-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, fgxkSzErT9TDu9WvQjwd9qchdQ3h4z4N4/sce1GKq3rQeTAkBR3NJrDayjVuOtLl 15R5qPdzpdxaMeUDUyHLuA== 0000898430-94-000249.txt : 19940404 0000898430-94-000249.hdr.sgml : 19940404 ACCESSION NUMBER: 0000898430-94-000249 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 19940101 FILED AS OF DATE: 19940401 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DOLE FOOD COMPANY INC CENTRAL INDEX KEY: 0000018169 STANDARD INDUSTRIAL CLASSIFICATION: 0100 IRS NUMBER: 990035300 STATE OF INCORPORATION: HI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 34 SEC FILE NUMBER: 001-04455 FILM NUMBER: 94519998 BUSINESS ADDRESS: STREET 1: 31355 OAK CREST DRIVE CITY: WESTLAKE VILLAGE STATE: CA ZIP: 91361 BUSINESS PHONE: 8188796600 FORMER COMPANY: FORMER CONFORMED NAME: CASTLE & COOKE INC DATE OF NAME CHANGE: 19910731 10-K 1 JANUARY 1, 1994 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) [X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended January 1, 1994 OR [_]TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from to Commission File Number 1-4455 DOLE FOOD COMPANY, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) HAWAII 99-0035300 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) 31355 OAK CREST DRIVE WESTLAKE VILLAGE, CALIFORNIA 91361 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (818) 879-6600 SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NAME OF EACH EXCHANGE ON TITLE OF EACH CLASS WHICH REGISTERED ------------------- ---------------- Common Stock, No Par Value New York Stock Exchange Pacific Stock Exchange SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants's knowledge, in definitive Proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K. [X] The aggregate market value of the voting stock held by non-affiliates of the registrant asMarch 16, 1994 was approximately $1,608,744,271. The number of shares of Common Stock outstanding as of March 16, 1994 was 59,466,535. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant's 1993 Annual Report to Stockholders for the year ended January 1, 1994 are incorporated by reference into Parts I, II and IV. Portions of the registrant's definitive Proxy Statement for its 1994 Annual Meeting of Stockholders are incorporated by reference into Part III. ================================================================================ DOLE FOOD COMPANY, INC. FORM 10-K FISCAL YEAR ENDED JANUARY 1, 1994 TABLE OF CONTENTS
ITEM NUMBER IN FORM 10-K PAGE --------- ---- PART I 1. Business................................................... 1 2. Properties................................................. 9 3. Legal Proceedings.......................................... 12 4. Submission of Matters to a Vote of Security Holders........ 12 Executive Officers of the Registrant....................... 12 PART II 5. Market for the Registrant's Common Equity and Related Stockholder Matters....................................... 13 6. Selected Financial Data.................................... 13 7. Management's Discussion and Analysis of Financial Condition and Results of Operations................................. 14 8. Financial Statements and Supplementary Data................ 14 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.................................. 14 PART III 10. Directors and Executive Officers of the Registrant......... 14 11. Executive Compensation..................................... 14 12. Security Ownership of Certain Beneficial Owners and Management................................................ 14 13. Certain Relationships and Related Transactions............. 14 PART IV 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K....................................................... 15 (a)1. Index to Financial Statements........................ 15 2. Index to Financial Statement Schedules.................. 15 3. Index to Exhibits....................................... 15 (b)Reports on Form 8-K..................................... 17 Signatures............................................................ 18 Financial Statements and Financial Statement Schedules................ F-1-F-7
PART I ITEM 1. BUSINESS Dole Food Company, Inc. was founded in Hawaii in 1851 and was incorporated under the laws of Hawaii in 1894. Unless the context otherwise requires, Dole Food Company, Inc. and its consolidated subsidiaries are referred to herein as the "Company". The Company's principal executive offices are located at 31355 Oak Crest Drive, Westlake Village, California 91361, telephone (818) 879-6600. At January 1, 1994, the Company had approximately 45,300 full-time employees worldwide. The Company is engaged in three principal businesses: food production and distribution, real estate development and resorts. The Company is one of the largest companies engaged in the worldwide sourcing, processing, distributing and marketing of high quality, branded food products. The Company's food operations are conducted through the Company's food group ("Dole"), which procures, grows, processes and markets fruits, vegetables and nuts in the following locations: North America; Latin America, principally Chile, Colombia, Costa Rica, Ecuador, Honduras and Panama; Asia, principally Japan, the Philippines and Thailand; and Europe, principally Germany, France and Italy. The Company's food business includes beverage operations which produce and distribute products in a number of markets throughout the world. The Company's real estate operations are conducted under the "Castle & Cooke" name through the Company's real estate group which develops residential, commercial, industrial and retail properties in Hawaii, California and Arizona. In March, 1993, the Company's homebuilding and residential development subsidiary, Castle & Cooke Homes, Inc., completed the initial public offering of 5,400,000 shares of its common stock. The Company retains an approximate 82% interest in Castle & Cooke Homes, Inc., which is listed on the New York Stock Exchange under the symbol "CKI". The Company's resort operations are located on the Hawaiian Island of Lana'i and include two luxury resorts: The Lodge at Koele and The Manele Bay Hotel. The Company's food, real estate development and resort operations are described below. For detailed financial information with respect to the revenue, operating income and assets of the Company's food products, real estate and resort segments, and its operations in various geographic areas, see the Company's Consolidated Financial Statements and the related Notes to Consolidated Financial Statements, which are included in its 1993 Annual Report for the fiscal year ended January 1, 1994 (the "Dole Annual Report") and incorporated by reference in Part II of this report. FOOD General Dole is engaged in the worldwide sourcing, processing, distributing and marketing of high quality branded food products. Dole provides retail and institutional customers and other food product companies with high quality products bearing the DOLE(R) name which are produced and improved through research, agricultural assistance and advanced harvesting, processing, packing, cooling, shipping and marketing techniques. Dole is one of the world's largest producers of bananas and pineapples. Dole is also a major marketer of citrus and table grapes worldwide and an industry leader in iceberg lettuce, celery, cauliflower and broccoli, and, to a lesser extent, in carrots. Dole is the second largest processor of California raisins and processes significant amounts of California's almond, pistachio and date crops. It is a major participant in the chilled, shelf-stable and frozen juice markets with DOLE(R) 100% pineapple juice and 100% blended juice varieties. Dole's fresh food products are produced both directly on Company-owned or leased land and through associated producer and independent grower arrangements pursuant to which Dole provides varying degrees of farming, harvesting, packing, storing, shipping, stevedoring and marketing services, as well as financing 1 through advances to growers of certain products. Fresh fruit and vegetable products, dried fruit and nuts and processed pineapple products are, for the most part, packed and/or processed directly by Dole. Other processed foods, such as fruit juices, are obtained through co-production arrangements with independent manufacturers. Co-producers manufacture these products pursuant to strict specifications and under Company supervision designed to ensure consistently high product quality. Dole utilizes product quality, brand recognition, competitive pricing, effective customer service and consumer marketing programs to enhance its position within the highly competitive food industry. Consumer and institutional recognition of DOLE(R) and related brands and the association of these brands with high quality food products contribute significantly to Dole's ability to compete in the markets for fresh fruit and vegetables, packaged foods and dried fruits and nuts. The Company owns these trademarks in the United States, Canada and in other countries in which it conducts business and regards them as important corporate assets with high recognition and acceptance. The markets for all of Dole's products are highly competitive. In order to compete successfully, Dole sources products of high quality and seeks to distribute them in worldwide markets on a timely basis. Dole's competitors in the fresh fruit business include a limited number of large international food distribution companies, as well as a large number of smaller independent distributors, including grower cooperatives and foreign government-sponsored producers which have intensified competition in recent years. With respect to vegetables, a limited number of grower-shippers in the United States and Mexico supply a significant portion of the domestic fresh produce market. However, numerous smaller independent distributors also compete with Dole in the market for fresh vegetables. With respect to packaged products, Dole competes against a number of large U.S. companies, as well as a substantial number of smaller independent canners; Dole's processed pineapple also competes against a significant volume of product processed abroad by foreign competitors. Dole's citrus and dried fruit and nut products compete primarily against large grower cooperatives with strong brand recognition. Dole's earnings from its fresh fruit, vegetable and dried fruit and nut operations, and its packaged foods operations are sensitive to fluctuations in the volatile market prices for these products. Excess supplies often cause severe price competition. Growing conditions in various parts of the world, particularly weather conditions such as floods, droughts and freezes, and diseases and pests are primary factors affecting market prices because of their influence on supply and quality of product. Other factors affecting Dole's operations include the seasonality of its supplies, the ability to process products during critical harvest periods, the timing and effects of ripening, the degree of perishability, the effectiveness of worldwide distribution systems, the terms of various federal and state marketing orders (particularly for dried fruit, nuts and citrus), total worldwide industry volumes, the seasonality of consumer demand, foreign currency exchange fluctuations and foreign political risks. Products Dole sources, distributes and markets fresh fruit products including bananas, pineapples, table grapes, apples, pears, plums, oranges, grapefruit, lemons, mangos, tangelos, melons, cherries, strawberries, raspberries and other deciduous, tropical and citrus fruits. Dole sources, harvests, cools, distributes and markets approximately 25 different types of fresh vegetable products, including iceberg lettuce, red and green leaf lettuce, romaine lettuce, butter lettuce, celery, cauliflower, green cauliflower, broccoli, carrots, brussels sprouts, spinach, red and green onions, asparagus, cucumbers, snow peas, artichokes, strawberries and raspberries. Dole also markets value-added products such as complete salad packs, fresh-cut salad mix, red and green cabbage, carrots, iceberg lettuce, coleslaw and broccoli and cauliflower florets. Dole sources, processes and markets almonds, pistachios, dates, raisins, prunes and trail mixes. 2 Dole's fresh fruit and vegetable products and its consumer dried fruit and nut products are marketed under the DOLE(R) brand, under other brand names owned by the Company, and, in the some cases, under private labels. Dole produces and markets processed food products including sliced, chunk, tidbit and crushed pineapple in cans, as well as tropical fruit salad, and markets mandarin oranges. Dole also markets DOLE(R) juice drinks and DOLEWHIP(R) soft-serve, non-dairy dessert. Dole's products are marketed through 24 direct selling offices in North America, nine in Europe, four in Japan, one in Hong Kong, one in Korea, one in the Middle East, one in the Philippines, one in Singapore and one in Taiwan, as well as through independent brokers. In September 1993, Dole announced a new management initiative for its worldwide food company operations. In each of Dole's major world markets -- North America, Latin America, Asia and Europe -- Dole's internal management structure was reorganized to integrate responsibility for all food operations and marketing in each region. Dole North America DOLE NORTH AMERICA sources, distributes and markets DOLE(R) fresh fruits and vegetables, dried fruit and nuts and other processed food products, including processed pineapple, juices and juice concentrates, in North America. Dole North America markets bananas grown in Latin America, table grapes grown in the United States, Chile and Mexico, apples and pears grown in the United States and Chile, melons grown in Ecuador and citrus fruit grown in the United States and Honduras, as well as other deciduous and tropical fruit grown in the United States, Chile, Costa Rica, Mexico and New Zealand. Fresh pineapple destined for North America and Western Europe is grown by Dole North America in Hawaii. Deciduous and citrus fruit products are sold primarily to wholesalers and retail chains, which in turn resell or distribute them to retail food stores. Fresh vegetables marketed by Dole are generally grown by independent growers in California, Arizona, Colorado and northern and central Mexico. The vegetables are generally field packed and transported to Dole's central cooling and distribution facilities. The products are sold to customers in North America, Asia and Western Europe. Dole has an agreement with Nestle Dairy Systems, Inc., a subsidiary of Nestle USA, Inc., in which Dole has licensed to Nestle its rights to market and manufacture processed products in key segments of the frozen novelty business in the United States and Canada, including FRUIT 'N JUICE(R), SUNTOPS(TM), FRESH LITES(R), FRUIT 'N YOGURT(TM) AND FRUIT 'N CREAM(TM) bars and, in the premium novelty category, Fruit Sorbet. Dried fruit and nut products are sourced from independent growers and, to a lesser extent, produced by Dole North America. They are packaged for the retail consumer and in bulk for cereal, confectionery and other food processors and for food service use. Raisins are acquired from growers and dehydrators located in the San Joaquin Valley of California. These products are marketed domestically and overseas, primarily in Western Europe and Asia. Approximately 60% of all production is sold to other food processors for eventual use in other food products. Raisins account for the largest portion of dried fruit and nut sales. Dole Latin America DOLE LATIN AMERICA sources and transports bananas grown in Honduras, Costa Rica, Colombia, Ecuador, Nicaragua and Panama for markets principally in North America and Europe and the Mediterranean. 3 Fresh pineapples destined for the North American and Western European markets are grown by Dole Latin America on plantations in Honduras, the Dominican Republic and Costa Rica. Dole Latin America sources table grapes, apples, pears and other deciduous and tropical fruit grown in Chile, melons grown in Ecuador and citrus fruit grown in Honduras and Argentina for markets in North America, Western Europe and Asia. Dole operates a fleet of approximately 35 refrigerated vessels, of which 8 are Company-owned and the remainder are chartered. From time to time, excess capacity may be chartered or subchartered to others. Dole Latin America conducts other food and beverage operations in Honduras, including an approximately 71% interest in a beer and soft drink bottling operation, a bottle crown and carton facility for beverage-related products, a plastic injection facility used primarily for the manufacture of beer and soft drink plastic cases, a sugar mill, as well as a majority interest in an edible oils refinery, a laundry soap factory and a palm oil plantation. The beer and soft drink bottling operation, which sells its products primarily in Honduras, competes against other local soft drink bottlers. Competition focuses on product quality, consumer marketing programs and the effectiveness of the distribution system. Dole Asia Bananas and pineapples grown in the Philippines are transported to markets principally in Asia and the Middle East. DOLE ASIA also sources DOLE(R) and Mountain(R) asparagus from the Philippines and distributes and markets these products in Japan and other Asian countries. Snow Dole Co., Ltd., a joint venture of Dole and Snow Brand Milk Products Co., Ltd. of Japan, processes and distributes a full line of 100% fruit juices, frozen desserts and canned pineapple in Japan. Pineapples used for processed products are grown primarily in Thailand and the Philippines, and, to a lesser extent, in the Dominican Republic and Honduras. Dole Asia, with joint venture partners, is developing citrus orchards and juice processing facilities on mainland China. Dole Asia also produces leather-leaf ferns, anthuriums and other tropical flowers in the Philippines for export to Japan. Dole recently announced its intention to close its shrimp farming operation in the Philippines. Dole Europe In January 1993, DOLE EUROPE acquired a French dried fruit and nut business which sources products from around the world for processing, packaging and distribution in France and to other European markets. This business complements the Company's current California operations by expanding the line of dried fruit and nut products sold throughout Europe. In early 1993, Dole Europe acquired three regional banana ripening and distribution companies in France, which complement the Company's investment in another French banana importer and ripening company. In 1993, the Company's designer and builder of banana ripening facilities and equipment established a European division. At the end of 1993, the Company acquired affiliated fruit juice businesses which produce and distribute juice products in Europe and the United States under the Looza(R), Fruvita(R) and Juice Bowl(R) brands. Looza(R) is a leader in shelf-stable juices and nectars in its market sector. Fruvita(R) is the leader in the chilled fruit juice category in continental Europe. Juice Bowl(R) brand juice products are distributed in the United States. 4 Research and Development Dole's research and development programs concentrate on the development of new value-added products and new uses for existing products, as well as agricultural research and packaging design for improving product quality. New product development and packaging research activities are conducted primarily at Dole's research technical center in San Jose, California. Agricultural research is directed toward improving product yields and product quality by examining and improving agricultural practices in all phases of production (such as development of specifically adapted plant varieties, land preparation, fertilization, cultural practices, pest and disease control, and post-harvesting, packing, and shipping procedures), and includes on-site technical services and the implementation and monitoring of recommended agricultural practices. Specialized machinery is also developed for various phases of agricultural production and packaging which reduces labor, improves productivity and efficiency and increases product quality. Agricultural research is conducted at field facilities primarily in California, Hawaii, Latin America and Asia. Foreign Operations Dole has significant food sourcing and related operations in Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, Honduras, Nicaragua, the Philippines and Thailand. Dole also sources food products in Algeria, Argentina, Australia, Cameroon, China, Greece, Italy, Ivory Coast, Mexico, New Zealand, Panama, Peru, Spain, Syria, Tunisia, Turkey and Venezuela. Significant volumes of Dole's fresh fruit and packaged products are marketed in Canada, Western Europe and Japan, with lesser volumes marketed in New Zealand, Hong Kong, South Korea, Australia and certain countries in Asia, Eastern Europe, Scandinavia, the Middle East and Central and South America. Exports of Dole's products to these countries, particularly Japan, South Korea and Taiwan, are subject to various restrictions which may be increased or reduced in response to international political pressures, thus affecting Dole's ability to compete in these markets. Significant volumes of Dole's dried fruit and nut products are marketed to Asia and Western Europe. The new European Community ("EC") banana regulations which impose quotas on bananas exported from Latin America were implemented on July 1, 1993. These regulations disrupted traditional trading patterns causing banana volumes displaced by the EC restrictions to be shipped into North America and non-EC European banana markets, resulting in lower prices in the affected markets. Present and proposed agricultural subsidies to Western European growers and processors, and phytosanitary restrictions on imported products could also affect Dole's ability to market its products in Western Europe. A small portion of Dole's vegetable products is exported to markets outside the United States and Canada, primarily to Asia and Western Europe. Dole's foreign operations are subject to risks of expropriation, civil disturbances, political unrest, increases in taxes and other restrictive governmental policies, such as import quotas. Loss of one or more of its foreign operations could have a material adverse effect on Dole's operating results. Dole attempts to maintain a cordial working relationship in each country where it operates. Because Dole's operations are a significant factor in the economies of certain countries, its activities are subject to intense public and governmental scrutiny, and may be affected by changes in the status of the host economies, the makeup of the government or even public opinion in a particular country. Dole's international sales are usually transacted in U.S. dollars and major European and Asian currencies, while many of its costs are incurred in currencies different from those that are received from the sale of the product. Results of operations may be significantly affected by fluctuations in currency exchange rates in both the sourcing and selling locations. Environmental and Regulatory Matters Dole's agricultural operations are subject to a broad range of evolving environmental laws and regulations in each country in which it operates. In the United States, these laws and regulations include the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the Federal Insecticide, Fungicide and Rodenticide Act and the Comprehensive Environmental Response, Compensation and Liability Act. 5 Compliance with these foreign and domestic laws and related regulations is an ongoing process which is not currently expected to have a material effect on Dole's capital expenditures, earnings or competitive position. Environmental concerns are, however, inherent in most major agricultural operations, including those conducted by Dole, and there can be no assurance that the cost of compliance with environmental laws and regulations will not be material. Moreover, it is possible that future developments, such as increasingly strict environmental laws and enforcement policies thereunder, and further restrictions on the use of agricultural chemicals could result in increased compliance costs. Dole's food operations are also subject to regulations enforced by, among others, the U.S. Food and Drug Administration and state, local and foreign equivalents and to inspection by the U.S. Department of Agriculture and other federal, state, local and foreign environmental and health authorities. Among other things, the U.S. Food and Drug Administration enforces statutory standards regarding the branding and safety of food products, establishes ingredients and manufacturing procedures for certain foods, establishes standards of identity for foods and determines the safety of food substances in the United States. Similar functions are performed by state, local and foreign governmental entities with respect to food products produced or distributed in their respective jurisdictions. Several of Dole's products, including but not limited to dried fruit, nuts and citrus fruit, are or in the future may be subject to, federal and state marketing orders which may affect the quantities of such products that can be sold at any one time, the amount of such products that must be held in reserve, the manner in which such products can be processed, quality standards for such products and various other matters relating to the marketing and sale of such products. Sources and Availability of Raw Materials The major raw material and operating supplies used by Dole are seed and other planting materials, fuels for transportation, agricultural chemicals, packaging materials and tinplate. Generally, all of these items are readily available from a number of sources; however, operations would be affected by any substantial reductions in supply. REAL ESTATE The Company conducts real estate activities, including residential, commercial and/or industrial real estate projects, in Hawaii, California, Arizona, North Carolina, Georgia and Mississippi. The Company generally competes against a number of large, well-capitalized real estate developers for residential, commercial and industrial projects. The Company competes for residential sales with other developers, homebuilders and individuals reselling existing residential housing in the greater metropolitan areas in which it conducts business. The Company competes primarily on the basis of location, prices, quality and design. The Company also competes with other developers and homebuilders for desirable properties, financing, raw materials and skilled labor. The Company's real estate's operations are subject to a variety of risks including increases in mortgage interest rates, shifts in population, real estate market fluctuations, changes in the desirability and preferences for residential, commercial and industrial areas, and the effects of changes in tax laws. Land use planning, management and development are also subject to local zoning, economic and political constraints. Residential Real Estate Operations All of the Company's residential real estate activities, except on the Island of Lana'i, are currently conducted through Castle & Cooke Homes, Inc. ("CKI"). In March 1993, the Company's homebuilding and residential development subsidiary, CKI, completed the initial public offering of 5,400,000 shares of its common stock. Dole retains approximately an 82% interest in CKI, which is listed on the New York Stock Exchange under the symbol "CKI". 6 In connection with the initial public offering, the Company entered into an Exclusive Residential Development Agreement with CKI, which provides, subject to certain exceptions, that until March 4, 2043, the Company will conduct all of its residential real estate development business in the United States through CKI, other than such activities on the Island of Lana'i. The Company also granted to CKI the right of first refusal to purchase up to 12,500 acres in Hawaii, California and Arizona. The right of first refusal expires March 4, 2013. In Hawaii, Mililani Town, located in central Oahu, is being developed as a 3,500-acre master-planned community, complete with homes, parks, recreation centers, schools, shopping centers and a library. In Mililani Makai, the first section of the community to be developed, approximately 9,300 units on approximately 2,300 acres of land have been sold. Mililani Mauka is the section of Mililani Town now undergoing development; current plans call for the development of approximately 6,600 units on 1,200 acres over the next ten years. The necessary land use and zoning approvals for the first phase of 4,500 units on approximately 790 acres in Mililani Mauka have been received, and 1,496 units have been sold through January 1, 1994. Other active Hawaii developments include Royal Kunia and The Crowne at Wailuna. During 1993, the Company substantially completed Sunset Pointe at Waikele, a residential development on approximately 35 acres in central Oahu. This development consists of 251 single-family detached homes and two homesites. Deliveries of finished homes began in May 1992 and as of January 1, 1994, only two homes remain to be sold. Royal Kunia is a 270-acre master-planned community to be built on the Ewa Plain in central Oahu. Royal Kunia is owned by a limited partnership in which a wholly-owned subsidiary of CKI is the sole general partner and holds a 50% interest. The development, when completed in accordance with the master plan, will offer single-family and multi-family housing adjacent to commercial properties, parks and recreational facilities. The master plan provides for 1,748 units, and the first homes are currently expected to be delivered in the second half of 1994. The Crowne at Wailuna is the fourth and final phase of a planned residential community above Pearl City on the Island of Oahu. This 26-acre parcel was purchased by the Company in 1993. It is planned to include 158 detached homes developed under condominium ownership. The first homes are currently expected to be delivered in late 1994. Na Pu'u Nani at Waikoloa is a proposed 640 unit residential development on approximately 255 acres of land in south Kohala on the Island of Hawaii. Site development and construction of infrastructure have not yet begun. Na Pu'u Nani is owned by a joint venture in which a subsidiary of CKI is the managing general partner and holds a 30% interest. The joint venture has filed suit against the third party which owned the property prior to the joint venture, seeking various remedies, including recision of the purchase of the property. If an adequate remedy is not granted, the project could be postponed or cancelled. In Bakersfield, California, planned residential communities are being developed on approximately 5,070 acres. The property was in various stages of development when acquired in late 1987. Approximately 1,535 acres are currently zoned for development, portions of which have been master-planned and subdivided, with roadways and utilities constructed to each subdivision. In Bakersfield, lots are sold to independent builders for single family projects, and in 1992, CKI began building homes. Current residential development activities in Bakersfield include Silver Creek, Seven Oaks and Brimhall. Silver Creek is a master-planned community encompassing approximately 600 acres. Homes and homesites are offered at three price levels. Approximately 1,350 homes and homesites remain to be developed on approximately 430 acres. Seven Oaks is a master-planned community on approximately 1,000 acres and is designed to be the premier residential development in Bakersfield. Seven Oaks surrounds an 18 hole golf course and country club developed by the Company, which will be contributed to a nonprofit mutual benefit corporation. The Company sells homesites in Seven Oaks and began building homes in 1993. Approximately 1,320 home and homesites on approximately 510 acres remain to be developed. 7 Brimhall is a 285-acre residential community designed to attract entry-level and middle-market homebuyers. Development commenced in 1991. The Company sells homesites to builders and builds its own homes in Brimhall. An additional 940 acres are currently being master-planned to complete the Brimhall community. The Company currently plans to develop approximately 4,040 homes and homesites on the approximately 1,195 remaining acres. Other developments include Camarillo Springs and Sierra Vista. Construction of the final phase of 57 townhomes at the Camarillo Springs project, located in the City of Camarillo in Ventura County, California was completed in 1992 and as of January 1, 1994, only nine units remain to be sold. The Sierra Vista, Arizona project contains single-family and multi-family homesites for sale to builders and individuals. Approximately 3,845 homesites remain to be developed on approximately 1,390 acres. The Company also operates a 320-unit apartment complex in Bakersfield. Commercial, Industrial and Retail Real Estate Operations The Company's commercial, industrial and retail real estate operations are conducted through wholly-owned subsidiaries of the Company, and not through CKI. In Hawaii, the Company is constructing a shopping center in Mililani Town on approximately 45 acres, of which approximately 180,000 square feet have been completed. Construction has commenced on the next phase of the shopping center, which includes approximately 70,000 square feet. In addition, the Company is developing Mililani Technology Park, a 256-acre, campus-like business/research office park currently zoned and designed primarily for high technology companies and technology-related companies. The first phase of 35 acres is complete and construction of the second phase of 38 acres is in progress. The Company also operates a Company-owned mixed-use complex at Dole's former cannery facility in Honolulu and a tourist attraction at Dole's pineapple plantation in central Oahu. In Bakersfield, California, the Company has three industrial parks in various stages of development. The Company also owns two office buildings, a 150,000 square foot industrial warehouse and a 50% general partnership interest in a partnership owning a shopping center. The Company also owns and operates four office buildings located in North Carolina and Georgia and four apartment complexes located in Arizona, Mississippi and North Carolina. The construction work conducted by the Company's residential, commercial, industrial and retail real estate operations is largely performed by independent contractors, subcontractors and suppliers, and the materials and supplies are secured by these contractors, subcontractors and suppliers from customary trade sources. Although certain products are subject to supply limitations from time to time, such limitations have not significantly impaired the Company's ability to conduct its business in the past. RESORTS The Company owns and operates two luxury hotels on the Hawaiian island of Lana'i. The Lodge at Koele is a two story 102-room luxury lodge set in the wooded highlands of Koele, Lana'i. It includes an18-hole golf course called The Experience at Koele. The Manele Bay Hotel is a luxury, oceanfront hotel with 245 guest rooms and suites. A conference center for The Manele Bay Hotel was completed in 1992. The Challenge at Manele, an 18-hole golf course immediately adjacent to The Manele Bay Hotel, was completed in 1993. The Company is also planning to develop the property contiguous to the Lodge and golf course sites on Lana'i as residential homesites. The Company anticipates marketing golf course frontage townhomes and single family lots at Koele by mid 1994. Development of homesites at Manele is awaiting final land use and zoning approvals. The Company's resort operations are subject to the risks of changes in the desirability and preference for resort areas and economic and local political constraints. 8 Environmental and Regulatory Matters The Company's real estate and resort operations are subject to a broad range of evolving federal, state and local environmental laws and regulations. Management is not currently aware of any environmental compliance issues that are expected to have a material effect on the Company's capital expenditures, earnings or competitive position. ITEM 2. PROPERTIES The Company maintains executive offices in Westlake Village, California and auxiliary executive offices in Los Angeles, California and New York, New York, each of which is leased from third parties. Dole's various divisions also maintain headquarters offices in the following California cities: Westlake Village, Salinas, and Fresno, which are leased from third parties, and in Wahiawa, Hawaii, Wenatchee, Washington and on the Island of Lana'i, which are owned by the Company. Dole has closed leased offices in San Francisco and Ontario, California to consolidate these operations with other Company operations. The Company owns the headquarters building of Dole Fresh Fruit International, Limited in Costa Rica. In addition, the Company's Hawaii commercial real estate operations and CKI's Hawaii real estate operations both maintain offices in Honolulu, Hawaii in a building which is owned by the Company. The Company's California commercial real estate operations, California fresh fruit and citrus operations and CKI's California operations are headquartered in Bakersfield, California in a building owned by the Company. The inability to renew any of the above office leases by the Company would not have a material adverse effect on the Company's operating results. The Company and each of its subsidiaries believe that their property and equipment are generally well maintained, in good operating condition and adequate for their present needs. The following is a description of the food and real estate operations' significant properties. DOLE Dole North America Dole's Hawaiian pineapple operations for the fresh produce market are located on the Island of Oahu and total approximately 6,500 acres. Dole produces citrus on approximately 9,500 acres in the San Joaquin and Coachella Valleys of California owned directly or through agricultural partnerships as well as through independent growing arrangements. Citrus is packed in eight Company-owned or leased packing houses--five in California, two in Florida and one in Arizona. Dole, through a joint venture, operates a 175,000 square foot packing house in southwest Florida with two multi-variety production lines. Domestic table grapes are sourced from approximately 6,000 acres on four Company-owned vineyards, one located in the Coachella Valley and three located in the San Joaquin Valley. Domestic table grapes are fumigated and cooled in three Company-owned facilities, two are located in the San Joaquin Valley and one is located in the Coachella Valley. Dole produces wine grapes on approximately 2,000 acres of vineyards, and stone fruit on approximately 800 acres of Company-owned property in the San Joaquin Valley. Dole also produces grapes on approximately 300 acres of Company-owned property in Chile. The Company owns a cherry packing and processing facility in Victor, California. Dole produces apples and pears directly from seven Company-owned orchards on approximately 1,800 productive acres in Wenatchee and Chelan, Washington as well as through independent growing arrangements. The Company also owns apple and pear storage, processing and packing facilities in Wenatchee and Chelan. The Company owns approximately 1,175 acres of farmland in California and Arizona, and leases approximately 10,600 acres of farmland in California and another 5,500 acres in Arizona in connection with Dole's vegetable operations. The majority of this acreage is farmed under joint growing arrangements with 9 independent growers, while the remainder is farmed by Dole. The Company owns cooling, packing and shipping facilities in Yuma, Arizona and the following California cities: Marina, Holtville, Guadalupe, Gonzales and Huron. Additionally, the Company has partnership interests in facilities in Yuma, Arizona and Mexico, and leases facilities in Oxnard, California. The Company owns a state-of-the-art, value-added processing plant in Yuma, Arizona. A similar plant in Soledad, California is under construction and is currently scheduled to open in April 1994. Dole produces almonds from approximately 5,300 acres and pistachios from approximately 2,900 acres of orchards in the San Joaquin Valley, owned directly or through agricultural partnerships or leased. The Company leases approximately 260 acres of date gardens in the Coachella Valley. The Company owns and operates one almond and pistachio processing and packing plant, three almond receiving and storage facilities, one pistachio processing plant and two raisin and prune processing plants, all of which are located in the San Joaquin and Sacramento Valleys. The Company owns and operates two date processing plants in the Coachella Valley, and leases a prune processing facility in Morgan Hill, California. Hawaiian sugar operations include a mill which produces raw sugar and a plantation on the Island of Oahu comprising approximately 12,100 acres (approximately 6,100 acres of which are owned and the remainder of which are leased). Dole recently announced its plan to close its Hawaiian sugar operation. As previously announced, over the past few years Dole has phased out its processed pineapple operations on the Island of Lana'i in Hawaii and its cannery in Honolulu. Portions of the Company's fresh fruit and vegetable farm properties are irrigated by surface water supplied by local government agencies using facilities financed by federal or state agencies, as well as from underground sources. Water received through federal facilities is subject to acreage limitations under the 1982 Reclamation Reform Act. The quantity and quality of these water supplies varies depending on weather conditions and government regulations. The Company believes that under normal conditions these water supplies are adequate for current production needs. Dole Latin America Dole produces bananas directly from Company-owned plantations in Costa Rica, Colombia and Honduras as well as through associated producers or independent growing arrangements in those countries and in Ecuador, Panama and Nicaragua. The Company owns approximately 40,400 acres in Honduras, 32,400 acres in Costa Rica and 3,600 acres in Colombia. Dole also grows pineapple on approximately 6,000 acres of owned land in Honduras, primarily for the fresh produce market, and operates a juice concentrate plant in Honduras for pineapple and citrus. Dole grows pineapple on approximately 11,000 acres of leased land in the Dominican Republic and owns and operates a juice concentrate plant located adjacent to the leased acreage. Dole produces citrus on approximately 650 acres of Company-owned land and 175 acres of leased land in Honduras. Dole also operates a grapefruit packing house in Honduras. Dole operates Company-owned corrugated box plants in Honduras, Costa Rica, Colombia and Chile and participates in the operation of a 49% Company-owned corrugated box plant in Ecuador. The Company has an interest in the following properties in Honduras: an approximately 71% interest in a beer and soft drink bottling operation, a bottle crown and carton facility for beverage-related products, a plastic injection facility used primarily for the manufacture of beer and soft drink plastic cases and a sugar mill, as well as a majority interest in an edible oils refinery, a laundry soap factory, a palm oil plantation and 3,000 acres of coconut palm growing area. 10 Dole operates a fleet of approximately 35 refrigerated vessels, of which 8 are Company-owned and the remainder are chartered. From time to time, excess capacity may be chartered or subchartered to others. Dole enters into spot charters as necessary to supplement its transportation resources. Dole has entered into an agreement with a Polish ship builder to construct refrigerated vessels for Dole at an aggregate purchase price of approximately $120 million. The first vessel is currently scheduled for delivery in the second quarter of 1994. Dole Asia Dole operates a pineapple plantation of approximately 30,200 acres in the Philippines. Originally covered by a grower agreement between Dole and a government-owned and controlled corporation, approximately 22,100 acres of the plantation have been transferred to a cooperative of Dole employees that will acquire the land pursuant to an agrarian reform law. The remaining acreage in the Philippines is farmed pursuant to farm management contracts. A cannery, chillroom, juice concentrate plant, corrugated box plant and can manufacturing plant, each owned by Dole, are proximately located to the plantation. Through a subsidiary in Thailand controlled by Dole, Dole grows pineapple on approximately 5,000 acres of leased land and purchases additional supplies of pineapple in Thailand on the open market. Dole's Thailand subsidiary owns and operates a cannery, can plant and juice concentrate plant located adjacent to the leased acreage in central Thailand, and a second multi-fruit cannery in southern Thailand. Dole also produces bananas through associated producers or independent growing arrangements in the Philippines, and, with a joint venture partner, is developing approximately 6,400 acres of citrus orchards in China. Dole Europe At the end of 1993, Dole acquired two affiliated fruit juice companies which have production facilities in Belgium, France and Florida. In France, the Company owns a dried fruit and nut processing, packaging and warehousing facility in Vitrolles and a date processing and packaging plant in Marseille. The Company also owns banana ripening facilities in Lille, Rouen and Bourges, France. REAL ESTATE AND RESORTS The Company owns an aggregate of approximately 128,900 acres of land in Hawaii. Of that total, approximately 40,300 acres are located on the Island of Oahu, of which approximately 13,100 acres currently are used for the cultivation of pineapple and sugar, approximately 12,100 acres are leased or rented to approximately 98 tenants and approximately 5,660 acres are owned by CKI. Additionally, the Company has granted CKI a right of first refusal to purchase approximately 5,300 acres of its 40,300 acres on Oahu. Approximately 88,600 acres are located on the Island of Lana'i, of which the Company uses approximately 1,300 acres for resort and residential development. In addition, approximately 15,100 acres on Lana'i are being used or are available for diversified agricultural operations, including pasture land for livestock. In California, the Company owns approximately 11,000 acres, including approximately 3,200 acres near San Jose, 7,700 acres near Bakersfield (of which 5,070 acres are owned by CKI and 1,280 are subject to CKI's right of first refusal) and 100 acres at the Mountaingate development in West Los Angeles. The Company also owns approximately 7,300 acres in Cochise County, Arizona, of which CKI owns approximately 1,390 acres and approximately 5,920 acres of which are subject to CKI's right of first refusal. The Company also owns and operates four office buildings located in North Carolina and Georgia and four apartment complexes located in Arizona, Mississippi and North Carolina. 11 ITEM 3. LEGAL PROCEEDINGS Lawsuits have been filed in Texas against the manufacturers of a formerly widely used agricultural chemical called DBCP and against the Company. Plaintiffs are foreign nationals who claim they were employees of Company subsidiaries during the 1970's. Damages are claimed for alleged personal injuries caused by contact with DBCP approximately 15 to 20 years ago. The Company has denied liability and asserted substantial defenses. In 1992, similar lawsuits with a different group of plaintiffs were settled. The portion paid by the Company was covered by insurance and immaterial to the Company. In the opinion of management, after consultation with legal counsel, these pending lawsuits are not expected to have a material adverse effect on the Company. The Company is involved from time to time in other various claims and legal actions incident to its operations, both as plaintiff and defendant. In the opinion of management, after consultation with outside counsel, none of the claims or actions to which the Company is a party is expected to have a material adverse effect on the Company. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters submitted to a vote of security holders during the quarter ended January 1, 1994. EXECUTIVE OFFICERS OF THE REGISTRANT Below is a list of the names and ages of all executive officers of the Company as of March 10, 1994 indicating their positions with the Company and their principal occupations during the past five years. The current terms of the executive officers will expire at the next organizational meeting of the Company's Board of Directors or at such time as their successors are elected.
POSITIONS WITH THE COMPANY AND SUBSIDIARIES NAME AND AGE AND FIVE-YEAR EMPLOYMENT HISTORY ------------ -------------------------------- David H. Murdock (70)............... Chairman of the Board, Chief Executive Officer and Director of the Company since July 1985. Chairman of the Board, Chief Executive Officer and Director of Castle & Cooke Homes, Inc. since September 1992. Since June 1982, Chairman of the Board and Chief Executive Officer of Flexi-Van Corporation, a Delaware corporation wholly owned by Mr. Murdock. Sole owner and developer of the Sherwood Country Club in Ventura County, California, and numerous other real estate developments; also sole stockholder of numerous corporations engaged in a variety of business ventures and in the manufacture of textiles and industrial and building products. David A. DeLorenzo (47)............. President of Dole Food Company-- International since September 1993 and Executive Vice President and Member of the Office of the Chairman of the Company since July 1990. Director of the Company since February 1991. President of Dole Fresh Fruit Company from September 1986 to June 1992. Gerald W. LaFleur (61).............. Executive Vice President and Member of the Office of the Chairman of the Company since April 1992. Executive Vice President of Pacific Holding Company (a sole proprietorship of Mr. Murdock) since July 1991. Prior to July 1991, partner in Arthur Andersen & Co.
