2015-08-13T08:08:28-05:00 2014-12-31 BDO USA LLP 7101 WISCONSIN AVE SUITE 800 BETHESDA MD 208144827 990 2014-01-01 620786018 COTTON INCORPORATED % DAVID BYRD COTT 9196782220 6399 WESTON PARKWAY Suite CARY NC 27513 DAVID N BYRD SENIOR VP AND CFO 7038930600 2015-08-12 true Mike Sorrells P00001737 3016544900 2014 2016-02-25 16:41:14Z DAVID N BYRD 6399 WESTON PARKWAY CARY NC 27513 77118352 false X WWW.COTTONINC.COM X 1967 TN SEE SCHEDULE O 101 101 152 101 0 81118420 77118352 0 0 -29235 -70991 0 0 81089185 77047361 401121 437597 0 0 12912285 22614356 0 0 0 62306142 57859590 75619548 80911543 5469637 -3864182 17196759 18562113 12764888 17994424 4431871 567689 X COTTON INCORPORATED, FUNDED BY U.S. GROWERS OF UPLAND COTTON AND IMPORTERS OF COTTON AND COTTON TEXTILE PRODUCTS, IS THE RESEARCH AND MARKETING COMPANY REPRESENTING UPLAND COTTON. THE PROGRAM IS DESIGNED AND OPERATED TO IMPROVE THE DEMAND FOR AND PROFITABILITY OF COTTON. false false The Consumer Marketing Committee is comprised of the Consumer Marketing Division and the Corporate Strategy and Program Metrics Division. The Consumer Marketing Division is tasked with creating awareness of, and interest in, cotton among consumer and trade audiences. This is accomplished through an integrated platform of traditional and digital advertising, engagement with the media, and activities and events that directly contact consumers. In television advertising, the Hayden Panettiere "Fabric of My Life" television commercial achieved continued increases in recall and likeability across both target demographics (women 18-34 and 35-54) as the spot was aired for the second year in a row. Recall reached 71% with women 18-34 during the second quarter of the year, and maintained that level in the third quarter. Supporting the commercial, a redesigned and multi-featured consumer website (TheFabricOfOurLives.com) was launched in June. The site focuses upon lifestyles (rather than fabrics) and is intended to attract both female and male consumers with compelling videos, shopping collections, care tips, do-it-yourself projects and profiles of interesting cotton artisans. Many elements of the new site appear across the web in numerous other sites sampling such things as our Common Threads video series and The Cotton Makers profiles. This media buy is intended to create a broad reach of cotton messages and to also encourage consumers to come to the site to see and experience more new content. In conjunction with the television and digital media buys, Advertising made a commitment to search advertising beginning in the fourth quarter. This allowed the placement of pertinent messages and information directly in front of consumers that are searching for something specific. Public Relations oversees a generic consumer program in China in conjunction with Cotton Council International. The Mian (cotton) is...campaign continued in 2014 and was used as the basis for a three-part video love story starring two attractive and popular young film stars. These videos, supported by a full-featured website and social media program, generated over 30,000,000 views through the beginning of October. This effort was supported by a consumer press outreach that resulted in coverage of the benefits of cotton, fashion-related topics, and tie-ins to company research and promotional activities. Public Relations was also actively involved in supporting and promoting all major company endeavors. Strategic Alliances major fourth quarter activity was the third iteration of the Cottons 24-Hour Runway Show in South Beach, Miami. 