-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LOhNptTnIOdmW/CEuy3gI1IBHg0dsbREW43tDKBKxVFZl6b7TanDH4WGByP1RQyj 6zGaWvnsP7x2dcTcIXq68A== 0001047469-98-042171.txt : 19981125 0001047469-98-042171.hdr.sgml : 19981125 ACCESSION NUMBER: 0001047469-98-042171 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19981010 FILED AS OF DATE: 19981124 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DOLE FOOD COMPANY INC CENTRAL INDEX KEY: 0000018169 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100] IRS NUMBER: 990035300 STATE OF INCORPORATION: HI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-04455 FILM NUMBER: 98758612 BUSINESS ADDRESS: STREET 1: 31365 OAK CREST DRIVE CITY: WESTLAKE VILLAGE STATE: CA ZIP: 91361 BUSINESS PHONE: 8188796600 MAIL ADDRESS: STREET 1: 31365 OAK CREST DR CITY: WESTLAKE VILLAGE STATE: CA ZIP: 91361 FORMER COMPANY: FORMER CONFORMED NAME: CASTLE & COOKE INC DATE OF NAME CHANGE: 19910731 10-Q 1 FORM 10-Q - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM 10-Q (Mark one) /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 10, 1998 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 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 No.) 31365 OAK CREST DRIVE WESTLAKE VILLAGE, CALIFORNIA 91361 --------------------------------------------------------------------------- (Address of principal executive offices and zip code) Registrant's telephone number, including area code: (818) 879-6600 Indicate by check mark whether the 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 the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
SHARES OUTSTANDING AT CLASS OCTOBER 31, 1998 - -------------------------------------------------- ------------------------- Common Stock, No Par Value 59,240,339
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- DOLE FOOD COMPANY, INC. INDEX
PAGE NUMBER ------------- PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Consolidated Statements of Income -- quarters and three quarters ended October 10, 1998 and October 4, 1997........................................................... 3 Consolidated Balance Sheets -- October 10, 1998 and January 3, 1998................ 5 Consolidated Statements of Cash Flow -- three quarters ended October 10, 1998 and October 4, 1997.................................................................... 6 Notes to Consolidated Financial Statements......................................... 7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations......................................................................... 9 PART II. OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K................................................... 12 Signatures......................................................................... 13
2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS DOLE FOOD COMPANY, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (IN 000S, EXCEPT PER SHARE AMOUNTS)
QUARTER ENDED -------------------------- OCTOBER 10, OCTOBER 4, 1998 1997 ------------ ------------ Revenue............................................................................... $ 1,209,794 $ 1,178,301 Cost of products sold................................................................. 1,035,312 1,022,144 ------------ ------------ Gross margin........................................................................ 174,482 156,157 Selling, marketing and administrative expenses........................................ 133,981 110,096 ------------ ------------ Operating income.................................................................... 40,501 46,061 Interest income....................................................................... 2,321 2,456 Other income (expense) -- net......................................................... (3,129) 45 ------------ ------------ Earnings before interest and taxes.................................................. 39,693 48,562 Interest expense...................................................................... 20,731 18,719 ------------ ------------ Income before income taxes.......................................................... 18,962 29,843 Income taxes.......................................................................... 3,400 5,400 ------------ ------------ Net income............................................................................ $ 15,562 $ 24,443 ------------ ------------ ------------ ------------ Net income per common share Basic............................................................................... $ 0.26 $ 0.41 Diluted............................................................................. 0.26 0.40 ------------ ------------ ------------ ------------ Diluted average number of common shares outstanding................................... 60,704 60,502 ------------ ------------ ------------ ------------
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 3 DOLE FOOD COMPANY, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (IN 000S, EXCEPT PER SHARE AMOUNTS)
THREE QUARTERS ENDED -------------------------- OCTOBER 10, OCTOBER 4, 1998 1997 ------------ ------------ Revenue............................................................................... $ 3,385,764 $ 3,251,097 Cost of products sold................................................................. 2,864,063 2,752,196 ------------ ------------ Gross margin........................................................................ 521,701 498,901 Selling, marketing and administrative expenses........................................ 324,707 291,833 ------------ ------------ Operating income.................................................................... 196,994 207,068 Interest income....................................................................... 5,652 5,876 Other income (expense) -- net......................................................... (5,229) 4,754 ------------ ------------ Earnings before interest and taxes.................................................. 197,417 217,698 Interest expense...................................................................... 50,599 50,683 ------------ ------------ Income before income taxes.......................................................... 146,818 167,015 Income taxes.......................................................................... 26,400 30,100 ------------ ------------ Net income............................................................................ $ 120,418 $ 136,915 ------------ ------------ ------------ ------------ Net income per common share Basic............................................................................... $ 2.00 $ 2.29 Diluted............................................................................. 1.98 2.27 ------------ ------------ ------------ ------------ Diluted average number of common shares outstanding................................... 60,788 60,349 ------------ ------------ ------------ ------------
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4 DOLE FOOD COMPANY, INC. CONSOLIDATED BALANCE SHEETS (IN 000S)
OCTOBER 10, JANUARY 3, 1998 1998 ------------ ------------ (UNAUDITED) (AUDITED) CURRENT ASSETS Cash and short-term investments..................................................... $ 153,212 $ 31,202 Receivables -- net.................................................................. 535,027 534,844 Inventories Finished products................................................................. 128,471 149,933 Raw material and work in progress................................................. 145,719 142,623 Growing crop costs................................................................ 42,825 46,207 Packing materials................................................................. 26,890 24,803 Operating supplies and other...................................................... 110,843 105,126 ------------ ------------ 454,748 468,692 Prepaid expenses.................................................................... 49,207 48,438 ------------ ------------ Total current assets.............................................................. 1,192,194 1,083,176 Investments........................................................................... 73,126 69,248 Property, plant and equipment -- net.................................................. 1,127,288 1,024,247 Goodwill -- net....................................................................... 204,481 65,941 Other assets.......................................................................... 