<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
CASTLE & COOKE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
CASTLE & COOKE, INC.
10900 Wilshire Boulevard
Los Angeles, CA 90024
March 31, 1998
To the Stockholders of Castle & Cooke, Inc.:
You are cordially invited to attend the Annual Meeting of Stockholders of
Castle & Cooke, Inc. (the "Company") which will be held at the Hyatt Westlake
Plaza, 880 S. Westlake Blvd., Westlake Village, California at 10:00 a.m. on May
14, 1998.
This booklet includes the Notice of Annual Meeting and the Proxy Statement,
which contain information about the formal business to be acted on at the
meeting by the stockholders. The meeting will also feature a report on the
operations of your Company, followed by a question and discussion period.
We hope that you will be able to attend the meeting. If so, please let us
know by checking the box on the form of proxy. However, whether or not you plan
to attend in person, please complete, sign, date and return the enclosed proxy
card(s) promptly to ensure that your shares will be represented. If you do
attend the meeting and wish to vote your shares personally, you may revoke your
proxy.
Thank you for your continued interest in Castle & Cooke, Inc.
Sincerely yours,
[SIGNATURE]
David H. Murdock
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
<PAGE>
CASTLE & COOKE, INC.
10900 WILSHIRE BOULEVARD
LOS ANGELES, CALIFORNIA 90024
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 14, 1998
------------------------
The Annual Meeting of Stockholders of CASTLE & COOKE, INC. (the "Company")
will be held at the Hyatt Westlake Plaza, 880 South Westlake Blvd., Westlake
Village, California at 10:00 a.m. on May 14, 1998 for the following purposes:
(1) To elect seven (7) directors of the Company, each to serve until the
next Annual Meeting of Stockholders and until his or her successor has
been duly elected and qualified;
(2) To elect Arthur Andersen LLP as the Company's independent public
accountants and auditors for the 1998 fiscal year; and
(3) To transact such other business as may properly come before the meeting
or any adjournments thereof.
The Board of Directors has fixed March 9, 1998 as the record date for the
determination of stockholders entitled to notice of and to vote at the Annual
Meeting. Accordingly, only stockholders of record at the close of business on
that date are entitled to vote at the Annual Meeting or any adjournments
thereof.
By Order of the Board of Directors,
[SIGNATURE]
Roberta Wieman
CORPORATE SECRETARY
March 31, 1998
IMPORTANT: IF YOU CANNOT BE PRESENT AND DESIRE TO HAVE YOUR STOCK VOTED AT THE
ANNUAL MEETING, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD(S) AS
PROMPTLY AS POSSIBLE AND RETURN IT (THEM) IN THE ENCLOSED PRE-ADDRESSED
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU
RECEIVE MORE THAN ONE PROXY CARD BECAUSE YOU OWN SHARES REGISTERED IN DIFFERENT
NAMES OR AT DIFFERENT ADDRESSES, EACH PROXY CARD SHOULD BE COMPLETED AND
RETURNED.
<PAGE>
CASTLE & COOKE, INC.
10900 WILSHIRE BOULEVARD
LOS ANGELES, CALIFORNIA 90024
------------------------
PROXY STATEMENT
---------------------
This Proxy Statement is furnished to stockholders by the Board of Directors
of Castle & Cooke, Inc. (the "Company") in connection with the solicitation of
proxies for use at the Annual Meeting of Stockholders of the Company to be held
at the Hyatt Westlake Plaza, 880 South Westlake Blvd., Westlake Village,
California at 10:00 a.m. on May 14, 1998, and at any adjournments thereof. The
Company's principal executive offices are located at 10900 Wilshire Boulevard,
Los Angeles, California, and its telephone number is (310) 208-3636.
This Proxy Statement, Notice of Annual Meeting and the accompanying proxy
card(s) are being first mailed to stockholders on or about March 31, 1998. The
Company's 1997 Annual Report is being mailed to stockholders with this Proxy
Statement. The Annual Report is not to be regarded as proxy soliciting material
or as a communication by means of which any solicitation of proxies by the
Company is to be made.