1,440 cotton looks provided by 80 brands and designers going down the runway, one a minute, for 24 straight hours. The event was streamed live on TheFabricOfOurLives.com, People.com and seven other web sites, drawing an audience of over 1,200,000 during the live feed. It also resulted in significant editorial coverage, social media traffic and pre- and post-show buzz. A couple of television commercials were produced and aired for several weeks prior to the show to increase awareness. Several celebrities (TV media, fashion, and musical) were included in the program. The other, on-going Strategic Alliance program is the Blue Jeans Go Green denim drive. In 2014 the program became a sponsor of NASCARs Nationwide Series, renaming the sponsored race as the Blue Jeans Go Green 200. The event took place at the Phoenix International Raceway in March. Denim was collected in the Phoenix market for weeks leading up to and during the race. Significant publicity was obtained, both locally and nationally. A video of the NASCAR sponsorship appeared on national movie theater screens last spring. In mid-summer a video was produced featuring a young man from Toledo, Ohio, Erek Hanson, who is known in his metro area as Eco-Erek. For five straight years he has pioneered a local denim collection drive that contributes to the Blue Jeans Go Green program. The video provided an opportunity to capture Ereks story. The video was placed on national movie theater screens for two weeks during the late summer. All other aspects of the ongoing Blue Jeans Go Green program continued in 2014 according to plan: collections on college campuses, retail programs, mail-ins directly to our warehouse site in Arizona, and distributions of denim insulation to Habitat for Humanity groups and other grant recipients. The Corporate Strategy & Program Metrics Division (CSPM) informs the company and the industry through market and economic research and analysis. Over the course of 2014, CSPM completed and distributed its ongoing analysis of economic data, as well as the Lifestyle MonitorTM and Retail MonitorTM surveys. There were more than 200 requests for CSPMs in-depth market and economic information in 2014. These data were also provided internally to assist with strategic direction for the Product Development, Global Supply Chain Marketing and Consumer Marketing divisions. CSPM was also active in reaching major brands, retailers, and sourcing and textile companies. Staff conducted nearly 200 presentations and meetings with key industry contacts to deliver economic and consumer market research analysis. CSPM also reached out to retailers and manufacturers with: the athletic apparel webinar, "Winning in the U.S. Activewear Market"; 68 economic publications; 17 Supply Chain Insights (10 Global Lifestyle Monitor) publications, a four-part Chinese Cotton Policy podcast series; 40 economic "Ag" radio segments; a national radio tour initiated by Public Relations focusing on consumer dissatisfaction with fiber substitution; as well as sustainability issues. To advance the strategic knowledge of the company and industry stakeholders, CSPM conducted 12 tactical research projects in 2014 with over 30,000 participants. The projects encompassed issues of strategic relevance to the cotton industry and included: Activewear, Denim Wear Test, Intimates, Chinese Nonwovens Focus Groups, Environmental Sustainability, and Indian and Chinese consumer studies conducted jointly with CCI. The division continued to manage ongoing research with Nielsen, which provides the third-party assessment for the national advertising campaign and conducted strategic, quantitative research to help define key concepts for the 2015 consumer and trade advertising campaigns. CSPM staff also continued to facilitate work in the Sustainability Working Group (SWG) to