253,266 221,283 ------------ ------------ TOTAL ASSETS...................................................................... $ 2,850,355 $ 2,463,895 ------------ ------------ ------------ ------------ CURRENT LIABILITIES Notes payable....................................................................... $ 26,441 $ 11,290 Current portion of long-term debt................................................... 4,994 2,326 Accounts payable and accrued liabilities............................................ 689,746 662,823 ------------ ------------ Total current liabilities......................................................... 721,181 676,439 Long-term debt........................................................................ 1,040,320 754,849 Other long-term liabilities........................................................... 301,559 328,293 Minority interests.................................................................... 50,884 37,842 Commitments and contingencies......................................................... Common shareholders' equity Common stock........................................................................ 319,884 320,707 Additional paid-in capital.......................................................... 143,164 174,058 Retained earnings................................................................... 355,847 259,456 Accumulated other comprehensive loss................................................ (82,484) (87,749) ------------ ------------ Total common shareholders' equity................................................. 736,411 666,472 ------------ ------------ TOTAL LIABILITIES AND EQUITY...................................................... $ 2,850,355 $ 2,463,895 ------------ ------------ ------------ ------------
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 5 DOLE FOOD COMPANY, INC. CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED) (IN 000S)
THREE QUARTERS ENDED ----------------------- OCTOBER 10, OCTOBER 4, 1998 1997 ----------- ---------- OPERATING ACTIVITIES Net income............................................................................... $ 120,418 $ 136,915 Adjustments to net income Depreciation and amortization........................................................ 88,181 88,044 Provision for deferred income taxes.................................................. 10,289 11,764 Change in operating assets and liabilities Receivables -- net................................................................... 32,198 28,632 Inventories.......................................................................... 28,583 81,041 Prepaid expenses and other assets.................................................... (4,252) (18,642) Accounts payable and accrued liabilities............................................. (64,468) (54,961) Internal Revenue Service payment related to prior years' audits...................... (17,145) -- Other................................................................................ (16,783) (27,406) ----------- ---------- Cash flow provided by operating activities............................................... 177,021 245,387 ----------- ---------- INVESTING ACTIVITIES Capital additions........................................................................ (97,735) (78,426) Proceeds from sales of property, plant & equipment....................................... 10,054 38,256 Businesses acquired -- net of acquired cash.............................................. (195,196) (11,206) Sales (purchases) of investments -- net.................................................. (1,133) 9,446 ----------- ---------- Cash flow used in investing activities................................................... (284,010) (41,930) ----------- ---------- FINANCING ACTIVITIES Short-term debt borrowings (repayments)--net............................................. 5,061 (15,535) Long-term debt borrowings (repayments)--net.............................................. 273,758 (166,770) Cash dividends paid...................................................................... (18,103) (18,122) Issuance of common stock................................................................. 10,368 6,406 Repurchase of common stock............................................................... (42,085) -- ----------- ---------- Cash flow provided by (used in) financing activities..................................... 228,999 (194,021) ----------- ---------- Increase in cash and short-term investments.............................................. 122,010 9,436 Cash and short-term investments at beginning of period................................... 31,202 34,342 ----------- ---------- Cash and short-term investments at end of period......................................... $ 153,212 $ 43,778 ----------- ---------- ----------- ----------
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 6 DOLE FOOD COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. In the opinion of management, the accompanying unaudited consolidated financial statements of Dole Food Company, Inc. (the "Company") include all adjustments necessary to present fairly its financial position as of October 10, 1998 and January 3, 1998 (audited), its results of operations for the quarters and three quarters ended October 10, 1998 and October 4, 1997 and its cash flow for the three quarters then ended. For additional information, refer to the notes to the Company's audited consolidated financial statements for the year ended January 3, 1998. Interim results are subject to significant seasonal variations and are not necessarily indicative of the results of operations for a full year. The Company's fresh fruit and vegetable operations are sensitive to a number of factors including weather conditions and their effect on industry volumes, prices, product quality and costs. Operations are also sensitive to fluctuations in currency exchange rates in both sourcing and selling locations. While the Company has historically not attempted to hedge foreign currency fluctuations, it occasionally enters into forward contracts related to specific foreign currency denominated purchase commitments and sales. As of October 10, 1998, the Company had contracted to purchase German marks to facilitate payment for two German-made refrigerated container vessels at a weighted average exchange rate of DM1.78 to $1.00 for a total notional value of $98.3 million. These fixed-rate contracts will be settled during the fourth quarter of 1999, and as of October 10, 1998, their fair value was approximately $108.6 million. Additionally, during the third quarter of 1998, the Company contracted to deliver Japanese yen collected from sales in that country at a weighted average exchange rate of JPY136.60 to $1.00 for a total notional value of $21.2 million. These fixed-rate contracts will be settled during the fourth quarter of 1998, and as of October 10, 1998, their fair value was approximately $17.3 million. Certain prior year amounts have been reclassified to conform with the 1998 presentation. 2. During the first three quarters of 1998, the Company declared dividends of $24.0 million on its common stock of which $18.1 million was paid. The dividends declared during the first three quarters of 1998 include regular quarterly dividends of 10 cents per share for the four quarters of 1998. For the same period of 1997, the Company declared and paid dividends of $18.1 million representing regular quarterly dividends of 10 cents per share. 3. The Company paid interest of $49.9 million in the first three quarters of 1998 and $53.0 million for the same period in 1997. The Company paid income taxes of $36.9 million for the first three quarters of 1998, which included $17.1 million paid to the Internal Revenue Service related to prior years' audits. The Company is currently pursuing a refund of this payment. The Company paid income taxes (net of refunds received) of $14.3 million for the first three quarters of 1997. 4. The Company recognized comprehensive income which consisted of net income and unrealized foreign currency translation gains (losses) as follows (in millions):