GENERAL INFORMATION, VOTING RIGHTS AND PROCEDURES
The Board of Directors has fixed March 9, 1998 as the record date (the
"Record Date") for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting or any adjournments thereof. On the Record Date,
19,996,288 shares of Common Stock of the Company ("Common Stock") were
outstanding and entitled to vote at the Annual Meeting. The Common Stock is the
only class of stock of the Company that is outstanding and entitled to vote at
the Annual Meeting.
Stockholders who own shares registered in different names or at different
addresses will receive more than one proxy card. A STOCKHOLDER WHO DOES NOT PLAN
TO ATTEND THE MEETING MUST SIGN AND RETURN EACH OF THE PROXY CARDS RECEIVED TO
ENSURE THAT ALL OF THE SHARES OWNED BY SUCH STOCKHOLDER ARE REPRESENTED AT THE
ANNUAL MEETING. Each accompanying proxy card that is properly signed and
returned to the Company and not revoked will be voted in accordance with the
instructions contained therein.
Any stockholder who gives a proxy has the power to revoke it at any time
before it is exercised by delivery, either in person or by mail, of a written
notice of revocation to the Corporate Secretary of the Company. Attendance at
the Annual Meeting will not in itself constitute revocation of the proxy.
Unless contrary instructions are given, the persons designated as proxy
holders in the accompanying proxy card(s) (or their substitutes) will vote FOR
the election of the Board of Directors' nominees, FOR the election of Arthur
Andersen LLP as the Company's independent public accountants and auditors for
the 1998 fiscal year, and in the proxy holders' discretion with regard to any
other matters (of which the Company is not now aware) that may be properly
presented at the meeting or any adjournments thereof, and all matters incident
to the conduct of the meeting.
The presence at the meeting, in person or by proxy, of a majority of the
shares of Common Stock outstanding on the Record Date will constitute a quorum.
The affirmative vote of the holders of at least a majority of the shares of
Common Stock represented in person or by proxy at the meeting and entitled to
vote at the meeting will be required with respect to the election of directors
and the election of Arthur Andersen LLP as the Company's independent public
accountants and auditors.
1
<PAGE>
Votes cast by proxy or in person at the Annual Meeting will be counted by
the persons appointed by the Company to act as the inspectors of election for
the meeting. The inspectors of election will treat shares represented by proxies
that reflect abstentions or include "broker non-votes" as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum. Abstentions or "broker non-votes" do not constitute a vote "for" or
"against" any matter and thus will be disregarded in any calculation of "votes
cast". Under Hawaii law, if a broker or nominee has indicated on the proxy that
it does not have discretionary authority to vote certain shares on a matter,
those shares will be treated as present and entitled to vote with respect to
that matter unless the broker also states that the shares are not to be deemed
present for that purpose.
Any unmarked proxies, including those submitted by brokers or nominees, will
be voted IN FAVOR of the proposals and nominees of the Board of Directors, as
indicated on the accompanying proxy card.
Each share of Common Stock entitles the holder thereof to one vote on each
matter to be voted on at the Annual Meeting. Under the Company's Bylaws,
stockholders are not entitled to cumulate their votes in the election of
directors. The Bylaws also provide that the presiding officer at the meeting may
adjourn a meeting at which a quorum is present if a matter to be acted upon at
the meeting requires the affirmative vote of more than a majority of a quorum at
the meeting and the number of shares actually voted (and not abstaining) at such
meeting is insufficient to approve of such matter.