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POSITIONS WITH THE COMPANY AND SUBSIDIARIES NAME AND AGE AND FIVE-YEAR EMPLOYMENT HISTORY ------------ -------------------------------- Alan B. Sellers (45)................ Executive Vice President and Member of the Office of the Chairman of the Company since January 1990. Chief Financial Officer of the Company since March 1992 and Chief Administrative Officer of the Company since July 1990. Senior Vice President and General Counsel of the Company from February 1988 to January 1990. Corporate Secretary of the Company since February 1986. Vice President-Legal Affairs of Flexi-Van Corporation (a corporation wholly owned by Mr. Murdock) from August 1987 to December 1993; Corporate Secretary of Flexi-Van Corporation and General Counsel of Pacific Holding Company (a sole proprietorship of Mr. Murdock) from August 1986 to December 1992. Ernest W. Townsend (48)............. Executive Vice President, Member of the Office of the Chairman of the Company and President of Dole Food Company--North America since September 1993. President of Dole Fresh Fruit and Vegetables (North America) since June 1992. President and Chief Executive Officer of the All- American Gourmet division of Kraft/General Foods from March 1989 to May 1992. President of Frozen Food Group of Kraft, Inc. from January 1988 to March 1989. George R. Horne (57)................ Vice President of the Company since October 1982. Vice President-Human Resources of Dole since February 1986. Michael S. Karsner (35)............. Vice President and Treasurer of the Company since January 1994. Vice President and Treasurer of The Black & Decker Corporation from January 1990 to January 1994. Vice President--Corporate Development of The Black and Decker Corporation from March 1989 to January 1990. Thomas C. Leppert (39).............. Vice President of the Company and President of Castle & Cooke Properties, Inc. since March 1989. President--Hawaii and Director of Castle & Cooke Homes, Inc. since June 1992. Patricia A. McKay (36).............. Vice President-Controller of the Company since August 1991. Controller of Dole Fresh Fruit Company since October 1988.
PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS As of March 16, 1994, there were approximately 16,691 holders of record of the Company's Common Stock. Additional information required by Item 5 is contained on pages 26, 27, 30, 35 and 37 of the Dole Annual Report. Such information is incorporated herein by reference. ITEM 6. SELECTED FINANCIAL DATA There is hereby incorporated by reference the information appearing under the caption "Results of Operations and Selected Financial Data" on page 35 of the Dole Annual Report. 13 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS There is hereby incorporated by reference the information appearing under the caption "Management's Discussion and Analysis of Results of Operations and Financial Position" on pages 32, 33 and 34 of the Dole Annual Report. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA There is hereby incorporated by reference the information appearing on pages 19 through 31 of the Dole Annual Report. See also Item 14 of this report. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There have been no changes in the Company's independent auditors for the 1993 and 1992 fiscal years nor have there been any disagreements with the Company's independent auditors on accounting principles or practices for financial statement disclosures. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT There is hereby incorporated by reference the information regarding the Company's directors to appear under the caption "Election of Directors" in the Company's definitive proxy statement for its 1994 Annual Meeting of Stockholders (the "1994 Proxy Statement"). See the list of the Company's executive officers and related information under "Executive Officers of the Registrant", which is set forth in Part I hereof. ITEM 11. EXECUTIVE COMPENSATION There is hereby incorporated by reference the information to appear under the captions "Remuneration of Directors" and "Compensation of Executive Officers" in the 1994 Proxy Statement. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT There is hereby incorporated by reference the information with respect to security ownership to appear under the captions "General Information", "Beneficial Ownership of Certain Stockholders" and "Security Ownership of Directors and Executive Officers" in the 1994 Proxy Statement. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS There is hereby incorporated by reference the information to appear under the caption "Certain Transactions" in the 1994 Proxy Statement. 14 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) 1. FINANCIAL STATEMENTS: The following consolidated financial statements are included in the Dole Annual Report and are incorporated herein by reference:
ANNUAL REPORT PAGES ------ Consolidated Statement of Income--fiscal years ended January 1, 1994, January 2, 1993 and December 28, 1991..................... 19 Consolidated Balance Sheet--January 1, 1994 and January 2, 1993.. 20 Consolidated Statement of Cash Flow--fiscal years ended January 1, 1994, January 2, 1993, and December 28, 1991................. 21 Notes to Consolidated Financial Statements....................... 22-30 Independent Public Accountants' Report........................... 31
2. FINANCIAL STATEMENT SCHEDULES:
FORM 10- K PAGES -------- Independent Public Accountants' Report on Financial Statement Schedules............................................................ F-1 Schedule II-Amounts receivable from related parties and underwriters, promoters, and employees other than related parties.................. F-2 Schedule V-Property, plant and equipment.............................. F-3 Schedule VI-Accumulated depreciation and amortization of property, plant and equipment.................................................. F-4 Schedule VIII-Valuation and qualifying accounts....................... F-5 Schedule IX-Short-term borrowings..................................... F-6 Schedule X-Supplementary income statement information................. F-7
All other schedules are omitted because they are not applicable, not required or the information is included elsewhere in the financial statements or notes thereto. 3. EXHIBITS:
EXHIBIT NO. ------- 3.1 The restated Articles of Association of the Company, as amended through July 30, 1991. Incorporated by reference to Exhibit 3(a) to the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 1991, File No. 1-4455. 3.2 By-Laws of the Company, as amended through March 25, 1993. 4.1 Credit Agreement dated as of November 15, 1993 among the Company, Citicorp USA, Inc., as Agent and Lender and the financial institutions which are Lenders thereunder, relating to the Company's $400 million, 364-day revolving credit facility. Incorporated by reference to Exhibit 4(d) to the Company's Quarterly Report on Form 10-Q for the quarter ended October 9, 1993, File No.1-4455. 4.2 Indenture dated as of April 15, 1993 between the Company and Chemical Trust Company of California, relating to $300 million of the Company's senior notes. Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K, event date May 6, 1993, File No. 1-4455.
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EXHIBIT NO. ------- 4.3 Indenture dated as of July 15, 1993 between the Company and Chemical Trust Company of California, relating to $400 million of the Company's senior notes. Incorporated by reference to Exhibit 4 to the Company's Current Report on Form 8-K, event date July 15, 1993, File No. 1-4455. 4.4 Revolving Credit Agreement dated as of February 26, 1993 by and among Castle & Cooke Homes, Inc. (a Hawaii corporation), Castle & Cooke Residential, Inc., Castle & Cooke Development Corporation, Castle & Cooke Kunia, Inc., Castle & Cooke Homes, Inc. (a California corporation), Castle & Cooke Sierra Vista, Inc., Castle & Cooke Silver Creek, Inc., and Prairie Vista, Inc. as Borrowers and Bank of Hawaii as Agent and the financial institutions which are Lenders thereunder. Incorporated by reference to Exhibit 10(a) to the Company's Annual Report on Form 10-K for the year ended January 2, 1993, File No. 1-4455. 4.5 The Company agrees to furnish to the Securities and Exchange Commission upon request a copy of each instrument with respect to issues of long-term debt of the Company and its subsidiaries, the authorized principal amount of which does not exceed 10% of the consolidated assets of the Company and its subsidiaries. 10.1 Intercompany Agreement dated as of March 4, 1993 between the Company and Castle & Cooke Homes, Inc. Incorporated by reference to Exhibit 10(a) to the Company's Annual Report on Form 10-K for the year ended January 2, 1993, File No. 1-4455. 10.2 Tax Sharing Agreement dated as of March 4, 1993 between the Company and Castle & Cooke Homes, Inc. Incorporated by reference to Exhibit 10(b) to the Company's Annual Report on Form 10-K for the year ended January 2, 1993, File No. 1-4455. 10.3 Right of First Refusal Agreement dated as of March 4, 1993 among the Company, Castle & Cooke Homes, Inc., Castle & Cooke Arizona, Inc. and Castle & Cooke Communities, Inc. Incorporated by reference to Exhibit 10(c) to the Company's Annual Report on Form 10-K for the year ended January 2, 1993, File No. 1-4455. 10.4 Exclusive Residential Development Agreement dated as of March 4, 1993 between the Company and Castle & Cooke Homes, Inc. Incorporated by reference to Exhibit 10(d) to the Company's Annual Report on Form 10- K for the year ended January 2, 1993, File No. 1-4455. 10.5 Stock Option Agreement dated as of March 4, 1993 between the Company and Castle & Cooke Homes, Inc. Incorporated by reference to Exhibit 10(e) to the Company's Annual Report on Form 10-K for the year ended January 2, 1993, File No. 1-4455. Executive Compensation Plans and Arrangements--Exhibits 10.6--10.16: 10.6 The Company's 1991 Stock Option and Award Plan, as amended through July 7, 1993. 10.7 The Company's 1982 Stock Option and Award Plan, as amended. Incorporated by reference to Exhibit 28(a) to the Company's Report on Form S-8 filed on May 22, 1989, Registration No. 33-28782. 10.8 Description of Executive Incentive Plan for key employees of the Company and its subsidiaries. Incorporated by reference to Exhibit 10(q) to the Company's Annual Report on Form 10-K for the fiscal year ended January 3, 1987, File No. 1-4455. 10.9 Dole Food Company, Inc. Executive Supplementary Retirement Plan (effective January 1, 1989), First Restatement. Incorporated by reference to Exhibit 10(c) to Company's Annual Report on Form 10-K for the fiscal year ended December 29, 1990, File No. 1-4455.
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EXHIBIT NO. ------- 10.10 Bonus Agreement dated as of August 30, 1991 by and between the Company and David A. DeLorenzo, with promissory note dated September 5, 1991 in the principal amount of $500,000 by David A. DeLorenzo in favor of the Company. Incorporated by reference to Exhibit 10(e) to the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 1991, File No. 1-4455. 10.11 Employment Agreement between the Company and Gerald W. LaFleur. Incorporated by reference to Exhibit 10(k) to the Company's Annual Report on Form 10-K for the fiscal year ended January 2, 1993, File No. 1-4455. 10.12 Board of Directors Deferred Compensation Plan. 10.13 1993 Stock Option and Award Plan of Castle & Cooke Homes, Inc., as amended through September 1, 1993. 10.14 Castle & Cooke Homes, Inc. Executive Incentive Plan. 10.15 Dole Food Company, Inc. Annual Incentive Plan. 10.16 Dole Food Company, Inc. Long-Term Incentive Plan. 11 Computations of earnings per common share. 13 Dole Food Company, Inc. 1993 Annual Report for the fiscal year ended January 1, 1994. (This Report is furnished for information of the Commission and, except for those portions thereof which are expressly incorporated by reference herein, is not "filed" as a part of this Annual Report on Form 10-K.) 21 Subsidiaries of Dole Food Company, Inc. 23 Consent of Arthur Andersen & Co.
(b) REPORTS ON FORM 8-K: No current reports on Form 8-K were filed by the Company during the last quarter of the year ended January 1, 1994. 17 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. DOLE FOOD COMPANY, INC. Registrant /s/ David H. Murdock By: _________________________________ David H. Murdock Chairman of the March 31, 1994 Board and Chief Executive Officer PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
NAME TITLE DATE ---- ----- ---- /s/ David H. Murdock Chairman of the Board and March 31, 1994 - ------------------------------------ Chief Executive Officer and David H. Murdock Director /s/ David A. DeLorenzo Executive Vice President and March 31, 1994 - ------------------------------------ Director David A. DeLorenzo /s/ Alan B. Sellers Executive Vice President-- March 31, 1994 - ------------------------------------ Chief Financial and Alan B. Sellers Administrative Officer (Principal Financial Officer) /s/ Patricia A. McKay Vice President--Controller March 31, 1994 - ------------------------------------ (Principal Accounting Patricia A. McKay Officer) /s/ Elaine L. Chao Director March 31, 1994 - ------------------------------------ Elaine L. Chao /s/ Mike Curb Director March 31, 1994 - ------------------------------------ Mike Curb /s/ Richard M. Ferry Director March 31, 1994 - ------------------------------------ Richard M. Ferry /s/ James F. Gary Director March 31, 1994 - ------------------------------------ James F. Gary /s/ Frank J. Hata Director March 31, 1994 - ------------------------------------ Frank J. Hata
18 INDEPENDENT PUBLIC ACCOUNTANT'S REPORT ON FINANCIAL STATEMENT SCHEDULES To the Shareholders and Board of Directors of Dole Food Company, Inc.: We have audited in accordance with generally accepted auditing standards, the consolidated financial statements included in Dole Food Company, Inc.'s annual report to shareholders incorporated by reference in this Form 10-K, and have issued our report thereon dated February 7, 1994. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. The schedules listed in the preceding index are the responsibility of the Company's management and are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements, and in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. Our report on the consolidated financial statements includes an explanatory paragraph with respect to the change in the method of accounting for postretirement benefits other than pensions, effective December 29, 1991. Arthur Andersen & Co. Los Angeles, California February 7, 1994 F-1 SCHEDULE II DOLE FOOD COMPANY, INC. AND SUBSIDIARIES AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS, PROMOTERS AND EMPLOYEES OTHER THAN RELATED PARTIES
BALANCE DEDUCTIONS AT END OF YEAR BALANCE AT --------------------- --------------- BEGINNING AMOUNTS AMOUNTS NOT NAME OF DEBTOR OF YEAR ADDITIONS COLLECTED WRITTEN OFF CURRENT CURRENT -------------- ---------- --------- --------- ----------- ------- ------- (IN THOUSANDS) Year Ended January 1, 1994 David A. DeLorenzo.... $400 $-- $100 $-- $100 $200 Glen T. Hierlmeier.... 317 2 100 3 212 Year Ended January 2, 1993 David A. DeLorenzo.... $500 $-- $100 $-- $100 $300 Glen T. Hierlmeier.... 318 -- 1 -- 317 -- Year Ended December 28, 1991 David A. DeLorenzo.... $-- $500 $-- $-- $100 $400 Glen T. Hierlmeier.... 321 -- 3 -- 1 317
- -------- Notes: The note receivable from David A. DeLorenzo is non-interest bearing and is payable in five annual installments commencing September 1992. On July 9, 1993, in connection with Mr. Hierlmeier's resignation, the terms of the above note receivable were amended. Principal was reduced by $100,000 and the interest rate was reduced from 10.25% to 7.34% per annum. The maturity date, at which time all remaining principal and accrued interest are due and payable, was extended to September 30, 1995. The note is secured by real property located in Bakersfield, California. F-2 SCHEDULE V DOLE FOOD COMPANY, INC. AND SUBSIDIARIES PROPERTY, PLANT AND EQUIPMENT
BALANCE AT BEGINNING OF ADDITIONS AT OTHER CHANGES BALANCE AT YEAR COST RETIREMENTS ADD (DEDUCT) END OF YEAR ------------ ------------ ----------- ------------- ----------- (IN THOUSANDS) Year Ended January 1, 1994 Land and land improvements......... $ 609,036 $ 7,325 $ 4,714 $ 69,706 $ 681,353 Buildings and improvements......... 460,415 7,052 7,179 39,392 499,680 Machinery and equipment............ 768,387 29,706 19,054 141,992 921,031 Construction in progress............. 114,693 174,576 135 (135,200) 153,934 ---------- -------- ------- --------- ---------- Total............... $1,952,531 $218,659 $31,082 $ 115,890(A) $2,255,998 ========== ======== ======= ========= ========== Year Ended January 2, 1993 (B) Land and land improvements......... $ 489,584 $ 3,594 $ 2,878 $ 118,736 $ 609,036 Buildings and improvements......... 497,058 15,348 5,499 (46,492) 460,415 Machinery and equipment............ 655,514 47,844 22,397 87,426 768,387 Construction in progress............. 124,183 124,959 1,141 (133,308) 114,693 ---------- -------- ------- --------- ---------- Total............... $1,766,339 $191,745 $31,915 $ 26,362 $1,952,531 ========== ======== ======= ========= ========== Year Ended December 28, 1991 (C) Land and land improvements......... $ 436,058 $ 40,540 $ 3,275 $ 16,261 $ 489,584 Buildings and improvements......... 289,826 58,169 2,317 151,380 497,058 Machinery and equipment............ 463,460 27,822 18,460 182,692 655,514 Construction in progress............. 261,031 198,629 425 (335,052) 124,183 ---------- -------- ------- --------- ---------- Total............... $1,450,375 $325,160 $24,477 $ 15,281 $1,766,339 ========== ======== ======= ========= ==========
- -------- Notes: (A) Additions for the year ended January 1, 1994 include property, plant and equipment acquired in connection with the purchases of a dried fruit and nut business and banana ripening and distribution companies in France, two affiliated fruit juice businesses and five commercial real estate properties, totaling approximately $111 million. (B) Certain prior year amounts have been reclassified to conform to the 1993 presentation. (C) During 1992, the Company implemented Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" by applying the provisions of the standard retroactively to 1989. Accordingly, amounts for year ended December 28, 1991 have been restated to reflect the adoption of the accounting change. Depreciation is computed principally by the straight-line method over the estimated useful lives of the assets as follows: Land improvements............................................. 5-55 years Buildings and improvements.................................... 10-45 years Machinery and equipment....................................... 2-25 years
F-3 SCHEDULE VI DOLE FOOD COMPANY, INC. AND SUBSIDIARIES ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
ADDITIONS BALANCE AT CHARGED TO BEGINNING OF COSTS AND OTHER CHANGES BALANCE AT YEAR EXPENSES RETIREMENTS ADD (DEDUCT) END OF YEAR ------------ ---------- ----------- ------------- ----------- (IN THOUSANDS) Year Ended January 1, 1994 Land improvements..... $ 56,720 $ 19,754 $ 790 $ (171) $ 75,513 Buildings and improvements......... 67,420 18,200 1,125 (8,887) 75,608 Machinery and equipment............ 263,256 82,856 12,412 4,088 337,788 -------- -------- ------- ------- -------- Total............... $387,396 $120,810 $14,327 $(4,970) $488,909 ======== ======== ======= ======= ======== Year Ended January 2, 1993 Land improvements..... $ 42,726 $ 12,803 $ 165 $ 1,356 $ 56,720 Buildings and improvements......... 48,273 24,024 2,669 (2,208) 67,420 Machinery and equipment............ 192,832 69,795 10,739 11,368 263,256 -------- -------- ------- ------- -------- Total............... $283,831 $106,622 $13,573 $10,516 $387,396 ======== ======== ======= ======= ======== Year Ended December 28, 1991 Land improvements..... $ 31,048 $ 10,251 $ 2,632 $ 4,059 $ 42,726 Buildings and improvements......... 33,287 17,172 1,533 (653) 48,273 Machinery and equipment............ 154,436 55,700 15,585 (1,719) 192,832 -------- -------- ------- ------- -------- Total............... $218,771 $ 83,123 $19,750 $ 1,687 $283,831 ======== ======== ======= ======= ========
F-4 SCHEDULE VIII DOLE FOOD COMPANY, INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS
ADDITIONS BALANCE AT CHARGED TO BEGINNING OF COSTS AND BALANCE AT YEAR EXPENSES DEDUCTIONS(A) END OF YEAR ------------ ---------- ------------- ----------- (IN THOUSANDS) Year Ended January 1, 1994 Allowance for doubtful accounts Trade receivables.......... $15,203 $7,733 $ 4,540 $18,396 Notes and other current receivables............... 9,706 1,083 1,636 9,153 Long-term receivables...... 27,838 4,572 13,026 19,384 Year Ended January 2, 1993 Allowance for doubtful accounts Trade receivables.......... $13,681 $3,148 $ 1,626 $15,203 Notes and other current receivables............... 11,974 3,031 5,299 9,706 Long-term receivables...... 22,401 6,633 1,196 27,838 Year Ended December 28, 1991 Allowance for doubtful accounts Trade receivables.......... $12,663 $2,964 $ 1,946 $13,681 Notes and other current receivables............... 8,398 5,028 1,452 11,974 Long-term receivables...... 20,451 4,444 2,494 22,401
- -------- Note: (A) Write-off of uncollectible amounts. F-5 SCHEDULE IX DOLE FOOD COMPANY, INC. AND SUBSIDIARIES SHORT-TERM BORROWINGS
WEIGHTED MAXIMUM AVERAGE WEIGHTED AVERAGE AMOUNT AMOUNT AVERAGE BALANCE INTEREST OUTSTANDING OUTSTANDING INTEREST CATEGORY OF AGGREGATE AT END RATE AT END DURING THE DURING THE RATE DURING SHORT-TERM BORROWINGS OF YEAR OF YEAR YEAR YEAR(A) THE YEAR(B) --------------------- ------- ----------- ----------- ----------- ----------- (DOLLAR AMOUNTS IN THOUSANDS) January 1, 1994 Notes payable Banks(C)........... $63,735 9.6% $93,370 $64,466 13.1% Other.............. 315 7.0 603 443 7.0 January 2, 1993 Notes payable Banks(C)........... $92,992 12.6% $92,992 $79,801 16.1% Other.............. 521 7.5 1,316 818 8.9 December 28, 1991 Notes payable Banks(C)........... $73,915 15.8% $92,013 $78,491 19.0% Other.............. 1,118 9.8 2,006 1,043 9.9
- -------- Notes: (A) Represents an average of the period-end balances. (B) Computed by dividing the actual short-term interest expense for the year by the Average Amount Outstanding During the Year. (C) Notes payable to banks include borrowings by foreign subsidiaries in local currencies. F-6 SCHEDULE X DOLE FOOD COMPANY, INC. AND SUBSIDIARIES SUPPLEMENTARY INCOME STATEMENT INFORMATION
CHARGED TO COSTS AND EXPENSES ---------------------------------- YEAR ENDED YEAR ENDED YEAR ENDED JANUARY 1, JANUARY 2, DECEMBER 28, 1994 1993 1991 ---------- ---------- ------------ (IN THOUSANDS) Maintenance and repairs..................... $78,345 $94,213 $93,485 General excise taxes........................ 53,471 46,547 41,342 Taxes other than general excise, payroll and income taxes............................... 42,459 47,721 46,016 Advertising................................. 57,058 51,419 54,615
- -------- Note: Amounts not presented are less than 1% of revenue. F-7 EXHIBIT INDEX
EXHIBIT NO. PAGE ------- ---- 3.1 The restated Articles of Association of the Company, as amended through July 30, 1991. Incorporated by reference to Exhibit 3(a) to the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 1991, File No. 1-4455. 3.2 By-Laws of the Company, as amended through March 25, 1993. 4.1 Credit Agreement dated as of November 15, 1993 among the Company, Citicorp USA, Inc., as Agent and Lender and the financial institutions which are Lenders thereunder, relating to the Company's $400 million, 364-day revolving credit facility. Incorporated by reference to Exhibit 4(d) to the Company's Quarterly Report on Form 10-Q for the quarter ended October 9, 1993, File No.1-4455. 4.2 Indenture dated as of April 15, 1993 between the Company and Chemical Trust Company of California, relating to $300 million of the Company's senior notes. Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K, event date May 6, 1993, File No. 1-4455. 4.3 Indenture dated as of July 15, 1993 between the Company and Chemical Trust Company of California, relating to $400 million of the Company's senior notes. Incorporated by reference to Exhibit 4 to the Company's Current Report on Form 8-K, event date July 15, 1993, File No. 1-4455. 4.4 Revolving Credit Agreement dated as of February 26, 1993 by and among Castle & Cooke Homes, Inc. (a Hawaii corporation), Castle & Cooke Residential, Inc., Castle & Cooke Development Corporation, Castle & Cooke Kunia, Inc., Castle & Cooke Homes, Inc. (a California corporation), Castle & Cooke Sierra Vista, Inc., Castle & Cooke Silver Creek, Inc., and Prairie Vista, Inc. as Borrowers and Bank of Hawaii as Agent and the financial institutions which are Lenders thereunder. Incorporated by reference to Exhibit 10(a) to the Company's Annual Report on Form 10-K for the year ended January 2, 1993, File No. 1-4455. 4.5 The Company agrees to furnish to the Securities and Exchange Commission upon request a copy of each instrument with respect to issues of long-term debt of the Company and its subsidiaries, the authorized principal amount of which does not exceed 10% of the consolidated assets of the Company and its subsidiaries. 10.1 Intercompany Agreement dated as of March 4, 1993 between the Company and Castle & Cooke Homes, Inc. Incorporated by reference to Exhibit 10(a) to the Company's Annual Report on Form 10-K for the year ended January 2, 1993, File No. 1-4455. 10.2 Tax Sharing Agreement dated as of March 4, 1993 between the Company and Castle & Cooke Homes, Inc. Incorporated by reference to Exhibit 10(b) to the Company's Annual Report on Form 10-K for the year ended January 2, 1993, File No. 1-4455. 10.3 Right of First Refusal Agreement dated as of March 4, 1993 among the Company, Castle & Cooke Homes, Inc., Castle & Cooke Arizona, Inc. and Castle & Cooke Communities, Inc. Incorporated by reference to Exhibit 10(c) to the Company's Annual Report on Form 10-K for the year ended January 2, 1993, File No. 1-4455. 10.4 Exclusive Residential Development Agreement dated as of March 4, 1993 between the Company and Castle & Cooke Homes, Inc. Incorporated by reference to Exhibit 10(d) to the Company's Annual Report on Form 10-K for the year ended January 2, 1993, File No. 1-4455. 10.5 Stock Option Agreement dated as of March 4, 1993 between the Company and Castle & Cooke Homes, Inc. Incorporated by reference to Exhibit 10(e) to the Company's Annual Report on Form 10-K for the year ended January 2, 1993, File No. 1-4455.
EXHIBIT NO. PAGE ------- ---- Executive Compensation Plans and Arrangements--Exhibits 10.6--10.16: 10.6 The Company's 1991 Stock Option and Award Plan, as amended through July 7, 1993. 10.7 The Company's 1982 Stock Option and Award Plan, as amended. Incorporated by reference to Exhibit 28(a) to the Company's Report on Form S-8 filed on May 22, 1989, Registration No. 33- 28782. 10.8 Description of Executive Incentive Plan for key employees of the Company and its subsidiaries. Incorporated by reference to Exhibit 10(q) to the Company's Annual Report on Form 10-K for the fiscal year ended January 3, 1987, File No. 1-4455. 10.9 Dole Food Company, Inc. Executive Supplementary Retirement Plan (effective January 1, 1989), First Restatement. Incorporated by reference to Exhibit 10(c) to Company's Annual Report on Form 10-K for the fiscal year ended December 29, 1990, File No. 1-4455. 10.10 Bonus Agreement dated as of August 30, 1991 by and between the Company and David A. DeLorenzo, with promissory note dated September 5, 1991 in the principal amount of $500,000 by David A. DeLorenzo in favor of the Company. Incorporated by reference to Exhibit 10(e) to the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 1991, File No. 1-4455. 10.11 Employment Agreement between the Company and Gerald W. LaFleur. Incorporated by reference to Exhibit 10(k) to the Company's Annual Report on Form 10-K for the fiscal year ended January 2, 1993, File No. 1-4455. 10.12 Board of Directors Deferred Compensation Plan. 10.13 1993 Stock Option and Award Plan of Castle & Cooke Homes, Inc., as amended through September 1, 1993. 10.14 Castle & Cooke Homes, Inc. Executive Incentive Plan. 10.15 Dole Food Company, Inc. Annual Incentive Plan. 10.16 Dole Food Company, Inc. Long-Term Incentive Plan. 11 Computations of earnings per common share. 13 Dole Food Company, Inc. 1993 Annual Report for the fiscal year ended January 1, 1994. (This Report is furnished for information of the Commission and, except for those portions thereof which are expressly incorporated by reference herein, is not "filed" as a part of this Annual Report on Form 10-K.) 21 Subsidiaries of Dole Food Company, Inc. 23 Consent of Arthur Andersen & Co.
EX-3.2 2 EXHIBIT 3.2 EXHIBIT 3.2 BY-LAWS OF DOLE FOOD COMPANY, INC. (as amended through March 25, 1993) ARTICLE I Stockholders (1) Meetings. An annual meeting of the stockholders shall be held each --------- calendar year during such month and at such time and place as the president shall direct for the purpose of electing directors and an auditor and for the transaction of such other business as may be brought before the meeting. Special meetings of the stockholders shall be called upon the request in writing of the president, or in his absence, a vice president, or by a vote of a majority of the board of directors, or upon the request in writing of stockholders of the corporation representing not less than one-third of the outstanding voting stock. (2) Notices. Notices of all meetings, annual or special, shall specify the -------- place, day and hour of the meeting, and shall be mailed at least fifteen days before such meeting, postage prepaid and addressed to each holder of voting stock at his address as it appears on the books of the corporation. Notice of every special meeting shall indicate briefly its purposes. (3) Quorum. The holders of a majority of the shares of the outstanding voting ------- stock of the corporation, present in person or by proxy at any meeting of the stockholders, shall constitute a quorum for the transaction of business, and any decision of a majority of such quorum shall be valid and binding upon the corporation, except as otherwise specifically provided by law, the articles of association or these by-laws, or the resolution of the board of directors creating any series of preferred stock. If the holders of the amount of stock necessary to constitute a quorum shall fail to attend in person or by proxy any meeting, annual or special, duly called and noticed, holders of a majority of the shares present in person or by proxy may adjourn from time to time without other notice than by announcement at the meeting until a quorum shall attend. At any such adjourned meeting at which a quorum shall be present any business may be transacted which could have been transacted at the meeting as originally called. (4) Voting. At each meeting of the stockholders each holder of voting stock ------- shall be entitled to vote in person, or by proxy appointed by instrument in writing subscribed by such stockholder or by his duly authorized attorney. Each holder of voting stock shall have one vote for each full share of voting stock registered in his name and a fraction of a vote equal to each fractional share of voting stock so registered, subject, however, to 1 the provisions of Section (4) of ARTICLE VII of these by-laws with respect to the determination of stockholders entitled to vote. The holders of the outstanding shares from time to time of the common stock and of any preferred stock which has voting rights shall vote together on all matters referred to the stockholders, including the election of directors; provided, however, that the foregoing is subject to any provisions of law or the articles of association or the resolution of the board of directors creating any series of preferred stock requiring with respect to any matter the approval or consent of the holders of any designated percentage of the outstanding shares of stock of any class or any series of any class. All provisions of these by-laws which specify or relate to the powers of the stockholder or to action which may be taken by the stockholders at or in connection with the meeting thereof shall be interpreted as referring to the holders of shares of voting stock of the corporation. (5) Determination of Contested Elections. Prior to any meeting of the ------------------------------------- stockholders called for the election of directors where there are more candidates for election to the board of directors than there are directors to be elected at such meeting (a "Contested Election"), the board of directors shall appoint an inspector of election (the "Inspector"). No director or candidate for the office of director shall be appointed as the Inspector. The corporation shall enter into an agreement with the Inspector providing that the Inspector shall determine the authenticity, validity and effect of proxies, votes and ballots and shall certify to the corporation the results of each vote taken by stockholders at such Contested Election on such date as the Inspector shall have finally determined such results (the "Determination Date"). The nominees for election to the board of directors in a Contested Election who are certified by the Inspector as having been elected shall be deemed to be duly elected and qualified upon the expiration of three business days following the Determination Date; provided, however, that in the event any court proceedings are commenced which challenge or dispute the results of such Contested Election, the nominees whose election is in dispute shall not be deemed to be duly elected and qualified until all such court proceedings, including appeals, shall have been fully concluded. (6) No holder of shares of any stock of any class of the corporation shall be entitled to cumulate his votes in the election of directors. (7) Conduct of Meetings of Stockholders by Presiding Officer. The officer of --------------------------------------------------------- the corporation who is the presiding officer at any meeting of the stockholders of the corporation shall have the power (A) to determine the procedure to be followed in presenting and voting upon all business that may be transacted at the meeting and (B) to adjourn a meeting, duly called and noticed, at which a quorum is present in person or by proxy if a matter to be considered and acted upon at the meeting requires the affirmative vote of more than a majority of a quorum at the meeting voting in person or by proxy and at the meeting as originally duly called and noticed (i) the number of shares voted in person or by proxy in favor of such matter is insufficient to approve it and (ii) the number 2 of shares voted in person or by proxy against such matter is insufficient to disapprove it. Shares which are voted in person or by proxy as abstaining from voting on any such matter shall be deemed not to have voted on such matter for the purposes of this section. At any adjourned meeting which has been adjourned by the presiding officer as approved in this section, any business may be transacted which could have been transacted at the meeting as originally called if a quorum is present. ARTICLE II Board of Directors (1) General. The Management of all of the affairs, business and property of -------- the corporation shall be vested in the board of directors. No director need be a stockholder. The number of directors shall be seven. Notwithstanding any other provision of these by-laws, each director shall continue in office until his successor is duly elected and qualified or until his earlier removal in the manner provided in Section (6) of this Article II, resignation in the manner provided in Section (9) of this Article II or death. In the event holders of any preferred stock or any series of preferred stock are entitled to elect directors, such holders shall be entitled to elect the number of directors provided for in the resolution authorizing the issuance of such stock subject to and upon the terms and conditions of such resolution, notwithstanding any limitation on the maximum number of directors provided for in this Section or any other conflicting provisions of these by-laws. (2) Vacancies. If any vacancy shall occur in the board of directors by reason ---------- of resignation, removal or death, increase in the number of directors or otherwise, such vacancy may be filled by the affirmative vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director. In the event that the resignation of any director shall specify that it shall take effect at a future date, the vacancy resulting from such resignation may be filled in the same manner as provided in the immediately preceding sentence. (3) Meetings. The board of directors may hold meetings in such place as the --------- board of directors from time to time may determine. A meeting of the board of directors elected at the annual meeting of the stockholders shall be held at the place of such annual meeting and as soon as practicable thereafter, and no notice thereof shall be necessary. (4) Notice. The secretary shall give notice, orally or in writing, of each ------- meeting of the board of directors (except the meeting following the annual meeting of stockholders) to each director at least one day before the meeting. The failure to give notice shall not invalidate any action at a meeting of the board of directors if a quorum is present. The presence of 3 any director at a meeting shall be the equivalent of a waiver of the requirement of the giving of notice of said meeting to such director. (5) Quorum. At all meetings of the board of directors, the presence in person ------- of a majority of the total number of directors then holding office shall be necessary and sufficient to constitute a quorum for the transaction of business, and, except as otherwise provided by law, by the articles of association or by these by-laws, if a quorum shall be present, the act of a majority of the directors present shall be the act of the board of directors. (6) Removal. The stockholders of the corporation may at any special meeting of -------- the stockholders remove from office any director or directors, for cause, and in the case of any such removal the vacancies on the board of directors arising from such removal shall be filled by the remaining directors in accordance with the provisions of Section (2) of this Article II. In addition, the board of directors of the corporation, by the affirmative vote of a majority of the whole board, may remove from office any director or directors, for cause, and may fill the vacancies arising from such removal in accordance with the provisions of Section (2) of this Article II. "Cause" shall mean malfeasance in office, harassment of other directors or the officers or employees of the corporation or other conduct which, in the opinion of the stockholders or the majority of the whole board of directors, is inimical or prejudicial to the interest of the corporation. (7) Action Without Meetings. Notwithstanding any other provisions of these by- ------------------------ laws relating to meetings of the board of directors, any action required or permitted to be taken at any meeting of the board of directors, or of a committee of the directors, may be taken without a meeting if all of the directors or all of the members of the committee, as the case may be, sign a written consent or written consents setting forth the action taken or to be taken at any time before or after the intended effective date of such action. Such consent or consents shall be filed with the minutes of the directors' meetings or committee meetings, as the case may be, and shall have the same effect as a unanimous vote. (8) Nomination of Director Candidates. Nominations of candidates for election ---------------------------------- to the board of directors of the corporation at any meeting of the stockholders called for election of directors (an "Election Meeting") may be made by the board of directors or by any stockholder entitled to vote at such Election Meeting. Nominations made by the board of directors shall be made at a meeting of the board of directors, or by written consent of directors in lieu of a meeting, not less than 30 days prior to the date of the Election Meeting. At the request of the secretary of the corporation, each person so nominated by the board of directors shall provide the corporation with such information concerning himself as is required, under the rules of the Securities and Exchange Commission, to be included in the corporation's proxy statement soliciting proxies for his election as a director. 4 Not less than 30 days prior to the date of an Election Meeting, any stockholder who intends to make a nomination of a candidate for election to the board of directors of the corporation at such Election Meeting shall deliver a notice to the secretary of the corporation setting forth (i) the name, age, business address and residence address of each such intended nominee, (ii) the principal occupation or employment of each such intended nominee, (iii) the number of shares of capital stock of the corporation which are beneficially owned by each such intended nominee and (iv) such other information concerning each such intended nominee as would be required, under the rules of the Securities and Exchange Commission, in a proxy statement soliciting proxies for the election of each such nominee; provided, however, that any such notice of nomination for the -------- ------- 1984 annual meeting of stockholders may be delivered at any time prior to the close of business on September 14, 1984. Such notice shall include a signed consent of each such intended nominee to serve as a director of the corporation, if elected. In the event that a person is validly designated as a nominee in accordance with the procedures specified above and shall thereafter become unable or unwilling to stand for election to the board of directors, the board of directors or the stockholder who proposed such nominee, as the case may be, may designate a substitute nominee. If the chairman of the Election Meeting determines that a nomination was not made in accordance with the foregoing procedures, such nomination shall be void. (9) Resignation. Any director may resign at any time by giving written notice ------------ to the board of directors, the president or the secretary. Such resignation shall take effect upon such date as shall be stated therein or, if no effective date is so stated, upon receipt thereof. ARTICLE III Executive Committee and Other Committees (1) Executive Committee. There may be an executive committee consisting of the -------------------- president, and not more than four other persons who shall be members of the board of directors and who shall be appointed and may be removed by the board of directors at any time. During the intervals between meetings of the board of directors, the executive committee shall possess and may exercise any powers of the board of directors which are delegated to it by the board of directors, and shall meet at the call of the president or any two members of the committee. Vacancies or temporary vacancies in the executive committee shall be filled by the board of directors. A majority of the committee shall constitute a quorum, and in every case the affirmative vote of a majority of the members of the committee shall be necessary to the validity of any act of the committee. 5 Regular minutes of proceedings shall be kept in a book provided for that purpose. All action by the executive committee, and its minutes, shall be reported to the board of directors at its next succeeding meeting for such action as the board of directors deems proper. (2) Other Committees. The board of directors may create and appoint from its ----------------- own membership or otherwise such general or special committee or committees as it deems desirable. ARTICLE IV Officers (1) Principal Officers. The principal officers of the corporation shall be a ------------------- president, one or more vice presidents, a secretary, a treasurer, one or more controllers, one of whom shall be designated as the principal accounting officer, and in addition thereto, in the discretion of the board of directors, a chairman of the board and a vice chairman of the board, all of whom shall be elected annually by the board of directors at its first meeting after the annual meeting of stockholders and shall serve for one year and/or until their successors shall have been elected, provided, that the number of vice presidents may be changed from time to time by the board of directors at any meeting of the board and if increased at any time the additional vice president or vice presidents shall be elected by the board of directors, and provided, further, that the chairman of the board may be elected at any time by the board of directors. (2) Other Officers. The board of directors may elect such other officers as it --------------- deems necessary, who shall have such authority and perform such duties as from time to time may be prescribed by the board of directors. One person may hold more than one office. (3) Removal and Vacancies. All officers shall be subject to removal at any ---------------------- time by the affirmative vote of a majority of the whole board of directors. If the office of any officer shall become vacant for any reason the board of directors may elect a successor. (4) Qualifications. The chairman of the board, if any, and the president shall --------------- be elected from among the directors. The vice president(s), the secretary, the treasurer, the controller(s) and such other officers as may be elected from time to time need not be directors. No officer need be a stockholder. (5) Chairman of the Board. Whenever there shall be a chairman of the board of ---------------------- directors he shall preside at all meetings of the board of directors. He shall have such other powers and perform such other duties as may be assigned to him by the board of directors. (6) President. The president shall preside at all meetings of the ---------- stockholders. He shall preside at all meetings of the board of directors in the absence of the chairman of the board. 