QUARTER ENDED THREE QUARTERS ENDED -------------------------- ------------------------ OCTOBER 10, OCTOBER 4, OCTOBER 10, OCTOBER 4, 1998 1997 1998 1997 ------------- ----------- ----------- ----------- Net income...................................................... $ 15.6 $ 24.4 $ 120.4 $ 136.9 Foreign currency translation gain (loss)........................ 11.5 (9.2) 5.3 (22.9) ----- ----- ----------- ----------- Comprehensive income............................................ $ 27.1 $ 15.2 $ 125.7 $ 114.0 ----- ----- ----------- ----------- ----- ----- ----------- -----------
7 DOLE FOOD COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) 5. The weighted average number of common shares outstanding before the dilutive effect of stock options at average prices were 60,238,000 and 59,989,000 for the quarters ended, and 60,262,000 and 59,928,000 for the three quarters ended, October 10, 1998 and October 4, 1997, respectively. 6. During the first three quarters of 1998, the Company acquired and invested in operations in Latin America, North America and Europe with an aggregate cash purchase price, net of cash acquired, of $195.2 million. The acquisitions were comprised primarily of the purchases of three flower businesses. The Company purchased an additional flower operation and made an initial payment of approximately 50% of the related total cash price. Each of the acquisitions was accounted for as a purchase and, accordingly, the purchase price was allocated to the net assets acquired. A preliminary allocation of purchase price resulted in approximately $130 million of goodwill, which will be amortized over 30 years. Net income from acquired operations included in the Company's results for the three quarters ended October 10, 1998 was not significant. 7. On October 6, 1998, the Company issued $300 million of seven-year, 6.375% notes for which it received cash proceeds of $297.2 million. The Company used a portion of the cash proceeds to repay amounts outstanding under its $400 million, five-year revolving credit facility. Such credit facility borrowings were primarily incurred to fund business acquisitions made during the third quarter. 8. During the latter part of October 1998, Hurricane Mitch significantly damaged the Company's operations in Honduras, Guatemala and Nicaragua. The Company's production areas in these countries total approximately 40,000 acres of bananas, of which approximately half is company-owned. This area, which represents approximately 25% of the Company's worldwide banana production, has been damaged in varying degrees of severity and will require significant rehabilitation. The Company also sustained damage to its Honduran beverage operation, including its sugar and palm oil plantations. The Company maintains various types of insurance coverage on the impacted areas and is currently discussing recovery under these policies with its insurance carriers. The Company anticipates taking a charge of $50 million to $70 million during the fourth quarter related to damage sustained. During November 1998, the Company acquired businesses including 60% of SABA Trading, A.B. and made a second payment on the purchase of a flower operation for an aggregate cash price of approximately $125 million. Each acquisition will be accounted for as a purchase and, accordingly, the purchase price will be allocated to the net assets acquired. 8 DOLE FOOD COMPANY, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Revenue for the third quarter of 1998 increased 3% to $1,209.8 million from $1,178.3 million for the same period of 1997. Revenue for the first three quarters of 1998 increased 4% to $3,385.8 million from $3,251.1 million for the first three quarters of 1997. For the third quarter of 1998, revenues increased due to European distribution businesses acquired in the fourth quarter of 1997, flower businesses acquired during 1998, and favorable volume and pricing in the Honduran beverage operation. The revenue increases during the third quarter were partially offset by a downturn in the banana business late in the quarter primarily due to the collapse of the Russian market. Revenue for the first three quarters of 1998 as compared with the same period of 1997 increased primarily due to European distribution businesses acquired in the fourth quarter of 1997, strong banana pricing in Europe and Asia during the second quarter of 1998 due to lower industry volume, favorable volume and pricing in the Honduran beverage operation, and third quarter revenues from flower businesses acquired during 1998. Revenue increases were partially offset by weaker pricing in the North American banana market as the result of high industry volume during the first and third quarters. Revenue for the first three quarters of 1997 included $82.6 million related to the Company's dried fruit facility located in Fresno, California, which was closed during 1997. There were no revenues related to the closed facility during 1998. Excluding the Fresno facility, revenue increased 7% for the first three quarters of 1998 as compared to the same period of 1997. As revenue from the closed facility during the third quarter of 1997 was minimal, the closure did not significantly affect the comparability of third quarter revenues. Selling, marketing and administrative expenses as a percentage of revenue for the third quarter of 1998 increased to 11% from 9% in the third quarter of 1997. For the first three quarters of 1998, selling, marketing and administrative expenses as a percentage of revenue increased to 10% from 9% during the same period of 1997. The third quarter and first three quarters of 1998 were largely impacted by an expansion of the Company's Honduran beverage operation to meet increased consumer product demand. The third quarter of 1998 was also impacted by receivable write-offs related to the collapse of the Russian banana market as well as higher promotional costs in the banana business as a result of market supply conditions. Additionally, the Company experienced a change in its product mix whereby businesses with higher gross margins and higher selling, general and administrative expenses comprised a larger portion of its operating results. These businesses included the Honduran beverage operation, the value-added vegetable business and the flower businesses acquired during 1998. Interest expense remained stable for the first three quarters of 1998 as compared to the first three quarters of 1997. During the first half of 1998, interest expense was lower than the same period of 1997 due to lower average debt levels. For the third quarter of 1998, interest expense increased 11% as compared to the third quarter of 1997 primarily due to acquisitions of flower businesses at the end of the second quarter and during the third quarter of 1998. Other income (expense)-net consists primarily of minority interest expense and gains and losses on the sale of property. In 1997, other income included a gain from the sale of an investment. Net income for the third quarter of 1998 decreased 36% to $15.6 million, or $0.26 per diluted share, from $24.4 million, or $.40 per diluted share, for the same period of 1997. Net income for the first three quarters of 1998 decreased 12% to $120.4 million, or $1.98 per diluted share, from $136.9 million, or $2.27 per diluted share, for the first three quarters of 1997. The decrease in earnings for the third quarter of 1998 as compared with the third quarter of 1997 was primarily due to the collapse of the Russian banana market combined with higher costs caused by the El Nino weather pattern. Earnings for the first three quarters of 1998 as compared with the same period of 1997 decreased primarily due to third quarter impacts combined 9 with weaker first quarter pricing in the North American banana market as a result of high industry volume. Decreases in the first and third quarters were partially offset by strong banana pricing in Europe and Asia during the second quarter of 1998 due to lower industry volume and increased volume and pricing in the Honduran beverage operation for the first three quarters of 1998. During the latter part of October 1998, Hurricane Mitch significantly damaged the Company's operations in Honduras, Guatemala and Nicaragua. The Company's production areas in these countries total approximately 40,000 acres of bananas, of which approximately half is company-owned. This area, which represents approximately 25% of the Company's worldwide banana production, has been damaged in varying degrees of severity and will require significant rehabilitation. The Company also sustained damage to its Honduran beverage operation, including