advance sustainability efforts and complete maintenance activities to develop the 2015 update to the lifecycle assessment data and analysis first compiled in 2009. The Global Supply Chain Marketing and Cotton Management Systems (CMS) Divisions comprise the Global Supply Chain Marketing Program Committee. Over the course of 2014, the Global Supply Chain Marketing (GSCM) Division executed a range of educational programs for industry, advanced the concept of cotton sustainability, and obtained technology adoptions for cotton by well-known brands and retailers. The Great Ideas in Cotton Conference was developed and executed by the division staff as a premier event to promote technology, fashion and sustainability strategies to the industry. Participation in the event numbered nearly 300 participants from 119 companies and 11 countries. The conference included technology and fashion exhibits as well as a Presidents Dinner featuring cotton leadership and top executives from Hong Kong and Asia-based companies. Several adoptions of Cotton Incorporated technologies were achieved in 2014 with companies such as Brooks Running, Exit, The North Face, Eddie Bauer; and the Nicklaus, Callaway, Ben Hogan, and PGA Tour golf apparel brands. Significant adoptions of cotton were achieved in the nonwovens market, as well, with the introduction of new cotton-containing diapers and hygiene products at CVS and Target stores. The Farm Tours program sponsored by the Importer Support Program was offered to 62 individuals from 29 brands and retailers as a means of providing a face-to-face opportunity to meet with cotton producers, and tour farm, gin, warehousing, and classing office facilities. The Cotton LEADS program builds on the need to make retailers and brands more aware of the science and best practices used in the U.S. Cotton LEADS continues to move forward and in 2014 staff were dedicated to promoting and developing this program. There are now 248 companies worldwide that have signed on as partners in the program. Our partner organizations in Australia have funded joint promotions efforts at major trade events and have worked side-by-side with Cotton Incorporated, the National Cotton Council, and Cotton Council International to promote the program. Through staff efforts in 2014, the USDA designated cotton from Cotton LEADS countries as certified under the USDAs BioPreferred Program. Cotton University, a major initiative of the Importer Support Program and the Global Supply Chain Marketing division grew to include more than 9,000 registered users, nearly a 100% increase in users over last year. Cotton University has evolved as a major marketing platform for reaching industry personnel involved with product development and sourcing of cotton products. CMS addresses two categories: Software Development and Maintenance, and Customer Service and marketing to the fiber processing links of the global cotton supply chain. Software Development and Maintenance includes ensuring through updates that MILLNet software applications are compliant with new hardware and operating systems, and that they meet changing customer needs in global markets; evaluating the contribution of MILLNet software to new bale flow systems; and studying low volume instrument measurements of cotton bales that lack high volume instrument data. The Customer Service and Marketing function of the division includes: on-site service visits to EFS licensees; customer support through telephone, e-mail and TeamViewer; the identification, signing, and training of new EFS licensees; and the development of EFS Value Metrics and Financial Models. Among the accomplishments of the Customer Service and Marketing arm