The Company's Bylaws provide that nominations of candidates for election to
the Company's Board of Directors may only be made by the Board or by a
stockholder entitled to vote at the meeting of the stockholders called for the
election of directors (the "Election Meeting"). Any such stockholder who intends
to nominate a candidate for election to the Board must deliver a notice to the
Corporate Secretary of the Company not less than 30 days prior to the date of
the Election Meeting 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 Company beneficially owned by each such intended nominee;
and (iv) such other information concerning each such intended nominee as would
be required to be included, under the rules of the Securities and Exchange
Commission (the "SEC"), in a proxy statement soliciting proxies for the election
of such nominee. Such notice also must include a signed consent of each such
intended nominee to serve as a director of the Company, if elected. To be
timely, any such notice with respect to the upcoming Annual Meeting must be
delivered to the Corporate Secretary, Castle & Cooke, Inc., 10900 Wilshire
Boulevard, Los Angeles, California 90024, no later than April 14, 1998. Any such
notice with respect to any subsequent Election Meeting must be delivered to the
Corporate Secretary not less than 30 days prior to the date of that Election
Meeting. The Bylaws provide that if the Chairman of an Election Meeting
determines that a nomination was not made in accordance with the procedures set
forth in the Bylaws, such nomination shall be void.
2
<PAGE>
BENEFICIAL OWNERSHIP OF CERTAIN STOCKHOLDERS
The following table sets forth, to the best knowledge of the Company,
information as to each person who beneficially owned more than 5% of the Company
Common Stock as of February 28, 1998 unless otherwise noted.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(1) CLASS(2)
- ---------------------------------------------------------------------- ---------------------- -----------------
<S> <C> <C>
David H. Murdock...................................................... 4,567,267(3) 22.84%
10900 Wilshire Boulevard
Los Angeles, CA 90024
Sasco Capital, Inc.................................................... 2,018,729(4) 10.1%
10 Sasco Hill Road
Fairfield, CT 06430
Franklin Resources, Inc............................................... 1,611,847(5) 8.06%
777 Mariners Island Boulevard
San Mateo, CA 94404
Southeastern Asset Management, Inc.................................... 1,427,600(6) 7.14%
6075 Poplar Avenue
Memphis, TN 38119
Ingalls & Snyder, LLC................................................. 1,258,761(7) 6.29%
61 Broadway
New York, NY 10006
</TABLE>
- ------------------------
(1) Unless otherwise indicated, each person has sole voting and dispositive
power with respect to the shares shown.
(2) The percentages set forth above are calculated on the basis of 19,996,288
shares of Common Stock outstanding on February 28, 1998, plus in the case of
Mr. Murdock, stock options granted to him under the Company's 1995 Stock
Option and Award Plan (the "1995 Plan") to purchase 39,001 shares, which
number includes all such options that are exercisable within 60 days
following February 28, 1998.
(3) Mr. Murdock has both voting and dispositive power over all of these shares
except for 26,956 of these shares which are beneficially owned by or for his
sons and over which Mr. Murdock has neither voting nor dispositive power.
(4) Based on a report on Schedule 13G dated January 30, 1998, Sasco Capital,
Inc. had sole voting power over 1,208,096 of these shares and sole
dispositive power over all of these shares.
(5) Based on a report on Schedule 13G dated January 16, 1998, by Franklin
Resources, Inc. ("Franklin") these shares are beneficially owned by one or
more open or closed-end investment companies or other managed accounts which
are advised by direct and indirect investment advisory subsidiaries (the
"Adviser Subsidiaries") of Franklin, and the applicable advisory contracts
grant to the Adviser Subsidiaries all investment and/or voting power over
such shares. In this regard, it was reported that sole voting and sole
dispositive power over such shares was held as follows: Franklin Advisory
Services, Inc. held 1,400,000 shares and Franklin Mutual Advisers, Inc. held
211,847 shares.
(6) Based on a report on Schedule 13G dated February 4, 1998, Southeastern Asset
Management, Inc. had shared voting and shared dispositive power over all of
these shares.
(7) Based on a report on Schedule 13G dated February 9, 1998, Ingalls & Snyder
LLC had sole voting power over 52,700 of these shares and sole dispositive
power over all of these shares.
3
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
GENERAL
Pursuant to the Articles of Incorporation of the Company, the Board of
Directors is comprised of seven (7) members. The Board of Directors nominated
the seven (7) persons named below for election to the Board of Directors until
the next annual meeting of stockholders and until their successors are duly
elected and qualified.