its sugar and palm oil plantations. While the final effects of the damage sustained, the resulting effect on pricing in worldwide banana markets, and the future impact on operating results in the Honduran beverage business are not currently known, the Company anticipates taking a charge in the fourth quarter of approximately $50 million to $70 million. The Company maintains various types of insurance coverage on the impacted areas and is currently discussing recovery under these policies with its insurance carriers. During the first three quarters of 1998, pineapple growing regions in Asia continued to experience drought conditions related to the El Nino weather pattern. The drought has caused a decrease in supply used for processed pineapple operations for both the Company and the canned pineapple industry. Product shortages are anticipated to continue into 1999. The Company is responding by reducing costs including advertising and promotional spending. The Company has assessed the effect of year 2000 on its computer software and hardware. Remediation has been completed at certain of the Company's operating units with most of the remaining operating units currently undergoing tests of remediated systems and software. Normal software version upgrades and hardware replacements remain on schedule to solve a large part of the remaining issues by the Company's internal target date of December 1998. The Company has now identified certain specific upgrade projects and personal computer replacements that will be completed during the first half of 1999. Remediation efforts related to companies acquired during 1998 are scheduled to be completed by June 1999. All remaining remediation work continues with a December 1998 target date. The Company is also in the process of confirming year 2000 compliance with key vendors and service providers, including suppliers of embedded technology. Once completed, the Company will develop a contingency plan related to its key vendors and service providers. Based on work performed to date, the Company believes that the total cost to remediate will not be material to its results of operations, liquidity or capital resources. The preceding discussion contains forward-looking statements regarding the Company's timetable for solving its year 2000 issues, costs to remediate, and the ultimate impact on its finances, that involve a number of risks and uncertainties. The potential risks and uncertainties that could cause actual results to differ materially include the continuing availability of key information technology personnel and consultants, the ability of third parties to complete their own year 2000 remediations on time, and, if necessary, the ability of the Company to identify and implement contingency plans. In June 1997, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information" ("SFAS 131"). In February 1998, and in June 1998, the FASB issued Statements of Financial Accounting Standards No. 132, "Employers' Disclosures about Pensions and Other Post Retirement Benefits" ("SFAS 132") and No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"), respectively. In accordance with SFAS 131 and SFAS 132, the Company is currently evaluating the additional business segments and pension and other postretirement benefit disclosures to be reported in its 1998 Annual Report on Form 10-K. Since these statements require additional disclosure only, they will have no effect on the financial condition or results of operations of the Company. The Company is also assessing the impact of accounting for derivative instruments in accordance with SFAS 133. The Company's derivative transactions are limited to hedging of certain foreign currency denominated purchase 10 commitments and receivables. The Company will adopt the statement during the first quarter of 2000. Such adoption is not expected to have a material impact on the Company's financial condition or results of operations. LIQUIDITY AND CAPITAL RESOURCES Cash flow provided by operating activities decreased to $177.0 million for the first three quarters of 1998 from $245.4 million for the comparable period of the prior year. The decrease was primarily due to lower net earnings, a payment to the Internal Revenue Service related to prior years' audits and the 1997 closure of the Company's dried fruit facility located in Fresno, California. The Company is currently pursuing a refund of the payment to the Internal Revenue Service. During the first three quarters of 1997, the Company experienced a decrease in its working capital requirements as a result of the closure of its Fresno dried fruit facility. The liquidation of inventory and other operating and fixed assets related to this closed facility provided approximately $70 million of cash flow during the first three quarters of 1997. On October 6, 1998, the Company issued $300 million of seven-year, 6.375% notes for which it received cash proceeds of $297.2 million. The Company used a portion of the cash proceeds to repay amounts outstanding under its $400 million, five year revolving credit facility. Such credit facility borrowings were primarily incurred to fund business acquisitions made during the third quarter. As of October 10, 1998, there were no borrowings outstanding under the credit facility. The remaining cash proceeds were primarily used to fund acquisitions during the fourth quarter. During the first three quarters of 1998, the Company expended $195.2 million of net cash for business acquisitions. This amount was comprised primarily of the acquisitions of three flower businesses as well as an additional flower operation for which the Company made an initial payment of approximately 50% of the related total cash price. The remaining purchase price will be paid during the fourth quarter of 1998. The acquisitions were primarily funded by cash flow from operations and debt. During November 1998, the Company acquired businesses including 60% of SABA Trading, A.B. and made a second payment on the purchase of a flower operation for an aggregate cash price of approximately $125 million. The acquisitions were funded primarily by the remaining cash proceeds from the Company's issuance of bonds during the third quarter of 1998. The Company is currently negotiating additional business acquisitions which, when combined with the final payment for the most recently acquired flower operation, will total approximately $20 million. If completed, the acquisitions would be funded primarily with debt and would be completed during the fourth quarter of 1998. Capital expenditures of $97.7 million for the first three quarters of 1998 were for the acquisition and improvement of productive assets and were funded largely by operating cash flow. During the first three quarters of 1998, the Company repurchased 1,165,200 of its common shares at a cost of $42.1 million. Approximately 1.8 million shares remain authorized for repurchase under the Company's stock repurchase program. This filing contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. The potential risks and uncertainties that could cause the Company's actual results to differ materially from those expressed or implied herein include weather related phenomena; market responses to industry volume pressures; economic crises in developing countries; quotas, tariffs and other governmental actions; changes in currency exchange rates; product supply and pricing; and computer conversion and Year 2000 issues. 11 PART II. OTHER INFORMATION DOLE FOOD COMPANY, INC. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits:
EXHIBIT PAGE NO. NUMBER - ----------- ------------- 4.1 Indenture dated as of July 15, 1993 between the Company and Chase Manhattan Bank and Trust Company, National Association (formerly Chemical Trust Company of California). 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. 4.2 Officer's Certificate (without exhibits), dated October 6, 1998, establishing the terms of the Company's 6.375% Notes due October 1, 2005. Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K, event date July 15, 1993, File no. 1-4455. 10.1 The Company's 1996 Non-Employee Directors Deferred Stock and Cash Compensation Plan, as amended October 9, 1998. 15 27 Financial data schedule 31