of the division in 2014 were the completion of all on-site service visits, except for Thailand, where a user group seminar was arranged at the Hong Kong office due to political instability in Thailand. Software updates were installed during each service visit. Support to more than 2,500 customers was provided over the course of the year, as needed. The department also completed the initial development of new MILLNet marketing materials, as well as a cooperative internet portal with Agricultural and Environmental Research. Four new EFS licensees came onboard in 2014; all related installations and training were completed. Rounding out the department highlights for past year was the completion of the first EFS evaluation study. The Research and Development Committee is comprised of the Product Development and Implmentation as well as the Fiber Quality Research Divisions. Product Development and Implementation (PDI) focused on three objectives: 1) the identification of and research into technology innovations that can preserve or grow market share for cotton; and 2) the optimization and implementation of products and technologies that can advance cotton in global markets; and 3) providing technical assistance and training, and participate in key industry forums. Due to the increased interest in eliminating certain chemistries traditionally used in textile technologies, PDI undertook research and successfully developed non-fluorine alternatives to the water-repellant finishes used in the TransDRY and STORM technologies. Research is also underway to find suitable replacement chemistry for WICKING WINDOWS. Evaluations of products continue to optimize performance and compatibility with other performance finishes. Another chemical of high concern for the cotton industry is formaldehyde, which is released after cotton fabrics and garments are finished for wrinkle resistance. Since most of those chemical developments come from Europe, a two-week trip was conducted to meet with the major suppliers of such products to learn any new progress made in the elimination or reduction of formaldehyde for this important market category. In addition, experimentation is continuing in-house and with research partners. Other developments currently being researched for performance finishes include thermal regulation, antimicrobial functions, dyeing and finishing in one stage, and cotton comfort evaluations. Over the course of the year, Textile Chemistry Research achieved promising results using water-less technology that had been developed for polyester that may lead to the technologys adaptation for cotton dyeing. The division was active at industry events, attending the major textile trade shows around the world. At the Intertextile Trade Show, alone, PDI met with more than 376 people from 95 companies. In addition, staff participated in the Cotton USA mill tour to China; provided expertise and support to the 2014 Importer Support Program workshops, as well as educational outreach through Cotton University. For 2014, Fiber Quailty Research, made progress in improving breeder sample protocols and testing. For improving breeder sample testing efforts, researchers used a Favimat (individual fiber tensile tester) to show that individual fiber elongation and strength are positively correlated. This means that it is feasible to produce fibers that are strong and have good elongation. Additional studies were mentioned that continue to show that fiber elongation is more critical than fiber strength for cotton to survive fiber processing stresses. Part of these findings came from a U.S./Australia funded Fiber Quality Fellowship that allowed a Texas Tech researcher to work in