6 Subject to the board of directors, he shall have general charge of the business of the corporation. The president shall have the powers and perform the duties customarily incidental to this office and such other powers and duties as may be assigned to him by the board of directors. (7) Vice Presidents. The board of directors may elect one or more vice ---------------- presidents, who shall in the order determined by the board of directors perform the duties of the president during his absence or disability or whenever the office is vacant. The board of directors may designate the vice president who shall be first in order to perform the duties of the president, as the executive vice president. The several vice presidents shall have such other powers and perform such other duties as may be assigned to them by the board of directors. (8) Treasurer. The treasurer shall be the financial officer of the ---------- corporation. Except insofar as some other officer or employee shall from time to time be expressly authorized and instructed so to do, the treasurer shall receive and receipt for, either personally or by an employee authorized by him so to do, all checks and drafts of the corporation; pay all debts of the corporation under direction of the board of directors; keep safely all notes, stocks, bonds, deeds and all evidences of property belonging to the corporation, have custody of all moneys either belonging to the corporation, or in its charge, and properly care for the same; and shall have such other powers and duties as assigned to him by the board of directors. (9) Assistant Treasurers. The board of directors may elect one or more --------------------- assistant treasurers who shall, in the order determined by the board of directors, perform the duties of the treasurer during his absence or disability or whenever the office is vacant. Each assistant treasurer shall have such powers and perform such duties as may be assigned to him by the board of directors. (10) Secretary. The secretary shall keep the minutes of all meetings of the ---------- board of directors and the stockholders in books provided for that purpose; he shall attend to the giving and serving of all notices of the corporation. The secretary shall have the powers and perform the duties customarily incidental to this office and such other powers and duties as may be assigned to him from time to time by the board of directors. (11) Assistant Secretaries. The board of directors may elect one or more ---------------------- assistant secretaries, who shall, in the order determined by the board of directors, perform the duties of the secretary during his absence or disability or whenever the office is vacant. Each assistant secretary shall have such powers and perform such duties as may be assigned to him by the board of directors. (12) Controller-Accounting. The controller-accounting shall be the principal ---------------------- accounting officer of the corporation. Except insofar as some other officer or employee shall from time to time be expressly authorized and instructed so to do, the controller-accounting shall keep 7 all financial books of the corporation; keep thorough and proper accounts of the financial transactions of the corporation and render statements of the same in such form and at such times as the board of directors shall require; maintain a system of budgeting control; prepare and render to such governmental officials having the right to so require, tax returns and all exhibits, reports and other instruments required by law; and have such other powers and duties as may be assigned to him by the board of directors. (13) Assistant Controllers. The board of directors may elect one or more ---------------------- assistant controllers, who shall, in the order determined by the board of directors, perform the duties of the controller during his absence or disability or whenever the office is vacant. Each assistant controller shall have such powers and perform such duties as may be assigned to him by the board of directors. (14) Stock in Other Corporations. Unless the board of directors otherwise ---------------------------- directs with respect to any meeting or meetings of the stockholders of any corporation shares of the stock of which are owned by the corporation, whether or not such corporation is a subsidiary of the corporation, the president or the chairman of the board or a vice president shall have full authority to attend any meeting of the stockholders of any such corporation and to vote at such meeting the shares of stock of such corporation owned by the corporation; and the president or the chairman of the board or a vice president shall have full authority to execute on behalf of the corporation any proxy authorizing any other person or persons to vote the shares of stock of any such corporation owned by the corporation at any meeting or meetings of the stockholders of any such corporation. Unless the board of directors otherwise directs, the presence at any meeting of the stockholders of any such corporation of an officer above listed of the corporation shall supersede as to such meeting any proxy. ARTICLE V Auditor The auditor shall be elected by the stockholders at their annual meeting to serve until the next annual meeting and thereafter until a successor is elected. ARTICLE VI Execution of Instruments All checks, drafts, notes, bonds, acceptances, deeds, leases, contracts and all other instruments, shall be signed by such person or persons as may be designated by general or special resolution of the board of directors, and in the absence of any such general or special resolution applicable to any such instrument then such instrument shall be signed by the president or a vice president and by the treasurer or the secretary or the controller or an assistant secretary or an assistant treasurer or an assistant controller. The board of directors 8 may by resolution provide for the use of facsimile signatures on any instrument and may also provide that any instrument may be sealed with the facsimile seal of the corporation. ARTICLE VII Capital Stock (1) Certificates. The certificates for shares of the capital stock of the ------------- corporation shall be in such form and not inconsistent with the articles of association as shall be approved by the board of directors. The certificates shall be sealed with the corporate seal and signed by the president or a vice president and countersigned by the treasurer or the secretary, provided, however, that the board of directors may provide that certificates shall be sealed with only the facsimile seal of the corporation and signed only with the facsimile signature of the president or a vice president and countersigned only with the facsimile signature of the treasurer or the secretary. The name of the person owning the shares represented by each certificate, with the number of such shares and the date of issue, shall be entered on the corporation's stock books. (2) Transfer of Shares. Transfer of shares of stock may be made by endorsement ------------------- and delivery of the certificate. No such transaction shall be valid, except between the parties thereto, until a new certificate shall have been obtained or the transfer shall have been recorded on the books of the corporation so as to show the date of transfer, the parties thereto, and the number and description of the shares transferred. Upon the surrender of any certificate it shall be cancelled. (3) Regulations. The board of directors shall have power and authority to make ------------ all such rules and regulations as it deems expedient concerning the issue, transfer and registration of certificates for shares of the capital stock of the corporation. (4) Fixing of Record Date. In lieu of closing the stock transfer books of the ---------------------- corporation, the board of directors may fix in advance a date, not more than sixty days nor less than ten days preceding the date of any meeting of stockholders and not more than sixty days preceding the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect or a date in connection with obtaining the consent of stockholders for any purpose, as a record date for the determination of the holders of capital stock of the corporation entitled to notice of, and to vote at, any such meeting or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital stock, or to give such consent; and in such case such stockholders and only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of, and vote at, such meeting, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be, notwithstanding any transfer of any stock on the books of the corporation after any such record date fixed as aforesaid. A determination of the stockholders of record entitled to notice of or to vote at a 9 meeting of the stockholders shall apply to any adjournment of such meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting. (5) Lost Certificates. The directors, subject to such rules and regulations as ------------------ they may from time to time adopt, may order a new certificate of stock to be issued in the place of any certificate of the corporation alleged to have been lost, destroyed or mutilated, but the board of directors may, in its discretion, refuse to replace any lost certificate save upon the order of some court having jurisdiction in such matters. (6) Holders of Record. The corporation shall be entitled to treat the holder ------------------ of record of any share or shares of its capital stock as the holder in fact thereof for any purpose whatsoever and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other claimant thereto. (7) Seal. The corporation shall have a corporate seal of such form and device ----- as the board of directors shall from time to time determine, which seal shall be in the charge of the secretary. When directed by the board of directors, a duplicate seal may be kept and used by such other officers or agents as the board may direct. ARTICLE VIII Indemnification (1) The corporation shall indemnify each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation or of any division of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of this corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of this corporation and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. (2) The corporation shall indemnify each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a 10 director, officer, employee or agent of the corporation or of any division of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of the corporation or of any division of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of this corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to this corporation unless and only to the extent that the court in which such action or suit was brought or in any other court having jurisdiction in the premises shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper. (3) To the extent that a director, officer, employee or agent of the corporation or of any division of the corporation, or a person serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 1 or Section 2 of this Article, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. (4) Any indemnification under Section 1 or Section 2 of this Article (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in Section 1 or Section 2. Such determination shall be made (i) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable or even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion to the corporation or (iii) by a majority vote of the shareholders. (5) Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding as authorized by the board of directors in a particular case upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the corporation as authorized in this Article. (6) Any indemnification pursuant to this Article shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the 11 benefit of heirs, executors and administrators of such a person. (7) The corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation or of any division of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of this Article.* (8) This Article shall be effective with respect to any person who is a director, officer, employee or agent of the corporation at any time on or after June 8, 1973 with respect to any action, suit or proceeding pending on or after that date, by reason of the fact that he is or was, before or after that date, a director, officer, employee or agent of the corporation or is or was serving, before or after that date, at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. * Any such insurance may be procured from any insurance company designated by the board of directors, including any insurance company in which the corporation shall have an equity or other interest, through stock ownership or otherwise. ARTICLE IX Limitation of Liability of Directors The personal liability of directors of the corporation for monetary damages shall be eliminated to the fullest extent permissible under Hawaii law, including, without limitation, to the fullest extent permissible under Section 415-48.5 of the Hawaii Revised Statutes, as amended from time to time. No repeal or amendment of this Article directly or by adoption of an inconsistent provision of the Articles of Association or these by-laws will be effective with respect to the liability of a director for acts or omissions occurring prior to such repeal or amendment. ARTICLE X Amendment of By-Laws These by-laws may be amended, altered, or repealed and new by-laws may be adopted by the affirmative vote of a majority of the members of the board of directors of the corporation, subject to repeal or change by action of the stockholders. Notwithstanding anything contained in the preceding paragraph of this Article to the contrary, the affirmative vote of the holders of two-thirds of the shares of the corporation represented 12 and having voting power at a stockholders meeting (provided that the vote also constitutes a majority of the outstanding shares having voting power) shall be required to alter, amend or repeal, or adopt any provision inconsistent with Article IX of these by-laws relating to the limitation of directors or to alter, amend or repeal this paragraph. 13 EX-10.6 3 EXHIBIT 10.6 EXHIBIT 10.6 DOLE FOOD COMPANY, INC. 1991 STOCK OPTION AND AWARD PLAN (As amended through July 7, 1993) I. DEFINITIONS. 1.1 Definitions. (a) "Award" shall mean an Option, which may be designated as a Nonqualified Stock Option or an Incentive Stock Option, a Stock Appreciation Right, a Restricted Stock Award or Performance Share Award, in each case granted under this Plan. (b) "Award Agreement" shall mean a written agreement setting forth the terms of an Award. (c) "Award Date" shall mean the date upon which the Committee took the action granting an Award or such later date as is prescribed by the Committee. (d) "Award Period" shall mean the period beginning on an Award Date and ending on the expiration date of such Award. (e) "Beneficiary" shall mean the person, persons, trust or trusts entitled by will or the laws of descent and distribution to receive the benefits specified under this Plan in the event of a Participant's death. (f) "Board" shall mean the Board of Directors of the Corporation. (g) "Change in Control" shall be deemed to have occurred if (a) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation representing 20% or more of the combined voting power of the Corporation's then outstanding securities, unless such person was, on the effective date of the Plan, such a beneficial owner of securities representing 20% or more of such voting power; or (b) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority thereof, unless the election, or the nomination for election by the Corporation's stockholders, of each new Board member was approved by a vote of at least three-fourths of the Board members then still in office who were Board members at the beginning of such period. (h) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. (i) "Commission" shall mean the Securities and Exchange Commission. (j) "Committee" shall mean the Corporate Compensation and Benefits Committee appointed by the Board and consisting of two or more Board members, each of whom, during such time as one or more Participants may be subject to Section 16 of the Exchange Act, shall be a Disinterested Director. (k) "Common Stock" shall mean the Common Stock of the Corporation. (1) "Company" shall mean the Corporation and/or its Subsidiaries. (m) "Corporation" shall mean Dole Food Company Inc., a Hawaii corporation, and its successors. (n) "Deferred Effective Date" shall mean September 1, 1994 or the expiration of the Rule 16b transition period, whichever is later, unless the Corporate Compensation and Benefits Committee of the Board of Directors of the Company decides otherwise. 1 (o) "Disinterested Director" shall mean a member of the Board who was not, during the year prior to being appointed to the Committee, or during the period of service as an administrator hereunder, granted or awarded equity securities pursuant to the Plan or pursuant to any other plan of the Corporation or its affiliates, except to the extent consistent with the disinterested plan administration requirements under Rule 16b-3. (p) "Eligible Employee" shall mean an officer or key employee of the Company. (q) "Event" shall mean any of the following: (1) Approval by the stockholders of the Corporation of the dissolution or liquidation of the Corporation; (2) Approval by the stockholders of the Corporation of an agreement to merge or consolidate, or otherwise reorganize, with or into one or more entities which are not Subsidiaries, as a result of which less than 50% of the outstanding voting securities of the surviving or resulting entity are, or are to be, owned by former stockholders of the Corporation; (3) Approval by the stockholders of the Corporation of the sale of substantially all of the Corporation's business and/or assets to a person or entity which is not a Subsidiary; or (4) A Change in Control. (r) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. (s) "Fair Market Value" shall mean the closing price of the stock on the Composite Tape, as published in the Western Edition of The Wall Street Journal, of the principal national securities exchange on which the stock is so listed or admitted to trade, on such date, or, if there is no trading of the stock on such date, then the closing price of the stock as quoted on such Composite Tape on the next preceding date on which there was trading in such shares; provided, however, that if the stock is not listed or admitted to trade on a national securities exchange, the Committee may designate such other exchange, market or source of data as it deems appropriate for determining such value for Plan purposes. (t) "Incentive Stock Option" shall mean an Option which is designated as an incentive stock option within the meaning of Section 422 of the Code, the award of which contains such provisions as are necessary to comply with that section. (u) "Nonqualified Stock Option" shall mean an Option which is designated as a Nonqualified Stock Option. (v) "Option" shall mean an option to purchase Common Stock under this Plan. An Option shall be designated by the Committee as a Nonqualified Stock Option or an Incentive Stock Option. (w) "Participant" shall mean an Eligible Employee who has been granted an Award. (x) "Performance Share Award" shall mean an award of shares of Common Stock, issuance of which is contingent upon attainment of performance objectives specified by the Committee. (y) "Personal Representative" shall mean the person or persons who, upon the disability or incompetence of a Participant, shall have acquired on behalf of the Participant, by legal proceeding or otherwise, the power to exercise the rights and receive the benefits specified in this Plan. (z) "Plan" shall mean the Dole Food Company, Inc. 1991 Stock Option and Award Plan. 2 (aa) "QDRO" shall mean an order requiring the transfer of an Award or portion thereof pursuant to a state domestic relations law to the spouse, former spouse, child or other dependent of a Participant. Such order must be in a form substantially identical to a qualified domestic relations order as defined by Code or Title I of the Employee Retirement Income Security Act of 1974, as amended. (bb) "Restricted Stock" shall mean those shares of Common Stock issued pursuant to a Restricted Stock Award which are subject to the restrictions set forth in the related Award Agreement. (cc) "Restricted Stock Award" shall mean an award of a fixed number of shares of Common Stock to a Participant subject, however, to payment of such consideration, if any, and such forfeiture provisions, as are set forth in the Award Agreement. (dd) "Retirement" shall mean retirement from active service as an employee or officer of the Company on or after attaining age 55 with ten or more years of service or age 65. (ee) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Commission pursuant to the Exchange Act in effect (a) prior to May 1, 1991 during the period prior to the Deferred Effective Date and (b) on or after May 1, 1991 during the period on and after the Deferred Effective Date. (ff) "Securities Act" shall mean the Securities Act of 1933, as amended from time to time. (gg) "Stock Appreciation Right" shall mean a right to receive a number of shares of Common Stock or an amount of cash, or a combination of shares and cash, determined as provided in Section 4.3. (hh) "Subsidiary" shall mean any corporation or other entity a majority or more of whose outstanding voting stock or voting power is beneficially owned directly or indirectly by the Corporation. (ii) "Total Disability" shall mean a "permanent and total disability" within the meaning of Section 22(e)(3) of the Code. II. THIS PLAN. 2.1 Purpose. The purpose of this Plan is to promote the success of the Company and its stockholders by providing a means to attract and retain key employees by providing them long-term incentives to improve the financial performance of the Company. 2.2 Administration. (a) This Plan shall be administered by the Committee. Action of the Committee with respect to the administration of this Plan shall be taken pursuant to a majority vote or the written consent of a majority of its members. In the event action by the Committee is taken by written consent, the action shall be deemed to have been taken at the time specified in the consent or, if none is specified, at the time of the last signature. The Committee may delegate administrative functions to individuals who are officers or employees of the Company. (b) Subject to the express provisions of this Plan, the Committee shall have the authority to construe and interpret this Plan and any agreements defining the rights and obligations of the Company and Participants under this Plan, to further define the terms used in this Plan, to prescribe, amend and rescind rules and regulations relating to the administration of this Plan, to determine the duration and purposes of leaves of absence which may be granted to Participants without constituting a termination of their employment for purposes of this Plan and to make all other determinations necessary or advisable for the administration of this Plan. The determinations of the Committee on the foregoing matters shall be conclusive. 3 (c) Any action taken by, or inaction of, the Corporation, any Subsidiary, the Board or the Committee relating to this Plan shall be within the absolute discretion of that entity or body and shall be conclusive and binding upon all persons. No member of the Board or Committee, or officer of the Corporation or any Subsidiary, shall be liable for any such action or inaction of the entity or body, or of another person or, except in circumstances involving bad faith, of himself or herself. Subject only to compliance with the express provisions hereof, the Board and Committee may act in their absolute discretion in matters related to this Plan. (d) Subject to the requirements of Section l.l(j), the Board, at any time it so desires, may increase or decrease the number of members of the Committee, may remove from membership on the Committee all or any portion of its members, and may appoint such person or persons as it desires to fill any vacancy existing on the Committee, whether caused by removal, resignation or otherwise. 2.3 Participation. Awards may be granted only to Eligible Employees. An Eligible Employee who has been granted an Award may, if otherwise eligible, be granted additional Awards if the Committee shall so determine. Members of the Board who are not officers or employees of the Company, and members of the Committee, shall not be eligible to receive Awards. 2.4 Stock Subject to this Plan. The stock to be offered under this Plan shall be shares of the Corporation's authorized but unissued Common Stock. The aggregate amount of Common Stock that may be issued or transferred pursuant to Awards granted under this Plan shall not exceed the sum of 2,500,000 shares subject to adjustment as set forth in Section 7.2. If any Option and any related Stock Appreciation Right shall lapse or terminate without having been exercised in full, or any Common Stock subject to a Restricted Stock Award which does not vest or any Common Stock subject to a Performance Share Award which has not been issued or become issuable, the unpurchased shares subject thereto, to the extent consistent with Rule 16b-3 shall again be available for purposes of this Plan. 2.5 Grant of Awards. Subject to the express provisions of this Plan, the Committee shall determine those individuals who are Eligible Employees and to whom Awards under this Plan shall be granted, the terms of Awards (which need not be identical) and the number of shares of Common Stock subject to each Award. Each Award shall be subject to the terms and conditions set forth in this Plan and such other terms and conditions established by the Committee as are not inconsistent with the purpose and provisions of this Plan. The grant of an Award is made on the Award Date. 2.6 Exercise of Awards. An Option or Stock Appreciation Right shall be deemed to be exercised when the Corporation receives written notice of such exercise from the Participant, together with payment of the purchase price made in accordance with Section 3.2, except as may be necessary or advisable to be made following delivery of written notice of exercise in accordance with Section 3.2. Notwithstanding any other provision of this Plan, the Committee may impose, by rule and in Award Agreements, such conditions upon the exercise of Awards (including, without limitation, conditions limiting the time of exercise to specified periods) necessary for those persons subject to the reporting and liability provisions of Section 16 of the Exchange Act to avoid liability under Section 16 of the Exchange Act or to secure the benefits otherwise available under any applicable exemptive or other rule thereunder with respect to a "plan" or particular award or action related thereto. 4 III. OPTIONS. 3.1 Grants. One or more Options may be granted to any Eligible Employee. Each Option so granted shall be designated by the Committee as either a Nonqualified Stock Option or an Incentive Stock Option. 3.2 Option Price. (a) The purchase price per share of the Common Stock covered by each Option shall be determined by the Committee, but in the case of Incentive Stock Options shall not be less than 100% (110% in the case of a Participant who owns more than 10% of the total combined voting power of all classes of stock of the Company) of the Fair Market Value of the Common Stock on the date the Incentive Stock Option is granted. The purchase price of any shares purchased shall be paid in full at the time of each purchase in one or a combination of the following methods: (i) in cash or by certified or cashier's check payable to the order of the Corporation, or (ii) by shares of Common Stock of the Corporation already owned by the Participant; provided, however, the Committee may in its absolute discretion limit the Participant's ability to exercise an Option by delivering shares, and any shares delivered which were initially acquired upon exercise of a stock option must have been owned by the Participant at least six months as of the date of delivery. Shares of Common Stock used to satisfy the exercise price of an Option shall be valued at their Fair Market Value on the date of exercise. (b) In addition to the payment methods described in subsection (a), the Option may provide that the Option can be exercised and payment made by delivering a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Corporation the amount of sale proceeds necessary to pay the exercise price and, unless otherwise allowed by the Committee, any applicable tax withholding under Section 7.6. The Corporation shall not be obligated to deliver certificates for the shares unless and until it receives full payment of the exercise price therefor. 3.3 Option Period. Each Option and all rights or obligations thereunder shall expire on such date as shall be determined by the Committee, but not later than 10 years after the Award Date, and shall be subject to earlier termination as hereinafter provided. 3.4 Exercise of Options. Except as otherwise provided in Sections 7.3 and 7.4, an Option may become exercisable, in whole or in part, on the date or dates specified in the Award Agreement and thereafter shall remain exercisable until the expiration or earlier termination of the Participant's Option. No Option shall be exercisable for at least six months after the Award Date. The Committee may, at any time after the granting of the Option and from time to time, increase the number of shares purchasable at any time so long as the total number of shares subject to the Option is not increased. No Option shall be exercisable except in respect of whole shares, and fractional share interests shall be disregarded. Not less than 100 shares of Common Stock may be purchased at one time unless the number purchased is the total number at the time available for purchase under the terms of the Option. 3.5 Limitations on Grant of lncentive Stock Options. (a) To the extent that the aggregate Fair Market Value of stock with respect to which incentive stock options first exercisable by a Participant in any calendar year exceeds $100,000, taking into account both Common Stock subject to Incentive Stock Options under this Plan and stock subject to incentive stock option-under all other plans of the Company, such options shall be treated as nonqualified stock options. For purposes of determining whether the $100,000 limit is exceeded, the Fair Market Value of stock subject to 5 options shall be determined as of the date the options are awarded. In reducing the number of options treated as incentive stock options to meet the $100,000 limit, the most recently granted options shall be reduced first. To the extent a reduction of simultaneously granted options is necessary to meet the $100,000 limit, the Corporation may, in the manner and to the extent permitted by law, designate which shares of Common Stock are to be treated as shares acquired pursuant to the exercise of an Incentive Stock Option under this Plan. (b) There shall be imposed in any Award Agreement relating to Incentive Stock Options such terms and conditions as are required in order that the Option be an "incentive stock option" as that term is defined in Section 422 of the Code. (c) No Incentive Stock Option may be granted to any person who, at the time the Incentive Stock Option is granted, owns shares of outstanding Common Stock possessing more than 10% of the total combined voting power of all classes of stock of the Company, unless the exercise price of such Option is at least 110% of the Fair Market Value of the stock subject to the Option and such Option by its terms is not exercisable after the expiration of five years from the date such Option is granted. IV. STOCK APPRECIATION RIGHTS. 4.1 Grants. In its discretion, the Committee may grant Stock Appreciation Rights concurrently with the grant of Options on such terms as set forth by the Committee in the Award Agreement for such Option. A Stock Appreciation Right shall extend to all or a portion of the shares covered by the related Option. A Stock Appreciation Right shall entitle the Participant who holds the related Option, upon exercise of the Stock Appreciation Right and surrender of the related Option, or portion thereof, to the extent the Stock Appreciation Right and related Option each were previously unexercised, to receive payment of an amount determined pursuant to Section 4.3. Any Stock Appreciation Right granted in connection with an Incentive Stock Option shall contain such terms as may be required to comply with the provisions of Section 422 of the Code and the regulations promulgated thereunder. 4.2 Exercise of Stock Appreciation Rights. (a) A Stock Appreciation Right shall be exercisable only at such time or times, and to the extent, that the related Option shall be exercisable and only when the Fair Market Value of the stock subject to the related Option exceeds the Option price of the related Option. (b) In the event that a Stock Appreciation Right is exercised, the number of shares of Common Stock subject to the related Option shall be charged against the maximum amount of Common Stock that may be issued or transferred pursuant to Awards under this Plan. The number of shares subject to the Stock Appreciation Right and the related Option of the Participant shall also be reduced by such number of shares. (c) If a Stock Appreciation Right extends to less than all the shares covered by the related Option and if a portion of the related Option is thereafter exercised, the number of shares subject to the unexercised Stock Appreciation Right shall be reduced only if and to the extent that the remaining number of shares covered by such related Option is less than the remaining number of shares subject to such Stock Appreciation Right. 4.3 Payment. (a) Upon exercise of a Stock Appreciation Right and surrender of an exercisable portion of the related Option, the Participant shall be entitled to receive payment of an amount determined by multiplying: (i) the difference obtained by subtracting the Option price per share of Common Stock under the related Option from the Fair Market Value of a share of Common Stock on the date of exercise of the Stock Appreciation Right, by 6 (ii) the number of shares with respect to which the Stock Appreciation Right shall have been exercised. (b) The Committee, in its sole discretion, may provide for payment upon exercise under subsection (a) above to be solely in cash, solely in shares of Common Stock (valued at Fair Market Value on the date of exercise of the Stock Appreciation Right), or partly in such shares and partly in cash, or may leave the election of same to the Participant, subject to any applicable legal requirements and, in the case of Participants subject to Section 16 of the Exchange Act, the limitations under Rule 16b-3, if applicable. In any event, cash shall be paid in lieu of fractional shares. Absent a determination to the contrary by the Committee, all Stock Appreciation Rights shall be settled in cash as soon as practical after exercise. The exercise price for the Stock Appreciation Right shall be the exercise price of the related Option. Notwithstanding the foregoing, the Committee may, in the Award Agreement, determine the specific form of payment or the specified amount of cash or stock or combination thereof which may be delivered upon exercise of a Stock Appreciation Right. V. RESTRICTED STOCK AWARDS. 5.1 Grants. Subject to Section 2.4, the Committee may, in its discretion, grant one or more Restricted Stock Awards to any Eligible Employee. Each Restricted Stock Award Agreement shall specify the number of shares of Common Stock to be issued to the Participant, the date of such issuance, the price, if any, to be paid for such shares by the Participant and the restrictions imposed on such shares, which restrictions shall not terminate earlier than one year after the Award Date. 5.2 Restrictions. (a) Shares of Common Stock included in Restricted Stock Awards may not be sold, assigned, transferred, pledged or otherwise disposed of or encumbered, either voluntarily or involuntarily, until such shares have vested. (b) Participants receiving Restricted Stock shall not be entitled to dividend or voting rights for the shares until they are vested. (c) In the event that the Participant shall have paid cash in connection with the Restricted Stock Award, the Award Agreement shall specify whether and to what extent such cash shall be returned upon a forfeiture (with or without an earnings factor). VI. PERFORMANCE SHARE AWARDS. 6.1 Grants. The Committee may, in its discretion, grant Performance Share Awards to Eligible Employees based upon: the appreciation in the Fair Market Value, book value or other measure of value of the Common Stock; the performance of the Company based on earnings or cash flow; or such other factors as the Committee shall determine. In making such determinations, the Committee shall consider (among other factors deemed relevant to the specific award type), the Eligible Employee's contributions to the Company, responsibilities and other compensation. A Performance Share Award Agreement shall specify the number of shares of Common Stock subject to the Performance Share Award, the price, if any, to be paid for such shares by the Participant and the required amount of appreciation in the Fair Market Value, book value or other measure of value of Common Stock, the required amount of change in the performance of the Company based on earnings or cash flow of the Company or specified Subsidiary or other factors and other conditions determined by the Committee upon which issuance to the Participant shall be based, which issuance shall not be less than six months after the Award Date. To the extent a Performance Share Award constitutes an equity security (as this phrase is defined in Rule 16a-1 under the Exchange Act) issued by the Corporation and is 7 paid in shares of Common Stock or cash, the number of shares of Common Stock subject to such Performance Share Award shall be charged against the maximum amount of Common Stock that may be issued pursuant to Awards under this Plan. VII. OTHER PROVISIONS. 7.1 Rights of Eligible Employees, Participants and Beneficiaries. (a) Status as an Eligible Employee shall not be construed as a commitment that any Award will be made under this Plan to an Eligible Employee or to Eligible Employees generally. (b) Nothing contained in this Plan (or in Award Agreements or in any other documents related to this Plan or to Awards) shall confer upon any Eligible Employee or Participant any right to continue in the employ of the Company or constitute any contract or agreement of employment, or interfere in any way with the right of the Company to reduce such person's compensation or other benefits or to terminate the employment of such Eligible Employee or Participant, with or without cause, but nothing contained in this Plan or any document related thereto shall affect any other contractual right of any Eligible Employee or Participant. (c) Amounts payable pursuant to an Award shall be paid only to the Participant or, in the event of the Participant's death, to the Participant's Beneficiary or, in the event of the Participant's Total Disability, to the Participant's Personal Representative or, if there is none, to the Participant. Other than by will or the laws of descent and distribution, no Award nor benefit payable under, nor interest in, this Plan or in any Award shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge and any such attempted action shall be void and no such benefit or interest shall be, in any manner, liable for, or subject to, debts, contracts, liabilities, engagements or torts of any Eligible Employee, Participant or Beneficiary. The Committee shall disregard any attempted transfer, assignment or other alienation prohibited by the preceding sentence and shall pay or deliver such cash or shares of Common Stock in accordance with the provisions of this Plan. (d) No Participant, Beneficiary or other person shall have any right, title or interest in any fund or in any specific asset (including shares of Common Stock) of the Company by reason of any Award granted hereunder. Neither the provisions of this Plan (or of any documents related hereto), nor the creation or adoption of this Plan, nor any action taken pursuant to the provisions of this Plan shall create, or be construed to create, a trust of any kind or a fiduciary relationship between the Company and any Participant, Beneficiary or other person. To the extent that a Participant, Beneficiary or other person acquires a right to receive an Award hereunder, such right shall be no greater than the right of any unsecured general creditor of the Company. 7.2 Adjustments Upon Changes in Capitalization. (a) If the outstanding shares of Common Stock are changed into or exchanged for cash or a different number or kind of shares or securities of the Corporation, or if additional shares or new or different securities are distributed with respect to the outstanding shares of the Common Stock, through a reorganization or merger in which the Corporation is the surviving entity, or through a combination, consolidation, recapitalization, reclassification, stock split, stock dividend, reverse stock split, stock consolidation, dividend or distribution of property to the stockholders of the Corporation which in the judgment of the Committee materially affects the value of the Common Stock or other capital change or adjustment, an appropriate adjustment shall be made in the number and kind of shares or other consideration that is subject to or may be delivered under this Plan and pursuant to outstanding Awards. A corresponding adjustment to the consideration payable with respect to Awards granted prior to any such change and to the price, if any, paid in connection with Restricted Stock Awards or Performance Share Awards shall also be made. Any such adjustment, however, shall be made without change in the total payment, if any, applicable to the portion of 8 the Award not exercised but with a corresponding adjustment in the price for each share. Corresponding adjustments shall be made with respect to Stock Appreciation Rights based upon the adjustments made to the Options to which they are related. The foregoing adjustments to Awards granted to such Participants may be suspended for so long as the Commission determines that such adjustments adversely affect the ability of persons subject to the reporting and liability provisions of Section 16 of the Exchange Act to avoid liability under Section 16 of the Exchange Act. (b) In adjusting Awards to reflect the changes described in this Section 7.2, or in determining that no such adjustment is necessary, the Board may rely upon the advice of independent counsel and accountants of the Corporation, and the determination of the Board shall be conclusive. No fractional shares of stock shall be issued under this Plan on account of any such adjustment. 7.3 Termination of Employment. (a) If the Participant's employment by the Company terminates for any reason other than Retirement, Total Disability or death, the Participant shall have, subject to earlier termination pursuant to or as contemplated by Section 3.3, three months from the date of termination of employment to exercise any Option to the extent it shall have become exercisable on the date of termination of employment, and any Option not exercisable on that date shall terminate. (b) If the Participant's employment by the Company terminates as a result of Retirement, Total Disability or death, the Participant, Participant's Personal Representative or his or her Beneficiary, as the case may be, shall have, subject to earlier termination pursuant to or as contemplated by Section 3.3, 12 months from the date of termination of employment to exercise any Option to the extent it shall have become exercisable by the date of termination of employment, and any Option not exercisable on that date shall terminate. (c) Each Stock Appreciation Right granted concurrently with an Option shall have the same termination provisions and exercisability periods as the Option to which it relates. The exercisability period of a Stock Appreciation Right shall not exceed that provided in Section 3.3 or in the related Award Agreement and the Stock Appreciation Right shall expire at the end of such exercisability period. (d) In the event of termination of employment with the Company for any reason, (i) shares of Common Stock subject to the Participant's Restricted Stock Award shall be forfeited in accordance with the provisions of the related Award Agreement to the extent such shares have not become vested on that date; and (ii) shares of Common Stock subject to the Participant's Performance Share Award shall be forfeited in accordance with the provisions of the related Award Agreement to the extent such shares have not been issued or become issuable on that date. (e) In the event of termination of employment with the Company for any reason, other than discharge for cause, the Committee may, in its discretion, increase the portion of the Participant's Award available to the Participant, or Participant`s Beneficiary or Personal Representative, as the case may be, upon such terms as the Committee shall determine. (f) If an entity ceases to be a Subsidiary, such action shall be deemed for purposes of this Section 7.3 to be a termination of employment of each employee of that entity who does not continue as an employee of another entity within the Company. 7.4 Acceleration of Awards. Unless prior to an Event the Board determines that, upon its occurrence, there shall be no acceleration of Awards or determines those Awards which shall be accelerated and the extent to which they shall be 9 accelerated, upon the occurrence of an Event (i) each Option and each related Stock Appreciation Right shall become immediately exercisable to the full extent theretofore not exercisable, (ii) Restricted Stock shall immediately vest free of restrictions and (iii) the number of shares covered by each Performance Share Award shall be issued to the Participant; provided, however, that Awards shall not in any event be so accelerated to a date less than six months after the Award Date. Acceleration of Awards shall comply with applicable regulatory requirements, including without limitation Rule 16b-3 and Section 422 of the Code. For purposes of this section only, the Board shall mean the Board as constituted immediately prior to the Event. 7.5 Government Regulations. This Plan, the granting of Awards under this Plan and the issuance or transfer of shares of Common Stock (and/or the payment of money) pursuant thereto are subject to all applicable federal and state laws, rules and regulations and to such approvals by any regulatory or governmental agency (including without limitation "no action" positions of the Commission) which may, in the opinion of counsel for the Corporation, be necessary or advisable in connection therewith. Without limiting the generality of the foregoing, no Awards may be granted under this Plan, and no shares shall be issued by the Corporation, nor cash payments made by the Corporation, pursuant to or in connection with any such Award, unless and until, in each such case, all legal requirements applicable to the issuance or payment have, in the opinion of counsel to the Corporation, been complied with. In connection with any stock issuance or transfer, the person acquiring the shares shall, if requested by the Corporation, give assurances satisfactory to counsel to the Corporation in respect of such matters as the Corporation may deem desirable to assure compliance with all applicable legal requirements. 7.6 Tax Withholding. Upon the disposition by a Participant or other person of shares of Common Stock acquired pursuant to the exercise of an Incentive Stock Option prior to satisfaction of the holding period requirements of Section 422 of the Code, or upon the exercise of a Nonqualified Stock Option, the exercise of a Stock Appreciation Right, the vesting of a Restricted Stock Award, or the payment of a Performance Share Award, the Company shall have the right to (i) require such Participant or such other person to pay by cash, or certified or cashier's check payable to the Company, the amount of any taxes which the Company may be required to withhold with respect to such transactions or (ii) deduct from amounts paid in cash the amount of any taxes which the Company may be required to withhold with respect to such cash amounts. The above notwithstanding, in any case where a tax is required to be withheld in connection with the issuance or transfer of shares of Common Stock under this Plan, the Participant may elect, pursuant to such rules as the Committee may establish, to have the Company reduce the number of such shares issued or transferred by the appropriate number of shares to accomplish such withholding; provided, the Committee may impose such conditions on the payment of any withholding obligation necessary in the case of persons subject to the reporting and liability provisions of Section 16 of the Exchange Act to avoid liability under Section 16 of the Exchange Act or to secure the benefits otherwise available under any applicable exemptive or other rule thereunder with respect to a "plan" or particular award or action related thereto. 