(b) The Company filed under cover of Form 8-K, Item 7, event date October 6, 1998, certain exhibits, including the Underwriting Agreement and Pricing Agreement and Officers' Certificate relating to the Company's 6.375% Notes due October 1, 2005. 12 SIGNATURES Pursuant to the requirements 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 By /s/ JAMES A. DYKSTRA ----------------------------------------- James A. Dykstra November 24, 1998 Controller and Chief Accounting Officer
13 EX-10 2 EXHIBIT 10 Exhibit 10 DOLE FOOD COMPANY, INC. NON-EMPLOYEE DIRECTORS DEFERRED STOCK AND CASH COMPENSATION PLAN (AS AMENDED OCTOBER 9, 1998) NON-EMPLOYEE DIRECTORS DEFERRED STOCK AND CASH COMPENSATION PLAN (AS AMENDED OCTOBER 9, 1998) TABLE OF CONTENTS
Page ARTICLE I TITLE, PURPOSE AND AUTHORIZED SHARES........................................1 ARTICLE II DEFINITIONS.................................................................1 ARTICLE III PARTICIPATION...............................................................3 ARTICLE IV DEFERRAL MANDATES AND ELECTIONS.............................................4 4.1. Mandatory Deferral...................................................4 4.2. Elections............................................................4 ARTICLE V DEFERRAL ACCOUNTS...........................................................4 5.1. Cash Account.........................................................4 5.2. Stock Unit Account...................................................5 5.3. Dividend Equivalent Credits to Stock Unit Account ...................6 5.4. Immediate Vesting and Accelerated Crediting..........................6 5.5. Distribution of Benefits.............................................6 5.6. Adjustments in Case of Changes in Common Stock.......................7 5.7. Company's Right to Withhold..........................................7 5.8. Stockholder Approval.................................................8 ARTICLE VI ADMINISTRATION..............................................................8 6.1. The Administrator ...................................................8 6.2. Committee Action.....................................................8 6.3. Rights and Duties ...................................................8 6.4. Indemnity and Liability..............................................9 ARTICLE VII PLAN CHANGES AND TERMINATION................................................9 7.1. Amendments...........................................................9 7.2. Term.................................................................9
ii ARTICLE VIII MISCELLANEOUS..............................................................10 8.1. Limitation on Eligible Directors' Rights............................10 8.2. Beneficiaries.......................................................10 8.3. Benefits Not Assignable; Obligations Binding Upon Successors........10 8.4. Governing Law; Severability.........................................11 8.5. Compliance With Laws................................................11 8.6. Plan Construction...................................................11 8.7. Headings Not Part of Plan ..........................................11 8.8. Relationship to the 1993 Deferred Compensation Plan.................11 8.9. Irrevocability of Payout Elections..................................11
iii NON-EMPLOYEE DIRECTORS DEFERRED STOCK AND CASH COMPENSATION PLAN (AS AMENDED OCTOBER 9, 1998) ARTICLE I TITLE, PURPOSE AND AUTHORIZED SHARES This Plan shall be known as "Dole Food Company, Inc. Non-Employee Directors Deferred Stock and Cash Compensation Plan". The purpose of this Plan is to attract, motivate and retain experienced and knowledgeable directors of the Company by permitting them to defer compensation and affording them the opportunity to link that compensation to an equity interest in the Company. The total number of shares of Common Stock that may be delivered pursuant to awards under this Plan is 100,000, subject to adjustments contemplated by Section 5.6. ARTICLE II DEFINITIONS Whenever the following terms are used in this Plan they shall have the meaning specified below unless the context clearly indicates to the contrary: ACCOUNT or ACCOUNTS shall mean one or more of the Eligible Director's Cash Account and Stock Unit Account or Accounts, as the context requires. AVERAGE FAIR MARKET VALUE shall mean the average of the Fair Market Values of a share of Common Stock during the last 10 trading days preceding the applicable Award Date. AWARD DATE shall mean (a) with reference to accruals under Section 4.1, March 31 and June 30 of the applicable Year, and (b) with reference to elections under Section 4.2, (1) in the case of cash deferrals for Meeting and Other Fees, the date of the meeting or other event for which the Compensation is payable, (2) in the case of cash deferrals for the Retainer, the last day of the applicable quarter, and (3) in the case of Stock Unit credits, the Pay Date; except as provided in Section 5.4. BOARD shall mean the Board of Directors of the Company. CASH ACCOUNT shall mean the bookkeeping account maintained by the Company on behalf of a Participant who elects to defer his or her Compensation in cash pursuant to Section 4.2 and unless the context otherwise requires shall include any Rollover Account. 1 CHANGE IN CONTROL EVENT shall have the meaning specified for such term under the 1995 Non-Employee Director Stock Option Plan. CODE shall mean the Internal Revenue Code of 1986, as amended. COMMON STOCK shall mean the Common Stock of the Company, subject to adjustment pursuant to Section 5.6. COMMITTEE shall mean the Board or a Committee of the Board acting in accordance with Article VI. COMPANY shall mean Dole Food Company, Inc., a Hawaii corporation, and its successors and assigns. COMPENSATION shall mean the Retainer and Meeting and Other Fees. DIVIDEND EQUIVALENT shall mean the amount of cash dividends or other cash distributions paid by the Company on that number of shares of Common Stock equivalent to the number of Stock Units then credited to a Participant's Stock Unit Account, which amount shall be allocated as additional Stock Units to the Participant's Stock Unit Account, as provided in Section 5.3. EFFECTIVE DATE shall mean April 1, 1996. ELIGIBLE DIRECTOR shall mean a member of the Board who is not an officer or employee of the Company and who is compensated in the capacity as a director and (with reference to any outstanding Account balance under this Plan) any person who has an Account balance under this Plan by reason of his or her prior status as an Eligible Director. EXCHANGE ACT shall mean the Securities Exchange Act of 1934, as amended from time to time. FAIR MARKET VALUE shall mean on any date the closing price of the Common Stock on the Composite Tape, as published in the Western Edition of The Wall Street Journal, of the principal securities exchange or market on which the Common Stock is so listed, admitted to trade, or quoted on such date, or, if there is no trading of the Common Stock on such date, then the closing price of the Common Stock as quoted on such Composite Tape on the next preceding date on which there was trading in such shares. If the Common Stock is not so listed, admitted or quoted, the Committee may designate such other exchange, market or source of data as it deems appropriate for determining such value for purposes of this Plan. INTEREST RATE shall mean the rate (quoted as an annual rate) that is 120% of the federal long-term rate for compounding on a quarterly basis, determined and published by the Secretary of the United States Department of Treasury under Section 1274(d) of the Code, for the month in which interest is credited. 