Australia for three months. A new experimental system for bias-free length measurement was developed by the department. The system uses electrostatic charges to lengthen the individual fibers. Solid progress is being made with the design and construction. To address accurate testing, two new potential measurements projects were initiated in 2014. One attempted to measure extraneous matter in cotton. It has proved successful at effectively analyzing different types of trash and is an improvement on the current measurement system. The second project entailed using ozone to measure soils on clothing, but is encountering some measurement challenges. Two new prototype samplers for the CottonScope using a corer punch have been designed and built and will undergo evaluations. This device will potentially replace the guillotine style sampler in use today. The laundry study added 1,080 more loads of laundry for 2014. Overall the results show little impact from low water on most clothing attributes, but issues related to color transfer and stain removal in low water may emerge. In 2014 the department purchased a Karl Fischer Titrator, which will be vital in the measurement of moisture content in cotton and other analytical testing. Over the course of the year, a variety of proficiency testing trials were completed in fiber, yarn, and fabric to help ensure that the lab instruments and lab staff are performing at optimal levels. false true false false false false false false false true false false false true true true false false true true false false false false false false false true true false false false false false false false false false false false false false false true 150 0 true 152 true false true CH HK JA MX false false false false X 101 101 false false false false false false false true true false false false true true true true true true true false NY NC TN X DAVID BYRD 9196782220 6399 WESTON PARKWAY CARY NC 27513 Buddy Allen Board Member 1.0 0.0 X 0 0 0 Albert Andel Board Member 1.0 0.0 X 0 0 0 Lloyd Arthur Board Member 1.0 0.0 X 0 0 0 Coley Bailey Board Member 1.0 0.0 X 0 0 0 Allen Below Board Member 1.0 0.0 X 0 0 0 Marvin Beyer Board Member 1.0 0.0 X 0 0 0 Frank Bezner Board Member 1.0 0.0 X 0 0 0 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Miller Board Member 1.0 0.0 X 0 0 0 Brady Mimms Board Member 1.0 0.0 X 0 0 0 Travis Mires Board Member 1.0 0.0 X 0 0 0 Van Murphy Board Member 1.0 0.0 X 0 0 0 Brent Nelson Board Member 1.0 0.0 X 0 0 0 John Newby Board Member 1.0 0.0 X 0 0 0 Herrick Norcross Board Member 1.0 0.0 X 0 0 0 John Olson Board Member 1.0 0.0 X 0 0 0 Norman Owen Board Member 1.0 0.0 X 0 0 0 Lyall Pacheco Board Member 1.0 0.0 X 0 0 0 Michael Patschke Board Member 1.0 0.0 X 0 0 0 David Pearson Board Member 1.0 0.0 X 0 0 0 Glen Phipps Board Member 1.0 0.0 X 0 0 0 Terry Pollard Board Member 1.0 0.0 X 0 0 0 Charles Provance Board Member 1.0 0.0 X 0 0 0 Barney Pustejovsky Board Member 1.0 0.0 X 0 0 0 Darryl Quigley Board Member 1.0 0.0 X 0 0 0 Nathan Reed Board Member 1.0 0.0 X 0 0 0 Johnie Reed Board Member 1.0 0.0 X 0 0 0 Danny Robbins Board Member 1.0 0.0 X 0 0 0 Ryan Robbins Board Member 1.0 0.0 X 0 0 0 Randolph Rogers Board Member 1.0 0.0 X 0 0 0 Dean Rovey Board Member 1.0 0.0 X 0 0 0 Larry Sayes Board Member 1.0 0.0 X 0 0 0 Harry Schroeder Board Member 1.0 0.0 X 0 0 0 Vance Shoaf Board Member 1.0 0.0 X 0 0 0 Timothy Smith Board Member 1.0 0.0 X 0 0 0 Lewie Joe Smith Board Member 1.0 0.0 X 0 0 0 Sam Sparks Board Member 1.0 0.0 X 0 0 0 Charles Speake Board Member 1.0 0.0 X 0 0 0 Lawrence Starrh Board Member 1.0 0.0 X 0 0 0 Cloyce Stevens Board Member 1.0 0.0 X 0 0 0 Earl Stiles Board Member 1.0 0.0 X 0 0 0 Martin Stoerner Board