7.7 Amendment, Termination and Suspension. (a) The Board may, at any time, terminate or, from time to time, amend, modify or suspend this Plan (or any part hereof), including without limitation, amendments or modifications as may be necessary to avoid liability under Section 16 of the Exchange Act or to secure the benefits otherwise available under any applicable exemptive or other rule thereunder with respect to a "plan" or particular award or action related thereto. In addition, the Committee may, from time to time, amend or modify any provision of this Plan except Section 7.4 and, with the consent of the Participant, make such modifications of the terms and conditions of such Participant's Award as it shall deem advisable. The Committee, with the consent of the Participant, may also amend the terms of any Option to provide that the purchase price under the Option of the shares remaining subject to the original Award shall be reestablished at a price not less than 100% of the Fair Market Value of the Common Stock on the effective date of the amendment. No modification of any 10 other term or provision of any Option which is amended in accordance with the foregoing shall be required, although the Committee may, in its discretion, make such further modifications of any such Option as are not inconsistent with or prohibited by this Plan. No Awards may be granted during any suspension of this Plan or after its termination. (b) If an amendment would (i) materially increase the benefits accruing to Participants under this Plan, (ii) materially increase the aggregate number of securities which may be issued under this Plan, or (iii) materially modify the requirements as to eligibility for participation in this Plan, the amendment shall be approved by the Board and, to the extent then required by Section 424 of the Code or as may be necessary or desirable to avoid liability under Section 16 of the Exchange Act or to secure the benefits otherwise available under any applicable exemptive or other rule thereunder with respect to a "plan" or particular award or action related thereto or required by any other applicable law, or any successor provision thereto, by the requisite number of stockholders. (c) In the case of Awards issued before the effective date of any amendment, suspension or termination of this Plan, such amendment, suspension or termination of this Plan shall not, without specific action of the Board or the Committee and the consent of the Participant, in any way modify, amend, alter or impair any rights or obligations under any Award previously granted under this Plan. 7.8 Privileges of Stock Ownership; Nondistributive Intent. A Participant shall not be entitled to the privilege of stock ownership as to any shares of Common Stock not actually issued to him or her. Upon the issuance and transfer of shares to the Participant, unless a registration statement is in effect under the Securities Act and applicable state securities law relating to such issued and transferred Common Stock and there is available for delivery a prospectus meeting the requirements of Section 10 of the Securities Act, the Common Stock may be issued and transferred to the Participant only if he or she represents and warrants in writing to the Corporation that the shares are being acquired for investment and not with a view to the resale or distribution thereof. No shares shall be issued and transferred unless and until there shall have been full compliance with any then applicable regulatory requirements (including those of exchanges upon which any Common Stock of the Corporation may be listed). 7.9 Effective Date of this Plan. This Plan shall become effective on May 15, 1991, the date of adoption by the Board, subject, however, to approval by the stockholders of the Corporation within 12 months from the date of its adoption by the Board. 7.10 Term of this Plan. Unless previously terminated by the Board, this Plan shall terminate at the close of business on May 14, 2001, and no Awards shall be granted under it thereafter, but such termination shall not affect any Award theretofore granted. 7.11 Governing Law. This Plan and the documents evidencing Awards and all other related documents shall be governed by, and construed in accordance with, the laws of the State of California. If any provision shall be held by a court of competent jurisdiction to be invalid and unenforceable, the remaining provisions of this Plan shall continue to be fully effective. 7.12 Limitations as to Section 16 Persons. (a) Notwithstanding any other provision of this Plan, any Award granted hereunder to an Eligible Employee who is then subject to Section 16 of the Exchange Act is subject to the following additional limitations: (1) the Award may provide for the issuance of shares of Common Stock as a stock bonus for no consideration other than services rendered; or 11 (2) in the case of an Award under which shares of Common Stock are or in the future may be issued for any other type of consideration, the amount of such consideration either (i) shall be equal to the minimum amount (such as the par value of such shares) required to be received by the Company to comply with applicable state law, or (ii) shall be equal to or greater than 50% of the Fair Market Value of the shares of Common Stock on the date of the Award; provided in the case of Restricted Stock Awards, that the purchase price shall equal the minimum amount described in clause (i) above (but not more than 10% of the market value of the stock subject to the Award on the Award Date) and any right to purchase such restricted stock must be exercised within sixty (60) days of the Award Date. (b) The foregoing limitations in this Section 7.12 on Awards granted to such Participants shall be suspended upon the earlier of (i) confirmation by the Commission either by regulation, official staff interpretation or no-action letter issued to the Corporation that such limitations are not necessary to secure the benefits otherwise available with respect to a "plan" or particular award as the case may be, under Rule 16b-3 or (ii) the Deferred Effective Date. 7.13 Transfer and Other Restrictions under Rule 16b-3. Any Option, similar right (including stock appreciation rights) or other Award that would constitute a derivative security (as this phrase is defined in Rule 16a-1 under the Exchange Act and used in Rule 16b-3 thereunder) and that is issued under this Plan shall not be transferable by the Participant other than by will or the laws of descent and distribution or, after the Deferred Effective Date, pursuant to a QDRO. The designation of a beneficiary by an officer or director of the Corporation shall not be deemed to constitute a transfer under this Plan. Any Option, similar right (including stock appreciation rights) or other Award granted prior to the Deferred Effective Date under this Plan shall be exercisable during the Participant's lifetime only by such Participant or by such Participant's duly appointed guardian or Personal Representative. It is the intent of the Corporation that the Plan satisfy and be interpreted in a manner that in the case of Participants who are or may be subject to Section 16 of the Exchange Act satisfied the applicable requirements of the applicable Rule 16b-3 so that such persons will be entitled to the benefits of such rule or other exemptive rules under Section 16 of the Exchange Act and will not be subjected to avoidable liability thereunder in respect of benefits intended by the Plan. If any provision of the Plan or of any Award would frustrate or otherwise conflict with the intent expressed above, that provision, to the extent possible, shall be interpreted and deemed amended as to avoid such conflict, but to the extent of any remaining irreconcilable conflict with such intent as to such persons in the circumstances, such provision shall be deemed void. 12 EX-10.12 4 EXHIBIT 10.12 EXHIBIT 10.12 DOLE FOOD COMPANY, INC. BOARD OF DIRECTORS DEFERRED COMPENSATION PLAN ARTICLE 1 PURPOSE ------- The purpose of this Dole Food Company, Inc. Board of Directors Deferred Compensation Plan (the "Plan") is to provide a means whereby Dole Food Company, Inc. (the "Company") may afford the opportunity to defer annual retained and meeting fees on a pre-tax basis to non-employee members of the Board of Directors (the "Board"). This plan is effective as of October 1, 1993. It shall have no application to any persons who terminated their service on the Board prior to October 1, 1993, except as otherwise expressly determined by the Committee. ARTICLE 2 DEFINITIONS AND CERTAIN PROVISIONS ---------------------------------- Annual Retainer. "Annual Retainer" means the Participant's annual retainer --------------- for service as a Director prior to any such compensation being deferred under this Plan or any plan or agreement of the Company whereby compensation for service as a Director is deferred. Beneficiary. "Beneficiary" means the person or persons ----------- designated as such in accordance with Article 6. Board. "Board" means the Board of Directors of the ----- Company. Committee. "Committee" means the Compensation and Benefits Committee of --------- the Board appointed to administer the Plan pursuant to Article 3. Declared Rate. "Declared Rate" means the interest rate for each Plan Year ------------- established by the Company in accordance with Section 4.3(a). Deferral Account. "Deferral Account" means the account maintained on the ---------------- books of account of the Company for each Participant pursuant to Section 4.3. Enrollment Agreement. "Enrollment Agreement" means the election form which -------------------- an eligible Director files with the Company to participate in the Plan. 1 Meeting Fees. "Meeting Fees" means the Participant's regular meeting fees ------------ for attending meetings of the Board and Committees of the Board prior to any such compensation being deferred under this Plan or any plan or agreement of the Company whereby compensation for service as a Director is deferred. Participant. "Participant" means a Director who has filed a completed and ----------- executed Enrollment Agreement with the Committee and is participating in the Plan in accordance with the provisions of Article 4. Plan Year. "Plan Year" means the calendar year beginning January 1 and --------- ending December 31, except the first Plan Year will be from October 1 to December 31, 1993. Retirement. "Retirement" means termination of service on the Board other ---------- than by reason of death. Director. "Director"" means a member of the Board who is not also an -------- employee of the Company. ARTICLE 3 ADMINISTRATION OF THE PLAN -------------------------- (a) The Committee is the plan administrator and shall supervise and control the operation of this Plan in accordance with its terms. (b) The Committee may appoint from its number such committees with such powers as it shall determine; may authorize one or more of its number or its agent to execute or deliver any instrument or make any payment on its behalf; and may utilize counsel, employ agents and provide for such clerical and accounting services as it may require in carrying out the provisions of the Plan. (c) The Committee shall hold meetings upon such notice, at such place or places, and at such time or times as it may from time to time determine. (d) The action of a majority of the members expressed from time to time by a vote at a meeting or in writing without a meeting shall constitute the action of the Committee and shall have the same effect for all purposes as if assented to by all members of the Committee at the time in office. 2 (e) No member of the Committee shall receive any compensation for his services as such, and, except as required by law, no bond or other security shall be required of him in such capacity in any jurisdiction. To the extent permitted by applicable law, the Company, without charging such to the Plan, shall indemnify each member of the Committee against any and all claims, losses, damages, expenses (including reasonable attorney fees) and liabilities arising from any action or failure to act, except when the same is finally judicially determined to be due to the gross negligence or willful misconduct of such member. (f) Subject to the limitations of the Plan, the Committee from time to time shall establish rules or regulations for the administration of the Plan and the transaction of its business. The Committee shall interpret the Plan and decide any and all matters arising hereunder (except such matters which the Board from time to time may reserve to itself), including the right to remedy possible ambiguities, inconsistencies or omissions. All interpretations, determinations and decisions of the Committee or the Board with respect to eligibility for benefits, the terms of the Plan or any other matter hereunder shall be based on a reasonable interpretation of the Plan and shall be made by the Committee or the Board, in its sole discretion. All such interpretations, determinations and decisions of the Committee or the Board shall be final, conclusive and binding on all parties affected thereby. No rule of strict construction shall be applied against the Company, the Committee, the Board or any other person in the interpretation of any terms of the Plan or any rule or procedure established by the Committee. (g) If a written request by a Participant or Beneficiary for the payment of any benefits hereunder has been rejected by the Committee, then the Committee shall within a reasonable period of time notify the Participant of such rejection in writing setting forth the specific reasons for such rejection. Such written explanation shall be written in a manner calculated to be understood by the Participant. The Committee shall afford any Participant, whose claim for benefits has been rejected, a reasonable opportunity for review of such claim. 3 ARTICLE 4 PARTICIPATION ------------- 4.1 Election to Participate. A Director may elect to participate in the ----------------------- Plan effective as of the first day of the Plan Year by filing a completed and fully executed Enrollment Agreement with the Committee prior to the beginning of such Plan Year. The Committee may also permit any person who first becomes a Director on or after the first day of a Plan Year to enroll in the Plan within 30 days following his election as a Director. A separate Enrollment Agreement must be completed for each Plan Year in which a Participant makes deferrals under the Plan. Pursuant to such Enrollment Agreement, the Participant shall irrevocably elect the deferral option(s) in which he chooses to participate in accordance with Section 4.2. 4.2 Deferral Options. The following deferral options will be available to ---------------- Directors under the Plan, subject to the limitations and conditions herein stated and such other limitations and conditions as the Committee may impose, from time to time, in its complete and sole discretion. (a) Annual Retainer. A Director may elect to defer a specified percent of --------------- his Annual Retainer to be earned the following year. A minimum deferral of fifty percent (50%) of the Participant's Annual Retainer is required, and the maximum deferral allowed is one hundred percent (100%) of the Participant's Annual Retainer. (b) Meeting Fees. A Director may elect to defer a specified percent of his ------------ Meeting Fees to be earned the following year. A minimum deferral of fifty percent (50%) of the Participant's Meeting Fees is required, and the maximum deferral allowed is one hundred percent (100%) of the Participant's Meeting Fees. A Director may elect deferral option (a) only, deferral option (b) only, or deferral options (a) and (b). 4 4.3 Deferral Accounts. The Committee shall establish and maintain separate ----------------- Deferral Accounts for each Participant. The amount by which a Participant's Annual Retainer or Meeting Fees are deferred in accordance with Section 4.2 shall be credited to the Participant's Deferral Account no later than the first day of the month following the month in which such Annual Retainer and/or Meeting Fees would otherwise have been paid. The Deferral Account shall be debited by the amount of any payments made to the Participant or the Participant's Beneficiary with respect to such Deferral Account pursuant to this Plan. (a) Interest on Deferral Accounts. Prior to the beginning of each Plan ----------------------------- Year a Declared Rate of interest will be established by the Company for that Plan Year. Interest will be credited monthly to unpaid balances of Deferral Accounts at one-twelfth of the annual Declared Rate, compounded annually. The Declared Rate for any Plan Year applies both to the amounts initially deferred for such Plan Year, and to the amounts previously credited to Deferral Accounts for previous Plan Years. 4.4 Valuation of Accounts. The value of a Deferral Account as of any date --------------------- shall equal the amounts theretofore credited to such account, plus the interest deemed to be earned on such account in accordance with Section 4.3 through the day preceding such date, less the amounts theretofore debited to such account. 4.5 Statement of Accounts. The Committee shall submit to each Participant, --------------------- within one hundred twenty (120) days after the close of each Plan Year, a statement in such form as the Committee deems desirable setting forth the balance standing to the credit of each Participant in each of his Deferral Accounts. ARTICLE 5 BENEFITS -------- 5.1 Retirement Benefit. A Participant is eligible for a retirement benefit ------------------ under this Plan when he has satisfied the requirements for Retirement (as defined in Article 2). The retirement benefit will be based on the total value of the Participant's Deferral Account. 5 The retirement benefit attributable to the amounts deferred for any Plan Year will be paid at the time and in the manner which the Participant elects pursuant to the Enrollment Agreement applicable to such Plan Year. Enrollment Agreements are irrevocable. The Enrollment Agreement shall provide that a Participant may elect to receive his retirement benefit either: (a) Commencing the first of the month following the Participant's Retirement; or (b) Commencing the first of the month and year the Participant elects in his Enrollment Agreement, or the first of the month following his Retirement, if later. The Enrollment Agreement shall also provide that a Participant may further elect to receive his retirement benefit in either a lump sum or annual installments over 5, 10, or 15 years. If the Participant elects to receive a lump sum payment, the amount will be equal to the value of the Deferral Account as of the last day of the month preceding the month of commencement of payment. If the Participant elects to receive annual installments, interest will be credited on the unpaid balance in the Deferral Account at the Declared Rate in effect during each year of the payment period. 5.2 Survivor Benefit. ---------------- (a) If a Participant dies before commencement of payment of his retirement benefit, the Company will pay to the Participant's Beneficiary the retirement benefit the Participant would have received had the Participant terminated his service on the Board on the day prior to such Participant's death, irrespective of when the Participant had elected to receive payment of his retirement benefit. Such payment shall be made in accordance with the method of payment (i.e.. lump sum or installments) which the Participant had elected for payment of his retirement benefit. (b) If a Participant dies after the commencement of a payment of his retirement benefit, the Company will pay to the Participant's Beneficiary the remaining installments of any such benefit that would have been paid to the Participant had the Participant survived. 6 5.3 Emergency Benefit. In the event that the Committee, upon written ----------------- petition of the Participant, determines, in its sole discretion, that the Participant has suffered an unforeseeable financial emergency, the Company shall pay to the Participant, as soon as practicable following such determination, an amount up to the balance of his Deferral Account as necessary to meet the emergency (the "Emergency Benefit"). For purposes of this Plan, an unforeseeable financial emergency is an unexpected need for cash arising from an illness, casualty loss, sudden financial reversal, or other such unforeseeable occurrence. The amount of the benefits otherwise payable under the Plan shall thereafter be adjusted to reflect the payment of the Emergency Benefit. Applications for Emergency Benefits and the determinations thereon by the Committee shall be in writing, and a Participant may be required to furnish written proof of the financial emergency. Any participant who receives an Emergency Benefit will be precluded from electing to make new deferrals under the Plan until the next enrollment period which occurs at least 12 months following payment of the Emergency Benefit. 5.4 Small Benefit. In the event the Committee determines that the balance ------------- of a Participant's Deferral Account is less than $25,000 at the time of commencement of payment of his retirement benefit, or the portion of the balance of the Participant's Deferral Account payable to any Beneficiary is less than $25,000 at the time of commencement of payment of a survivor benefit to such Beneficiary, the Company may pay the benefit in the form of a lump sum payment, notwithstanding any provision of this Article 5 to the contrary. Such lump sum payment shall be equal to the balance of the Participant's Deferral Account or the portion thereof payable to a Beneficiary. 5.5 Withholding: Employment Taxes. To the extent required by the law in ----------------------------- effect at the time payments are made, the Company shall withhold from payments made hereunder the minimum taxes required to be withheld by the federal or any state or local government. ARTICLE 6 BENEFICIARY DESIGNATION ----------------------- Each Participant shall have the right, at any time to designate any person or persons as Beneficiary or Beneficiaries to whom payments under this Plan shall be made in the event of the Participant's death prior to complete distribution to the Participant of the benefits due under the Plan. Each Beneficiary designation shall become effective only when filed in writing with the Committee on a form prescribed or accepted by the Committee. 7 Any Participant shall have the right to designate a new Beneficiary at any time by filing with the Committee a written request for such change, but any such change shall become effective only upon receipt of such request by the Committee. Upon receipt by the Committee of such request, the change shall relate back to and take effect as of the date the Participant signs such request, whether or not the Participant is living at the time the Committee receives such request. If there is no designated Beneficiary living at the death of the Participant when any payment hereunder shall be payable to a Beneficiary, then such payment shall be made as follows: To such Participant's wife or husband, if living and if not living, to such Participant's executors or administrators. ARTICLE 7 ARBITRATION ----------- 7.1 (a) A Participant or, following the Participant's death, a Beneficiary (collectively referred to in this section as "Claimant") may, if he desires, submit any claim for payment under this Plan or dispute regarding the interpretation of this Plan to arbitration. This right to select arbitration shall be solely that of the Claimant, and the Claimant, may decide whether or not to arbitrate in his discretion. The "right to select arbitration" does not impose upon the Claimant a requirement to submit a dispute for arbitration. The Claimant may, in lieu of arbitration, bring an action in appropriate civil court. The Claimant retains the right to select arbitration, even if a civil action (including, without limitation, an action for declatory relief) is brought by the Company, or any other fiduciary of the Plan prior to the commencement of arbitration. If arbitration is selected by the Claimant after a civil action concerning the Claimant's dispute has been brought by a person other than the Claimant, the Company, the Trustee and the Claimant shall take such actions as are necessary or appropriate, including dismissal of the civil action, so that the arbitration can be timely heard. Once an arbitration is commenced, it may not be discontinued without the unanimous consent of all parties to the arbitration. During the lifetime of the Participant only he can use the arbitration procedure set forth in this section. (b) Any claim for arbitration may be submitted as follows: if the Claimant disagrees with an interpretation of this Plan by the Company, or any fiduciary of the Plan, or disagrees with the calculation of his benefit under the Plan, such claim may be filed in writing with an arbitrator of the Claimant's choice who is selected by the method described in the next four sentences. The first step of the selection shall consist of the Claimant submitting in writing a list of five potential arbitrators to the Company, and the trustee of any grantor trust which holds assets 8 for the purpose of making benefit payments under this Plan ("Trustee"). Each of the five arbitrators must be either (1) a member of the National Academy of Arbitrators located in the state of the Claimant's principal resident or (2) a retired California Superior Court or Appellate Court judge. Within one week after receipt of the list, the Trustee and the Company shall jointly select one of the five arbitrators as the arbitrator for the dispute in question. If the Trustee and Company fail to select an arbitrator in a timely manner (including failure to select an arbitrator by reason of disagreement between the Trustee and Company as to the arbitrator to be selected), the Claimant shall then designate one of the five arbitrators as the arbitrator of the dispute in question. (c) The arbitration hearing shall be held within seven days (or as soon thereafter as possible) after the selection of the arbitrator. No continuance of said hearing shall be allowed without the mutual consent of the Claimant, the Trustee and the Company. Absence from or nonparticipation at the hearing by any party shall not prevent the issuance of an award. Hearing procedures which will expedite the hearing may be ordered at the arbitrator's discretion, and the arbitrator may close the hearing in his sole discretion when he decides he has heard sufficient evidence to satisfy issuance of an award. (d) The arbitrator's award shall be rendered as expeditiously as possible and in no event later than one week after the close of the hearing. In the event the arbitrator finds that the Claimant is entitled to the benefits he claimed, the arbitrator shall order the Company and/or the Trustee to pay such benefits, in the amounts and at such time as the arbitrator determines. The obligation of the Trustee to pay such benefits shall not, however, exceed the assets of the trust, and the Company shall be jointly and severally liable for any amount which the Trustee is ordered to pay. The award of the arbitrator shall be final and binding upon the parties. The Company shall thereupon pay the Claimant immediately the amount that the arbitrator orders to be paid in the manner described in the award. The award may be enforced in any appropriate court as soon as possible after its rendition. If any action is brought to confirm the award, no appeal shall be taken by any party from any decision rendered in such action. (e) If the arbitrator determines either that the Claimant is entitled to the claimed benefits or that the claim by the Claimant was made in good faith, the arbitrator shall direct the Company to pay to the Claimant and Company agrees to pay to the Claimant in accordance with such order, an amount equal to the Claimant's expenses in pursuing the claim, including attorneys' fees. 9 ARTICLE 8 AMENDMENT AND TERMINATION OF THE PLAN ------------------------------------- 8.1 Amendment. The Board may at any time amend the Plan in whole or in --------- part; provided, however, that (1) no such amendment shall be effective to decrease the benefits accrued by any Participant prior to the date of such amendment; (2) no such amendment shall, without the written consent of a Participant, delay the date on which payment of the Participant's benefit is to be made; and (3) no amendment shall modify the procedure set forth under Section 8.2(b), except as may apply to a Participant who consents in writing to such amendment. Written notice of any amendment shall be given to each Participant in the Plan. 8.2 Termination. ----------- (a) Company's right to Terminate. The Board may at any time ---------------------------- terminate the Plan. (b) Payments Upon Termination. Upon any termination of the Plan ------------------------- under this Section 8.2, the Participants will be deemed to have voluntarily terminated their participation under the Plan as of the date of such termination. Annual Retainer and Meeting Fees shall prospectively cease to be deferred for the then Plan Year, and the Company will pay to each Participant the value of each of the Participant's deferral accounts, determined as if each had met the requirements for Retirement on the date of such termination of the Plan, at such times and pursuant to such terms and conditions as the Committee in its sole discretion shall determine. ARTICLE 9 MISCELLANEOUS ------------- 9.1 Unsecured General Creditor. Participants and their Beneficiaries, -------------------------- heirs, successors, and assigns shall have no legal or equitable rights, claims, or interests in any specific property or assets of the Company, nor shall they be, as a result of this Plan, beneficiaries of, or have any rights, claims, or interest in any life insurance policies, annuity contracts, or the proceeds therefrom which may hereafter be owned or acquired by the Company("Policies"). Such Policies or assets of the Company shall not be held under any trust for the benefit of Participants, their Beneficiaries, heirs, successors, or assigns, or held in any way as collateral security for the fulfilling of the obligations of the Company under this Plan. Any and all of the Company's assets and Policies, shall be, and remain, the general, unpledged, unrestricted assets of the Company. The Company's obligation under the Plan shall be merely that of any 10 unfunded and unsecured promise of the Company to pay money in the future. 9.2 Obligations to Company. If a Participant becomes entitled to a ---------------------- distribution of benefits under the Plan, and if at such time the Participant has outstanding any debt, obligation, or other liability representing an amount owing to the Company, then the Company may offset such amount owed to it against the amount of benefits otherwise distributable. Such determination shall be made by the Committee. 9.3 Nonassignability. Neither a Participant nor any other person shall ---------------- have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, hypothecate or convey in advance of actual receipt the amounts, if any, payable, hereunder, or any part thereof, or interest therein which are, and all rights to which are, expressly declared to be unassignable and non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant's or any other person's bankruptcy or insolvency. 9.4 Service as a Director Not Guaranteed. Nothing contained in this Plan ------------------------------------ nor any action taken hereunder shall be construed as a contract giving any Director any right to be retained in service on the Board. 9.5 Protective Provisions. Each Participant shall cooperate with the --------------------- Company by furnishing any and all information requested by the Company in order to facilitate the payment of benefits hereunder. 9.6 Gender, Singular, & Plural. All pronouns and any variations thereof -------------------------- shall be deemed to refer to the masculine, feminine, or neuter, as the identity of the person or persons may require. As the context may require, the singular may be read as the plural and the plural as the singular. 9.7 Captions. The captions of the articles, sections, and paragraphs of -------- this Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions. 9.8 Validity. In the event any provision of this Plan is held invalid, -------- void, or unenforceable, the same shall not affect, in any respect, whatsoever, the validity of any other provision of this Plan. 9.9 Notice. Any notice or filing required or permitted to be ------ given to the Committee under the Plan shall be sufficient if in writing and 11 hand delivered, or sent by registered or certified mail, to the principal office of the Company, directed to the attention of the Vice President--Human Resources of the Company. Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. 9.10 Applicable Law. This Plan shall be governed and construed in -------------- accordance with the laws of the State of California. 12 EX-10.13 5 EXHIBIT 10.13 EXHIBIT 10.13 CASTLE & COOKE HOMES, INC. 1993 STOCK OPTION AND AWARD PLAN (as amended, through September 1, 1993) TABLE OF CONTENTS
Page ----- I. THE PLAN............................................. 1 1.1 Purpose......................................... 1 1.2 Administration and Authorization; Power and Procedure............................. 1 1.3 Participation................................... 3 1.4 Shares Available for Awards..................... 3 1.5 Grant of Awards................................. 4 1.6 Award Period.................................... 4 1.7 Limitations on Exercise and Vesting of Awards.. 4 1.8 Acceptance of Notes to Finance Exercise......... 5 1.9 No Transferability.............................. 6 II. EMPLOYEE OPTIONS..................................... 6 2.1 Grants.......................................... 6 2.2 Option Price.................................... 6 2.3 Limitations on Grant and Terms of Incentive Stock Options......................... 7 2.4 Limits on 10% Holders........................... 8 2.5 Option Repricing/Cancellation and Regrant/Waiver of Restrictions.................. 8 III. STOCK APPRECIATION RIGHTS............................ 8 3.1 Grants.......................................... 8 3.2 Exercise of Stock Appreciation Rights........... 9 3.3 Payment......................................... 9
i IV. RESTRICTED STOCK AWARDS.......................... 10 4.1 Grants..................................... 10 4.2 Restrictions............................... 10 4.3 Return to the Corporation.................. 11 V. PERFORMANCE SHARE AWARDS AND STOCK BONUSES....... 11 5.1 Grants of Performance Share Awards......... 11 5.2 Grants of Stock Bonuses.................... 11 5.3 Deferred Payments.......................... 12 VI. OTHER PROVISIONS................................. 12 6.1 Rights of Eligible Employees, Participants.and Beneficiaries............. 12 6.2 Adjustments; Acceleration.................. 13 6.3 Termination of Employment; Termination of Subsidiary Status....................... 14 6.4 Compliance with Laws....................... 15 6.5 Tax Withholding............................ 15 6.6 Plan Amendment, Termination and Suspension................................. 16 6.7 Privileges of Stock Ownership.............. 16 6.8 Effective Date of this Plan................ 17 6.9 Term of this Plan.......................... 17 6.10 Governing Law/Construction/Severability.... 17 6.11 Captions................................... 18 6.12 Non-Exclusivity of Plan.................... 18 VII. DEFINITIONS......................................... 18 7.1 Definitions................................. 18
ii CASTLE & COOKE HOMES, INC. 1993 STOCK OPTION AND AWARD PLAN (as amended, through September 1, 1993) I. THE PLAN. 1.1 Purpose ------- The purpose of this Plan is to promote the success of the Company and the interest of its stockholders by providing an additional means through the grant of Awards to attract, motivate, retain and reward key employees by providing them long-term incentives to improve the financial performance of the Company. "Corporation" means Castle & Cooke Homes, Inc., a Hawaii corporation, and its successors, and "Company" means the Corporation and its Subsidiaries, collectively. These terms and other capitalized terms are defined in Article VII. 1.2 Administration and Authorization; Power and Procedure. ----------------------------------------------------- (a) Committee. This Plan shall be administered by and all --------- Awards to Eligible Employees shall be authorized by the Committee. Action of the Committee with respect to the administration of this Plan shall be taken pursuant to a majority vote or by written consent of its members. (b) Plan Awards; Interpretation; Powers of Committee. Subject ------------------------------------------------ to the express provisions of this Plan, the Committee shall have the authority, and the determinations of the Committee shall be conclusive with respect: (i) to determine the particular Eligible Employees who will receive Awards; (ii) to grant Awards to Eligible Employees, determine the price at which securities will be offered or awarded and the amount of securities to be offered or awarded to any of such persons, and determine the other specific terms and conditions of such Awards consistent with the express limits of this Plan, and establish the installments (if any) in which such Awards shall become exercisable or shall vest, or determine that no delayed exercisability or vesting is required, and establish the events of termination or reversion of such Awards; 1 (iii) to approve the forms of Award Agreements (which need not be identical either as to type of award or among Participants); (iv) to construe and interpret this Plan and any agreements defining the rights and obligations of the Company and Employee Participants under this Plan, further define the terms used in this Plan, and prescribe, amend and rescind rules and regulations relating to the administration of this Plan; (v) to cancel, modify, or waive the Corporation's rights with respect to, or modify, discontinue, suspend, or terminate any or all outstanding Awards held by Eligible Employees, subject to any required consent under Section 6.6; (vi) to accelerate or extend the exercisability or extend the term of any or all such outstanding Awards within the maximum ten-year term of Awards under Section 1.6; and (vii) to make all other determinations and take such other action as contemplated by this Plan or as may be necessary or advisable for the administration of this Plan and the effectuation of its purposes. (c) Binding Determinations. Any action taken by, or inaction ---------------------- of, the Corporation, any Subsidiary, the Board or the Committee relating or pursuant to this Plan shall be within the absolute discretion of that entity or body and shall be conclusive and binding upon all persons. No member of the Board or Committee, or officer of the Corporation or any Subsidiary, shall be liable for any such action or inaction of the entity or body, of another person or, except in circumstances involving bad faith, of himself or herself. Subject only to compliance with the express provisions hereof, the Board and Committee may act in their absolute discretion in matters within their authority related to this Plan. (d) Reliance on Experts. In making any determination or in ------------------- taking or not taking any action under this Plan, the Committee or the Board, as the case may be, may obtain and may rely upon the advice of experts, including professional advisors to the Corporation. No director, officer or agent of the Company shall be liable for any such action or determination taken or made or omitted in good faith. (e) Delegation. The Committee may delegate ministerial, non- ---------- discretionary functions to individuals who are officers or employees of the Company. 2 1.3 Participation. ------------- Awards may be granted by the Committee only to those persons that the Committee determines to be Eligible Employees. An Eligible Employee who has been granted an Award may, if otherwise eligible, be granted additional Awards if the Committee shall so determine. Non-Employee Directors shall not be eligible to receive any Awards. 1.4 Shares Available for Awards. ---------------------------- Subject to the provisions of Section 6.2, the capital stock that may be delivered under this Plan shall be shares of the Corporation's authorized but unissued Common Stock. The shares may be delivered for any lawful consideration. (a) Number of Shares. The maximum number of shares of Common ---------------- Stock that may be delivered pursuant to Awards granted to Eligible Employees under this Plan shall not exceed 900,000 shares, subject to adjustments contemplated by Section 6.2. (b) Calculation of Available Shares and Replenishment. Shares -------------------------------------------------- subject to outstanding Awards of derivative securities (as defined in Rule 16a- 1(c) under the Exchange Act) shall be reserved for issuance. If any Option or other right to acquire shares of Common Stock under or receive cash or shares in respect of an Award shall expire or be cancelled or terminated without having been exercised or paid in full, or any Common Stock subject to a Restricted Stock Award or other Award shall not vest or be delivered, the unpurchased, unvested or undelivered shares of Common Stock subject thereto shall again be available for the purposes of this Plan, subject only to any applicable limitations under Rule 16b-3; provided, however, that if the Corporation ------------------ withholds shares of Common Stock pursuant to Section 6.5, the number of shares that would have been deliverable with respect to an Award but that are withheld pursuant to the provisions of Section 6.5 may in effect not be issued, but the aggregate number of shares issuable with respect to the applicable Award and under this Plan shall be reduced by the number of shares withheld and such shares shall not be available for additional Awards under this Plan. Subject only to the preceding sentence, Section 1.4(c) and Section 6.10(c), (1) Awards payable solely in cash, and Awards that do not constitute equity securities as defined in Rule 16a-1(d), shall not reduce the number of shares available for Awards under this Plan, (2) any imputed charges to the maximum number of shares deliverable under this Plan (through reserves or otherwise) shall be reversed in the case of Awards actually paid in cash, and (3), to the extent any shares were previously reserved in respect of Awards payable in cash or shares, the number of shares not delivered shall again be available for purposes of this Plan. 3 (c) Provisions for Certain Cash Awards. The maximum number of Awards ----------------------------------- payable solely in cash under the Plan that would constitute derivative securities but for the exclusion in Rule 16a-1(c)(3)(i) under the Exchange Act ("Cash Only Awards"), including Cash Only Awards in the form of Performance Share Awards or Stock Appreciation Rights, to the extent paid in cash, shall be based upon the number of shares referenced for purpose of determining the value or price of the Cash Only Award and shall not, together with the number of shares theretofore delivered and subject to then outstanding Awards payable (or deemed payable) in shares under this Plan, exceed 900,000, subject to adjustments under Section 6.2. Cash Only Awards and other Awards payable in cash or payable in cash or shares that are forfeited or for any reason are not so paid under this Plan may again, subject to Section 6.10(c), be the subject of and available for subsequent Awards under the Plan. Except as above provided for tax withholding offsets under Section 6.5, if an Award may be settled only in cash and satisfies the requirements for exemption under Rule 16b-3 or exclusion from the definition of derivative security under Rule 16a-1(c)(3)(ii), such Award need not be counted against the limits under Section 1.4(a), (b) or (c). 1.5 Grant of Awards. --------------- Subject to the express provisions of this Plan, the Committee shall determine those individuals who are Eligible Employees, the number of shares of Common Stock subject to each Award, the price (if any) to be paid for the shares or the Award, the other terms of the Award, and, in the case of Performance Share Awards, in addition to the matters addressed in Section 1.2(b), the specific objectives, goals and performance criteria (such as an increase in sales, market value, earnings or book value over a base period, the years of service before vesting, the relevant job classification or level of responsibility or other factors) that further define the terms of the Performance Share Award. Each Award shall be evidenced by an Award Agreement signed by the Corporation and, if required by the Committee, by the Participant. Each Award shall be subject to the terms and conditions set forth in this Plan and such other terms and conditions established by the Committee as are not inconsistent with the specific provisions of this Plan. 1.6 Award Period. ------------ Each Award and all executory rights or obligations under the related Award Agreement shall expire on such date (if any) as shall be determined by the Committee, but in the case of Options or other rights to acquire Common Stock not later than ten (10) years after the Award Date. 1.7 Limitations on Exercise and Vesting of Awards. --------------------------------------------- (a) Provisions for Exercise. Unless the Committee otherwise ----------------------- provides, no Award shall be exercisable or shall vest until at least six months after the initial 4 Award Date, and once exercisable an Award shall remain exercisable until the expiration or earlier termination of the Award. (b) Procedure. Any exercisable Award shall be deemed to be --------- exercised when the Corporation receives written notice of such exercise from the Participant, together with any required payment made in accordance with Section 2.2. (c) Fractional Shares/Minimum Issue. Fractional share interests ------------------------------- shall be disregarded, but may be accumulated. The Committee, however, may determine in the case of Eligible Employees that cash, other securities, or other property will be paid or transferred in lieu of any fractional share interests. No fewer than 100 shares may be purchased on exercise of any Award at one time unless the number purchased is the total number at the time available for purchase under the Award. 1.8 Acceptance of Notes to Finance Exercise. --------------------------------------- The Corporation may, with the Committee's approval, accept one or more notes from any Eligible Employee in connection with the exercise or receipt of any outstanding Award; provided that any such note shall be subject to the following terms and conditions: (a) The principal of the note shall not exceed the amount required to be paid to the Corporation upon the exercise or receipt of one or more Awards under this Plan and the note shall be delivered directly to the Corporation in consideration of such exercise or receipt. (b) The initial term of the note shall be determined by the Committee; provided that the term of the note, including extensions, shall not -------- exceed a period of 10 years. (c) The note shall provide for full recourse to the Employee Participant and shall bear interest at a rate determined by the Committee but not less than the interest rate necessary to avoid the imputation of interest under the Code. (d) If the employment of the Employee Participant terminates, the unpaid principal balance of the note shall become due and payable on the 10th business day after such termination; provided, however, that if a sale of such shares would cause such Employee Participant to incur liability under Section 16(b) of the Exchange Act, the unpaid balance shall become due and payable on the 10th business day after the first day on which a sale of such shares could have been made without incurring such liability assuming for these purposes that there are no other transactions (or deemed transactions in securities of this 5 Corporation) by the Employee Participant subsequent to such termination. (e) If required by the Committee or by applicable law, the note shall be secured by a pledge of any shares or rights financed thereby in compliance with applicable law. (f) The terms, repayment provisions, and collateral release provisions of the note and the pledge securing the note shall conform with applicable rules and regulations of the Federal Reserve Board as then in effect. 1.9 No Transferability. ------------------ Awards may be exercised only by, and amounts payable or shares issuable pursuant to an Award shall be paid only to (or registered only in the name of), the Participant or, if the Participant has died, the Participant's Beneficiary or, if the Participant has suffered a Disability, the Participant's Personal Representative, if any, or if there is none, the Participant, or (to the extent permitted by applicable law and Rule 16b-3) to a third party pursuant to such conditions and procedures as the Committee may establish. Other than by will or the laws of descent and distribution or other exception to transfer restrictions under Rule 16b-3 (except to the extent not permitted in the case of an Incentive Stock Option), no right or benefit under this Plan or any award, including, without limitation, any Option, performance share or share of Restricted Stock shall be transferrable by the Participant or shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge (other than to the Corporation) and any such attempted action shall be void. The Corporation shall disregard any attempt at transfer, assignment or other alienation prohibited by the preceding sentences and shall pay or deliver such cash or shares of Common Stock in accordance with the provisions of this Plan. The designation of a Beneficiary for purposes hereof shall not constitute a transfer for these purposes. II. EMPLOYEE OPTIONS. 