. Nam-Hai Chua 02 W. Thomas Jagodinski 03 Stanley P. Roth
Proposal 2 - To ratify the appointment of the independent auditors for the fiscal
year ending August 31, 2006
For Against Abstain
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