Member 1.0 0.0 X 0 0 0 Gary Tidwell Board Member 1.0 0.0 X 0 0 0 Phil Vandiver Board Member 1.0 0.0 X 0 0 0 Tom Wade Board Member 1.0 0.0 X 0 0 0 Robert Walker Board Member 1.0 0.0 X 0 0 0 Jim Waters Board Member 1.0 0.0 X 0 0 0 Mark Watte vice chairman 1.0 0.0 X X 0 0 0 William Weaver Board Member 1.0 0.0 X 0 0 0 Clint Webb Board Member 1.0 0.0 X 0 0 0 Jason West Board Member 1.0 0.0 X 0 0 0 Lance Whitehead Board Member 1.0 0.0 X 0 0 0 Stephen Wilbur Board Member 1.0 0.0 X 0 0 0 Mark Wright Board Member 1.0 0.0 X 0 0 0 Eric seidenberger board member 1.0 0.0 X 0 0 0 J Berrye Worsham President & CEO 40.0 0.0 X 552448 0 139692 David Byrd SR. VP & Cfo 40.0 0.0 X 238907 0 76474 John Morgans VP Administration 40.0 0.0 X 190082 0 78021 Richmond Hendee SR. VP Consumer MKTG. 40.0 0.0 X 246479 0 94070 Kater Hake VP Agriculture/Environment 40.0 0.0 X 236957 0 102481 Mark Messura SR. VP Global Supply Chain 40.0 0.0 X 254176 0 93192 Robert Tyndall VP Prod Dev & Implem. 40.0 0.0 X 168120 0 58549 Michael Watson VP Fiber Competition 40.0 0.0 X 172548 0 67237 Kimberly S Kitchings VP., Corp. Strategy 40.0 0.0 X 150674 0 68883 Edward Barnes SR. Dir., AG/Envir Research 40.0 0.0 X 144082 0 54458 Wentao Zheng Manager, EFS 40.0 0.0 X 143803 0 38170 GLENN SCIACHITANO sr. dir. advertising 40.0 0.0 X 147723 0 38587 2645999 0 909814 35 false true false BDO USA LLP 5430 Wade Park Blvd Suite 300 RALEIGH NC 27607 Audit/Tax Services 112200 DONALD BAILEY 7620 Rock Quarry Rd RALEIGH NC 27610 Importer Support Con 149493 MARKET SHARE SPORTS LLC 135 Shorecrest Dr DAVIDSON NC 28036 MARKETING CONSULTANT 353884 3 77118352 77118352 0 0 0 0 0 0 0 70991 -70991 -70991 -70991 0 0 0 0 77047361 -70991 0 437597 0 0 2503418 0 11205428 6113528 1937192 854790 4748312 149412 171458 0 0 304466 1358171 22153491 628336 851521 0 1804018 2901121 0 2244918 0 0 1428991 268771 0 0 0 RESEARCH & PROMOTION 13506920 SPONSORSHIP 1681267 MAINTENANCE 1018615 GRAPHICS 954486 1685316 80911543 0 0 0 2777 2654 2437166 3769174 0 0 9032427 8713826 0 0 0 0 0 0 0 0 979457 959643 19629206 14512390 4340763 5116816 0 0 0 0 0 0 0 0 404169 0 17196759 18562113 12464644 13619685 147965 0 0 0 0 0 0 0 0 0 0 0 0 0 152279 4374739 12764888 17994424 X 4431871 567689 0 0 0 0 4431871 567689 17196759 18562113 -3864182 X false true X true false RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 2790749 1779539 1011210 15348238 11359686 3988552 1490219 1373165 117054 5116816 0 DEFERRED LEASE OBLIGATION 73372 ACCRUED PENSION COST LIABILITY 4301367 4374739 X 79244253 2125901 2125901 77118352 -70991 -70991 77047361 83108435 2125901 70991 2196892 80911543 80911543 PART X, LINE 2: EXPLANATION: THE COMPANY IS EXEMPT FROM FEDERAL INCOME TAXES UNDER SECTION 501(C)(6) OF THE INTERNAL REVENUE CODE, EXCEPT FOR ANY UNRELATED BUSINESS INCOME. THERE WAS NO UNRELATED BUSINESS INCOME EARNED DURING THE YEARS ENDED DECEMBER 31, 2014 AND 2013, AND THUS, NO PROVISION FOR INCOME TAXES HAS BEEN MADE. THE COMPANY ACCOUNTS FOR UNCERTAINTY IN INCOME TAXES USING A RECOGNITION THRESHOLD OF MORE-LIKELY-THAN-NOT TO BE SUSTAINED UPON EXAMINATION BY THE APPROPRIATE TAXING AUTHORITY. MEASUREMENT OF UNCERTAINTY OCCURS IF THE RECOGNITION THRESHOLD HAS BEEN MET. MANAGEMENT BELIEVES THAT THERE WERE NO UNCERTAIN TAX POSITIONS THAT MET THE RECOGNITION THRESHOLD IN 2014 OR 2013. THE COMPANY'S TAX RETURNS ARE OPEN FOR EXAMINATION FOR YEARS 2010 THROUGH 2013. PART XI, LINE 4B - OTHER ADJUSTMENTS: LOSS ON DISPOSAL OF FIXED ASSETS -70,991 PART XII, LINE 2D - OTHER ADJUSTMENTS LOSS ON DISPOSAL OF FIXED ASSETS 70,991 true East Asia and the Pacific 3 14 Program Services TECH & INFO SUPPORT 5733363 North America 1 2 Program Services TECH & INFO SUPPORT 960361 Europe (Including