2.1 Grants. ------ One or more Options may be granted under this Article to any Eligible Employee. Each Option granted shall be designated by the Committee in the applicable Award Agreement as either a Nonqualified Stock Option or an Incentive Stock Option. 2.2 Option Price. ------------ (a) Pricing Limits. The purchase price per share of the Common ------------- Stock covered by each Option shall be determined by the Committee at the time of the 6 Award, but in the case of Incentive Stock Options shall not be less than 100% (110% in the case of a Participant described in Section 2.4) of the Fair Market Value of the Common Stock on the date of grant. (b) Payment Provisions. The purchase price of any shares ------------------ purchased on exercise of an Option granted under this Article shall be paid in full at the time of each purchase in one or a combination of the following methods: (i) in cash or by electronic funds transfer; (ii) by certified or cashier's check payable to the order of the Corporation; (iii) if authorized by the Committee or specified in the applicable Award Agreement, by a promissory note of the Participant consistent with the requirements of Section 1.8; or (iv) by the delivery of shares of Common Stock of the Corporation already owned by the Participant, provided, however, that the Committee may in its absolute -------- ------- discretion limit the Participant's ability to exercise an Award by delivering such shares, and any shares delivered which were initially acquired upon exercise of a stock option must have been owned by the Participant at least six months as of the date of delivery. Shares of Common Stock used to satisfy the exercise price of an Option shall be valued at their Fair Market Value on the date of exercise. In addition to the payment methods described above, the Committee may provide that the Option can be exercised and payment made by delivering a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Corporation the amount of sale proceeds necessary to pay the exercise price and, unless otherwise allowed by the Committee, any applicable tax withholding under Section 6.5. The Corporation shall not be obligated to deliver certificates for the shares unless and until it receives full payment of the exercise price therefor and any related withholding obligations have been satisfied. 2.3 Limitations on Grant and Terms of Incentive Stock Options. --------------------------------------------------------- (a) $100,000 Limit. To the extent that the aggregate Fair -------------- Market Value of stock with respect to which incentive stock options first become exercisable by a Participant in any calendar year exceeds $100,000, taking into account both Common Stock subject to Incentive Stock Options under this Plan and stock subject to incentive stock options under all other plans of the Company or any parent corporation, such options shall be treated as nonqualified stock options. For this purpose, the Fair Market Value of the stock subject to options shall be determined as of the date the options were awarded. In reducing the number of options treated as incentive stock options to meet the $100,000 limit, the most recently granted options shall be reduced first. To the extent a reduction of simultaneously granted options is necessary to meet the $100,000 limit, the Committee may, in the manner and to the extent permitted by law, designate which shares of Common Stock are to be treated as shares acquired pursuant to the exercise of an Incentive Stock Option. (b) Option Period. Each Option and all rights thereunder shall ------------- expire no later than ten years after the Award Date. 7 (c) Other Code Limits. There shall be imposed in any Award ----------------- Agreement relating to Incentive Stock Options such terms and conditions as from time to time are required in order that the Option be an "incentive stock option" as that term is defined in Section 422 of the Code. 2.4 Limits on 10% Holders. --------------------- No Incentive Stock Option may be granted to any person who, at the time the Option is granted, owns (or is deemed to own under Section 424(d) of the Code) shares of outstanding Common Stock possessing more than 10% of the total combined voting power of all classes of stock of the Corporation, unless the exercise price of such Option is at least 110% of the Fair Market Value of the stock subject to the Option and such Option by its terms is not exercisable after the expiration of five years from the date such Option is granted. 2.5 Option Repricing/Cancellation and Regrant/Waiver of --------------------------------------------------- Restrictions. ------------ Subject to Section 1.4 and Section 6.6 and the specific limitations on Awards contained in this Plan, the Committee from time to time may authorize, generally or in specific cases only, for the benefit of any Eligible Employee any adjustment in the exercise or purchase price, the vesting schedule, the number of shares subject to, the restrictions upon or the term of, an Award granted under this Article by cancellation of an outstanding Award and a subsequent regranting of an Award, by amendment, by substitution of an outstanding Award, by waiver or by other legally valid means. Such amendment or other action may result among other changes in an exercise or purchase price which is higher or lower than the exercise or purchase price of the original or prior Award, provide for a greater or lesser number of shares subject to the Award, or provide for a longer or shorter vesting or exercise period. III. STOCK APPRECIATION RIGHTS. 3.1 Grants. ------ In its discretion, the Committee may grant to any Eligible Employee Stock Appreciation Rights concurrently with the grant of Options on such terms as set forth by the Committee in the Award Agreement for such Option. Any Stock Appreciation Right granted in connection with an Incentive Stock Option shall contain such terms as may be required to comply with the provisions of Section 422 of the Code and the regulations promulgated thereunder. 8 3.2 Exercise of Stock Appreciation Rights. ------------------------------------- (a) Exercisability. Unless the Award Agreement or the Committee -------------- otherwise provides, a Stock Appreciation Right shall be exercisable at such time or times, and to the extent, that the related Option shall be exercisable and only when the Fair Market Value of the stock subject to the related Option exceeds the Option price of the related Option. (b) Effect on Available Shares. To the extent that a Stock -------------------------- Appreciation Right is exercised, the number of shares of Common Stock subject to the related Option shall be charged against the maximum amount of Common Stock that may be delivered pursuant to Awards under this Plan. The number of shares subject to the Stock Appreciation Right and the related Option of the Participant shall also be reduced by such number of shares. (c) Proportionate Reduction. If a Stock Appreciation Right ------------------------ extends to less than all the shares covered by the related Option and if a portion of the related Option is thereafter exercised, the number of shares subject to the unexercised Stock Appreciation Right shall be reduced only if and to the extent that the remaining number of shares covered by such related Option is less than the remaining number of shares subject to such Stock Appreciation Right. 3.3 Payment. ------- (a) Amount. Unless the Committee otherwise provides, upon ------ exercise of a Stock Appreciation Right and surrender of an exercisable portion of any related Option to the extent required by Section 3.2, the Participant shall be entitled to receive subject to Section 6.5 payment of an amount determined by multiplying (i) the difference obtained by subtracting the exercise price per share of Common Stock under the related Option from the Fair Market Value of a share of Common Stock on the date of exercise of the Stock Appreciation Right, by (ii) the number of shares with respect to which the Stock Appreciation Right shall have been exercised. (b) Form of Payment. The Committee, in its sole discretion, --------------- shall determine the form in which payment shall be made of the amount determined under paragraph (a) above, either solely in cash, solely in shares of Common Stock (valued at Fair Market Value on the date of exercise of the Stock Appreciation Right), or partly in such 9 shares and partly in cash, provided that the Committee shall have determined that such exercise and payment are consistent with applicable law. If the Committee permits the Participant to elect to receive cash or shares (or a combination thereof) on such exercise, any such election shall be subject to such conditions as the Committee may impose and, in the case of any Section 16 Person, any election to receive cash shall be subject to any applicable limitations under Rule 16b-3. IV. RESTRICTED STOCK AWARDS. 4.1 Grants. ------ The Committee may, in its discretion, grant one or more Restricted Stock Awards to any Eligible Employee. Each Restricted Stock Award Agreement shall specify the number of shares of Common Stock to be issued to the Participant, the date of such issuance, the consideration for such shares (but not less than the minimum lawful consideration under applicable state law) by the Participant and the restrictions imposed on such shares and the conditions of release or lapse of such restrictions. Such restrictions shall not lapse earlier than one year after the Award Date, except to the extent the Committee may otherwise provide. Stock certificates evidencing shares of Restricted Stock pending the lapse of the restrictions ("Restricted Shares") shall bear a legend making the appropriate reference to the restrictions imposed hereunder and shall be held by the Corporation or by a third party designated by the Committee until the restrictions on such shares have vested in accordance with the provisions of the Award and Section 1.7. Upon issuance of the Restricted Stock Award, the Participant may be required to provide such further assurance and documents as the Committee may require to enforce the restrictions. 4.2 Restrictions. ------------ (a) Pre-Vesting Restraints. Except as provided in Section 4.1 ---------------------- and 1.9, restricted shares comprising any Restricted Stock Award may not be sold, assigned, transferred, pledges or otherwise disposed of or encumbered, either voluntarily or involuntarily, until such shares have vested. (b) Dividend and Voting Rights. Unless otherwise provided in -------------------------- the applicable Award Agreement, a Participant receiving a Restricted Stock Award shall not be entitled to dividends for any of the shares (which may be retained in a restricted account) until they have vested, but shall be entitled to vote such shares prior to vesting. (c) Cash Payments. If the Participant shall have paid cash in ------------- connection with the Restricted Stock Award, the Award Agreement shall specify whether and to what extent such cash shall be returned (with or without an earnings factor) as to any 10 restricted shares which cease to be eligible for vesting. 4.3 Return to the Corporation. -------------------------- Unless the Committee otherwise expressly provides, shares of Restricted Stock that are subject to restrictions at the time of termination of employment or are subject to other conditions to vesting that have not been satisfied by the time specified in the applicable Award Agreement shall not vest and shall be returned to the Corporation in such manner and on such terms as the Committee shall therein provide. V. PERFORMANCE SHARE AWARDS AND STOCK BONUSES. 5.1 Grants of Performance Share Awards. ---------------------------------- The Committee may, in its discretion, grant Performance Share Awards to Eligible Employees based upon such factors, which in the case of any Award to a Section 16 Person shall include but not be limited to the contributions, responsibilities and other compensation of the person as the Committee shall deem relevant in light of the specific type and terms of the award. An Award Agreement shall specify the maximum number of shares of Common Stock (if any) subject to the Performance Share Award, the consideration (but not less than the minimum lawful consideration) to be paid for any such shares as may be issuable to the Participant, the duration of the Award and the conditions upon which delivery of any shares or cash to the Participant shall be based. The amount of cash or shares or other property that may be deliverable pursuant to such Award shall be based upon the degree of attainment over a specified period (a "performance cycle") as may be established by the Committee of such measure(s) of the performance of the Company (or any part thereof) or the Participant as may be established by the Committee. The Committee may provide for full or partial credit, prior to completion of such performance cycle or the attainment of the performance achievement specified in the Award, in the event of the Participant's death, Retirement, or Total Disability, a Change in Control Event or in such other circumstances as the Committee may determine. 5.2 Grants of Stock Bonuses. ----------------------- The Committee may grant a Stock Bonus to any Eligible Employee to reward exceptional or special services, contributions or achievements in the manner and on such terms and conditions (including any restrictions on such shares) as determined from time to time by the Committee. The number of shares so awarded shall be determined by the Committee. The Award may be granted independently or in lieu of a cash bonus. 11 5.3 Deferred Payments. ----------------- The Committee may authorize for the benefit of any Eligible Employee the deferral of any payment of cash or shares that may become due or of cash otherwise payable under this Plan, and provide for accreted benefits thereon based upon such deferral, at the election or at the request of such Participant, subject to the other terms of this Plan. Such deferral shall be subject to such further conditions, restrictions or requirements as the Committee may impose, subject to any then vested rights of Participants. VI. OTHER PROVISIONS. 6.1 Rights of Eligible Employees, Participants and Beneficiaries. ------------------------------------------------------------ (a) Employment Status. Status as an Eligible Employee shall not ----------------- be construed as a commitment that any Award will be made under this Plan to an Eligible Employee or to Eligible Employees generally. (b) No Employment Contract. Nothing contained in this Plan (or ---------------------- in any other documents related to this Plan or to any Award) shall confer upon any Eligible Employee or other Participant any right to continue in the employ or other service of the Company or constitute any contract or agreement of employment or other service, nor shall interfere in any way with the right of the Company to change such person's compensation or other benefits or to terminate the employment of such person, with or without cause, but nothing contained in this Plan or any document related hereto shall adversely affect any independent contractual right of such person without his or her consent thereto. (c) Plan Not Funded. Awards payable under this Plan shall be --------------- payable in shares or from the general assets of the Corporation, and (except as provided in Section 1.4(b)) no special or separate reserve, fund or deposit shall be made to assure payment of such Awards. No Participant, Beneficiary or other person shall have any right, title or interest in any fund or in any specific asset (including shares of Common Stock, except as expressly otherwise provided) of the Company by reason of any Award hereunder. Neither the provisions of this Plan (or of any related documents), nor the creation or adoption of this Plan, nor any action taken pursuant to the provisions of this Plan shall create, or be construed to create, a trust of any kind or a fiduciary relationship between the Company and any Participant, Beneficiary or other person. To the extent that a Participant, Beneficiary or other person acquires a right to receive payment pursuant to any Award hereunder, such right shall be no greater than the right of any unsecured general creditor of the Company. 12 6.2 Adjustments; Acceleration. ------------------------- (a) Adjustments. If the outstanding shares of Common Stock are ----------- changed into or exchanged for cash, other property or a different number or kind of shares or securities of the Corporation, or if additional shares or new or different securities are distributed with respect to the outstanding shares of the Common Stock, through a reorganization or merger in which the Corporation is the surviving entity, or through a combination, consolidation, recapitalization, reclassification, stock split, stock dividend, reverse stock split, stock consolidation, dividend or distribution of cash or property to the shareholders of the Corporation, or if there shall occur any other extraordinary corporate transaction or event in respect of the Common Stock or a sale of substantially all the assets of the Corporation as an entirety which in the judgment of the Committee materially affects the Common Stock, then the Committee shall, in such manner and to such extent (if any) as it deems appropriate and equitable, (a) proportionately adjust any or all of (1) the number and kind of shares or other consideration that is subject to or may be delivered under this Plan and pursuant to outstanding Awards, (2) any performance standards appropriate to any outstanding awards and/or (3) the consideration payable with respect to Awards granted prior to any such change and the price, if any, paid in connection with Restricted Stock Awards or Performance Share Awards; or (b) in the case of an extraordinary dividend or other distribution, merger, reorganization, consolidation, combination, sale of assets, split up, exchange or spin off, make provision for a cash payment or for the substitution or exchange of (x) any or all outstanding Awards or the cash, securities or property deliverable to the holder of any or all outstanding Awards, for (y) cash, property and/or other securities, based upon the distribution or consideration payable to holders of the Common Stock of the Corporation upon or in respect of such event; provided, --------- however, in each case, that with respect to awards of Incentive Stock Options, - ------- no such adjustment shall be made which would cause this Plan to violate Section 422 or 424(a) of the Code or any successor provisions thereto. Corresponding adjustments shall be made with respect to any Stock Appreciation Rights based upon the adjustments made to the Options to which they are related. (b) Acceleration of Awards Upon Change in Control. Unless prior --------------------------------------------- to a Change in Control Event the Committee determines that, upon its occurrence, there shall be no acceleration of benefits under Awards or determines that only certain or limited benefits under Awards shall be accelerated and the extent to which they shall be accelerated, and/or establishes a different time in respect of such Event for such acceleration, then upon the occurrence of a Change in Control Event (i) each Option and Stock Appreciation Right shall become immediately exercisable, (ii) Restricted Stock shall immediately vest free of restrictions, and (iii) the number of shares, cash or other property covered by each Performance Share Award shall be issued to the Participant; provided, however, that in no event shall any Award be accelerated as to any Section 16 Person to a date less than six months after the Award Date of such Award. The Committee may override the limitations on acceleration in this Section 6.2 (b) by express provision in the Award Agreement and may 13 accord any Eligible Employee a right to refuse such acceleration in such circumstances as the Committee may approve. Any acceleration of Awards shall comply with any applicable regulatory requirements, including without limitation Rule 16b-3 and Section 422 of the Code. (c) Possible Early Termination of Accelerated Awards. If any ------------------------------------------------- Option or other right to acquire Common Stock under this Plan has been fully accelerated as permitted by Section 6.2(b) but is not exercised prior to (i) a dissolution of the Corporation, or (ii) a reorganization event described in Section 6.2(a) that the Corporation does not survive, or (iii) the consummation of the reorganization event described in Section 6.2(a) that results in a Change of Control approved by the Board, and no provision has been made for the survival, substitution, exchange or other settlement of such Option or right, such Option or right shall thereupon terminate. 6.3 Termination of Employment; Termination of Subsidiary Status. ------------------------------------------------------------ (a) If the Participant's employment by the Company terminates for any reason other than Retirement, Total Disability or death, the Participant shall have, subject to earlier termination pursuant to or as contemplated by Section 1.6, three months from the date of termination of employment to exercise any Option to the extent it shall have become exercisable on the date of termination of employment, and any Option to the extent not exercisable on that date shall terminate. (b) If the Participant's employment by the Company terminates as a result of Retirement, Total Disability or death, the Participant, Participant's Personal Representative or his or her Beneficiary, as the case may be, shall have, subject to earlier termination pursuant to or as contemplated by Section 1.6, 12 months from the date of termination of employment to exercise any Option to the extent it shall have become exercisable by the date of termination of employment, and any Option to the extent not exercisable on that date shall terminate. (c) Each Stock Appreciation Right granted concurrently with an Option shall have the same termination provisions and exercisability periods as the Option to which it relates. The exercisability period of a Stock Appreciation Right shall not exceed that provided in Section 1.6 or in the related Award Agreement and the Stock Appreciation Right shall expire at the end of such exercisability period. (d) The Committee shall establish in respect of each other Award granted hereunder the Participant's rights and benefits (if any) in the event of a termination of employment and in so doing may make distinctions based upon the cause of termination and the nature of the Award. 14 (e) For purposes of this Plan and any Award hereunder, if an entity ceases to be a Subsidiary, a termination of employment shall be deemed to have occurred with respect to each employee of such Subsidiary who does not continue as an employee of another entity owned, controlled by or under common control with the Company. (f) Notwithstanding the foregoing provisions, in the event of, or in anticipation of, a termination of employment with the Company for any reason, other than discharge for cause, the Committee may, in its discretion, increase the portion of the Participant's Award available to the Participant, or Participant's Beneficiary or Personal Representative, as the case may be, or, subject to the provisions of Section 1.6, extend the exercisability period upon such terms as the Committee shall determine. 6.4 Compliance With Laws. -------------------- This Plan, the granting and vesting of Awards under this Plan and the offer, issuance and delivery of shares of Common Stock and/or the payment of money under this Plan or under Awards granted hereunder are subject to compliance with all applicable federal and state laws, rules and regulations (including but not limited to state and federal securities law and federal margin requirements) and to such approvals by any listing, agency or any regulatory or governmental authority as may, in the opinion of counsel for the Corporation, be necessary or advisable in connection therewith. Any securities delivered under this Plan shall be subject to such restrictions, and the person acquiring such securities shall, if requested by the Corporation, provide such assurances and representations to the Corporation as the Corporation may deem necessary or desirable to assure compliance with all applicable legal requirements. 6.5 Tax Withholding. --------------- Upon any exercise, vesting, or payment of any Award or upon the disposition of shares of Common Stock acquired pursuant to the exercise of an Incentive Stock Option prior to satisfaction of the holding period requirements of Section 422 of the Code, the Company shall have the right at its option to (i) require the Participant (or Personal Representative or Beneficiary, as the case may be) to pay or provide for payment of the amount of any taxes which the Company may be required to withhold with respect to such transaction or (ii) deduct from any amount payable the amount of any taxes which the Company may be required to withhold with respect to such cash amount. In any case where a tax is required to be withheld in connection with the delivery of shares of Common Stock under this Plan, the Participant may elect, pursuant to such rules and subject to such conditions as the Committee may establish, to have the Corporation reduce the number of shares to be delivered by (or otherwise reacquire) the appropriate number of shares valued at their then Fair Market Value, to satisfy such withholding obligation; provided, the Committee may impose such conditions on the payment of any withholding obligation necessary in the 15 case of persons subject to the reporting and liability provisions of Section 16 of the Exchange Act to avoid liability under Section 16 of the Exchange Act or to secure the benefits otherwise available under any applicable exemptive or other rule thereunder with respect to a "plan" or particular award or action related thereto. 6.6 Plan Amendment, Termination and Suspension. ------------------------------------------ (a) Board or Committee Authorization. The Board may, at any -------------------------------- time, terminate or, from time to time, amend, modify or suspend this Plan, in whole or in part. No Awards may be granted during any suspension of this Plan or after termination of this Plan, but the Committee shall retain jurisdiction as to Awards then outstanding in accordance with the terms of this Plan. (b) Shareholder Approval. To the extent then required by Rule -------------------- 16b-3 to secure benefits thereunder or to avoid liability under Section 16 of the Exchange Act (and Rules thereunder) or required under Sections 422 and 424 of the Code or any other applicable law, or deemed necessary or advisable by the Board, any amendment to this Plan shall be subject to shareholder approval. (c) Amendments to Awards. Without limiting any other express -------------------- authority of the Committee under but subject to the express limits of this Plan, the Committee by agreement or resolution may waive conditions of or limitations on Awards to Eligible Employees that the Committee in the prior exercise of its discretion has imposed, without the consent of a Participant, and may make other changes to the terms and conditions of Awards that do not affect, in any manner materially adverse to the Employee Participant, his or her rights and benefits under an Award. (d) Limitations on Amendments to Plan and Awards. No amendment, -------------------------------------------- suspension or termination of this Plan or change of or affecting any outstanding Award shall, without written consent of the Participant, affect in any manner materially adverse to the Participant any rights or benefits of the Participant or obligations of the Corporation under any Award granted under this Plan prior to the effective date of such change. Changes contemplated by Section 6.2 shall not be deemed to constitute changes or amendments for purposes of this Section 6.6. 6.7 Privileges of Stock Ownership. ----------------------------- Except as otherwise expressly authorized by the Committee or this Plan, a Participant shall not be entitled to any privilege of stock ownership as to any shares of Common Stock not actually delivered to and held of record by him or her. No adjustment will be made for dividends or other rights as a shareholders for which a record date is prior to such date of delivery. 16 6.8 Effective Date of this Plan. --------------------------- This Plan shall be effective as of February ________, 1993. 6.9 Term of this Plan. ----------------- No Award shall be granted after February _______, 2003 (the "termination date"). Unless otherwise expressly provided in this Plan or in an applicable Award Agreement, any Award theretofore granted may extend beyond such date, and all authority of the Committee with respect to Awards hereunder, including its authority to amend an Award, shall continue during any suspension of this Plan and in respect of outstanding Awards on such termination date. 6.10 Governing Law/Construction/Severability. --------------------------------------- (a) Choice of Law. This Plan, the Awards, all documents ------------- evidencing Awards and all other related documents shall be governed by, and construed in accordance with the laws of the State of Hawaii. (b) Severability. If any provision shall be held by a court of ------------ competent jurisdiction to be invalid and unenforceable, the remaining provisions of this Plan shall continue in effect. (c) Plan Construction. It is the intent of the Corporation that ----------------- this Plan and Awards hereunder satisfy and be interpreted in a manner that satisfies the applicable requirements of Rule 16b-3 so that such persons will be entitled to the benefits of Rule 16b-3 or other exemptive rules under Section 16 of the Exchange Act and will not be subjected to avoidable liability thereunder. If any provision of this Plan or of any Award or any prior action by the Committee would otherwise frustrate or conflict with the intent expressed above, that provision to the extent possible shall be interpreted and deemed amended so as to avoid such conflict, but to the extent of any remaining irreconcilable conflict with such intent as to Section 16. Persons in the circumstances, such provision shall be deemed void, to the extent permitted by law and deemed advisable by the Committee. (d) Limitations Prior to September 1, 1993. Notwithstanding any --------------------------------------- other provision of this Plan, any Award granted to a Section 16 Person prior to the mandatory expiration of the Rule 16b transition period is subject to the following additional limitations: (1) the Award may provide for the issuance of shares of Common Stock as a stock bonus for no consideration other than services rendered; and 17 (2) in the event of an Award under which shares of Common Stock are or in the future may be issued for any other type of consideration, the amount of such consideration either (a) shall be equal to the minimum (such as the par value of such shares) required to be received by the Corporation to comply with applicable state law, or (b) shall be equal to or greater than 50% of the Fair Market Value of the shares of Common Stock on the date of the Award; provided -------- that in the case of Restricted Stock Awards, the amount shall equal the minimum lawful amount (but not more than 10% of the market value of the stock subject to the Award on the Award Date) and any right to purchase the Restricted Stock must be exercised within 60 days of the Award Date. 6.11 Captions. -------- Captions and headings are given to the sections and subsections of this Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Plan or any provision thereof. 6.12 Non-Exclusivity of Plan. ----------------------- Nothing in this Plan shall limit or be deemed to limit the authority of the Board or the Committee to grant awards or authorize any other compensation, with or without reference to the Common Stock, under any other plan or authority. VII. DEFINITIONS. 7.1 Definitions. ----------- (a) "Award" shall mean an award of any Option, Stock ------- Appreciation Right, Restricted Stock, Stock Bonus, Performance Share Award, dividend equivalent or deferred payment right or other right or security that would constitute a "derivative security" under Rule 16a-1(c) of the Exchange Act, or any combination thereof, whether alternative or cumulative, authorized by and granted under this Plan. (b) "Award Agreement" shall mean any writing setting forth the ----------------- terms of an Award that has been authorized by the Committee. (c) "Award Date" shall mean the date upon which the Committee ------------ took the action granted an Award or such later date as the Committee designates as the Award Date. (d) "Award Period" shall mean the period beginning on an Award -------------- Date and ending on the expiration date of such Award. 18 (e) "Beneficiary" shall mean the person, persons, trust or ------------- trusts entitled by will or the laws of descent and distribution to receive the benefits specified in the Award Agreement and under this Plan in the event of a Participant's death, and shall mean the Participant's executor or administrator if no other Beneficiary is identified and able to act under the circumstances. (f) "Board" shall mean the Board of Directors of the ------- Corporation. (g) "Change in Control Event" shall mean any of the following: ------------------------- (1) Approval by the shareholders of the Corporation of the dissolution or liquidation of the Corporation; (2) Approval by the shareholders of the Corporation of an agreement to merge or consolidate, or otherwise reorganize, with or into one or more entities that are not Subsidiaries or other affiliates, as a result of which less than 50% of the outstanding voting securities of the surviving or resulting entity immediately after the reorganization are, or will be, owned, directly or indirectly, by shareholders of the Corporation immediately before such reorganization (assuming for purposes of such determination that there is no change in the record ownership of the Corporation's securities from the record date for such approval until such reorganization but including in such determination any securities of the other parties to such reorganization held by affiliates of the Corporation); (3) Approval by the shareholders of the Corporation of the sale of substantially all of the Corporations' business and/or assets to a person or entity which is not a Subsidiary or other affiliate; or (4) Any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) (other than a person having beneficial ownership of securities of the Corporation at the time of adoption of this Plan or an affiliate of such person, or any successor, heir, descendent or related party of or to any of them) becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation representing more than 50% of the combined voting power of the Corporation's then outstanding securities entitled to then vote generally in the election of directors of the Corporation. (h) "Code" shall mean the Internal Revenue Code of 1986, as ------ amended from time to time. 19 (i) "Commission" shall mean the Securities and Exchange ------------ Commission. (j) "Committee" shall mean a committee appointed by the Board to ----------- administer this Plan, which committee shall be comprised only of three (or, effective September 1, 1993, two) or more directors or such greater number of directors as may be required under applicable law, each of whom, during such time as one or more Participants may be subject to Section 16 of the Exchange Act, shall be Disinterested; provided that until such time as the Corporation has a class of securities registered pursuant to Section 12 of the Exchange Act, the Board as a whole shall comprise the Committee without regard to whether its members are "Disinterested" . (k) "Common Stock" shall mean the Common Stock of the -------------- Corporation and such other securities or property as may become the subject of Awards, or become subject to Awards, pursuant to an adjustment made under Section 6.2 of this Plan. (l) "Company" shall mean, collectively, the Corporation and its --------- Subsidiaries. (m) "Corporation" shall mean Castle & Cooke Homes, Inc., a ------------- Hawaii corporation, and its successors. (n) "Disinterested" shall mean disinterested within the meaning --------------- of any applicable regulatory requirements, including Rule 16b-3. (o) "Eligible Employee" shall mean an officer (whether or not a ------------------- director) or key employee of the Company, or any Other Eligible Person, as determined by the Committee in its discretion. (p) "ERISA" shall mean the Employee Retirement Income Security ------- Act of 1974, as amended. (q) "Exchange Act" shall mean the Securities Exchange Act of -------------- 1934, as amended from time to time. (r) "Fair Market Value" on any date shall mean the closing price ------------------- of the stock on the Composite Tape, as published in the Western Edition of The Wall Street Journal, of the principal national securities exchange on which the stock is so listed or admitted to trade, on such date, or, if there is no trading of the stock on such date, then the closing price of the stock as quoted on such Composite Tape on the next preceding date on which there was trading in such shares; provided, however, if the stock is not listed or admitted to trade on a national securities exchange, the Committee may designate such other 20 exchange, market or source of data as it deems appropriate for determining such value for Plan purposes. (s) "Incentive Stock Option" shall mean an Option which is ------------------------ designated as an incentive stock option within the meaning of Section 422 of the Code and which contains such provisions as are necessary to comply with that section. (t) "Nonqualified Stock Option" shall mean an Option that is --------------------------- designated as a Nonqualified Stock Option and shall include any Option intended as an Incentive Stock Option that fails to meet the applicable legal requirements thereof. Any Option granted hereunder that is not designated as an incentive stock option shall be deemed to be designated a nonqualified stock option under this Plan and not an incentive stock option under the Code. (u) "Non-Employee Director" shall mean a member of the Board of ----------------------- Directors of the Corporation who is not an officer or employee of the Company. (v) "Option" shall mean an option to purchase Common Stock under -------- this Plan. The Committee shall designate any Option granted to an Eligible Employee as a Nonqualified Stock Option or an Incentive Stock Option. (w) "Other Eligible Person" shall mean any other person ----------------------- (including significant agents and consultants) who performs substantial services for the Company of a nature similar to those performed by key employees, who is selected to participate in this Plan by the Committee from time to time; provided that in no event shall a Non-Employee Director be selected as an Other Eligible Person. (x) "Participant" shall mean an Eligible Employee who has been ------------- granted an Award under this Plan. (y) "Performance Share Award" shall mean an award of a right to ----------------------- receive shares of Common Stock, the issuance of which is contingent upon attainment of performance objectives specified by the Committee. (z) "Personal Representative" shall mean the person or persons ------------------------- who, upon the disability or incompetence of a Participant, shall have acquired on behalf of the Participant, by legal proceeding or otherwise, the power to exercise the rights or receive benefits under this Plan by virtue of having become the legal representative of the Participant. (aa) "Plan" shall mean this Castle & Cooke Homes, Inc. 1993 Stock ------ Option and Award Plan. 21 (bb) "Restricted Stock" shall mean shares of Common Stock awarded to a ------------------ Participant subject to payment of such consideration, if any, and such conditions on vesting (which may include, among others, the passage of time, specified performance objectives or other factors) and such transfer and other restrictions as are established in or pursuant to this Plan and the related Award Agreement, for so long as such shares remain unvested under the terms of the applicable Award Agreement. (cc) "Retirement" shall mean retirement from active service as an ------------ employee or officer of the Company on or after attaining age 55 with ten or more years of service or age 65. (dd) "Rule 16b-3" shall mean Rule 16b-3 as promulgated by the ------------ Commission pursuant to the Exchange Act. (ee) "Section 16 Person" shall mean a person subject to Section ------------------- 16(a) of the Exchange Act. (ff) "Securities Act" shall mean the Securities Act of 1933, as ---------------- amended from time to time. (gg) "Stock Appreciation Right" shall mean a right authorized -------------------------- under this Plan to receive a number of shares of Common Stock or an amount of cash, or a combination of shares and cash, the aggregate amount or value of which is determined by reference to a change in the Fair Market Value of the Common Stock. (hh) "Stock Bonus" shall mean an Award of shares of Common Stock ------------- for no consideration other than past services and without restriction other than such transfer or other restrictions as the Committee may deem advisable to assure compliance with law. (ii) "Subsidiary" shall mean any corporation or other entity a ------------ majority of whose outstanding voting stock or voting power is beneficially owned directly or indirectly by the Corporation. (jj) "Total Disability" shall mean a "permanent and total ------------------ disability" within the meaning of Section 22(e)(3) of the Code and such other disabilities, infirmities, afflictions or conditions as the Committee by rule may include. 22 EX-10.14 6 EXHIBIT 10.14 EXHIBIT 10.14 CASTLE & COOKE HOMES, INC. EXECUTIVE INCENTIVE PLAN ------------------------ This Castle & Cooke Homes, Inc. incentive plan is intended to better match performance, short term and long term, and allow management to tie incentive compensation to specific goals and objectives. The Castle & Cooke Homes, Inc. plan is divided into three sections as follows: 1. Incentive Plan Objectives 2. Senior Operating Managers 3. Executive Incentive Plan OBJECTIVES The primary objective of the incentive plan is to better relate individual performance to individual compensation. Six specific objectives of this incentive compensation plan are as follows: 1. Better relate individual performance to individual compensation. 2. Expand the boundaries of the current program to better reward superior performance and allow for management discretion in rewarding special achievement. 3. Acknowledge differing business objectives between staff and operating positions and reflect those differences in individualized incentive reward systems. 4. Directly relate the individual goal setting process to individual accountability for results and resultant incentive compensation. 5. Reflect differing objectives and business needs by group. 6. Incorporate a long-term business component in the program. Separate programs of the incentive plan are needed to differentiate between senior operating positions and other operating and staff/support functions. The next two sections outline those programs. The eligibility requirements are as follows: 1. Key management personnel who have significant impact. 2. Salary Grade 15 and above. 3. Work at least three periods during year. 4. Full-time active employee on payment date. SENIOR OPERATING MANAGERS INCENTIVE PLAN The line/operating managers plan is focused on bottom line performance at the level of the individual's responsibilities. This is most heavily weighted towards short term financial goals but also includes strategic objectives aimed at longer term business development. The three key factors emphasized in this plan to determine individual incentive awards are: individual achievement of goals, management discretion, and division performance (e.g., Castle & Cooke Homes - Hawaii or Castle & Cooke Homes - Mainland in total). Participation - ------------- Eligibility will consist of only the top operating managers designated by the Presidents (Hawaii and Mainland) of Castle & Cooke Homes, Inc. In future years eligibility may be extended to other key operating managers with major profit/loss or cost responsibility. Plan Overview - ------------- The plan is customized to recognize the specific role and basic objectives of each position. The plan, and more specifically the measures, are determined at the beginning of the period for each position by the President with input of each individual in the plan and approval of the Chairman. The plan would include specific quantifiable budget targets as well as other objectives which are crucial to the long-term strength of the business. 1. Through the budget process, financial targets are established. Those would differ somewhat by position. The major measurement would be EBIT, but in certain cases the focus would be on other quantitative measurements (such as project costs, product delivery timing, etc.). Next, a quantitative target (e.g., EBIT of $12.3 M) is determined for each measure. This would be based on the approved budgets of the group or project. 2. To adequately focus the individual on actions which may not have an impact on current period financial measures but are crucial to the long term health of the project/group/division, additional goals or objectives which are more qualitative are established. These are a function of the strategic objectives established for the Division as a whole and each Business Group through the budget process. (Note: If financial performance fell below 75% of the objective/budget, any incentive rewards for attaining those qualitative objectives would be discretionary.) 2 3. Next, by position, those financial and strategic goals are individually weighted depending on the focus of the employee's position and overall importance of the goal to the Division and Business Group's success. For example, a Project Manager will have a higher weight assigned to a financial goal (i.e., project EBIT goal - 90% versus strategic goals - 10%) than might a Group head who is also responsible for the overall strategic management of the Business Group (i.e., division EBIT - 75% versus strategic goals - 25%). In all instances, the emphasis or majority weighting would be on financial rather than strategic objectives. 4. Target incentive compensation levels by positions are determined by grade. Within each Business Group, key managers are assigned an Unadjusted Potential Incentive percent of base salary based on their level of responsibility and impact on Business Group performance. This percent corresponds to assigned salary grades as shown below:
Unadjusted Salary Grade Potential Incentive ------------ ------------------- E-20 to E-17 40% E-23 to E-21 35% E-26 to E-24 30% E-29 to E-27 25% E-30 20% 15 to 17 15%
The unadjusted potential incentive multiplied by annual salary equals Individual Guideline Incentive. Each individual guideline incentive is then adjusted based on the division performance adjustment shown in 5.b. below, to establish an Adjusted Guideline Incentive. Meeting financial and other objectives would position the individual to earn 100% of their target level compensation. For exceptional performance for this small group, there would be a cap at a doubling of salary. 5. This program takes into consideration the overall profitability of the division as well as the need for groups and individuals to work together as a team. a. If either division (C&C Homes - Hawaii or C&C Homes - Mainland) is unprofitable as a whole, all payments would be suspended for that division. 3 b. Payments would be adjusted by each division's performance in total.