2 MEETING AND OTHER FEES shall mean all meeting fees (including committee meeting fees) and other fees except for the Retainer that are payable by the Company to an Eligible Director for services as a director of the Company. PARTICIPANT shall mean any person who has an Account balance under this Plan. PAY DATE shall mean the date Compensation or dividends would otherwise have been paid. PLAN shall mean the Dole Food Company, Inc. Non-Employee Directors Deferred Stock and Cash Compensation Plan, as amended. RECORD DATE shall mean the date, as determined by the Board of the Company, on which a shareholder must own shares in order to be entitled to a dividend. RETAINER shall mean the annual retainer payable by the Company to an Eligible Director. ROLLOVER ACCOUNT shall mean the bookkeeping account maintained by the Company on behalf of an Eligible Director with respect to his or her prior account balance under the Company's 1993 Board of Directors Deferred Compensation Plan that has been transferred to this Plan pursuant to Section 8.8. STOCK UNIT OR UNIT shall mean a non-voting unit of measurement which is deemed for bookkeeping purposes to be equivalent to one outstanding share of Common Stock of the Company solely for purposes of this Plan. STOCK UNIT ACCOUNT shall mean the bookkeeping account maintained by the Company on behalf of each Eligible Director which is credited with Stock Units in accordance with Section 5.2. YEAR shall mean the calendar year. ARTICLE III PARTICIPATION Each Eligible Director shall participate under Section 4.1 of this Plan with respect to the entire amount of Retainer that would otherwise be payable to the director from January 1 through June 30 of each Year (or, for 1996, from April 1 through September 30). Each Eligible Director may elect to defer under and subject to Section 4.2 of this Plan his or her remaining Compensation for the applicable Year. 3 ARTICLE IV DEFERRAL MANDATES AND ELECTIONS 4.1. MANDATORY DEFERRAL. The Stock Unit Account of each Eligible Director shall be credited on each March 31 and June 30 with a number of Units determined by dividing the amount of the Retainer otherwise payable to the Eligible Director from January 1 (or the date service commences) through March 31 and from April 1 (or the date service commences) June 30 of the applicable Year by the Average Fair Market Value of the Common Stock on the Award Date.(1) 4.2. ELECTIONS. (a) TIME AND TYPES OF ELECTIONS. On or before December 31 of each Year (or, in the case of a person who first becomes an Eligible Director during the Year, within 30 days after election to office), each Eligible Director may make an irrevocable election to defer: (1) IN CASH all or part of the remaining Compensation not otherwise deferred pursuant to Section 4.1 or 4.2(a)(2) (subject to section 4.2(b) hereof) payable for services to be rendered by the Eligible Director during the next Year (or remainder of the Year, as the case may be); (2) IN STOCK UNITS all or part of the remaining Compensation not otherwise deferred pursuant to Section 4.1 or 4.2(a)(1) (subject to Section 4.2(b) hereof) payable to the Eligible Director for services to be rendered during the next Year (or remainder of the Year, as the case may be). (b) PERMITTED AMOUNTS; ELECTIONS. The portions of the remaining Retainer and Meeting and Other Fees subject to deferral shall be limited to increments of 25%, 50%, 75% or 100%. All elections shall be in writing on forms provided by the Company. If an election is made under this Section 4.2 and is not revoked or changed by the end of the applicable deferral period with respect to the next applicable period, the election will be deemed a continuing one. ARTICLE V DEFERRAL ACCOUNTS 5.1. CASH ACCOUNT. If an Eligible Director has made a cash election under Section 4.2, the Company shall establish and maintain a Cash Account for the Eligible Director under this Plan, which Account - ---------------------- For 1996, the applicable period under Section 4.1 was April 1 through September 30, and the elective deferral period under Section 4.2 was October 1 through December 31. 4 shall be a memorandum account on the books of the Company. An Eligible Director's Cash Account shall be credited as follows: (a) As of the date the Compensation would have been otherwise payable, the Company shall credit the Eligible Director's Cash Account with an amount equal to the portion of the Retainer (for the third and fourth quarters only) and Meeting and Other Fees so deferred by the Eligible Director; and (b) As of the last day of each calendar quarter, the Eligible Director's Cash Account shall be credited with earnings on the balance credited to such account as of the last day of the preceding quarter, plus earnings (from the applicable date of crediting under Section 5.1) on any additional amounts deferred during the current quarter, at a rate equal to the Interest Rate for the applicable period during which the amounts were so deferred (i.e., the entire quarter or portion thereof, as the case may be). 5.2. STOCK UNIT ACCOUNT. (a) MANDATORY DEFERRALS. Deferrals pursuant to Section 4.1 shall be credited on the applicable Award Date to the Stock Unit Account of the Eligible Director. The number of Units credited shall be determined by dividing the dollar amount of the Retainer so deferred and payable to the Eligible Director by the Average Fair Market Value of a share of Common Stock as of the applicable March 31 or June 30 of the applicable year. (b) ELECTIVE DEFERRALS. If an Eligible Director has made a Stock Unit election under Section 4.2, the Committee shall, as of the Pay Date, credit the Eligible Director's Stock Unit Account with an amount of Units determined by dividing the applicable portion of the Eligible Director's Retainer and Meeting and Other Fees by the Average Fair Market Value of a share of Common Stock as of the Pay Date. (c) ELECTION TO TRANSFER FROM CASH ACCOUNT TO STOCK UNIT ACCOUNT. If an Eligible Director has an existing Cash Account balance as of the end of the immediately preceding Year, he or she may make an irrevocable election, in the form prescribed by Exhibit A hereto (or such other form as the Committee may from time to time approve) to transfer all or an amount of at least $5,000 (in whole dollars) of such accrued Cash Account balance (i.e., an amount other than with respect to any amounts credited or accrued during the then current Year) to his or her Stock Unit Account. The Company shall credit the Eligible Director's Stock Unit Account with an amount of Stock Units determined by dividing the amount from the Cash Account elected to be so transferred by the Average Fair Market Value of a share of Common Stock as of the first business day after the Corporate Secretary of the Company receives a written notice of the election. Stock Units so credited shall at all times be fully vested and shall be distributed according to the election originally filed with regard to the Cash Account from which the amount was transferred. Stock Units credited pursuant to the Section 5.2(c) shall be subject to all provisions of the Plan governing Stock Units (except as expressly otherwise provided) and shall no longer be subject to provisions relating solely to the Cash Account. 5 (d) LIMITATIONS ON RIGHTS ASSOCIATED WITH UNITS. An Eligible Director's Stock Unit Account shall be a memorandum account on the books of the Company. The Units credited to an Eligible Director's Stock Unit Account shall be used solely as a device for the determination of the number of shares of Common Stock to be eventually distributed to such Eligible Director in accordance with this Plan. The Units shall not be treated as property or as a trust fund of any kind. No Eligible Director shall be entitled to any voting or other stockholder rights with respect to Units granted or credited under this Plan. The number of Units credited (and the Common Stock to which the Eligible Director is entitled under this Plan) shall be subject to adjustment in accordance with Section 5.6. 5.3. DIVIDEND EQUIVALENT CREDITS TO STOCK UNIT ACCOUNT. As of the Pay Date, an Eligible Director's mandatory and any elective Stock Unit Accounts shall be credited with additional Units in an amount equal to the amount of the Dividend Equivalents representing dividends paid on that number of shares equal to the aggregate Stock Units in the Participant's Stock Unit Account as of the Record Date divided by the Average Fair Market Value of a share of Common Stock as of the Pay Date, provided that if the Participant has made a transfer election under Section 5.2(c) during such preceding six months, the accruals of earnings under Section 5.1(b) shall be made through the date the transfer occurred on the amount transferred, and Dividend Equivalents on the Stock Units resulting from the transfer shall be credited in additional Stock Units as provided in this Section 5.3. 