Iceland and Greenland) Program Services TECH & INFO SUPPORT 1417174 Middle East and North Africa Program Services TECH & INFO SUPPORT 35088 4 16 4 16 8145986 8145986 false false false false false false true RESEARCH 7 437597 PART I, LINE 2: EXPLANATION: GRANTS ARE OVERSEEN BY OUR AGRICULTURAL AND ENVIRONMENTAL RESERACH EMPLOYEES. THESE EMPLOYEES MONITOR THE PROGRESS OF THOSE RECEIVING GRANTS, INCLUDING RQUIRED COMMUNICATIONS OF THEIR PROGRESS AND SITE VISITS. X X X true true X X true false false J Berrye Worsham President & CEO 456886 0 46000 0 49562 0 101279 0 38413 0 692140 0 0 0 David Byrd SR. VP & Cfo 209425 0 23000 0 6482 0 52486 0 23988 0 315381 0 0 0 John Morgans VP Administration 168036 0 16840 0 5206 0 37513 0 40508 0 268103 0 0 0 Richmond Hendee SR. VP Consumer MKTG. 213562 0 17669 0 15248 0 56606 0 37464 0 340549 0 0 0 Kater Hake VP Agriculture/Environment 210614 0 16593 0 9750 0 66076 0 36405 0 339438 0 0 0 Mark Messura SR. VP Global Supply Chain 224621 0 20226 0 9329 0 54466 0 38726 0 347368 0 0 0 Robert Tyndall VP Prod Dev & Implem. 153756 0 8868 0 5496 0 41507 0 17042 0 226669 0 0 0 Michael Watson VP Fiber Competition 157420 0 10262 0 4866 0 41293 0 25944 0 239785 0 0 0 Kimberly S Kitchings VP., Corp. Strategy 137008 0 12306 0 1360 0 27769 0 41114 0 219557 0 0 0 Edward Barnes SR. Dir., AG/Envir Research 130560 0 10223 0 3299 0 29975 0 24483 0 198540 0 0 0 Wentao Zheng Manager, EFS 71898 0 3097 0 68808 0 17527 0 20643 0 181973 0 0 0 GLENN SCIACHITANO sr. dir. advertising 88893 0 7048 0 51782 0 14264 0 24323 0 186310 0 PART I, LINE 1a A U.S. employee worked in China during 2014 and received housing as well as tax indemnification from the company during his assignment. The company also provides for business class tickets for all employees on all international trips, which include first-class tickets when domestic travel is involved on those itineraries. PART I, LINE 4 J. Berrye Worsham had $32,500 included in his income under section 457(f) but is not receiving payments from the plan. Glenn Sciachitano received severance payments totaling $41,470. FORM 990, PART I, LINE 1: DESCRIPTION OF ORGANIZATION MISSION: COTTON INCORPORATED, FUNDED BY U.S. GROWERS OF UPLAND COTTON AND IMPORTERS OF COTTON AND COTTON TEXTILE PRODUCTS, IS THE RESEARCH AND MARKETING COMPANY REPRESENTING UPLAND COTTON. THE PROGRAM IS DESIGNED AND OPERATED TO IMPROVE THE DEMAND FOR AND PROFITABILITY OF COTTON. FORM 990, PART VI, SECTION B, LINE 11: EXPLANATION: THE FORM 990 IS REVIEWED IN DETAIL WITH THE COMPANY'S AUDIT COMMITTEE AFTER COMPLETION AT THE AUGUST BOARD OF DIRECTORS MEETING FOR APPROVAL PRIOR TO FILING. SUBSEQUENT TO REVIEW, THE CHAIRMAN OF THE AUDIT COMMITTEE WILL INFORM THE COMPLETE BOARD OF DIRECTORS OF THE PROCEEDINGS AND OUTCOME. FORM 990, PART VI, SECTION B, LINE 12C: EXPLANATION: ALL DIRECTORS ARE REQUIRED TO ATTEST THAT THEY ARE FREE OF ANY CONFLICTS OF INTEREST. FORM 990, PART VI, SECTION B, LINE 15: EXPLANATION: An independent compensation committee determines compensation for all employees of the Company. The compensation committee engages an outside consultant to provide recommendations based on comparable pay information as well. Minutes of their meetings are maintained. FORM 990, PART VI, SECTION C, LINE 19: EXPLANATION: THE ORGANIZATION MAKES ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND FINANCIAL STATEMENTS AVAILABLE UPON REQUEST BY AN APPROPRIATE PARTY. FORM 990, PART XII, LINE 2C: EXPLANATION: THERE HAVE BEEN NO CHANGES DURING THE YEAR IN THE PROCESS FOR OVERSIGHT OF THE AUDIT OF THE FINANCIAL STATEMETNS. FORM 990, PART III, LINE 4D: OTHER PROGRAM SERVICES OTHER PROGRAM SERVICES INCLUDE AGRICULTURAL RESEARCH AND CORPORATE SERVICES.