Division Actual/Budget Adjustments ------------- ----------- 80% - 15% 100% -0- 120% + 10%
The emphasis is on encouraging superior performance through exceptional incentives. The plan has been constructed and objectives/incentives payments will be developed to ensure incentives are a fraction of the benefits to the Company and its shareholders. 6. Management discretion is the final incentive determinant. There is --------------------- implicit management discretion in determining the degree to which certain goals are achieved (i.e., those goals not entirely objectively quantifiable). In addition, this final management discretion factor allows top management to increase or decrease Adjusted Guideline Incentive payments by up to + 20% in order to account for unusual performance factors or business conditions not addressed in the incentive system itself. Individual Guideline Incentive multiplied by the management discretion factor equals the actual recommended incentive payment. The Chairman may adjust more or less than the 20% guideline. A discretionary adjustment by the Chairman shall not be construed to be a pattern or waiver of the usual rule. At bonus review time, the Chairman will be presented with an Incentive Data Sheet. The Incentive Data Sheet will indicate the specific business group (i.e., Residential Projects - Hawaii or Residential Projects - Mainland), the key individual and operating group goals and results, and the manager recommending the incentive payment. EXECUTIVE INCENTIVE PLAN This plan is designed to incorporate a formal objective setting and monitoring process into the program itself. This will permit a more direct link between the two and reinforce the adherence to previously determined objectives. Incentive Pool - -------------- Each key manager is assigned an unadjusted potential incentive percent of base salary based on his or her level of responsibility and impact on overall performance. This percent corresponds to assigned salary grades as shown below: 4
Unadjusted Salary Grade Potential Incentive ------------ ------------------- E-20 to E-17 40% E-23 to E-21 35% E-26 to E-24 30% E-29 to E-27 25% E-30 20% 15 to 17 15%
Each individual guideline incentive is adjusted based on performance, resulting in an Adjusted Guideline Incentive as shown below. Threshold C&C Homes - Hawaii or C&C Homes - Mainland performance is 75% of EBIT budget and is capped at 150%. The sum of all Adjusted Guideline Incentives is the total incentive pool for the plan. See example below. While individual payments may be higher or lower than the Adjusted Guideline Incentive (as discussed in detail below), the total of all incentive payments should not exceed the total Guideline Incentive Pool. Castle & Cooke Homes, Inc. --------------------------
Unadjusted Adjusted Potential Annual Performance Guideline Employee Incentive X Salary X Adjustment Incentive - -------- ---------- ------ ----------- --------- A 15% $50,000 110% $ 8,250 B 20% 60,000 " 13,200 C 20% 65,000 " 14,300 D 30% 80,000 " 26,400 ------- Total Guideline Incentive Pool $62,150
Incentive Awards to Individuals - ---------------------------------- At the beginning of the year objectives for each individual are established through an interactive process between the employee and senior management. These goals will be specific and measurable and will relate to the key objectives established by top management. Goals will be reviewed semi-annually and will be revised as necessary to account for more short-term or time sensitive objectives. Once an Adjusted Guideline Incentive is established for each participant, the recommended individual incentive award is determined based on both performance against objectives and top management input as follows: 5 a. Performance Against Objectives ------------------------------ 75% of the individual recommended incentive award is based on level of achievement on established goals and objectives. Attainment of these goals is considered standard performance and qualifies an individual for up to 100% of his or her target incentive. Exceptional performance relative to these goals could allow for up to 150% of an individual's unadjusted potential incentive, subject to the total amount available in the Guideline Incentive Pool. For example, a person who had a 15% potential incentive and had achieved all his or her goals, could receive a 15% incentive for 75% of his or her individual recommended incentive award. A person who had a 15% potential incentive and exceptional performance could receive 16.9% incentive (15% x 150% x 75%). b. Top Management Input -------------------- The remaining 25% of the individual recommended incentive award is discretionary based on top management's view of performance on factors such as team orientation, support toward others in the organization and other criteria not specifically evaluated in the individual's key objectives. For example, a person with a 15% target and 100% performance could receive a 3.75% target incentive for 25% of his or her individual recommended incentive award (15% x 100% x 25%). The final recommended incentive for each plan participant is the total of the awards for (a) performance against objectives and (b) top management input. In the situation above, the individual would receive a 20.65% award, subject to the pool. Adjustments would be made to individual incentives if the total individual recommendations exceeds the Guideline Incentive Pool. Approvals of Proposed Incentive Awards - -------------------------------------- At bonus review time, the Chairman will be presented with an Incentive Data Sheet and addenda for the plan. The Incentive Data Sheet will indicate the key individual and operating group goals and results, recommended individual incentives and the total incentive pool and the names of managers recommending the incentive payments. 6 EX-10.15 7 EXHIBIT 10.15 EXHIBIT 10.15 DOLE FOOD COMPANY, INC. ANNUAL INCENTIVE PLAN FOR EXECUTIVE OFFICERS SECTION 1. PURPOSE The purposes of the Plan are (i) to compensate and reward the Executive Officers/1/ of the Corporation on an individual basis with annual cash Bonuses ("Bonuses") for the achievement of pre-established performance goals and ------- (ii) to stimulate the efforts of such persons by giving them an opportunity to receive Bonuses directly related to such performance. Maximum amounts payable will be based upon the application of a formula that includes variables relative to base salary levels and the degree of the attainment of the applicable performance goals. SECTION 2. TERM Subject to Section 9, the Plan shall be effective as of January 2, 1994 (the "Effective Date") and shall be in effect with respect to each of the -------------- five years ending December 26, 1998, unless earlier terminated by the Corporation pursuant to Section 10. SECTION 3. COVERAGE; ELIGIBLE PERSONS Each Executive Officer serving as such in any of the positions set forth in Section 4.1 or any equivalent position at any time during the applicable Year for which a Bonus may be granted hereunder shall be eligible to participate and may be a Participant in the Plan, subject to the provisions hereof. The specific Participants shall be designated by the Committee at the time performance goal targets are set or, in the case of a person becoming eligible during a Year, within 30 days after such event. An Eligible Person not selected to participate in the Plan for any Year may participate in another annual cash incentive plan of the Corporation for such Year or be selected by the Committee to participate in the Plan in other Years. An Eligible Person may not participate concurrently in both the Plan and such other annual incentive plan. - ------------------ /1/ This and certain other terms used in the Plan are defined in Section 13. 1 SECTION 4. BASE SALARY FACTOR 4.1. Base Salary and Base Salary Factor. Subject to the terms ----------------------------------- hereof, each Participant's Bonus, if any, shall be determined by reference to the applicable multiplier (the "Base Salary Factor") of the Participant's base ------------------ salary ("Base Salary") for his or her position at the beginning of the ----------- applicable year (or, if services commence during the year, in accordance with the provisions of Section 7.5 and, if the Participant's eligible position changes during the year, in accordance with the provisions of Section 4.2). The initial Base Salary of each eligible position shall be his or her Base Salary as of January 1, 1994 or any later date of appointment as an Eligible Person. The Base Salary Factors are as follows: Base Salary Factors ------------------- Chairman and Chief Executive Officer 75% Other Participants 50% 4.2. Base Salary Adjustments for Changes in Position. If a ----------------------------------------------- Participant holds more than one eligible position during any Year, the product of the Base Salary and the Base Salary Factor of such Participant for purposes of the Plan for such year shall be computed by (a) multiplying (i) the Base Salary Factor (as indicated in or pursuant to Section 4.1 above) for each position, by (ii) the applicable Base Salary for each position, and by (iii) a fraction, the numerator of which is the number of Periods in the Year during which such Participant held such position and the denominator of which is the number of Periods in the applicable Year, and (b) taking the sum of the products of such calculation. 4.3. Base Salary Limit. Base Salary for purposes of this Plan shall ----------------- not exceed $900,000. SECTION 5. PERFORMANCE TARGETS AND GOALS; MAXIMUM BONUSES 5.1. Performance Goals. Performance Goals under the Plan initially ----------------- shall include one or a combination of the following measures: Earnings Before Taxes (EBT) Business Unit Earnings Before Taxes (B/U-EBT) Cost Reduction (CR) Subject to the provisions of Section 8, the Committee from time to time, in respect of Years after the 1994 Year, may use any one or combination of the Performance Goals (as defined in Section 2 13.2), weighted in such manner as the Committee may determine pursuant to Section 6.2. The Applicable Performance Factor with respect to any such additional or substituted performance goals, subject to such weighting, shall be as set forth in Section 6.1. 5.2. Pre-Established Targets. For each Year commencing with 1994, ----------------------- the Committee shall determine the Applicable Performance Goal or Goals and targets (including applicable Minimum, On Plan and Maximum for applying the Performance Factors) and the weighting (subject to Section 6.2) of the --- Performance Goals(and Performance Factors), if more than one Goal applies, in advance of any applicable deadline for such action under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code") for the subject Year. ---- Prior to such deadline, the Committee also shall determine or confirm each Participant's Base Salary for such Year for purposes of the Plan, subject to Sections 4 and 8. 5.3. Formula for Determining Maximum Bonus. Subject to Sections 5.4, ------------------------------------- 6.2, 7 and 8, each Participant's maximum Bonus for any Year will be the product of his or her (a) Base Salary, (b) the Base Salary Factor, and (c) the Applicable Performance Factor. For the first Year of the Plan, the Applicable Performance Factors will be the EBT or B/U-EBT Factor and the CR Factor, at the consolidated level, and for subsequent Years, one or more of the Performance Factors. 5.4 Maximum Dollar Amount. Notwithstanding any other provision --------------------- hereof, no Person shall receive any Bonus under the Plan in any Year in excess of $1,012,500. SECTION 6. PERFORMANCE FACTORS 6.1. Performance Factor. ------------------ The Applicable Performance Factor for any Year shall be determined in accordance with the following table, where Minimum, Target and Maximum represent, respectively, the attainment of the Minimum, On Plan, and Maximum for the applicable Year, established by the Committee for such purposes: Applicable Performance Performance Factor* ------------- ------------------ Less than Minimum 0 Minimum 50% Target/On Plan 100% At or Above Maximum 150% * Applicable Factors for performance between specified performance-to-target levels above Minimum and below Maximum shall be determined using linear interpolation. 3 6.2. Weighting of Factors. If more than one Performance Factor -------------------- applies to a Participant's bonus opportunity, the weighting of the Factors shall be as established by the Committee, initially in the ratio of 7 (for the EBT and/or B/U-EBT Factors) to 3 (for the CR Factor) or, for Years after 1994, in such other proportion (and including such other or additional Performance Factors) as the Committee, consistent with Sections 5 and 8, may from time to time determine in advance of the deadline described in Section 5.2. The maximum Bonus payable if more than one Performance Factor applies shall be determined by taking the result obtained by application of the formula set forth in the first sentence of Section 5.3 to each Performance Goal, multiplying that result by the weighting factor for that Performance Goal, and taking the sum of the products of such calculation. Each weighting factor shall be expressed as a fraction (less than one) or percentage, and the aggregate amount of all weighting factors shall be one (1) or 100%. SECTION 7. PAYMENTS 7.1. Time of Payment. Bonuses for any Year shall be payable as soon --------------- as practicable following the completion of the Company's audit for the Year, but not later than 90 days after Year end. 7.2. Committee Certification. As a condition to the right of a ----------------------- Participant to receive any payment under the Plan, the Committee shall first be required to certify, by resolution of the Committee or other appropriate action, that the Bonus has been accurately determined in accordance with the provisions of the Plan and that the Performance Goals and any other material terms were in fact satisfied. 7.3. Committee Discretion to Reduce Bonuses. The Committee in its -------------------------------------- sole discretion may reduce the amount payable under the formula provisions of the Plan as applied to the pre-established goals to any one or more Participants for any Year as to which the Committee determines that the level of achievement of the pre-established performance goals was influenced by any extraordinary, non-recurring event or other factor extraneous to such individual Participant's performance, or that the Company or applicable Business Unit failed to achieve other corporate objectives. Subject to Section 8, the Committee may also define such other conditions and terms of payment of Bonuses (including but not limited to the achievement of other financial, strategic or individual goals, which may be objective or subjective) as it may deem desirable in carrying out the purposes of the Plan, provided, however, that the Committee may not increase the -------- ------- maximum amount payable hereunder, under the applicable formula or otherwise, to any individual. 4 7.4. Deferral. The Committee may determine that payment of all or a -------- portion of any Bonus may be deferred under a Company-sponsored deferred compensation plan, if in effect, provided that the amount of any interest -------- accrued thereon shall not exceed 120% of the Applicable Federal Rate, compounded semi-annually. 7.5. Payment for Partial Periods. --------------------------- (a) Effect of Termination of Service. If any Participant ceases to be -------------------------------- an Eligible Person for any reason (other than a voluntary resignation or termination for Cause) prior to the end of a Year during which he or she participates and such person has served as an Executive Officer at least three Periods during such Year, such Participant (or his or her Beneficiary) may be paid, subject to Sections 7.2 and 7.3, a prorated Bonus computed as follows: the Bonus that would have been payable for the full Year shall be multiplied by a fraction the numerator of which shall be the number of full Periods in the Year through the date the Participant ceased to be eligible, and the denominator of which shall be the number of full Periods in the applicable Year. If the Participant served less than three Periods during such Year or there has been a Termination of Service for Cause or because of a voluntary resignation, no Bonus shall be paid hereunder. (b) Mid-Year Commencement of Service. Notwithstanding the -------------------------------- provisions of Section 4.1 above, if a Participant's services as an Executive Officer commence during any year, his or her Base Salary for purposes of the Plan in that year shall be his or her Base Salary as of the commencement of services as an Executive Officer, multiplied by a fraction, the numerator of which is the number of full Periods in the year during which such Participant held such position and the denominator of which is the number of full Periods in the applicable Year; provided such person is employed by the Company for at -------- least three full Periods during the year. (c) Minimum Service Limits. If the Participant fails to meet ---------------------- the applicable minimum service requirements of this Section 7.5 during such Year, no Bonus shall be paid hereunder. 7.6. Withholding. The Company that employs the Participant shall ----------- have the right to deduct any sums required by federal, state or local tax law to be withheld with respect to the payment of any Bonus. The Company shall have no obligation to advise any Participant of the existence of the tax or the amount which the employer corporation will be so required to withhold. 5 SECTION 8. ADMINISTRATION AND INTERPRETATION The Plan shall be administered by the Committee, which shall have the sole authority to make rules and regulations for the administration of the Plan and to interpret the Plan. The interpretations and decisions of the Committee with regard to the Plan shall be final, conclusive and binding. The Committee may request advice or assistance or employ such persons (including, without limitation, officers and employees of the Company, legal counsel and accountants) as it deems necessary for the proper administration of the Plan and may delegate to such persons responsibility for the day-to-day operations of the Plan not requiring discretion of the Committee hereunder. It is the intent of the Company that all payments under the Plan qualify as performance-based compensation under Section 162(m) of the Code and the Plan shall be interpreted consistent with such intent. Any provision, application or interpretation of the Plan inconsistent with this intent to satisfy the standards in Section 162(m) of the Code shall be disregarded. The Committee shall have no liability for its actions taken or omitted in good faith. SECTION 9. STOCKHOLDER APPROVAL The Plan shall be subject to approval by a majority of those shares of Common Stock of the Corporation voting in person or by proxy on the Plan at the 1994 annual meeting of stockholders. Such stockholder approval shall be a condition to the right of a Participant to receive any payment hereunder. SECTION 10. AMENDMENT OR TERMINATION The Committee may from time to time amend the Plan in any respect or terminate the Plan, in whole or in part, provided that no such action shall retroactively impair or otherwise adversely affect the rights of any Participant to benefits under the Plan which have vested prior to the date of such action. SECTION 11. RIGHTS OF PARTICIPANTS AND BENEFICIARIES; NO ASSIGNMENT 11.1. Vesting. No rights hereunder shall vest prior to the ------- Committee's action under Section 7.2. 11.2. Employment Matters. Participation in this Plan shall not be ------------------ construed as constituting a commitment, guarantee, agreement or understanding of any kind that the Company shall continue to employ any individual. 11.3. No Assignment; No Attachment; No Preference. The Company shall ------------------------------------------- pay all amounts payable only to the Participant or his or her Beneficiary for purposes of the Plan. The Company shall not be liable for the debts, contracts, or engagements of any Participant or his or her Beneficiaries, and rights to 6 payments under the Plan may not be taken in execution by attachment or garnishment, or by any other legal or equitable proceeding while in the hands of the Company; nor shall any Participant or his or her Beneficiaries have any right to assign, pledge or hypothecate any benefits or payments hereunder; nor shall any Participant or his or her Beneficiaries have any claims to any assets of the Company for any payments hereunder which are senior to the claims of the Company's general creditors. 11.4 Governing Law. This Plan, any Bonuses hereunder, and all other ------------- related matters shall be governed by, and construed in accordance with the laws of the State of California, except as to matters of Federal law. 11.5 Reliance on Experts. In making any determination or in taking ------------------- or not taking any action under the Plan, the Committee may obtain and may rely upon the advice of experts, including officers and professional advisors to the Corporation. No director, officer or agent of the Company shall be liable for any such action or determination taken or made or omitted in good faith. 11.6 Golden Parachute Limitations. In no event shall a payment be ---------------------------- made under the Plan in an amount which would not be fully deductible by the Company for federal income tax purposes because of Section 280G of the Internal Revenue Code of 1986, as amended, (the "Code") nor shall any payment hereunder be accelerated if any portion of such accelerated payment would not be deductible by the Company because of Section 280G of the Code. If a Participant would be entitled to benefits or payments hereunder and under any other plan or program which would constitute "parachute payments" as defined in Section 280G of the Code, then the Participant may by written notice to the Corporation designate the order in which such parachute payments shall be reduced or modified so that the Company is not denied federal income tax deductions for any "parachute payments" because of Section 280G of the Code. SECTION 12. ACCELERATION ON CHANGE IN CONTROL AND CERTAIN OTHER EVENTS; ADJUSTMENTS UPON CERTAIN REORGANIZATIONS, RECAPITALIZATIONS, OR OTHER MATERIAL CHANGES. 12.1. Fundamental Corporate Changes; Change in Control. ------------------------------------------------- In the event of a merger, consolidation, or other reorganization in which the Corporation is not the surviving entity, or a Change in Control, or upon the sale of substantially all the property of the Corporation as an entirety to an unaffiliated entity, or upon the dissolution or liquidation of the Corporation, in any case occurring more than three Periods after the commencement of a Year, payment shall be made, subject 7 to Section 7.2 (but with the satisfaction of the applicable performance level or targets determined on the basis of annualizing the year-to-date results from the beginning of the applicable Year to the end of the month preceding the date of such event), on a prorated basis to the date of such event in the manner contemplated by Section 7.5(a). The Committee shall authorize early payout in such event, provided that it determines the applicable Performance Goals have -------- been so met. The amount of the prorated payment shall be discounted at the Applicable Federal Rate. 12.2. Changes From Material Acquisitions, Dispositions or -------------------------------------- Recapitalizations; Extraordinary Items; Accounting Changes. In the event of a - ---------------------------------------------------------- material acquisition or disposition of business or assets, material recapitalization, a material change in accounting principles or practices during any Year, or extraordinary gains or losses, that in any case materially affects the Company or applicable Business Unit and was not anticipated by the Committee in setting the targets for that Year, the Committee, subject to Section 8, may make adjustments to the targets for such Year, applied as of the date of such event, based solely on objective criteria, so as to neutralize, in the Committee's best judgement, the effect of the change on the applicable pre- established targets for such Year. SECTION 13. DEFINITIONS 13.1. Accounting Terms. Except as otherwise expressly provided or ---------------- the context otherwise requires, financial and accounting terms are used as defined for purposes of, and shall be determined in accordance with, generally accepted accounting principles, as from time to time in effect, and, if applicable, as specifically applied and reflected in financial statements of the Company or the applicable Business Unit, prepared in the ordinary course of business. Without limiting the generality of the foregoing, such calculations shall be made after all compensation accruals. 13.2. Defined Terms. For all purposes of the Plan, the following ------------- definitions shall apply: "Applicable Federal Rate" means the applicable federal rate determined ----------------------- under Section 1274(d) of the Code and Treasury Regulations issued thereunder for the month in which an early payment is made or interest on a deferred payment is credited hereunder. "Applicable Performance Factor" means the applicable EBT Factor, B/U- ----------------------------- EBT Factor, CR Factor, ROE Factor, ROA Factor, B/U-EBT-ROI Factor, or Productivity Index Factor, or combination thereof as the case may be, weighted in the manner provided herein, as determined by the Committee consistent with Sections 5, 6 and 8 for the applicable Year. 8 "Base Salary" means the base annualized salary (or cash compensation) ----------- rate of a Participant when the applicable target is set for the applicable Year, or when the participant first becomes eligible to participate (if other than the start of the applicable Year), exclusive of any Bonuses, commissions or actual or imputed income from any Company-provided benefit or perquisite programs, subject to any limitations in or pursuant to the Plan and prior to any reductions for salary deferred pursuant to any plan of deferred compensation. "Base Salary Factor" means the multiplier described in Section 4.1. ------------------ "Beneficiary" means the person designated by a Participant to receive ----------- any benefits hereunder in the event of the death of the Participant during a Year or prior to the payment of a Bonus for such Year or, in the absence of a designated beneficiary, such Participant's estate. "Bonus" means a cash payment or payment opportunity as the context ----- requires. "Business Unit" means a region, subsidiary, division or other ------------- organizational unit of the Company, or segment of its operations for accounting purposes, which maintains or which is the subject of a separate accounting of its financial performance. "B/U-CR" means Cost Reduction applied at the level of the applicable ------ Business Unit rather than on a consolidated basis. "Business Unit Earnings Before Taxes" or "B/U-EBT" means pre-tax ----------------------------------- ------- earnings before the Business Unit's interest expense for the Year, less the Business Unit's Capital Charge. "Capital Charge" means (i) the target ratio of the Company's Debt to --------------- Total Capital for the Year, as of the beginning of the Year, multiplied by the Business Unit Net Investment at the beginning of the Year multiplied by the Company's Cost Of Debt, less (ii) the product of (a) the sum of the Business Unit's pre-tax earnings before interest expense for the Year and the difference between the Business Unit Net Investment at the beginning and end of the Year and (b) the Company's Cost Of Debt, less (iii) the Business Unit's capitalized interest during the Year. "B/U-EBT Factor" means the multiple based on performance relative to -------------- Minimum, On Plan, and Maximum B/U-EBT, as set forth in or pursuant to Section 6. "B/U-EBT ROI" means B/U-EBT for the Year divided by the average of the ----------- amounts of Business Unit Net Investment at the end of each quarter of such year. 9 "B/U-EBT ROI Factor" means the multiple based on performance relative ------------------ to Minimum, On Plan, and Maximum B/U-EBT ROI, as set forth in or pursuant to Section 6. "Business Unit Net Investment" means the applicable Business Unit's ---------------------------- total assets less the Business Unit's (i) cash and cash equivalents (short-term investments), (ii) accounts payable and accrued liabilities, and (iii) minority interests and deferred credits. "Cause" means, in the judgment of the Committee, failure to perform ----- one's duties of employment in a manner acceptable to the Committee or the person's senior officer (or the Board in the case of the Chief Executive Officer), conduct injurious to the Company, breach of fiduciary duty, neglect of duty, willful misconduct or conviction of any felony. "Change in Control" means and shall be deemed to have occurred if: ----------------- (a) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any person described in and satisfying the conditions of Rule 13d-1(b)(1)) becomes the "beneficial owner" (as defined generally in Rule 13d-3 under Exchange Act), directly or indirectly, of securities of the Corporation representing 20% or more of the combined voting power of the Corporation's then outstanding securities, unless such person was, on the effective date of the Plan, such a beneficial owner of securities representing 20% or more of such voting power; or (b) during any Period for two consecutive years, individuals who at the beginning of such Period constitute the Board cease for any reason to constitute at least a majority thereof, except to the extent that the election, or the nomination for election by the Corporation's stockholders, of each new Board member was approved by a vote of at least three-fourths of the Board members then still in office who were Board members at the beginning of such Period, with any such new director being deemed for these purposes to have been an incumbent at the beginning of such Period (but in case of succession, without duplication). "Committee" means the Corporate Compensation and Benefits Committee of --------- the Board or another committee appointed by the Board to administer the Plan and comprised of two or more Board members, all of whom shall be ineligible to participate in the Plan during their service on the Committee and (to the extent required by applicable law and regulations) shall be "outside directors" within the meaning of Section 162(m). "Company" includes the Corporation and its subsidiaries, on a ------- consolidated basis, unless the context otherwise requires. "Corporation" means Dole Food Company, Inc. and shall include its ----------- successors and assigns. 10 "Cost of Debt" or "Cost of Funds" means the weighted average cost of ------------ ------------- short- and long-term debt during the Year immediately preceding the applicable date of determination. "Cost Reduction" or "CR" for any Year means a reduction in cost of -------------- -- goods sold, selling, marketing, general and administrative expenses during the Year, as compared to a prior year or average of more than one Year, expressed as an absolute dollar amount, applied to the Company (on a consolidated basis) or to the applicable Business Unit. "CR Factor" means the multiple based on performance relative to --------- Minimum, On Plan, and Maximum CR for the Company (on a consolidated basis) or the applicable Business Unit, as set forth in or pursuant to Section 6. "Debt" means the sum of short-term and long-term debt. ---- "Earnings Before Income Taxes" or "EBT" for any Year means the ---------------------------- --- consolidated net income of the Corporation for such Year before income taxes. "EBT Factor" means the multiple based on performance relative to ---------- Minimum, On Plan, and Maximum EBT for the applicable Year, as set forth in or pursuant to Section 6. "Eligible Person" means an Executive Officer of the Corporation. --------------- "Executive Officer" has the meaning set forth in Rule 3b-7 under the ----------------- Securities Exchange Act of 1934 and refers to the individuals confirmed to be within such definition by the Committee. "Maximum" means either the maximum payout or the level of performance ------- at or above which such payout may be made, as the context requires, expressed as a dollar amount or percentage of the Target amount. "Minimum" has the same meaning as Threshold. ------- "On Plan" has the same meaning as Target and reflects the performance ------- level required for an Applicable Performance Factor of 1.00 (i.e., a payment opportunity equal to 100% of the product of Base Salary and the Base Salary Factor in the applicable Year). "Participant" in respect of a Plan Year means an Executive Officer at ----------- any time during the Year who is designated to participate in the Plan for such Year by the Committee. "Performance Factors" means the EBT Factor, the B/U-EBT Factor, the CR ------------------- Factor, or, as contemplated by Section 5.1, the 11 ROE Factor, the ROA Factor, the Productivity Index Factor, the B/U-EBT ROI Factor, or any combination thereof, to the extent provided by the Committee pursuant to Sections 5 and 6 and subject to Section 8. "Performance Goals" include EBT, B/U-EBT, ROE, ROA, B/U EBT-ROI, and, ----------------- at the Business Unit or Company (consolidated) level, CR and the Productivity Index. "Period" means the four-week accounting cycle of the Company. ------ "Productivity Index" means the weighted average cost per unit of ------------------ production divided by the standard or budgeted cost per unit of production for the products included in such Index of the Company (on a consolidated basis) or the applicable Business Unit or Units. "Productivity Index Factor" means the Performance Factor multiple ------------------------- based on performance relative to Minimum, On Plan and Maximum Productivity Index, for the Company (on a consolidated basis) or the applicable Business Unit, as set forth in or pursuant to Section 6. "Return on Average Common Equity" or "ROE" means consolidated net ------------------------------- --- income to common stockholders for the Year divided by the average of the beginning and ending total common stockholders equity during the Year. "ROE Factor" means the Performance Factor multiple based on ---------- performance relative to Minimum, On Plan and Maximum ROE, as set forth in or pursuant to Section 6. "Return on Average Assets" or "ROA" means consolidated net income ------------------------ --- divided by the average of the beginning and ending total assets of the Company. "ROA Factor" means the Performance Factor multiple based on ---------- performance relative to Minimum, On Plan and Maximum ROA, as set forth in or pursuant to Section 6. "Target" means "On Plan" and represents a performance level that is a ------ precondition to a payout under the formula provisions of the Plan at a Performance Factor of 1.00 or 100% of the product of the Base Salary and the Base Salary Factor. When used with lower case, "target" means a Minimum, Threshold and/or Maximum, as the context requires. "Termination of Service" means a termination of Service from the ---------------------- Company for any reason, whether voluntary or involuntary, including death or disability. 12 "Threshold" or "Minimum" means the minimum level of performance --------- -------- relative to an On Plan target required to generate a payment under the Plan for the applicable Year. "Total Capital" means Debt plus total stockholders equity. ------------- "Year" or "Plan Year" means the applicable fiscal year of the ---- --------- Corporation. 13 EX-10.16 8 EXHIBIT 10.16 Exhibit 10.16 DOLE FOOD COMPANY, INC. LONG-TERM INCENTIVE PLAN FOR EXECUTIVE OFFICERS TABLE OF CONTENTS
Page ----- I. PURPOSE....................................................... 1 II. PLAN DESCRIPTION.............................................. 1 2.1 Participation............................................ 1 2.2 Description of Awards.................................... 1 2.3 Performance Measurement and Goals........................ 1 III. ADMINISTRATION................................................ 2 3.1 Role of the Committee................................... 3 3.2 Committee Certification................................. 3 3.3 Committee Discretion to Reduce Bonuses.................. 3 3.4 No Authority to Increase Bonuses........................ 3 3.5 Finality of Action; Exercise of Discretion.............. 3 IV. PERFORMANCE GOALS AND FACTORS................................. 4 4.1 Formula for Determining Awards; Base Salary and Performance Factors..................................... 4 4.2 Base Salary Limit....................................... 4 4.3 Performance Goals....................................... 4 4.4 Pre-Established Targets................................. 4 4.5 Applicable Performance Factors and Weighting for Determining Maximum Bonus Opportunity................... 4 4.6 Specific Performance Factors............................ 5 4.7 Maximum Dollar Amount................................... 5 4.8 Effect of Termination of Service........................ 5 4.9 New Participants........................................ 6 4.10 Intracompany and Position Transfers..................... 6 4.11 Award Payout............................................ 6 4.12 Deferral Option......................................... 7 4.13 Acceleration of Award Opportunities..................... 7 4.14 Adjustments Upon Acquisitions, Dispositions, Recapitalizations, Extraordinary Items or Changes in Accounting.............................................. 8 V. TERM; AMENDMENT AND TERMINATION OF THE PLAN..................... 8 5.1 Term.................................................... 8 5.2 Stockholder Approval.................................... 8 5.3 Amendments or Termination............................... 8 5.4 Effect of Plan Termination.............................. 9 VI. DISCRETIONARY NATURE OF GRANTS AND PAYOUTS..................... 9 6.1 No Assurance of Participation........................... 9 6.2 No Assurance of Continued Employment.................... 9 6.3 Disqualification........................................ 9 6.4 Vesting................................................. 9 VII. OTHER PROVISIONS.............................................. 10
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Page ---- 7.1 Nonassignability....................................... 10 7.2 Designation of Beneficiaries........................... 10 7.3 Unsecured Status of Claim.............................. 10 7.4 Right of Offset........................................ 11 7.5 Tax Withholding........................................ 11 7.6 Validity............................................... 11 7.7 Inurement of Rights and Obligation..................... 11 7.8 Applicable Law......................................... 11 7.9 Golden Parachute Limitations........................... 11 VIII. DEFINITIONS; RULES OF CONSTRUCTION AND INTERPRETATION...... 12 8.1 Rules of Construction.................................. 12 8.2 Financial and Accounting Terms......................... 12 8.3 Section 162(m)......................................... 12 8.4 Defined Terms.......................................... 12
ii DOLE FOOD COMPANY, INC. LONG-TERM INCENTIVE PLAN FOR EXECUTIVE OFFICERS I. PURPOSE. The primary purpose of the Plan is to enhance the long-term performance of the Company/1/ by linking a meaningful portion of each Participant's compensation to the achievement of specific long-term financial objectives of the Company and the Company's various Business Units. The Plan also is designed to enhance the Company's ability to attract and retain high quality management talent by providing, in conjunction with other compensation plans offered by the Company, a competitive, performance-based total compensation package. II. PLAN DESCRIPTION. 2.1 PARTICIPATION. Awards may be granted only to Eligible Persons. Actual Participants in the Plan shall be determined for each Cycle by the Committee. An Eligible Person not selected to participate in the Plan for any Cycle may participate in another long-term cash incentive plan of the Corporation for such Year or be selected by the Committee to participate in the Plan in other Cycles. An Eligible Person may not participate concurrently in both the Plan and such other long-term cash incentive plan. 2.2 DESCRIPTION OF AWARDS. Awards granted under the Plan provide Participants with the opportunity to earn a cash payment ("bonus") following the end of a Performance Cycle based upon the level of performance of the Company and/or Business Unit, as the case may be, against specific financial and/or strategic performance goals established for the Performance Cycle by the Committee. Each Award granted under the Plan shall consist of a Minimum (or Threshold), On Plan (or Target) and Maximum payment opportunity expressed as a multiple ("Applicable Performance Factor") of the product of a Participant's ----------------------------- Base Salary and the applicable Base Salary Factor, as provided in Article IV. Threshold, Target and Maximum payment opportunities for each Participant shall be established by the Committee for each Performance Cycle and shall be contained in the Participant's Award Agreement. 2.3 PERFORMANCE MEASUREMENT AND GOALS. Specific performance targets and the relationship between achievement and payout opportunity shall be determined by the Committee for each - ---------------------- /1/ This and certain other terms used in the Plan are defined in Article VIII. Performance Cycle and described or referenced in the Participant's Award Agreement, but shall constitute confidential, proprietary business information of the Company. III. ADMINISTRATION. 3.1 ROLE OF THE COMMITTEE. The Plan shall be administered by the Committee. Actions of the Committee with respect to the administration of the Plan shall be taken pursuant to a majority vote or the unanimous written consent of its members. The Committee may delegate ministerial, accounting, record- keeping and similar functions necessary for the administration of the Plan to individuals who are officers or employees of the Company. Subject to the express provisions of the Plan, the Committee shall have the authority (a) to construe, interpret and administer the Plan and any agreements defining the rights and obligations of the Company and Participants under the Plan, (b) to further define the terms used in the Plan, (c) to prescribe, amend and rescind rules and regulations pertaining to the administration of the Plan, (d) to determine the duration and purposes of leaves of absence which may be granted to Participants without constituting a Termination of Service for purposes of the Plan, (e) to designate Plan Participants, (f) to establish the size of Awards made to Participants under the Plan and the Performance Goals for the Cycles, and the targets and weighting of Performance Goals used to determine whether payments are earned under the Plan, (g) to determine when Awards shall be granted under the Plan, (h) to validate the level of achievement in terms of goals or objectives established for the Plan and to collect and interpret financial results relative to performance measures, targets and objectives, (i) to evaluate performance measures or targets or specific numerical objectives during a Performance Cycle to determine (subject to Section 8.3) whether adjustments are necessary for extraordinary events or changes in capitalization, changes in accounting principles or policies, or other events that were not contemplated when 2 Awards were made or that are outside of the reasonable responsibility or control of the Participants or make other adjustments as the Committee deems appropriate, reasonable or equitable to reflect materially changed circumstances of the Company or the applicable Business Unit from those existing at the time the applicable targets or goals were established, in accordance with the terms and limits of the Plan, (j) to evaluate the extent to which the applicable Performance Goals were achieved and determine, compute and certify the extent of amounts payable, (k) to reduce formula-based payment opportunities based upon objective or subjective criteria deemed by the Committee to be appropriate and in furtherance of the compensation policies of the Company, and (l) to make all other determinations necessary or advisable for the administration of the Plan. The determination of the Committee on the foregoing matters need not be the same from Cycle to Cycle or for all Participants in like manner in respect of a single Performance Cycle. 3.2 COMMITTEE CERTIFICATION. No payment shall be made and no Participant shall be entitled to receive any payment under the Plan, unless the Committee shall have first certified, by resolution of the Committee or other appropriate action, that the payment amount has been accurately determined in accordance with the provisions of the Plan and the applicable Performance Goals and any other material terms have been satisfied. 3.3 COMMITTEE DISCRETION TO REDUCE BONUSES. The Committee in its sole discretion may reduce the maximum amount payable hereunder to any one or more Participants for any Cycle in which it determines that (a) the achievement of the pre-established Performance Goals was influenced by any unusual, extraordinary, non-recurring event or other factor extraneous to individual performance, or (b) in its judgement, the failure to meet other corporate objectives in any respect or Period(s) within the Cycle warrants such reduction, or (c) the Company or the individual failed to achieve other financial, strategic or personal goals, which may be objective or subjective. 3.4 NO AUTHORITY TO INCREASE BONUSES. Subject to Section 4.14 and 8.3, the Committee may not increase the maximum amount payable to any individual based on the formula or other provisions of the Plan. 3.5 FINALITY OF ACTION; EXERCISE OF DISCRETION. Any action taken by, or inaction of, the Company, and Business Unit, the Board or the Committee relating to the Plan shall be within 3 the absolute discretion of that entity or body and shall be conclusive and binding upon all persons. No member of the Board or Committee, or officer of the Company or any Business Unit, shall be liable for any such action or inaction, or the action or inaction of another person, except in circumstances involving his or her bad faith. Subject only to compliance with the express provisions hereof, the Committee may act in its absolute discretion in all matters related to the Plan. IV. PERFORMANCE GOALS AND FACTORS. 4.1 FORMULA FOR DETERMINING AWARDS; BASE SALARY AND PERFORMANCE FACTORS. Subject to the terms hereof, each Participant's maximum bonus opportunity under the Plan shall be the product of his or her Base Salary, the Base Salary Factor for the applicable Cycle and, subject to Section 4.5, the Applicable Performance Factor. The Base Salary Factors shall be as follows: Base Salary Factors ------------------- Office of the Chairman 150% Other Participants 75% - 100% * * The specific factor shall be within this range and determined by the Committee at the time the applicable performance targets are established pursuant to Section 4.4. 4.2 BASE SALARY LIMIT. Base Salary for purposes of the Plan shall not exceed $800,000 during the first Cycle, $900,000 during the second Cycle and $1,000,000 during the third Cycle. 4.3 PERFORMANCE GOALS. Performance Goals under the Plan shall include one or a combination of the following: Earnings Before Taxes (EBT) Business Unit Earnings Before Taxes (B/U-EBT) 4.4 PRE-ESTABLISHED TARGETS. For each Cycle commencing with 1994, the Committee shall determine the applicable EBT and B/U-EBT targets (including the applicable Minimum, On Plan and Maximum for applying the Performance Factors) and the weighting of such goals, if more than one goal is applicable, in advance of any applicable deadline for such action under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code") for the subject Cycle. ---- 4.5 APPLICABLE PERFORMANCE FACTORS AND WEIGHTING FOR DETERMINING MAXIMUM BONUS OPPORTUNITY. For Participants in the Office of the Chairman (or having similar responsibilities), the Applicable Performance Factor in the first Cycle shall be the EBT Factor and in the second or third Cycles any one or a weighted 4 average of the EBT and B/U-EBT Factors, as determined by the Committee. For any other Participants, the Applicable Performance Factor will be any one or a weighted average of the EBT Factor and the B/U-EBT Factor. The initial weighting where both Factors apply shall be in such proportion as the Committee, consistent with Section 8.3, may from time to time determine in advance of the deadline described in Section 4.4. The maximum bonus payable if more than one Performance Factor applies shall be determined by taking the result obtained by application of the formula set forth in the first sentence of this Section 4.5 to each Performance Goal, multiplying that result by the weighting factor for that Performance Goal and taking the sum of the products of such calculation. Each weighting factor shall be expressed as a fraction (less than one) or percentage, and the aggregate amount of all weighting factors shall be one (1) or 100%. 4.6 SPECIFIC PERFORMANCE FACTORS. The EBT or B/U-EBT Factor for any Cycle shall be determined in accordance with the following table, where Minimum, Target and Maximum represent, respectively, the attainment of the Minimum, On Plan, and Maximum for the applicable Cycle, established by the Committee for such purposes: EBT or B/U-EBT Applicable Performance EBT or B/U-EBT Factor* ----------- --------------------- Less than Minimum 0 Minimum 50% Target 100% At or Above Maximum 150% * Applicable Factors for performance between specified Performance-to-Target levels above Minimum and below Maximum shall be determined using linear interpolation (applied to the targets in the manner specified by the Committee). 4.7 MAXIMUM DOLLAR AMOUNT. Notwithstanding any other provision hereof, no Person shall receive any bonus under the Plan in excess of $1,800,000 for the first Cycle, $2,025,000 for the second Cycle, and $2,250,000 for the third Cycle. 4.8 EFFECT OF TERMINATION OF SERVICE. If a Participant has a Termination of Service during a Performance Cycle (other than because of a voluntary resignation or termination by the Company for Cause) after at least thirteen Periods of service as a Participant, the Participant shall remain eligible to receive a prorated payment under the Plan. The maximum amount of such payment shall be determined by multiplying the amount that the Participant would have received if the Termination of Service had not occurred by a factor equal to the number of full Periods of Service by the Participant during the 5 Performance Cycle divided by the number of full Periods in the Performance Cycle. Unless accelerated consistent with the provisions of Section(s) 4.13 and 8.3 in connection with or after the Termination of Service or other event described in Section 4.13, prorated payments may only be made at the same time as other payments under the Plan for the Performance Cycle in which the Termination of Service occurred. If the foregoing minimum service requirement is not met or a Participant's Termination of Service occurs during a Performance Cycle for Cause or because of a voluntary resignation, the Participant's opportunity to receive any payment under the Plan for the Performance Cycle shall terminate, and no payout shall be made under the Plan. 4.9 NEW PARTICIPANTS. Subject to Section 8.3, an Eligible Person may become a Participant in the Plan at any time before the end of the second year of the Cycle, at the discretion of the Committee. If an Eligible Person becomes a Participant during a Performance Cycle, the Participant's payment opportunity shall be prorated by a factor equal to the number of full Periods that the Eligible Officer was a Participant during the Performance Cycle divided by the number of full Periods in the Performance Cycle. In calculating such Participant's payment opportunity, the performance achievement level shall be measured over the entire Performance Cycle; provided that if interim targets -------- within the Cycle were established by the Committee in setting the targets for the Cycle, any payout to such Participant shall be further conditioned upon the achievement of such performance targets on a cumulative basis for the remainder of the Cycle. 4.10 INTRACOMPANY AND POSITION TRANSFERS. If a Participant participates in more than one capacity during any Cycle, the product of his or her Base Salary and Base Salary Factor for purposes of the Plan for such year shall be computed by (a) multiplying (i) the Base Salary Factor (as indicated in or pursuant to Section 4.1 above) for each position by (ii) the applicable Base Salary for such position, and by (iii) a factor equal to the number of full Periods that the Eligible Officer was a Participant in each position during the Performance Cycle divided by the number of full Periods in the Performance Cycle, and (b) taking the sum of the products of such calculation. In determining prorated payments for Participants affiliated with more than one Business Unit (or more than one Business Unit/Company combination) during a Cycle, performance achievement for each component (whether Business Unit or Company) shall be measured over the entire Cycle, while the weighting of each component shall be determined according to each Participant's Award Agreement, as the same may be amended consistent herewith. 4.11 AWARD PAYOUT. Subject to opportunities to defer the receipt of payment in accordance with Section 4.12 below and to accelerate payment under Section 4.13, payment of any amounts which may be payable under the Plan shall be in cash equivalent, 6 payable as follows: one-half of the Award (as certified by the Committee pursuant to Section 3.2 of the Plan) will be paid within ninety (90) days following the completion of the Performance Cycle. The remaining one-half of the Award for the Cycle will be paid, with interest from the day after the end of the Cycle to the date paid, at the lesser of (a) the Company's Cost of Funds, or (b) 120% of the Applicable Federal Rate, upon the first anniversary of the completion of the Cycle, provided that the Participant's employment has ------------- continued through such date, unless the Committee otherwise permits. Deferred portions of Awards and associated interest accumulated thereon to the date of payment will become immediately payable in the event of a Change in Control or a Termination of Service for any reason other than for Cause or voluntary resignation during such extended one-year Period. 4.12 DEFERRAL OPTION. The Committee may permit a Participant to irrevocably elect to voluntarily defer payments vested in accordance with the terms of any deferral plan adopted by the Company, provided that the amount of -------- ---- any interest accrued thereon shall not exceed 120% of the Applicable Federal Rate, compounded semi-annually. 4.13 ACCELERATION OF AWARD PAYOUT OPPORTUNITIES. (a) Acceleration. Subject to Section 3.2 (certification), the ------------ Committee may authorize early payment of an Award if, at least one Year after the commencement of a Cycle, a Participant's employment terminates for any reason, other than a voluntary resignation or a termination for Cause, or there shall occur an event described in Section 4.13(b) (including a Change in Control), provided that the Committee determines ------------- that the applicable Performance Goals have been met through the date of such termination on the basis of achievement of Performance Goals relative to targets to the date of such event and the amount of the payment is discounted at the Applicable Federal Rate, compounded semi-annually, and prorated based on time, in the manner contemplated by Section 4.8. (b) Fundamental Corporate Changes; Change in Control. In the event of ------------------------------------------------ a merger, consolidation, or other reorganization in which the Corporation is not the surviving entity, or a Change in Control, or upon the sale of substantially all the property of the Corporation as an entirety to an unaffiliated entity, or upon the dissolution or liquidation of the Corporation, payment shall be made, subject to Section 3.2 (but with the satisfaction of the applicable performance level or targets determined on the basis of the Cycle-to-date results from the beginning of the applicable Cycle to the end of the month preceding the date of such event), on a prorated basis to the date of such event in the manner contemplated by Section 4.8. The 7 Committee shall authorize early payout in such event, provided that it determines that the applicable Performance Goals have been so met. The amount of the prorated payment shall be discounted at the Applicable Federal Rate. 4.14 ADJUSTMENTS UPON ACQUISITIONS, DISPOSITIONS, RECAPITALIZATIONS, EXTRAORDINARY ITEMS OR CHANGES IN ACCOUNTING. (a) Changes From Material Acquisitions, Dispositions or --------------------------------------------------- Recapitalizations. In the event of a material acquisition or ----------------- disposition of business or assets, a material recapitalization or restructuring, or any extraordinary gain or loss, that affects the Company (on a consolidated basis) or the applicable Business Unit and was not anticipated by the Committee in setting the targets for the applicable Cycle, the Committee, subject to Section 8.3, may make adjustments to the targets for such Cycle, applied as of the date of such event, based solely on objective criteria, so as to neutralize, in the Committee's best judgement, the effect of the change on the applicable pre-established targets for such Cycle. (b) Accounting Matters. Similar changes shall be made in the case of ------------------ material changes in accounting policies or practices affecting the Company or the applicable Business Unit, to the extent any such material change was not anticipated at the time the targets were set, based on objective criteria so as to neutralize, in the Committee's best judgement, the effect of the change or event on the applicable pre-established targets for such Cycle. V. TERM; AMENDMENT AND TERMINATION OF THE PLAN. 5.1 TERM. Subject to Sections 5.2 and 5.3, the Plan shall be effective as of January 2, 1994 (the "Effective Date") and shall be in -------------- effect in respect of and through the three Cycles then commencing, unless earlier terminated by the Committee pursuant to Section 5.3. 5.2 STOCKHOLDER APPROVAL. The Plan shall be subject to approval by a majority of those shares voting, in person or by proxy, on the Plan at the 1994 annual meeting of stockholders. Such stockholder approval shall be a condition to the right of a Participant to receive any payment hereunder. 5.3 AMENDMENTS OR TERMINATION. The Committee may, at any time, terminate or, from time to time amend, modify or suspend the Plan (or any part thereof). No such action shall retroactively impair or otherwise adversely affect the rights of any Participant to benefits under the Plan which have vested pursuant to Section 6.4 prior to the date of such action. 