5.4. IMMEDIATE VESTING AND ACCELERATED CREDITING. (a) UNITS AND OTHER AMOUNTS VEST IMMEDIATELY. All Units or other amounts credited to one or more of an Eligible Director's Stock Unit or Cash Accounts (including any Rollover Account) shall be at all times fully vested. (b) ACCELERATION OF CREDITING OF ACCOUNTS. The crediting of the rights of each Eligible Director in respect of Accounts shall be accelerated if an Eligible Director ceases to be a member of the Board. In such case: (1) the amount of cash that would have been credited as of the next quarter end shall be prorated based on the number of full weeks of service during the applicable period; and (2) the number of Units that would have been credited to the Eligible Director's Stock Unit Accounts as of the next quarter end shall be prorated based on the number of full weeks of service during the applicable period. For these purposes, the Award Date shall be deemed to be the date of termination of service. 5.5. DISTRIBUTION OF BENEFITS. (a) COMMENCEMENT OF BENEFIT DISTRIBUTION. Each Eligible Director shall be entitled to receive a distribution of his or her Accounts upon his or her termination of service on the Board. Notwithstanding the foregoing, the distribution of each Eligible Director's Rollover Account shall be governed by Section 8.8. (b) MANNER OF DISTRIBUTION. The benefits payable under this Plan shall be distributed to the Eligible Director (or, in the event of his or her death, the Eligible Director's 6 Beneficiary) in a lump sum, or, subject to Section 8.9, as permitted by this Section 5.5(b). Each Eligible Director may elect in writing on forms provided by the Company at the time of making his or her deferral election under Article IV or (subject to Section 8.9) at least 12 months in advance of the date benefits become distributable under Section 5.5(a) to receive a distribution of his or her benefits in up to five annual installments. Such installment payments shall commence as of the date benefits become distributable under Section 5.5(a). Notwithstanding the foregoing, if the balance remaining in an Eligible Director's Cash Account is less than $5,000 or, if the number of Units remaining in the Eligible Director's Stock Unit Accounts is less than 100, then such remaining balances shall be distributed in a lump sum. (c) EFFECT OF CHANGE IN CONTROL EVENT. Notwithstanding Sections 5.5(a) and (b), if a Change in Control Event and a termination of service has occurred or shall occur, the Eligible Director's Accounts (including accelerated benefits under Section 5.4(b)) shall be distributed immediately in a lump sum. (d) FORM OF DISTRIBUTION. Stock Units credited to an Eligible Director's Stock Unit Account, including those Stock Units credited under Section 5.2(c), shall be distributed in an equivalent whole number of shares of the Company's Common Stock. Fractions shall be disregarded. Amounts credited to an Eligible Director's Cash Account, including any Rollover Account not transferred to Stock Units under Section 5.2(c), shall be distributed in cash. 5.6. ADJUSTMENTS IN CASE OF CHANGES IN COMMON STOCK. If any stock dividend, stock split, recapitalization, merger, consolidation, combination or other reorganization, exchange of shares, sale of all or substantially all of the assets of the Company, split-up, split-off, spin-off, extraordinary redemption, liquidation or similar change in capitalization or any distribution to holders of the Company's Common Stock (other than cash dividends and cash distributions) shall occur, proportionate and equitable adjustments consistent with the effect of such event of stockholders generally (but without duplication of benefits if Dividend Equivalents are credited) shall be made in the number and type of shares of Common Stock or other securities, property and/or rights contemplated hereunder and of rights in respect of Units and Accounts credited under this Plan so as to preserve the benefits intended. 5.7. COMPANY'S RIGHT TO WITHHOLD. The Company shall satisfy any state or federal income tax withholding obligation arising upon distribution of an Eligible Director's Accounts by reducing the amount of cash or the number of shares of Common Stock otherwise deliverable to the Eligible Director, as the case may be. The appropriate number of shares required to satisfy such tax withholding obligation in the case of Stock Units will be based on the Fair Market Value of a share of Common Stock on the day prior to the date of distribution. If the Company, for any reason, cannot satisfy the withholding obligation in accordance with the preceding sentence, the Eligible Director shall pay or provide for payment in cash of the amount of any taxes which the Company may be required to withhold with respect to the benefits hereunder. 7 5.8 STOCKHOLDER APPROVAL. This Plan, and all the elections, actions and accruals with respect to Stock Units and Dividend Equivalents made prior to stockholder approval, were subject to approval of this Plan by the stockholders of the Company, which was obtained on May 9, 1996. ARTICLE VI ADMINISTRATION 6.1. THE ADMINISTRATOR. The Committee hereunder shall consist of the Board or a committee of Directors appointed from time to time by the Board to serve as administrator of this Plan. Any member of the Committee may resign by delivering a written resignation to the Board. Members of the Committee shall not receive any additional compensation for administration of this Plan. 6.2. COMMITTEE ACTION. A member of the Committee shall not vote or act upon any matter which relates solely to himself or herself as a Participant in this Plan. Action of the Committee with respect to the administration of this Plan shall be taken pursuant to a majority vote or by unanimous written consent of its members. 6.3. RIGHTS AND DUTIES. Subject to the limitations of this Plan, the Committee shall be charged with the general administration of this Plan and the responsibility for carrying out its provisions, and shall have powers necessary to accomplish those purposes, including, but not by way of limitation, the following: (a) To construe and interpret this Plan; (b) To resolve any questions concerning the amount of benefits payable to a Participant (except that no member of the Committee shall participate in a decision relating solely to his or her own benefits); (c) To make all other determinations required by this Plan; (d) To maintain all the necessary records for the administration of this Plan; and (e) To make and publish forms, rules and procedures for the administration of this Plan. The determination of the Committee made in good faith as to any disputed question or 8 controversy and the Committee's determination of benefits payable to Eligible Directors shall be conclusive. In performing its duties, the Committee shall be entitled to rely on information, opinions, reports or statements prepared or presented by: (i) officers or employees of the Company whom the Committee believes to be reliable and competent as to such matters; and (ii) counsel (who may be employees of the Company), independent accountants and other persons as to matters which the Committee believes to be within such persons' professional or expert competence. The Committee shall be fully protected with respect to any action taken or omitted by it in good faith pursuant to the advice of such persons. The Committee may delegate ministerial, bookkeeping and other non-discretionary functions to individuals who are officers or employees of the Company. 6.4. INDEMNITY AND LIABILITY. All expenses of the Committee shall be paid by the Company and the Company shall furnish the Committee with such clerical and other assistance as is necessary in the performance of its duties. No member of the Committee shall be liable for any act or omission of any other member of the Committee nor for any act or omission on his or her own part, excepting only his or her own willful misconduct or gross negligence. To the extent permitted by law, the Company shall indemnify and save harmless each member of the Committee against any and all expenses and liabilities arising out of his or her membership on the Committee, excepting only expenses and liabilities arising out of his or her own willful misconduct or gross negligence, as determined by the Board. ARTICLE VII PLAN CHANGES AND TERMINATION 7.1. AMENDMENTS. The Board shall have the right to amend this Plan in whole or in part from time to time or may at any time suspend or terminate this Plan; PROVIDED, however, that, except as contemplated by Section 5.8, no amendment or termination shall cancel or otherwise adversely affect in any way, without his or her written consent, any Eligible Director's rights with respect to Stock Units and Dividend Equivalents credited to his or her Stock Unit Accounts (assuming solely for such purposes a voluntary termination of services as of the date of such amendment or termination) or to any amounts previously credited (or that in such circumstances would be credited) to his or her Cash Account, including any Rollover Account. Any amendments authorized hereby shall be stated in an instrument in writing, and all Eligible Directors shall be bound thereby upon receipt of notice thereof. 