8 5.4 EFFECT OF PLAN TERMINATION. If the Committee terminates or suspends the Plan during a Cycle, the Committee may provide Participants with a prorated payment for such Cycle based on the number of full Periods of the Cycle completed at the time of the Committee's action divided by the number of full Periods in the Cycle. Performance for determining the amount of such prorated payments shall be based in the Committee's discretion on the entire Cycle or, if payout is to be accelerated, on the basis of performance through the date of the Committee's action, as contemplated by Section 4.13. If performance continues to be measured over the original Cycle, payment of any earned amounts shall be made following completion of the Cycle, as provided in Section 4.11. If performance is measured over a shorter Period, payment of any amounts shall be made within 90 days following the completion of the revised performance measurement term, subject to Sections 6.4 and 8.3. VI. DISCRETIONARY NATURE OF GRANTS AND PAYOUTS. 6.1 NO ASSURANCE OF PARTICIPATION. Status as an Eligible Person shall not be construed as a commitment that any Award will be made under the Plan or to Eligible Persons generally. 6.2 NO ASSURANCE OF CONTINUED EMPLOYMENT. Nothing contained in the Plan or in Award Agreements or in any other documents related to the Plan shall confer upon any Eligible Person or Participant any right to continue in the employ of the Company or constitute any contract or agreement of employment, or interfere in any way with the right of the Company to reduce such person's compensation or other benefits or to terminate the employment of such Eligible Person or Participant, with or without Cause. However, nothing contained in the Plan or any document related thereto shall affect any other contractual right of any Eligible Person or Participant. 6.3 DISQUALIFICATION. Members of the Board who are not officers or employees of the Company, and members of the Committee during the Period of their service on the Committee, shall be ineligible to be granted Awards under the Plan. 6.4 VESTING. Rights under the Plan shall not vest prior to the Committee's action under Section 3.2 and confirmation of the amount to be paid and, with respect to mandatorily deferred portions of any such amount, completion of the additional year of service contemplated by Section 4.11. Such rights thereafter shall be solely as an unsecured general creditor of the Corporation. 9 VII. OTHER PROVISIONS. 7.1 NONASSIGNABILITY. No Participant shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, hypothecate or convey in advance of actual receipt any benefit payable under the Plan, or any part thereof, or any interest therein, which are, and all rights to which are, expressly declared to be unassignable and non-transferable. No portion of the amounts payable under the Plan shall, prior to actual payment, be subject to seizure, attachment, lien or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant's or any other person's bankruptcy or insolvency. Any such transfer in violation of the preceding provisions shall be considered null and void. 7.2 DESIGNATION OF BENEFICIARIES. Each Participant shall have the right at any time to designate any person or persons as beneficiaries to whom any benefits provided under the Plan shall be distributed in the event of the Participant's death prior to distribution of all benefits due the Participant under the Plan. Each beneficiary designation shall be effective only when filed in writing with the Company during a Participant's lifetime on a Beneficiary Designation Form approved by the Company. If a Participant designates more than one beneficiary, distribution of any payment due the Participant under the Plan shall be made in equal proportions to each beneficiary unless otherwise stated on the Beneficiary Designation Form. The filing of a new Beneficiary Designation Form shall cancel all designations previously filed. Any finalized divorce or marriage (other than a common law marriage) of a Participant subsequent to the date of filing of a Beneficiary Designation Form shall revoke such designation, unless (a) in the case of divorce, the previous spouse was not designated as beneficiary, or (b) in the case of marriage, the Participant's new spouse had been previously designated as beneficiary. The spouse of a married Participant shall join in any designation of a beneficiary other than the spouse. If a Participant fails to designate a beneficiary as provided for above, if the beneficiary designation is revoked by marriage, divorce or otherwise, or if the beneficiary predeceases the Participant without execution of a new designation, then the Committee shall direct the distribution of Plan benefits to the Participant's estate. 7.3 UNSECURED STATUS OF CLAIM. Participants and their beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in respect of any unvested benefits under the Plan, and no rights, interests or claims as to any vested benefits in any specific property or assets of the Company. No asset of the Company shall be held under any trust for the benefit of Participants, their 10 beneficiaries, heirs, successors or assigns, or held in any way as collateral security for the fulfillment of the Company's obligations under the Plan. 7.4 RIGHT OF OFFSET. If a Participant becomes entitled to a payment under the Plan and if at such time the Participant has outstanding any debt, obligation or other liability representing an amount owing to the Company, then the Company, to the maximum extent permitted by law, may offset such amount against the amount of the payment otherwise due the Participant under the Plan. 7.5 TAX WITHHOLDING. The Company shall withhold from any payment due under the Plan an amount sufficient to satisfy all and any amounts required by applicable federal, state and local laws with respect to such payment. The Company shall have no obligation to advise any Participant of the existence of any tax or the amount which the employer corporation may be so required to withhold. 7.6 VALIDITY. In the event that any provision of the Plan is held to be invalid or unenforceable, the same shall not affect, in any way whatsoever, the validity of any other provision of the Plan. 7.7 INUREMENT OF RIGHTS AND OBLIGATIONS. Any rights and obligations under the Plan shall inure to the benefit of, and shall be binding upon the Corporation, its successors and assigns, Participants and Beneficiaries. 7.8 APPLICABLE LAW. The Plan and any related documents and matters shall be governed in accordance with the laws of the State of California, except as to matters of Federal law. 7.9 GOLDEN PARACHUTE LIMITATIONS. In no event shall a payment be made under the Plan in an amount which would not be fully deductible by the Company for federal income tax purposes because of Section 280G of the Internal Revenue Code of 1986, as amended, (the "Code") nor shall any ---- payment hereunder be accelerated if any portion of such accelerated payment would not be deductible by the Company because of Section 280G of the Code. If a Participant would be entitled to benefits or payments hereunder and under any other plan or program which would constitute "parachute payments" as defined in Section 280G of the Code, then the Participant may by written notice to the Corporation designate the order in which such parachute payments shall be reduced or modified so that the Company is not denied federal income tax deductions for any "parachute payments" because of Section 280G of the Code. 11 VIII. DEFINITIONS; RULES OF CONSTRUCTION AND INTERPRETATION. 8.1 RULES OF CONSTRUCTION. For all purposes of the Plan and Award Agreements, unless otherwise expressly provided or the context otherwise requires, (a) the terms used in the Plan, and not otherwise defined have the meaning assigned to them in this Article VIII, and the terms include the plural and the singular, (b) all references in this Plan to designated "Articles," "Sections" and other subdivisions are to the designated Articles, Sections and other subdivisions of the body of this Plan, and (c) pronouns of either gender or neuter shall include, as appropriate, the other pronoun forms. 8.2 FINANCIAL AND ACCOUNTING TERMS. Except as otherwise expressly provided or the context otherwise requires, financial and accounting terms are used as defined for purposes of, and shall be determined in accordance with, generally accepted accounting principles, as from time to time in effect, and, if applicable, as specifically applied and reflected in financial statements of the Company or the applicable Business Unit, prepared in the ordinary course of business and, without limiting the generality of the foregoing, after all compensation accruals. 8.3 SECTION 162(M). It is the intent of the Company that all payments under the Plan qualify as performance-based compensation under Section 162(m) of the Code and the Plan shall be interpreted consistent with such intent. Any inconsistent provision shall be disregarded. 8.4 DEFINED TERMS. For all purposes of the Plan, the following definitions shall apply: "APPLICABLE FEDERAL RATE" means the applicable federal rate determined under Section 1274(d) of the Code and Treasury Regulations issued thereunder for the month in which an early payment is made or interest on a deferred payment is credited under the Plan. "APPLICABLE PERFORMANCE FACTOR" means the applicable EBT Factor and/or B/U- EBT Factor, weighted in the manner provided herein, as determined by the Committee consistent with the terms hereof, for the applicable Cycle. "AWARD" shall mean the grant of the opportunity to earn a payment or bonus under the Plan. 12 "AWARD AGREEMENT" shall mean a written agreement entered into between the Corporation and a Participant setting forth the terms and conditions with respect to an Award. Such agreement shall specify the payment opportunity associated with the Award, the performance measures and objectives on which such opportunity is based, and the applicable Cycle and, if applicable, the period of time over which performance shall be measured for determining amount of any payment. "BASE SALARY" means the average of the base annualized salary (or cash compensation) rate of a Participant as of the beginning of each year of participation in the applicable Cycle (or the time during the Cycle when a Participant first commences participation in the Plan), exclusive of any bonuses, commissions or actual or imputed income from any Company-provided benefit or perquisite programs, subject to any limitations in or pursuant to the Plan and prior to any reductions for salary deferred pursuant to any plan of deferred compensation. "BASE SALARY FACTOR" means the multiple of Base Salary as set forth in or pursuant to Section 4.1. "BENEFICIARY" means the person designated by a Participant to receive any benefits hereunder in the event of the death of the Participant during a Cycle or prior to the payment of a bonus for such Cycle or, in the absence of a designated beneficiary, such Participant's estate. "BOARD" shall mean the Board of Directors of the Company. "BUSINESS UNIT" means a region, subsidiary, division or other organizational unit of the Company, or segment of its operations for accounting purposes, which maintains or which is the subject of a separate accounting of its financial performance. "BUSINESS UNIT EARNINGS BEFORE TAXES" OR "B/U-EBT" means the sum of the pre-tax earnings before the Business Unit's interest expense, less the Business Unit's Capital Charge for each Year of the Cycle. "CAPITAL CHARGE" means (i) the target ratio of the Company's Debt to Total Capital for each Year of the Cycle, as of the beginning of the Year, multiplied by the Business Unit Net Investment at the beginning of such Year, multiplied by the Company's Cost of Debt, less (ii) the product of (a) the sum of (1) the Business Unit's pre-tax earnings before interest expense for the Year and (2) the difference between the Business Unit Net Investment at the beginning and end of the Year and (b) the Company's Cost of Debt, less 13 (iii) the Business Unit's capitalized interest during such Year. "DEBT" means the sum of short-term and long-term debt. "NET INVESTMENT" means the applicable Business Unit's total assets less the Business Unit's (i) cash and cash equivalents (short-term investments), (ii) accounts payable and accrued liabilities, and (iii) minority interests and deferred credits. "TOTAL CAPITAL" means Debt plus total stockholders' equity. "B/U-EBT FACTOR" means the multiple based on performance relative to Minimum, On Plan, and Maximum B/U-EBT, as set forth in or pursuant to Section 4.6. "CAUSE" means, in the judgment of the Committee, failure to perform one's duties of employment in a manner acceptable to the Committee or the person's senior officer (or the Board in the case of the Chief Executive Officer), conduct injurious to the Company, breach of fiduciary duty, neglect of duty, willful misconduct, or conviction of any felony. "CHANGE IN CONTROL" means and shall be deemed to have occurred if: (a) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any person described in and satisfying the conditions of Rule 13d-1(b)(1) thereunder) becomes the "beneficial owner" (as defined generally in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation representing 20% or more of the combined voting power of the Corporation's then outstanding securities, unless such person was, on the effective date of the Plan, such a beneficial owner of securities representing 20% or more of such voting power; or (b) during any Period for two consecutive years, individuals who at the beginning of such Period constitute the Board cease for any reason to constitute at least a majority thereof, except to the extent that the election, or the nomination for election by the Corporation's stockholders, of each new Board member was approved by a vote of at least three-fourths of the Board members then still in office who were Board members at the beginning of such Period, with any such new director being deemed for these purposes to have been an incumbent at the beginning of such Period (but in case of succession, without duplication). "COMMITTEE" means the Corporate Compensation and Benefits Committee of the Board or another committee appointed by the Board to administer the Plan and comprised of two or more Board members, all of whom shall be ineligible to 14 participate in the Plan during their service on the Committee and (to the extent then required by applicable law and regulations) shall be "outside directors" within the meaning of Section 162(m). "COMPANY" includes the Corporation and its subsidiaries, on a consolidated basis, unless the context otherwise requires. "CORPORATION" means Dole Food Company, Inc. and shall include its successors and assigns. "COST OF FUNDS" OR "COST OF DEBT" means the weighted average cost of short- term and long-term debt during the applicable Year, which in the case of determinations under Section 4.11 shall be the Year immediately preceding the applicable date of determination. "CYCLE" means Performance Cycle. "EARNINGS BEFORE INCOME TAXES" or "EBT" for any Cycle means the consolidated net income of the Corporation for such Cycle before income taxes. "EBT" has the meaning set forth above. "EBT FACTOR" means the multiple based on performance relative to Minimum, On Plan, and Maximum EBT for the applicable Cycle, as set forth in or pursuant to Section 4.6. "ELIGIBLE PERSON" means an Executive Officer of the Corporation. "EXECUTIVE OFFICER" has the meaning set forth in Rule 3b-7 under the Securities Exchange Act of 1934 and refers to the individuals confirmed to be within such definition by the Committee. "MAXIMUM" means either the maximum payout or the level of performance at or above which such payout may be made, as the context requires, in any Cycle under the Plan, expressed as a dollar amount or percentage of the Target amount. "MINIMUM" has the same meaning as Threshold. "ON PLAN" has the same meaning as Target and reflects the performance level required for an Applicable Performance Factor of 1.00 (i.e., a payment opportunity equal to 100% of the product of Base Salary and the Base Salary Factor in the applicable Cycle). 15 "PARTICIPANT" means an Eligible Officer who has been designated a Participant by the Committee for the applicable Performance Cycle and granted an Award in accordance with the terms and subject to the conditions of the Plan. "PERFORMANCE CYCLE" OR "CYCLE" means the period of time over which performance is measured for determining the amount of any payment earned from Awards granted under the Plan. Each Performance Cycle shall represent an exclusive period of three fiscal years (i.e., thirty-nine consecutive Periods) beginning on the first day of the Company's fiscal year in 1994. "PERFORMANCE GOALS" means EBT, and/or B/U-EBT. "PERIOD" means the four-week accounting cycle of the Company. "PLAN" means the Dole Food Company, Inc. Long-Term Incentive Plan for Executive Officers, as described in this document. "SECTION 162(m)" means Section 162(m) of the Internal Revenue Code of 1986, as from time to time in effect. "SERVICE" means full-time employment with the Company, or part-time employment as approved by the Committee, including a voluntary leave of absence if approved by the Committee. "SUBSIDIARY" means any corporation or other entity of which the Company beneficially owns, either directly or indirectly, a majority or more of the voting stock or voting power. "TARGET" means "On Plan" and represents a performance level that is a precondition to a payout under the formula provisions of the Plan at a Performance Factor of 1.00 or 100% of the product of the Base Salary and the Base Salary Factor. When used with lower case, "target" means a Minimum, Threshold and/or Maximum, as the context requires. "TERMINATION OF SERVICE" means a termination of Service from the Company for any reason, whether voluntary or involuntary, including death and disability. "THRESHOLD" means the minimum level of performance relative to an On Plan target required to generate a payment under the Plan for the applicable Cycle, expressed as a dollar amount or percentage of the Target amount. "YEAR" means the applicable fiscal year of the Corporation. 16 CONFIDENTIAL ------------ DOLE FOOD COMPANY, INC. LONG-TERM INCENTIVE PLAN FOR EXECUTIVE OFFICERS AWARD AGREEMENT This AWARD AGREEMENT is made and entered into at Westlake Village, California as of _______, 199 by and between DOLE FOOD COMPANY, INC. (the "Company") and ___________________ (the "Participant"). WHEREAS, the Company has adopted the DOLE FOOD COMPANY, INC. LONG-TERM INCENTIVE PLAN FOR EXECUTIVE OFFICERS (the "Plan"), and WHEREAS, the Participant has been designated an Eligible Person and has been selected to participate in the Plan in accordance with the terms and conditions of the Plan, and WHEREAS, the Plan states that an Award Agreement be entered into between the Company and the Participant setting forth certain terms and conditions of the Plan as they apply to the Participant. NOW, THEREFORE, the Company and the Participant hereby agree as follows: 1. The Plan. The Plan is hereby incorporated into and made a part of this Award Agreement as though set forth in full herein. The parties shall be bound by, and have the benefit of, each and every provision of the Plan. Undefined terms used herein are used as defined in the Plan. The Participant acknowledges that he or she has read and understands the terms of the Plan. 2. The Award. The Participant is hereby granted an Award under the Plan for the Performance Cycle beginning ____________ and ending _________________. 17 3. Payment Opportunity. The total Threshold, Target and Maximum payment opportunities associated with the Award are as follows:
if Performance is Performance Factor* ----------------- ------------------ Less than Threshold 0 Threshold .5 Target 1.0 At or Above Maximum 1.5
* Applicable Factors for performance between specified Performance-to- Target levels above Minimum to Target and from Target to Maximum shall be determined using linear interpolation. 4. Performance Factors; Allocation/Weighting of Goals. The total payment opportunity associated with the Award will be allocated as follows: EBT - % [cross out an B/U-EBT- % inapplicable ----- 100% performance goal] 5. Confidentiality of Performance Targets. Performance targets and applicable Minimum, On Plan and Maximum levels for purposes of determining any payment opportunity on the Award may be reviewed by the Participant at the Office of the General Counsel of the Corporation, upon reasonable request during normal business hours. SUCH INFORMATION CONSTITUTES CONFIDENTIAL AND PROPRIETARY BUSINESS INFORMATION, THE DISCLOSURE OF WHICH IS PROHIBITED BY THE COMPANY'S POLICIES. 6. Base Salary Factor. Participant's Base Salary Factor shall be _____. 7. Tax Withholding and Legal Compliance. All payments hereunder shall be subject to applicable withholding tax obligations and compliance with applicable other laws. 18 8. Commencement Date. Participant's service during the Performance Cycle commenced _______, 19__. IN WITNESS WHEREOF, the parties hereto have entered into the Agreement on the date first above written. DOLE FOOD COMPANY, INC. By: ___________________________ Its: __________________________ PARTICIPANT ___________________________ 19 EX-11 9 EXHIBIT 11 EXHIBIT 11 DOLE FOOD COMPANY, INC. AND SUBSIDIARIES Computation of Earnings Per Common Share (in thousands, except per share data)
1993 1992 1991 ------ ------ ------ PRIMARY Income before cumulative effect of change in accounting principle $ 77,889 $ 65,213 $ 133,726 Cumulative effect of change in accounting principle - (49,492) - ---------- ---------- ---------- Net income applicable to common shares $ 77,889 $ 15,721 $ 133,726 ========== =========== ========== Average number of common shares outstanding during the year 59,441 59,408 59,337 Shares issuable upon exercise of stock options at average prices during the year 261 253 329 ---------- ---------- ---------- Total 59,702 59,661 59,666 ========== ========== ========== Primary earnings per common share Income before cumulative effect of change in accounting principle $ 1.30 $ 1.09 $ 2.24 Cumulative effect of change in accounting principle - (0.83) - ---------- ---------- ---------- Net income $ 1.30 $ 0.26 $ 2.24 ========== ========== ========== FULLY DILUTED Income before cumulative effect of change in accounting principle $ 77,889 $ 65,213 $ 133,726 Cumulative effect of change in accounting principle - (49,492) - ---------- ---------- ---------- Net income applicable to common shares $ 77,889 $ 15,721 $ 133,726 ========== ========== ========== Average number of common shares outstanding during the year 59,441 59,408 59,337 Shares issuable upon exercise of stock options at higher of average prices or end of year prices 261 262 329 ---------- ---------- ---------- Total 59,702 59,670 59,666 ========== ========== ========== Fully diluted earnings per common share Income before cumulative effect of change in accounting principle $ 1.30 $ 1.09 $ 2.24 Cumulative effect of change in accounting principle - (0.83) - ---------- ---------- ---------- Net income $ 1.30 $ 0.26 $ 2.24 ========== ========== ==========
EX-13 10 EXHIBIT 13 Dole Food Company, Inc. Consolidated Statement of Income
(in thousands, except per share data) 1993 1992 1991 - ---------------------------------------------------------------------------------------- Revenue $3,430,521 $3,375,492 $3,215,999 Cost of products sold 2,880,502 2,862,729 2,636,250 - ---------------------------------------------------------------------------------------- Gross margin 550,019 512,763 579,749 Selling, marketing and administrative expenses 365,250 327,985 355,997 Cost reduction program 42,500 45,700 -- - ---------------------------------------------------------------------------------------- Operating income 142,269 139,078 223,752 Interest expense (71,682) (72,777) (64,357) Interest income 12,464 15,846 14,942 Gain on sale of 18% of common stock of subsidiary 30,853 -- -- Other expense -- net (15,815) (10,534) (5,111) - ---------------------------------------------------------------------------------------- Income before income taxes and cumulative effect of change in accounting principle 98,089 71,613 169,226 Income taxes (20,200) (6,400) (35,500) - ---------------------------------------------------------------------------------------- Income before cumulative effect of change in accounting principle 77,889 65,213 133,726 Cumulative effect of change in accounting principle -- (49,492) -- - ---------------------------------------------------------------------------------------- Net income $ 77,889 $ 15,721 $ 133,726 ======================================================================================== Earnings per common share, primary and fully diluted Income before cumulative effect of change in accounting principle $ 1.30 $ 1.09 $ 2.24 Cumulative effect of change in accounting principle -- (.83) -- - ---------------------------------------------------------------------------------------- Net income $ 1.30 $ .26 $ 2.24 ========================================================================================
See Notes to Consolidated Financial Statements. PAGE NINETEEN Dole Food Company, Inc. Consolidated Balance Sheet
(in thousands, except shares outstanding) 1993 1992 - ------------------------------------------------------------------------------ Current assets Cash and short-term investments $ 37,497 $ 57,272 Receivables -- net 407,554 346,284 Inventories 553,428 550,947 Real estate development inventory 105,900 85,788 Prepaid expenses 37,970 26,693 - ------------------------------------------------------------------------------ Total current assets 1,142,349 1,066,984 Real estate developments 288,217 288,475 Investments 34,071 31,603 Property, plant and equipment -- net 1,767,089 1,565,135 Long-term receivables -- net 70,653 91,608 Other assets 85,540 51,258 - ------------------------------------------------------------------------------ $3,387,919 $3,095,063 ============================================================================== Current liabilities Notes payable $ 64,050 $ 93,513 Current portion of long-term debt 14,612 20,802 Accounts payable 163,966 137,604 Accrued liabilities 417,524 393,756 - ------------------------------------------------------------------------------ Total current liabilities 660,152 645,675 Long-term debt 1,158,297 987,730 Deferred income taxes and other long-term liabilities 430,014 425,304 Minority interests 87,342 35,336 Common shareholders' equity Common stock (shares outstanding: 1993 -- 59,455,918; 1992 -- 59,414,655) 320,099 320,057 Additional paid-in capital 164,908 163,686 Retained earnings 596,573 542,468 Cumulative foreign currency translation adjustment (29,466) (25,193) - ------------------------------------------------------------------------------ Total common shareholders' equity 1,052,114 1,001,018 - ------------------------------------------------------------------------------ $3,387,919 $3,095,063 ==============================================================================
See Notes to Consolidated Financial Statements. PAGE TWENTY Dole Food Company, Inc. Consolidated Statement of Cash Flow
(in thousands) 1993 1992 1991 - -------------------------------------------------------------------------------- Operating activities Net income $ 77,889 $ 15,721 $ 133,726 Adjustments to net income Depreciation and amortization 132,623 109,631 86,777 Equity (earnings) distributions, net (3,306) (1,880) 4,595 Gain on sale of subsidiary stock (30,853) -- -- Provision (benefit) for deferred income taxes 649 (33,408) 36,122 Cumulative effect of accounting change -- 49,492 -- Charge for cost reduction program 42,500 45,700 -- Other (963) (585) 88 Change in operating assets and liabilities, net of effects from acquisitions Receivables -- net (18,603) (22,024) (22,492) Inventories 16,477 4,609 (58,570) Prepaid expenses (8,222) 1,947 (1,527) Real estate developments (22,598) (86,990) (23,334) Other assets (23,145) (14,345) (606) Accounts payable and accrued liabilities (31,296) (35,113) (4,666) Income taxes payable (5,636) 13,929 (15,327) Other 5,146 (13,043) (12,552) - -------------------------------------------------------------------------------- Cash flow from operations 130,662 33,641 122,234 Investing activities Proceeds from property disposals 17,140 5,917 1,479 Capital additions (218,659) (191,745) (325,160) Purchase price of acquisitions, net of acquired cash (107,996) (14,342) -- Purchases of investments -- net (181) (5,002) (5,088) Other 1,659 2,776 2,488 - -------------------------------------------------------------------------------- Cash flow used in investing activities (308,037) (202,396) (326,281) Financing activities Short-term borrowings 78,244 149,184 159,933 Repayments of short-term debt (117,014) (134,313) (169,133) Long-term borrowings 687,782 359,480 605,027 Repayments of long-term debt (542,487) (166,734) (350,680) Cash dividends paid (23,784) (23,763) (29,710) Net proceeds on sale of subsidiary common stock 73,595 -- -- Other 1,264 568 3,388 - -------------------------------------------------------------------------------- Cash flow from financing activities 157,600 184,422 218,825 Increase (decrease) in cash and short-term investments (19,775) 15,667 14,778 Cash and short-term investments at beginning of year 57,272 41,605 26,827 - -------------------------------------------------------------------------------- Cash and short-term investments at end of year $ 37,497 $ 57,272 $ 41,605 ================================================================================
See Notes to Consolidated Financial Statements. PAGE TWENTY-ONE Dole Food Company, Inc. Notes to Consolidated Financial Statements Note 1 -- Summary of Accounting Policies Principles of Consolidation -- The consolidated financial statements include the accounts of Dole Food Company, Inc. and all significant majority-owned subsidiaries ("the Company"). Annual Closing Date -- The Company's fiscal year ends on the Saturday closest to December 31. Fiscal years 1993, 1992 and 1991 ended on January 1, 1994, January 2, 1993 and December 28, 1991, respectively. Fiscal years 1993 and 1991 had 52 weeks and fiscal year 1992 had 53 weeks. Inventories -- Inventories are stated at the lower of cost or market. Cost is determined principally on a first-in, first-out basis. Specific identification and average cost methods are also used for packing materials and operating supplies. Agricultural Costs -- The costs of growing bananas and pineapples are charged to operations as incurred. Growing costs related to other crops are recognized when the crops are harvested and sold. Real Estate Developments -- Real estate developments are carried at cost, not in excess of net realizable value. Costs which are directly related to land development and construction are capitalized and amortized to cost of sales as closings occur. Income from the sale of land and residential units is recognized when closings have occurred and other criteria for sale and profit recognition are satisfied in accordance with generally accepted accounting principles governing profit recognition for real estate transactions. Investments -- Investments in affiliates with ownership of 20% to 50% are generally recorded on the equity method. Property, Plant and Equipment -- Property, plant and equipment are stated at cost, less accumulated depreciation. Depreciation is computed principally by the straight-line method over the estimated useful lives of the assets. Foreign Exchange -- The U.S. dollar is the functional currency for substantially all of Dole's consolidated operations. Net foreign exchange gains or losses for companies with the U.S. dollar as their functional currency are included in determining net income and resulted in net losses of $3.6 million, $2.4 million and $.4 million, for 1993, 1992 and 1991, respectively. Net exchange gains or losses resulting from the translation of assets and liabilities of foreign subsidiaries whose local currency is the functional currency are accumulated in a separate component of common shareholders' equity. Income Taxes -- The Company adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" effective January 1, 1989. Under this method, income tax liabilities and assets are recognized at enacted tax rates for the expected future tax consequences of temporary differences between carrying amounts and the tax basis of assets and liabilities. The income taxes which would be due upon the distribution of foreign subsidiary earnings have not been provided where the undistributed earnings are considered permanently invested. Earnings Per Common Share -- Primary earnings per common share are based on the weighted average number of shares outstanding during the period after consideration of the dilutive effect of stock options and restricted stock awards. The primary weighted average number of common shares outstanding was 59.7 million for 1993, 1992 and 1991. Cash and Short-Term Investments -- Cash and short-term investments include cash on hand and time deposits. Such short-term investments generally have maturities of three months or less at the time of purchase. Fair Value of Financial Instruments -- For short-term financial instruments, the historical carrying amount is a reasonable estimate of fair value. For long-term financial instruments not readily marketable, fair values were estimated based upon discounted future cash flows at prevailing market interest rates. Based on these assumptions, management believes the fair market values of the Company's financial instruments are not materially different from their recorded amounts as of January 1, 1994. Reclassifications -- Certain prior year amounts have been reclassified to conform to the 1993 presentation. Note 2 -- Acquisitions During 1993, the Company acquired certain businesses for an aggregate purchase price of approximately $117 million. These acquisitions included a French dried fruit and nut business with revenues of $65 million, and three French banana ripening and distribution companies which occurred in January 1993. In December 1993, the Company acquired two affiliated fruit juice businesses with combined estimated annual sales of $90 million. The purchase agreement related to this acquisition provides for potential additional consideration to be paid based upon the future operating results of the acquired company through February 1996. The Company also acquired in December 1993, PAGE TWENTY-TWO five commercial real estate properties. These acquisitions were accounted for as purchases and accordingly, the purchase price was allocated on a preliminary basis to the net assets acquired based upon their estimated fair values at the dates of acquisitions. The fair values of assets acquired and liabilities assumed in connection with these acquisitions were $200 million (including cash of $9 million) and $83 million, respectively. Note 3 -- Sale of Subsidiary Stock On March 4, 1993, approximately 18% or 5.4 million shares of the common stock of the Company's residential real estate development company, Castle & Cooke Homes, Inc., was sold at $15 per share through an initial public offering. The Company continues to own the remaining 82% of Castle & Cooke Homes, Inc.'s common stock. Net proceeds from the sale totaled approximately $74 million and resulted in a gain of approximately $31 million ($18 million, net of tax). The minority shareholders' interest of 18% totaled approximately $49 million at January 1, 1994. Note 4 -- Current Assets and Liabilities Short-term investments of $11.7 million and $35.3 million in 1993 and 1992, respectively, consisted principally of time deposits. Outstanding checks which are funded as presented for payment totaled $31.7 million and $37.3 million in 1993 and 1992, respectively, and were included in accounts payable. Details of certain current assets were as follows:
(in thousands) 1993 1992 - ----------------------------------------------------------- Receivables Trade $290,507 $245,539 Notes and other 130,253 110,926 Affiliated operations 14,343 14,728 - ----------------------------------------------------------- 435,103 371,193 Allowance for doubtful accounts (27,549) (24,909) - ----------------------------------------------------------- $407,554 $346,284 =========================================================== Inventories Finished products $213,753 $192,339 Raw materials and work in progress 160,635 152,337 Growing crop costs 38,509 46,297 Packing materials 69,843 84,345 Operating supplies and other 70,688 75,629 - ----------------------------------------------------------- $553,428 $550,947 ===========================================================
Accrued liabilities in 1993 and 1992 included approximately $105 million and $96 million, respectively, of amounts due to growers. In 1992, the Company implemented a worldwide cost reduction program which involved employee reductions, facility consolidations and aggressive efforts to reduce procurement costs and enhance productivity. The Company recorded a charge in the fourth quarter of 1992 of $45.7 million for severance and costs associated with these undertakings. In 1993, in line with its continued cost reduction and profit improvement efforts, the Company targeted additional operations for closure and consolidation, resulting in a fourth quarter charge of $42.5 million. Accrued liabilities in 1993 and 1992 included a liability of approximately $46 million and $42 million, respectively, related to these programs. Note 5 -- Property, Plant and Equipment Major classes of property, plant and equipment were as follows:
(in thousands) 1993 1992 - --------------------------------------------------------- Land and land improvements $ 681,353 $ 609,036 Buildings and improvements 499,680 460,415 Machinery and equipment 921,031 768,387 Construction in progress 153,934 114,693 - --------------------------------------------------------- 2,255,998 1,952,531 Accumulated depreciation (488,909) (387,396) - --------------------------------------------------------- $1,767,089 $1,565,135 =========================================================
At January 1, 1994, the Company had commitments to spend approximately $60 million for vessels for its fresh fruit operations. PAGE TWENTY-THREE Note 6 -- Debt Notes payable of $64.1 million in 1993 and $93.5 million in 1992 consisted primarily of short-term borrowings required to fund certain foreign operations. Long-term debt consisted of:
(in thousands) 1993 1992 - -------------------------------------------------------------- Unsecured debt Notes payable to banks at an average interest rate of 3.9% (4.4% -- 1992) $ 397,807 $ 757,599 10.06% senior notes due 1995 -- 172,000 6.75% notes due 2000 225,000 -- 7% notes due 2003 300,000 -- 7.875% debentures due 2013 175,000 -- Various other notes due 1994- 2006 at an average interest rate of 7.2% (5.5% -- 1992) 16,604 62,038 Secured debt Mortgages, contracts and notes due 1994-2006, at an average interest rate of 6.7% (10.4% -- 1992) 61,967 17,303 Unamortized debt discount and issue costs (3,469) (408) - -------------------------------------------------------------- 1,172,909 1,008,532 Current maturities (14,612) (20,802) - -------------------------------------------------------------- $1,158,297 $ 987,730 ==============================================================
On May 6, 1993 and July 27, 1993, the Company sold $300 million and $400 million, respectively, of unsecured notes in public offerings. The $300 million notes bear interest at 7% and mature in 2003. The $400 million issuance is comprised of $225 million notes bearing interest at 6.75% and maturing in 2000 and $175 million notes bearing interest at 7.875% and maturing in 2013. Net proceeds from the sales of the notes were used to refinance outstanding indebtedness, including the early retirement of $172 million of 10.06% senior notes due 1995. At January 2, 1993, notes payable to banks were comprised of net borrowings under a $1.1 billion revolving credit agreement which was terminated in November 1993. On November 17, 1993, the Company entered into a $400 million, 364-day revolving credit facility ("Facility"). The initial and each succeeding revolving 364- day term may be extended for an additional 364 days upon approval by the lenders. Alternatively, the outstanding loans, if any, at the end of a 364-day term may be converted to a 3-year term loan at the request of the Company. At the Company's option, borrowings under the Facility bear interest at a certain percentage over the agent's prime rate or the London Interbank Offered Rate ("LIBOR"). There were no borrowings outstanding under the Facility at year- end. The Company may borrow under uncommitted lines of credit at rates offered from time to time by various banks that may or may not be lenders under the $400 million Facility. At January 1, 1994, net borrowings outstanding under the uncommitted lines of credit totaled $398 million. At January 2, 1993, Castle & Cooke Homes, Inc. had borrowings under a $75 million revolving credit facility totaling $52.5 million with a weighted average interest rate of 5.1%. In February 1993, Castle & Cooke Homes, Inc. entered into a $100 million revolving credit facility consisting of an $81 million line of credit for existing operations and a $19 million line of credit which, subject to lender approval, is available for future real estate developments. The $81 million portion of the credit facility requires a series of commitment reductions over its term as follows: $10 million in each of March 1994, September 1994 and March 1995; $20 million in September 1995. The revolving credit facility terminates in March 1996 and is secured by real property. At the option of Castle & Cooke Homes, Inc., the revolving credit facility bears interest at a certain percentage over the agent bank's base rate or LIBOR. Borrowings under this agreement totaled $47.7 million at January 1, 1994 with a weighted average interest rate of 5.5%. Sinking fund requirements and maturities with respect to long-term debt at January 1, 1994 were as follows (in millions): 1995 -- $22; 1996 -- $33; 1997 -- $399; 1998 -- $1; and thereafter -- $703. Interest payments during 1993, 1992 and 1991, net of amounts capitalized, totaled $60.0 million, $75.9 million and $67.7 million, respectively. Interest costs of $4.4 million, $5.4 million and $9.1 million were capitalized in 1993, 1992, and 1991, respectively, pertaining to self-constructed assets. PAGE TWENTY-FOUR Provisions under revolving loan agreements require the Company and certain real estate subsidiaries (in the case of the $100 million credit facility) to comply with certain financial covenants which include maintaining a minimum consolidated net worth and minimum fixed charge coverage ratio and limit the amount of outstanding indebtedness, certain project financing and real estate investments. Note 7 -- Employee Benefit Plans The Company has qualified defined benefit pension plans covering most full-time employees. Benefits under these plans are generally based on each employee's eligible compensation, except for certain hourly plans which are based on negotiated benefits, and years of service. The Company's funding policy is to fund the net periodic pension cost plus a 15- year amortization of the unfunded liability. The status of the plans was as follows:
(in thousands) 1993 1992 - --------------------------------------------------------------- Actuarial present value of accumulated benefit obligation Vested $248,492 $219,972 Non-vested 16,866 10,378 - --------------------------------------------------------------- $265,358 $230,350 =============================================================== Actuarial present value of projected benefit obligation $282,765 $254,530 Plan assets at fair value, primarily stocks and bonds 241,262 220,545 - --------------------------------------------------------------- Projected benefit obligation in excess of plan assets (41,503) (33,985) Unrecognized net transition obligation 2,167 3,082 Unrecognized prior service cost 6,763 4,905 Unrecognized net loss 13,320 854 Additional minimum liability (9,120) (2,907) - --------------------------------------------------------------- Accrued pension liability $(28,373) $(28,051) ===============================================================
For U.S. plans, the projected benefit obligation was determined using an assumed discount rate of 7.25% in 1993 and 8.5% in 1992, and an assumed rate of increase in future compensation levels of 5% in 1993 and 6% in 1992. The expected long- term rate of return on assets was 9% in both years. For non-U.S. plans, the projected benefit obligation was determined using assumed discount rates of 12% to 15% in 1993 and 12.5% to 15% in 1992, and assumed rates of increase in future compensation levels of 10% to 13% in 1993 and 10.5% to 13% in 1992. The expected long-term rate of return on assets for non-U.S. plans was 12% to 15% in 1993. Pension expense included the following components:
(in thousands) 1993 1992 1991 - ------------------------------------------------------------ Service cost-benefits earned during the year $ 6,600 $ 6,691 $ 6,379 Interest cost on projected benefit obligation 21,737 20,894 19,627 Actual return on plan assets (33,136) (16,675) (33,947) Net amortization and deferral 14,125 (2,085) 14,719 - ------------------------------------------------------------ $ 9,326 $ 8,825 $ 6,778 ============================================================
The Company has several 401(k) plans generally covering full-time U.S. employees with at least one year of continuous service. Eligible employees may defer a percentage of their annual compensation up to a maximum allowable under federal income tax law to supplement their retirement income. These plans provide for Company contributions based on a certain percentage of each participant's contribution. Total Company contributions to these plans for 1993, 1992 and 1991 were $4.8 million, $4.3 million, and $4.9 million, respectively. The Company is also a party to various industrywide collective bargaining agreements which also provide pension benefits. Total contributions to these plans plus direct payments to pensioners were $1.9 million in 1993 and $3.0 million in both 1992 and 1991. In addition to providing pension benefits, the Company provides certain health care and life insurance benefits for eligible retired employees. Certain employees may become eligible for such benefits if they fulfill established requirements upon reaching retirement age. In 1992, the Company implemented Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." This statement, among other changes, requires companies to accrue the projected costs of retiree benefits during the employee's active service period. The Company elected to immediately recognize the accumulated postretirement benefit obligation as of December 29, 1991 of $82.5 million ($49.5 million, net of tax). PAGE TWENTY-FIVE The status of the plans was as follows:
(in thousands) 1993 1992 - ---------------------------------------------------------------- Accumulated postretirement benefit obligation ("APBO") Retirees $61,993 $54,737 Fully eligible actives 20,560 18,274 Other actives 15,511 12,874 - ---------------------------------------------------------------- 98,064 85,885 Unrecognized prior service cost (92) -- Unrecognized net loss (9,347) (299) - ---------------------------------------------------------------- Accrued postretirement benefit liability $88,625 $85,586 ================================================================
Net periodic postretirement benefit cost included the following components:
(in thousands) 1993 1992 - ---------------------------------------------------------------- Service cost -- benefits earned during the year $ 852 $ 926 Interest cost on APBO 7,751 7,622 Net amortization and deferral 5 -- - ---------------------------------------------------------------- Net periodic postretirement benefit cost $8,608 $8,548 ================================================================
For U.S. plans, an annual rate of increase in the per capita cost of covered health care benefits of 13.5% in 1993 decreasing to 5.5% in 2010 and thereafter was assumed for 1993, and a level rate of 10.5% was assumed for 1992. For the Company's foreign plan, the assumed health care cost trend rate was 15% in both years. The health care cost trend rate assumption has a significant effect on the amounts reported. Increasing the assumed health care cost trend rate by one percentage point in each year would have resulted in an increase in the Company's APBO as of January 1, 1994 of approximately $9.6 million and the aggregate of the service and interest cost components of net periodic postretirement benefit cost for 1993 of approximately $1 million. The weighted average discount rate used in determining the APBO was 7.25% in 1993 and 9% in 1992 for U.S. plans and 15% in both years for the foreign plan. The plans are not funded. Prior to 1992, the cost of postretirement benefits was recognized as payments were made. These costs totaled $4.9 million during 1991. Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits" is effective for the Company's 1994 fiscal year. This standard requires that the cost of benefits provided to former or inactive employees be recognized on the accrual basis of accounting. Since most of these benefits were already accounted for by the Company on an accrual method, the cumulative effect of adopting this new standard is not expected to be material. Note 8 -- Stock Options and Awards Under the 1991 and 1982 Stock Option and Award Plans ("the Plans"), the Company can grant incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards and performance share awards to officers and key employees of the Company. Stock options may be exercised for up to ten years from the date of grant with or without stock appreciation rights, as determined by the committee of the Company's Board of Directors administering the Plans. No stock appreciation rights or performance share awards were outstanding at January 1, 1994. Stock option transactions during 1993 were as follows:
Average Shares Price - ---------------------------------------------------- Beginning of year-outstanding 1,495,730 $29.70 Granted 411,850 33.12 Exercised (41,733) 27.88 Cancelled (146,065) 36.52 - ---------------------------------------------------- End of year-outstanding 1,719,782 $29.98 ==================================================== Exercisable 1,172,694 $28.08 ====================================================
During 1992, the Company granted 27,500 restricted stock awards to key employees. These awards become fully vested over a five-year period from the date of grant. Note 9 -- Shareholders' Equity Authorized capital at January 1, 1994 consisted of 80 million shares of no par value common stock and 30 million shares of no par value preferred stock, issuable in series. At January 1, 1994, approximately 3.8 million shares of common stock were reserved for issuance under the Company's Stock Option and Award Plans (see Note 8). There was no preferred stock outstanding. PAGE TWENTY-SIX The changes in shareholders' equity were as follows:
Cumulative Foreign Total Additional Currency Common Common Common Paid-in Retained Translation Shareholders' Shares (in thousands, except share data) Stock Capital Earnings Adjustment Equity Outstanding - ------------------------------------------------------------------------------------------------------------------------ Balance, December 29, 1990 $319,912 $159,875 $440,567 $(23,465) $ 896,889 59,270,305 Net income -- -- 133,726 -- 133,726 -- Cash dividends declared ($.40 per share) -- -- (23,783) -- (23,783) -- Translation adjustments -- -- -- (780) (780) -- Other 124 3,264 -- -- 3,388 123,638 - ------------------------------------------------------------------------------------------------------------------------ Balance, December 28, 1991 320,036 163,139 550,510 (24,245) 1,009,440 59,393,943 Net income -- -- 15,721 -- 15,721 -- Cash dividends declared ($.40 per share) -- -- (23,763) -- (23,763) -- Translation adjustments -- -- -- (948) (948) -- Other 21 547 -- -- 568 20,712 - ------------------------------------------------------------------------------------------------------------------------ Balance, January 2, 1993 320,057 163,686 542,468 (25,193) 1,001,018 59,414,655 Net income -- -- 77,889 -- 77,889 -- Cash dividends declared ($.40 per share) -- -- (23,784) -- (23,784) -- Translation adjustments -- -- -- (4,273) (4,273) -- Other 42 1,222 -- -- 1,264 41,263 - ------------------------------------------------------------------------------------------------------------------------ Balance, January 1, 1994 $320,099 $164,908 $596,573 $(29,466) $1,052,114 59,455,918 ========================================================================================================================
Note 10 -- Contingencies The Company is contingently liable as joint indemnitors on surety bonds related to its real estate development operations. Outstanding bond commitments approximated $97 million at January 1, 1994. The Company is involved from time to time in various claims and legal actions incident to its operations, both as plaintiff and defendant. In the opinion of management, after consultation with legal counsel, none of such claims is expected to have a material adverse effect on the Company. Note 11 -- Lease Commitments The Company has obligations under non-cancelable operating leases, primarily for ship charters and containers, and certain equipment and office facilities. Lease terms are generally for less than the economic life of the property. Certain agricultural land leases provide for increases in minimum rentals based on production. Total rental expense was $169 million, $171 million and $147 million (net of sublease income of $19 million, $39 million and $30 million) for 1993, 1992 and 1991, respectively. At January 1, 1994, the aggregate minimum rental commitments were as follows (in millions): 1994 -- $99; 1995 -- $77; 1996 -- $51; 1997 -- $31; 1998 -- $13 and thereafter -- $37. Future sublease income totaled $24 million. PAGE TWENTY-SEVEN Note 12 -- Income Taxes In 1992, the Company adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" and elected to apply the provisions retroactively to 1989. Accordingly, retained earnings at December 30, 1989 were reduced by $31.7 million, the cumulative effect of the change in the method of accounting for income taxes. The accompanying consolidated financial statements for 1991 have been restated for the effects of adopting this standard. Income tax expense (benefit) was as follows:
(in thousands) 1993 1992 1991 - ---------------------------------------------------------------- Current Federal, state and local $ 5,926 $ 20,472 $(16,907) Foreign 13,625 19,336 16,285 - ---------------------------------------------------------------- 19,551 39,808 (622) - ---------------------------------------------------------------- Deferred Federal, state and local 6,034 (33,408) 36,122 Foreign (5,385) -- -- - ---------------------------------------------------------------- 649 (33,408) 36,122 - ---------------------------------------------------------------- $20,200 $ 6,400 $ 35,500 ================================================================
Pretax earnings attributable to foreign operations were $145 million, $163 million and $231 million for 1993, 1992 and 1991, respectively. Undistributed earnings of foreign subsidiaries, which have been or are intended to be permanently invested, aggregated $768 million at January 1, 1994. The Company's reported income tax expense varied from the expense calculated using the U.S. federal statutory tax rate for the following reasons:
(in thousands) 1993 1992 1991 - ----------------------------------------------------------- Expense computed at U.S. federal statutory income tax rate $ 34,331 $ 24,348 $ 57,537 Foreign income taxed at different rates (24,014) (21,431) (25,514) Dividends from subsidiaries 341 425 174 State and local income tax, net of federal income tax benefit 1,715 1,532 1,620 Impact of tax rate change 2,510 -- -- Other 5,317 1,526 1,683 - ----------------------------------------------------------- Reported income tax expense $ 20,200 $ 6,400 $ 35,500 ===========================================================
Total income tax payments for 1993, 1992 and 1991 were $23.7 million, $29.4 million and $19.2 million, respectively. Deferred tax assets (liabilities) were comprised of the following:
(in thousands) 1993 1992 1991 - ------------------------------------------------------------------------- Operating reserves $ 16,769 $ 17,919 $ (18,895) Accelerated depreciation (41,703) (42,613) (39,982) Inventory valuation methods 10,083 14,437 11,896 Effect of differences between book values assigned in prior acquisitions and historical tax values (109,953) (104,245) (90,909) Postretirement benefits 36,336 34,234 -- Current year acquisitions (8,603) -- -- Tax credit carryforward 39,075 -- -- Net operating loss carryforward 3,115 16,042 -- Gain on sale of subsidiary stock (12,650) -- -- Other (30,053) (24,125) (16,864) - ------------------------------------------------------------------------- $ (97,584) $ (88,351) $(154,754) =========================================================================
The tax credit carryforward amount is primarily comprised of alternative minimum tax credits which can be utilized to reduce regular tax liabilities and may be carried forward indefinitely. The remaining credits expire from 1998 to 2008. Total deferred tax assets and deferred tax liabilities were as follows:
(in thousands) 1993 1992 1991 - -------------------------------------------------------------------------- Deferred tax assets $ 200,249 $ 190,546 $ 140,074 Deferred tax liabilities (297,833) (278,897) (294,828) - -------------------------------------------------------------------------- $ (97,584) $ (88,351) $(154,754) ==========================================================================
The Company remains contingently liable with respect to certain tax credits sold with recourse by Flexi-Van Corporation ("Flexi-Van"), the Company's former transportation equipment leasing business, to a third party in 1981. These credits are now being contested by the Internal Revenue Service. Flexi-Van, which separated from the Company in 1987 and was subsequently acquired by David H. Murdock, has indemnified the Company against obligations that might result from the resolution of this matter. PAGE TWENTY-EIGHT Note 13 -- Industry and Geographic Area Segment Information The Company's major operations are in Food Products, Real Estate and Resorts. The Food Products segment procures, grows, processes and markets fruits, vegetables and nuts in the following locations: (1) North America; (2) Latin America -- principally Chile, Colombia, Costa Rica, Ecuador, Honduras and Panama; (3) Far East -- principally Japan, the Philippines and Thailand; and (4) Europe -- principally Germany, France and Italy. Real estate activities are conducted in the United States and consist primarily of holding, developing, operating and selling residential and commercial real estate in Hawaii, California and Arizona. Resorts include two luxury hotels on the Island of Lana'i in Hawaii. Revenue, operating income, identifiable assets, capital expenditures and depreciation and amortization pertaining to the industries and geographic areas in which the Company operates are presented below. Product transfers between geographic areas are accounted for based on the estimated fair market value of the products.
(in millions) 1993 1992 1991 - --------------------------------------------------------- Revenue Food Products North America $1,852 $1,997 $1,950 Latin America 640 924 931 Far East 700 648 589 Europe 577 488 445 Intercompany elimination (661) (937) (951) - --------------------------------------------------------- Total Food Products 3,108 3,120 2,964 Real Estate 284 230 235 Resorts 39 26 17 - --------------------------------------------------------- $3,431 $3,376 $3,216 ========================================================= Operating Income Food Products North America $ 39 $ 40 $ 35 Latin America 62 64 91 Far East 77 83 91 Europe -- 10 36 - --------------------------------------------------------- Total Food Products 178 197 253 Real Estate 64 53 41 Resorts (40) (41) (39) Corporate and unallocated (17) (24) (31) Cost reduction program (43) (46) -- - --------------------------------------------------------- $ 142 $ 139 $ 224 =========================================================
(in millions) 1993 1992 1991 - --------------------------------------------------------- Identifiable Assets Food Products North America $1,264 $1,199 $1,205 Latin America 486 495 469 Far East 266 248 195 Europe 211 85 53 - --------------------------------------------------------- Total Food Products 2,227 2,027 1,922 Real Estate 788 715 617 Resorts 316 301 292 Corporate 57 52 47 - --------------------------------------------------------- $3,388 $3,095 $2,878 ========================================================= Capital Expenditures Food Products $ 174 $ 164 $ 259 Real Estate 9 18 13 Resorts 36 10 53 - --------------------------------------------------------- $ 219 $ 192 $ 325 ========================================================= Depreciation and Amortization Food Products $ 100 $ 88 $ 71 Real Estate 12 5 5 Resorts 16 15 10 Corporate and unallocated 5 2 1 - --------------------------------------------------------- $ 133 $ 110 $ 87 =========================================================
Notes: Food Products revenue includes inter-area transfers from Latin America to North America, the Far East and Europe of $418 million in 1993; $731 million in 1992 and $757 million in 1991; inter-area transfers from the Far East to North America and Europe of $227 million in 1993; $206 million in 1992 and $184 million in 1991; inter-area transfers from North America to Latin America, the Far East and Europe of zero in 1993 and 1992 and $10 million in 1991; and inter- area transfers from Europe to North America and Latin America of $16 million in 1993 and zero in 1992 and 1991. The cost reduction program charge included in operating income for 1993 is related to the Food Products segment. The cost reduction program charge included in operating income for 1992 is allocable to the following segments: Food Products -- $43 million, Real Estate -- $3 million. PAGE TWENTY-NINE Note 14 -- Quarterly Financial Information (Unaudited) The following table presents summarized quarterly results.
First Second Third Fourth (in thousands, except per share data) Quarter Quarter Quarter Quarter Year - ------------------------------------------------------------------------------------------------------------------------- 1993 Revenue $766,488 $863,653 $1,005,791 $794,589 $3,430,521 Gross margin 131,791 159,307 149,203 109,718 550,019 Net income (loss) 53,258 39,656 5,103 (20,128) 77,889 ========================================================================================================================= Earnings (loss) per common share $ .89 $ .66 $ .09 $ (.34) $ 1.30 ========================================================================================================================= 1992 Revenue $753,284 $901,753 $ 956,880 $763,575 $3,375,492 Gross margin 120,857 151,673 151,588 88,645 512,763 Income (loss) before cumulative effect of accounting change 26,694 40,064 21,313 (22,858) 65,213 Cumulative effect of accounting change (49,492) -- -- -- (49,492) - ------------------------------------------------------------------------------------------------------------------------- Net income (loss) $(22,798) $ 40,064 $ 21,313 $(22,858) $ 15,721 ========================================================================================================================= Earnings (loss) per common share Income (loss) before cumulative effect of accounting change $ .45 $ .67 $ .36 $ (.39) $ 1.09 Cumulative effect of accounting change (.83) -- -- -- (.83) - ------------------------------------------------------------------------------------------------------------------------- Net income (loss) $ (.38) $ .67 $ .36 $ (.39) $ .26 =========================================================================================================================
Operating results for the fourth quarters of both 1993 and 1992 include a $42.5 million ($26.7 million, net of tax) and a $45.7 million ($27.4 million, net of tax) charge, respectively, for the Company's cost reduction programs. The first quarter of 1992 has been restated to reflect the adoption of SFAS No. 106. The impact of the adoption was not material in subsequent quarters, which have not been restated. See Note 7 in Notes to Consolidated Financial Statements. All quarters have 12 weeks, except the third quarters of 1993 and 1992 which have 16 weeks each and the fourth quarter of 1992 which has 13 weeks. Note 15 -- Common Stock Data (Unaudited) The following table shows the market price range of the Company's common stock for each quarter in 1993 and 1992.
High Low - -------------------------------------------- 1993 First Quarter $35 1/2 $30 1/4 Second Quarter 37 7/8 32 1/4 Third Quarter 37 1/2 30 3/8 Fourth Quarter 31 3/4 25 7/8 - -------------------------------------------- Year $37 7/8 $25 7/8 ============================================ 1992 First Quarter $40 $33 Second Quarter 36 7/8 29 1/4 Third Quarter 31 3/8 26 3/4 Fourth Quarter 32 7/8 26 - -------------------------------------------- Year $40 $26 ============================================
PAGE THIRTY Dole Food Company, Inc. Report of Independent Public Accountants To the Shareholders and Board of Directors of Dole Food Company, Inc.: We have audited the accompanying consolidated balance sheet of Dole Food Company, Inc. (a Hawaii corporation), and subsidiaries as of January 1, 1994 and January 2, 1993, and the related consolidated statements of income and cash flow for the years ended January 1, 1994, January 2, 1993 and December 28, 1991. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Dole Food Company, Inc. and subsidiaries as of January 1, 1994 and January 2, 1993, and the results of their operations and their cash flow for the years ended January 1, 1994, January 2, 1993 and December 28, 1991, in conformity with generally accepted accounting principles. As discussed in Note 7 to the consolidated financial statements, the Company changed its method of accounting for postretirement benefits other than pensions, effective December 29, 1991. /s/ ARTHUR ANDERSEN & CO. Los Angeles, California February 7, 1994 PAGE THIRTY-ONE Dole Food Company, Inc. Management's Discussion and Analysis of Results of Operations and Financial Position 1993 Compared With 1992 -- Revenue -- Consolidated revenue for 1993 was comparable to 1992, increasing $55 million and reaching a record level of over $3.4 billion. Revenues for the food operations in 1993 and 1992 were level, accounting for just over 90% of consolidated net sales. New businesses acquired in early 1993 accounted for approximately $100 million of revenue growth. Banana revenues generated in the Company's North America and Far East markets were down in 1993 due to lower prices. Revenues in the European market were also lower as volumes into the European Community ("EC") were limited due to the new EC banana regulations. Overall, the Company's worldwide banana volumes were comparable in 1993 and 1992. Improvements in 1993 revenue were noted for the fresh vegetable business, attributable to higher lettuce and celery prices. This increase was offset by declines in citrus revenues due to lower volumes and in fresh and packaged pineapple sales due to lower prices. The Company's residential real estate company, Castle & Cooke Homes, Inc., reported higher revenue in 1993 as home deliveries for both Hawaii and California increased by 46% in 1993 compared to 1992, partially offset by lower average home prices. Selling, Marketing and Administrative Expenses -- Selling, marketing and administrative expenses increased 11% from $328 million in 1992 to $365 million in 1993. The effect of new acquisitions, plus additional spending for new products and marketing programs for the fresh vegetable and packaged foods operations more than offset savings achieved through cost reduction measures. Cost Reduction Program -- The Company is continuing its emphasis on cost reduction efforts. Dole has targeted the closure of certain of its businesses which have suffered continuing losses. These include its Hawaiian sugar operations, its Argentina deciduous operation, its Philippine shrimp farming operation and a vegetable packing house. In addition, under Dole's newly implemented management structure, certain functions within each of four global regions, North America, Latin America, the Far East and Europe, are being streamlined and consolidated, resulting in labor savings. One-time costs associated with the above mentioned operational closures and other actions total $43 million on a pretax basis and have been recorded in the 1993 fourth quarter results. The charge included provisions for severance payments and other employee related expenses, facilities consolidation costs, and other related expenses, as well as write-downs of non-recoverable assets resulting from the decision to close the above operations. These new initiatives identified in 1993 are part of the Company's continuing worldwide cost reduction program initially launched in 1992, which is aimed at reducing the Company's cost structure and increasing profitability. However, the ultimate impact on operating results of the cost reduction measures described above and other steps initiated in the prior year will depend on various operating factors and market conditions in which the Company operates. Operating Income -- Consolidated operating income, before cost reduction charges, was $185 million in both 1993 and 1992. Operating income for the Company's food operations, net of corporate general and administrative expenses and before the 1993 and 1992 charges for cost reduction programs, totaled $161 million in 1993 compared to $173 million in 1992. During 1993, the food operations experienced price pressures on some of its products, resulting in lower earnings. However, the successful implementation of cost reduction efforts throughout the Company partially offset a portion of these earnings declines. Cost reductions achieved during 1993 were significant, totaling approximately $130 million, including a substantial reduction in the Company's worldwide labor force. Marginally productive banana lands were abandoned and various agricultural and harvesting practices were re-examined and modified to be more cost effective. The efficiency of the Company's shipping service between Latin America and North America was significantly improved. The Company's citrus and deciduous businesses were consolidated in Bakersfield, several citrus packing houses and an underutilized facility in Bakersfield were closed, and the packaged foods headquarters were relocated from San Francisco to Westlake Village, California. Tighter inventory controls and new supplier contracts also contributed significantly to 1993's cost reductions. Banana earnings which accounted for a significant portion of operating income were lower in 1993 than in 1992 due to several factors. The new European Community banana regulations which impose quotas on bananas exported from Latin America to the EC were implemented on July 1, 1993. These regulations disrupted traditional trading patterns causing banana volumes displaced by the EC restrictions to be shipped into North American and non-EC European banana markets, resulting in lower prices in the affected markets. Earnings were also lower in the Far East markets due to the recession in Japan and increased industry volumes. Another condition which affected the 1993 banana results was an outbreak in the Company's farms in Honduras of sigatoka, a fungus which attacks banana plants. This resulted in reduced volumes and increased fruit costs from that source in the second half of 1993. Steps were taken to control the disease and at year-end, growing costs are returning to more normal levels. In addition, operating income for the fourth quarter of 1992 included an insurance recovery of approximately $15 million related to the 1991 Costa Rican earthquake. Dole distributes its products in more than 70 countries throughout the world. Its international sales are usually transacted in U.S. dollars and major European and Asian currencies, while many of its costs are incurred in currencies PAGE THIRTY-TWO different from those that are received from the sale of the product. Results of operations may be significantly affected by fluctuations of currency exchange rates in both the sourcing and selling locations. The overall net impact of foreign currency fluctuations was immaterial to the results of operations in 1993 and 1992. The packaged foods and fresh pineapple operations also reported lower earnings in 1993. Price pressures for canned pineapple resulted from heavy industry supplies and a drop in demand in Europe and Japan due to recessions in those areas. Prices were also lower in 1993 for Dole's beverage products due to strong competition from lower-priced orange juice, and for fresh pineapple due to the recession. During 1994 worldwide banana markets will continue to adjust to the new European Community banana regulations and price pressures are expected to persist on canned pineapple and concentrate. Lower 1993 earnings for bananas and pineapples were partially offset by the strong performance of the fresh vegetable operations resulting primarily from higher lettuce and celery prices and improvements in cost structure. Improved 1993 results were also reported for California table grapes as sales prices were up from 1992 levels. Included in the Company's real estate operations was Castle & Cooke Homes, Inc., which reported operating income for 1993 of $56 million compared to $52 million for 1992. Higher earnings in 1993 were primarily attributable to an increase in the number of units sold at the Hawaiian developments, partially offset by lower earnings for the California developments. The Lana'i resorts operations reported an operating loss before depreciation of $24 million for 1993 as compared to $26 million in 1992, with improved occupancy rates for both hotels in 1993. Depreciation expense was approximately $16 million and $15 million in 1993 and 1992, respectively. Gain on Sale of Subsidiary Common Stock -- On March 4, 1993, approximately 18% or 5.4 million shares of the common stock of Castle & Cooke Homes, Inc. was sold at $15 per share through an initial public offering. The Company continues to own the remaining 82% of Castle & Cooke Homes, Inc.'s common stock. Net proceeds from the sale totaled approximately $74 million and resulted in a gain of approximately $31 million ($18 million, net of tax). Interest Expense, Net -- Interest expense, net of interest income and capitalized interest, increased to $59 million in 1993 from $57 million in 1992, primarily attributable to higher average debt levels offset by a lower weighted average borrowing rate, and a decline in interest income. Income Taxes -- The Company's effective income tax rate increased to 20.6% for 1993 from 8.9% in 1992, primarily as a result of a change in the mix of domestic and foreign earnings, largely due to the inclusion of the gain on the initial public offering of Castle & Cooke Homes, Inc. In addition, the higher federal income tax rates enacted in August 1993 required the Company to provide additional taxes on its 1993 domestic earnings, as well as on its net deferred tax liability. 1992 Compared With 1991-- Revenue -- Consolidated revenue increased $160 million or 5% from 1991 to 1992, reaching nearly $3.4 billion. This improvement was largely attributable to the fresh fruit and vegetable operations, primarily citrus which returned to normal packing and farming operating levels after suffering in 1991 from reduced fruit production caused by the December 1990 freeze in California. In fresh vegetables, higher sales volumes for most products resulted in a revenue gain in 1992. The Company's Latin American beverage operation also contributed to the revenue growth as a result of higher soft drink prices and volumes. Bananas accounted for approximately 30% and 32% of consolidated revenue in 1992 and 1991, respectively. Although sales volumes for the Company's banana operations were moderately higher in 1992 and foreign currency exchange rates were favorable compared to 1991, prices worldwide were down, keeping revenue at its 1991 level. Selling, Marketing and Administrative Expenses -- Selling, marketing and administrative expenses decreased 8% from $356 million in 1991 to $328 million in 1992, primarily due to reduced costs of marketing programs and lower general and administrative expenses. Cost Reduction Program -- In 1992, the Company implemented a formal worldwide cost reduction program which involved employee reductions, facility consolidations and aggressive efforts to reduce procurement costs and enhance productivity. A fourth quarter pretax charge of $46 million was recorded for severance and costs associated with this program. Operating Income -- Consolidated operating income for 1992, before the cost reduction charge, was $185 million compared to $224 million in 1991, an overall decline of 17%. The Company's food operations, net of corporate general and administrative expenses and before the cost reduction program charge described above, reported operating income of $173 million in 1992 as compared to $222 million in 1991. This decline was principally related to banana operations, where lower prices due to a worldwide oversupply and global recession led to lower results. Nevertheless, banana operations continued to account for a significant portion of operating income in 1992. Citrus showed improved results as volumes were significantly higher in 1992 compared to 1991, when volumes were negatively affected by the December 1990 California freeze. The Latin American beverage operations enjoyed improved results in 1992, as did the packaged foods operations. Partially offsetting these increases were lower 1992 results for the dried fruit and nuts and the fresh vegetable operations, primarily attributable to lower first half lettuce prices caused by high industry volumes. Operating income for 1992 also included an insurance recovery of approximately $15 million related to the 1991 Costa Rican earthquake. PAGE THIRTY-THREE Included in the Company's real estate operations was the residential business which reported operating income of $52 million for 1992 as compared to $44 million for 1991, an 18% increase. The improvement in earnings was primarily due to an increase in the average sales price of homes sold at the Company's residential projects in Hawaii. Resort operations and related support activities on the Island of Lana'i in Hawaii reported improved occupancy rates and lower marketing expense in 1992, resulting in an operating loss before depreciation of $26 million for 1992 as compared to $29 million in 1991. Depreciation expense was $15 million and $10 million for 1992 and 1991, respectively. Interest Expense, Net -- Interest expense, net of interest income and capitalized interest, increased to $57 million in 1992 from $50 million in 1991. This increase reflects the higher average borrowing levels required to finance the Company's capital investments and a lower amount of capitalized interest, partially offset by lower interest rates. Other Expense -- Other expense increased in 1992, primarily the result of higher minority interest expense related to improved earnings for the Company's citrus and Latin American beverage operations. Income Taxes -- The Company's effective income tax rate decreased from 21% in 1991 to 8.9% in 1992 as a result of the effect of the significant fourth quarter charge for the cost reduction program on the mix of foreign and domestic earnings. New Accounting Pronouncements -- In 1992, the Company implemented Statements of Financial Accounting Standards Nos. 106 and 109 covering postretirement benefits and income tax accounting. Complying with the requirements of these standards resulted in a one-time non-cash charge to 1992 earnings of $49 million, net of tax, and a retroactive charge to prior earnings of $32 million. The impact of the adoption of these standards is more fully described in the Consolidated Financial Statements and related Notes. Liquidity and Capital Resources -- In 1993, the Company's working capital requirements and capital programs were financed through a combination of internally generated funds and external borrowings. Cash flow from operations was $131 million for 1993, an increase of $97 million from $34 million for 1992. The increase was primarily attributable to decreased spending for real estate developments. Cash flow from financing activities of $158 million in 1993 decreased from $184 million in 1992. The Company's financing needs were lower in 1993 in part due to the proceeds generated by the March 1993 initial public offering of Castle & Cooke Homes, Inc. The balance of the Company's financing needs were met primarily by long-term borrowings. On May 6, 1993 and July 27, 1993, the Company sold $300 million and $400 million, respectively, of unsecured notes in public offerings. The $300 million notes bear interest at 7% and mature in 2003. The $400 million issuance is comprised of $225 million notes bearing interest at 6.75% and maturing in 2000 and $175 million notes bearing interest at 7.875% and maturing in 2013. Net proceeds from the sale of the notes were used to refinance outstanding indebtedness. On November 17, 1993, the Company entered into a $400 million, 364-day revolving credit facility ("Facility"). The initial and each succeeding revolving 364- day term may be extended for an additional 364 days upon approval by the lenders. Alternatively, the outstanding loans, if any, at the end of a 364-day term may be converted to a 3-year term loan at the request of the Company. At the Company's option, borrowings under the Facility bear interest at a certain percentage over the agent's prime rate or the London Interbank Offered Rate ("LIBOR"). There were no borrowings outstanding under the Facility at year- end. The Company may borrow under uncommitted lines of credit at rates offered from time to time by various banks that may or may not be lenders under the $400 million Facility. At January 1, 1994, net borrowings under the uncommitted lines of credit totaled approximately $398 million, with a weighted average interest rate of 3.9%. In connection with the initial public offering mentioned above, Castle & Cooke Homes, Inc. entered into a $100 million revolving credit facility with a group of banks. The revolving credit facility has a term of three years and bears interest at a variable rate. At January 1, 1994, borrowings under this credit facility totaled $48 million, with a weighted average interest rate of 5.5%. Capital expenditures for 1993 totaled approximately $219 million, of which $174 million was invested in the Company's food operations for infrastructure, further development and modernization of new and existing facilities and progress payments on new vessels. The remaining progress payments related to the vessels, which are expected to be delivered in 1994, total approximately $60 million. During 1993, the Company acquired certain businesses for an aggregate purchase price of approximately $117 million. These acquisitions included a French dried fruit and nut business with revenues of $65 million, and three French banana ripening and distribution companies which occurred in January 1993. In December 1993, the Company acquired two affiliated fruit juice businesses with combined estimated annual sales of $90 million. The purchase agreement related to this acquisition provides for potential additional consideration to be paid based upon the future operating results of the acquired company through February 1996. The Company also acquired in December 1993, five commercial real estate properties. During 1993, an additional $36 million was invested in the continuing development of the Lana'i resort project, primarily related to the Manele Bay golf course. The Company declared and paid four quarterly dividends of 10 cents per share on its common stock totaling approximately $24 million in 1993. PAGE THIRTY-FOUR Dole Food Company, Inc. Results of Operations and Selected Financial Data
(in millions, except per share data) 1993 1992 1991 1990 1989 1988 1987 1986 - ---------------------------------------------------------------------------------------------------------------------------------- Revenue $3,431 $3,376 $3,216 $3,003 $2,718 $2,469 $1,855 $1,777 Cost of products sold 2,881 2,863 2,636 2,419 2,167 1,919 1,456 1,386 - ---------------------------------------------------------------------------------------------------------------------------------- Gross margin 550 513 580 584 551 550 399 391 Selling, marketing and administrative expenses 365 328 356 355 352 355 247 260 Cost reduction program 43 46 -- -- -- -- -- -- - ---------------------------------------------------------------------------------------------------------------------------------- Operating income 142 139 224 229 199 195 152 131 Interest expense -- net (59) (57) (50) (42) (41) (34) (15) (26) Gain on sale of subsidiary stock or investment 31 -- -- 8 -- 18 -- -- Other expense -- net (16) (11) (5) (7) (7) (4) (3) (5) - ---------------------------------------------------------------------------------------------------------------------------------- Income from continuing operations before income taxes and accounting change 98 71 169 188 151 175 134 100 Income taxes (20) (6) (35) (68) (56) (63) (45) (27) - ---------------------------------------------------------------------------------------------------------------------------------- Income from continuing operations before accounting change 78 65 134 120 95 112 89 73 Discontinued operations -- -- -- -- -- -- 8 (29) - ---------------------------------------------------------------------------------------------------------------------------------- Income before accounting change 78 65 134 120 95 112 97 44 Cumulative effect of accounting change -- (49) -- -- (32) -- -- -- - ---------------------------------------------------------------------------------------------------------------------------------- Net income $ 78 $ 16 $ 134 $ 120 $ 63 $ 112 $ 97 $ 44 ================================================================================================================================== Earnings per common share, fully diluted Continuing operations $1.30 $ 1.09 $2.24 $2.03 $1.60 $1.90 $1.49 $1.22 Cumulative effect of accounting change -- (.83) -- -- (.53) -- -- -- Net income $1.30 $ .26 $2.24 $2.03 $1.07 $1.90 $1.60 $.56 ================================================================================================================================== Other statistics Working capital $ 482 $ 421 $ 466 $ 309 $ 102 $ 350 $ 306 $ 324 Total assets 3,388 3,095 2,878 2,499 2,349 1,922 1,711 1,227 Long-term debt 1,158 988 813 542 244 331 341 139 Total debt 1,237 1,102 889 638 648 431 385 198 Convertible preferred stocks -- -- -- -- -- -- 107 108 Common shareholders' equity 1,052 1,001 1,009 897 804 743 532 470 Cash dividends declared per common share .40 .40 .40 .10 -- -- -- -- Capital additions for continuing operations 219 192 325 247 304 155 87 34 Depreciation and amortization from continuing operations 133 110 87 72 58 44 29 30 ==================================================================================================================================
Note: The results of operations of Flexi-Van Corporation for 1987 and 1986 have been presented as a discontinued operation. PAGE THIRTY-FIVE Company and Shareholder Information The Company Founded in Hawaii in 1851, Dole Food Company, Inc. is the world's largest producer and marketer of fresh fruits and vegetables, and markets a growing line of packaged foods. It is also a major real estate owner and developer in Hawaii, California and Arizona. The Company does business in more than 70 countries and employs approximately 45,000 full-time people worldwide. Corporate Headquarters 31355 Oak Crest Drive Westlake Village, CA 91361 (818) 879-6600 Auditors Arthur Andersen & Co. 633 West Fifth Street Los Angeles, CA 90071 Securities Transfer Agent The First National Bank of Boston P.O. Box 644 Boston, MA 02102 Shareholder Inquiries Shareholders and members of the investment industry should direct inquiries to: Office of the Corporate Secretary Dole Food Company, Inc. 31355 Oak Crest Drive Westlake Village, CA 91361 (818) 879-6600 Form 10-K A copy of Dole Food Company, Inc.'s Form 10-K, a corporate operational and financial report filed annually with the Securities and Exchange Commission, is available upon request without charge. Stock Exchange Dole Food Company, Inc.'s common stock (DOL) is traded on the New York and Pacific Stock Exchanges. [PRINTED ON RECYCLED PAPER LOGO APPEARS HERE] The financial pages of this annual report are printed on recycled paper. Dole(R) is a registered trademark of Dole Food Company, Inc. The Lodge at Koele, The Manele Bay Hotel, The Experience at Koele and The Challenge at Manele are trademarks and service marks of Dole Food Company, Inc. and/or its affiliates. (C) 1994 Dole Food Company, Inc. All rights reserved. PAGE THIRTY-SEVEN EX-21 11 EXHIBIT 21 EXHIBIT 21 SUBSIDIARIES OF DOLE FOOD COMPANY, INC. --------------------------------------- There are no parents of the Registrant. Registrant's consolidated subsidiaries are shown below together with the percentage of voting securities owned and the state or jurisdiction of organization of each subsidiary. The names have been omitted for subsidiaries which, if considered in the aggregate as a single subsidiary, do not constitute a significant subsidiary. Subsidiaries of subsidiaries are indented in the following table:
PERCENT OF OUTSTANDING VOTING SECURITIES OWNED AS OF SUBSIDIARIES OF REGISTRANT JANUARY 1, 1994 -------------------------- ----------------- Castle & Cooke Fresh Fruit Company 100% (Nevada) ABA Holding, Inc. 100% (New Jersey) Juice Bowl Products, Inc. 100% (Florida) Looza Distribution N.V. 100% (Belgium) Beebe Orchard Company 100% (Delaware) Dole Citrus 100% (California) Dole Fresh Fruit Company 100% (Nevada) Dole Europe Company 100% (Delaware)
1
PERCENT OF OUTSTANDING VOTING SECURITIES OWNED AS OF SUBSIDIARIES OF REGISTRANT JANUARY 1, 1994 -------------------------- ----------------- Castle & Cooke Fresh Fruit Company (cont'd) Dole Fresh Fruit Europe Ltd. & Co. 100% (Federal Republic of Germany) Dole Fresh Fruit International, Inc. 100% (Panama) Standard Fruit Company 100% (Delaware) Cerveceria Hondurena, S.A. 66% (Honduras) Standard Fruit Company de Costa Rica, S.A. 100% (Costa Rica) Standard Fruit and Steamship Company 100% (Delaware) Wells & Wade Fruit Company 100% (Washington) Castle & Cooke Worldwide Limited 100% (Hong Kong) Dole Fresh Fruit International, Limited 100% (Liberia) Solvest, Ltd. 100% (Bermuda)
2
PERCENT OF OUTSTANDING VOTING SECURITIES OWNED AS OF SUBSIDIARIES OF REGISTRANT JANUARY 1, 1994 -------------------------- ----------------- Castle & Cooke Worldwide Limited (cont'd) Standard Fruit de Honduras, S.A. 100% (Honduras) Dole Europe B.V. 100% (Netherlands) Soleil Holding France S.A. 100% (France) SAMICA, S.A. 100% (France) Dole Chile, S.A. 100% (Chile) Dole Thailand Limited 64% (Thailand) Compania Financiera de Costa Rica, S.A. 100% (Costa Rica) Dole Bakersfield, Inc. 100% (California) Dole Dried Fruit and Nut Company 100% (California) Dole Fresh Vegetables, Inc. 100% (California) Bud Antle, Inc. 100% (California)
3
PERCENT OF OUTSTANDING VOTING SECURITIES OWNED AS OF SUBSIDIARIES OF REGISTRANT JANUARY 1, 1994 - -------------------------- ----------------- Dole Carrot Company 100% (California) Royal Packing Co. 100% (California) Dole Japan, Ltd. 100% (Japan) Dole Land Company, Inc. 100% (Hawaii) Dole Mega Holding Corp. 100% (Hawaii) Mega Properties Partnership 1% (a Delaware general partnership) Dole Mega Trust 99% (a Delaware business trust) Mega Properties Partnership 99% (a Delaware general partnership) Dole Philippines, Inc. 99% (Republic of the Philippines) Earlibest Orange Association, Inc. 100% (California) S & J Ranch, Inc. 100% (California) Dole Nut Company 100% (California)
4
PERCENT OF OUTSTANDING VOTING SECURITIES OWNED AS OF SUBSIDIARIES OF REGISTRANT JANUARY 1, 1994 - -------------------------- ----------------- M K Development, Inc. 100% (Hawaii) Lanai Resort Partners 98% (a California general partnership) Castle & Cooke Properties, Inc. 100% (Hawaii) Castle & Cooke Homes, Inc. 50% (Hawaii) Castle & Cooke Homes Hawaii, Inc. 100% (Hawaii) Castle & Cooke California, Inc. 100% (California) Castle & Cooke Communities, Inc. 100% (Hawaii) Castle & Cooke Bakersfield Holdings, Inc. 100% (Delaware) Castle & Cooke Homes, Inc. 32% (Hawaii) Castle & Cooke Homes, Inc. 100% (California) Waialua Sugar Company, Inc. 100% (Hawaii)
5 EX-23 12 EXHIBIT 23 Exhibit 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our reports included (or incorporated by reference) in this Form 10-K into Dole Food Company, Inc.'s previously filed Registration Statements on Form S-3 Registration Nos. 33-41480 and 33-64984 and Form S-8 Registration Nos. 2-87475, 33-594, 33-28782 and 33-42152. Los Angeles, California February 7, 1994 -----END PRIVACY-ENHANCED MESSAGE-----