7.2. TERM. It is the current expectation of the Company that this Plan shall be continued for a period of 10 years after the Effective Date, but continuance of this Plan is not assumed as a contractual obligation of the Company. In the event that the Board of Directors decides to discontinue or terminate this Plan, it shall notify the Committee and Participants in this Plan of its action in 9 writing, and this Plan shall be terminated at the time therein set forth. All Participants shall be bound thereby. In such event, the then credited benefits of a Participant (including any accelerated benefits under Section 5.4) shall be distributed at the time(s) and in the manner elected and provided under Section 5.5. ARTICLE VIII MISCELLANEOUS 8.1. LIMITATION ON ELIGIBLE DIRECTORS' RIGHTS. Participation in this Plan shall not give any person the right to continue to serve as a member of the Board or any rights or interests other than as herein provided. No Participant shall have any right to any payment or benefit hereunder except to the extent provided in this Plan. This Plan shall create only a contractual obligation on the part of the Company as to such amounts and shall not be construed as creating a trust. This Plan, in and of itself, has no assets. Participants shall have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, on their Cash Accounts and rights no greater than the right to receive the Common Stock (or equivalent value) as a general unsecured creditor. 8.2. BENEFICIARIES. (a) BENEFICIARY DESIGNATION. Upon forms provided by and subject to conditions imposed by the Company, each Participant may designate in writing the Beneficiary or Beneficiaries (as defined in Section 8.2(b)) whom such Participant desires to receive any amounts payable under this Plan after his or her death. The Company and the Committee may rely on the Participant's designation of a Beneficiary or Beneficiaries last filed in accordance with the terms of this Plan. (b) DEFINITION OF BENEFICIARY. A Participant's "Beneficiary" or "Beneficiaries" shall be the person, persons, trust or trusts (or similar entity) designated by the Participant or, in the absence of a designation, entitled by will or the laws of descent and distribution to receive the Participant's benefits under this Plan in the event of the 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. 8.3. BENEFITS NOT ASSIGNABLE; OBLIGATIONS BINDING UPON SUCCESSORS. Benefits of a Participant under this Plan shall not be assignable or transferable and any purported transfer, assignment, pledge or other encumbrance or attachment of any payments or benefits under this Plan, or any interest therein, other than by operation of law or pursuant to Section 8.2, shall not be permitted or recognized. Obligations of the Company under this Plan shall be binding upon successors of the Company. 10 8.4. GOVERNING LAW; SEVERABILITY. The validity of this Plan or any of its provisions shall be construed, administered and governed in all respects under and by the laws of the State of California. If any provisions of this instrument shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof shall continue to be fully effective. 8.5. COMPLIANCE WITH LAWS. This Plan and the offer, issuance and delivery of shares of Common Stock and/or the payment of money through the deferral of compensation under this Plan 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 to such approvals by any listing, agency or any regulatory or governmental authority as may, in the opinion of counsel for the Company, 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 Company, provide such assurances and representations to the Company as the Company may deem necessary or desirable to assure compliance with all applicable legal requirements. 8.6. PLAN CONSTRUCTION. It is the intent of the Company that transactions pursuant to this Plan satisfy and be interpreted in a manner that satisfies the applicable requirements of Rule 16b-3 promulgated under the Exchange Act ("Rule 16b-3") so that mandatory deferrals and, to the extent elections are timely made, elective deferrals 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. Any contrary interpretation shall be avoided. 8.7. HEADINGS NOT PART OF PLAN. Headings and subheadings in this Plan are inserted for reference only and are not to be considered in the construction of the provisions hereof. 8.8. RELATIONSHIP TO THE 1993 DEFERRED COMPENSATION PLAN. Subject to Section 5.8, this Plan supersedes in its entirety the 1993 Board of Directors Deferred Compensation Plan (the "1993 Plan"). As of the date of stockholder approval of this Plan, accrued balances under the 1993 Plan shall be credited to a Cash Account under this Plan and such balances shall thereafter be credited in accordance with the provisions of this Plan. Payout elections under the 1993 Plan shall be conformed to the nearest equivalent under this Plan. 8.9. LIMITED EXCEPTION TO IRREVOCABILITY OF PAYOUT ELECTIONS. A Participant may, subject to the approval of the Committee, prospectively change an election under Section 5.5(b) by a subsequent election that will take effect at least 12 months after 11 the subsequent election is received by the Company if, in the opinion of Counsel to the Company, the subsequent election would not adversely effect the efficacy of deferrals under the Code in respect of other Participants or this Plan. The Committee may, subject to Sections 8.5 and 8.6, permit elections that would not qualify for exemption under Section 16(b) of the Exchange Act, so long as the availability of any exemption thereunder for other Directors under this Plan is not compromised. 12 EXHIBIT A DOLE FOOD COMPANY, INC. NON-EMPLOYEE DIRECTORS DEFERRED STOCK AND CASH COMPENSATION PLAN, AS AMENDED ACCOUNT TRANSFER ELECTION AGREEMENT ELECTIONS I hereby IRREVOCABLY elect to transfer $_______(specify an amount in whole dollars not less than $5,000) of my Cash Account balance as of last December 31 to Stock Unit Account. I direct that the above amount shall be transferred from my deferral elections as follows: $___________from the Election Agreement for the year_________ $___________from my Rollover Account ACKNOWLEDGMENT I hereby acknowledge that I understand and consent to the terms of this Election Agreement and the Plan, that the transfer is irrevocable, that the Stock Units to be allocated as a result thereof will be distributed only in an equivalent whole number of shares of the Company's Common Stock with fractional shares disregarded, and that, subject to Section 8.9 of the Plan, the manner of distribution (lump sum or annual installments) and the time of payout will be governed by my previous Election Agreement listed above (or, as to a Rollover Account, in accordance with Section 8.8 of the Plan). I understand that my other elections, including my other deferral elections and all of my distribution elections, shall remain unchanged and that this election affects only the form of payment (cash or stock) on amounts transferred and the amounts thereafter accrued on balances under the terms of the Plan. SIGNATURE ACCEPTANCE - --------------------------- Dole Food Company, Inc. (Director's Signature) By: - --------------------------- ------------------------------ (Print Name) Name: - --------------------------- ---------------------------- (Date) Date: ---------------------------- EX-27 3 EXHIBIT 27
5 1,000 9-MOS JAN-02-1999 JAN-04-1998 OCT-10-1998 153,212 0 599,654 64,627 454,748 1,192,194 1,828,549 701,261 2,850,355 721,181 1,040,320 0 0 319,884 416,527 2,850,355 3,385,764 3,385,764 2,864,063 2,864,063 329,936 0 50,599 146,818 26,400 120,418 0 0 0 120,418 2.00 1.98 THE COMPANY'S FISCAL YEAR ENDS ON THE SATURDAY CLOSEST TO DECEMBER 31, FISCAL YEAR 1998 ENDS JANUARY 2, 1999 AND INCLUDES 52 WEEKS. ALL QUARTERS IN 1998 HAVE 12 WEEKS, EXCEPT THE THIRD QUARTER WHICH HAS 16 WEEKS. IN ACCORDANCE WITH SFAS NO. 128, "EARNINGS PER SHARE", THIS ITEM REFLECTS BASIC EARNINGS PER SHARE. IN ACCORDANCE WITH SFAS NO. 128, "EARNINGS PER SHARE", THIS ITEM REFLECTS DILUTED EARNINGS PER SHARE.
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