Current members of the Board will continue to serve until the election and
qualification of directors at the Annual Meeting.
Unless authority to do so is WITHHELD, the persons named in each proxy card
(or their substitutes) will vote the shares represented thereby FOR the election
of ALL the director nominees named below. If any nominee becomes unavailable or
is unable to serve as a director, which is not anticipated, the persons named as
proxies (or their substitutes) shall have full discretion and authority to vote
or refrain from voting for any other nominee in accordance with their judgement.
NOMINEES
The following brief statements contain biographical information concerning
each nominee for election as a director, including information concerning his or
her principal occupation for at least the past five years, as of February 28,
1998. Except for Mr. Murdock, Mr. Miyahira and Ms. Scott Safrit, all nominees
and current directors are otherwise unaffiliated with the Company and its
subsidiaries. Each nominee's age is given as of March 31, 1998.
<TABLE>
<CAPTION>
YEAR ELECTED PRINCIPAL OCCUPATION, POSITIONS WITH THE COMPANY
NAME AS A DIRECTOR AGE AND SUBSIDIARIES AND OTHER INFORMATION
- ------------------------- --------------- --- -----------------------------------------------------------------
<S> <C> <C> <C>
David H. Murdock......... 1995 74 Chairman of the Board, Chief Executive Officer and Director of
the Company since October 1995, and of Dole Food Company, Inc.
(the Company's former parent) ("Dole") since July 1985.
Chairman of the Board, Chief Executive Officer and Director of
Castle & Cooke Homes, Inc. (formerly a publicly-traded company
that was 82% owned by Dole) from September 1992 until January
1995. Since June 1982, Chairman of the Board and Chief
Executive Officer of Flexi-Van Leasing, Inc., 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 textile-related
products, and industrial and building products.
Wallace S. Miyahira...... 1996 65 President, Hawaii Residential and Commercial Operations of the
Company and a Director since December 1996. Senior Vice
President of the Company from October 1995 to December 1996.
Senior Vice President of Castle & Cooke Homes, Inc. from June
1993 to January 1995. Senior Vice President of Castle & Cooke
Properties, Inc. (a subsidiary of the Company conducting real
estate business in Hawaii) from 1983 to
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
YEAR ELECTED PRINCIPAL OCCUPATION, POSITIONS WITH THE COMPANY
NAME AS A DIRECTOR AGE AND SUBSIDIARIES AND OTHER INFORMATION
- ------------------------- --------------- --- -----------------------------------------------------------------
December 1996, and President since December 1996. President of
Castle & Cooke Homes Hawaii, Inc. (a subsidiary of the Company
conducting the residential real estate business in Hawaii) from
1984 to March 1995 and from December 1995 to present.
<S> <C> <C> <C>
Lynne Scott Safrit....... 1995 39 President-North American Commercial Operations of the Company
since October 1995 and Director since December 1995. President
of Mega Management Company, Inc. since December 1993, and
President of Atlantic American Properties, Inc. since August
1989, both of which are real estate management companies
wholly-owned, directly or indirectly, by Mr. David H. Murdock.
Ms. Scott Safrit is also a member of the Board of Directors of
Landis Savings Bank.
Dell Trailor............. 1996 71 President and owner of Dell Trailor Construction Company,
Phoenix, Arizona, a real estate development company. Mr.
Trailor also served on the Board of Directors of Castle & Cooke
Homes, Inc. from April 1993 until January 1995.
Edward J. Hogan.......... 1996 70 Chairman of the Board and Chief Executive Officer of Pleasant
Holidays, Inc. and numerous corporations engaged in the travel
industry. Mr. Hogan also served on the Board of Directors of
Castle & Cooke Homes, Inc. from April 1993 until January 1995.
Member of the Board of Directors of the American Society of
Travel Agents, The United States Tour Operators Association,
Dollar Thrifty Automotive Group, Inc., Loyola Marymount
University, ChildHelp USA, and the Hugh O'Brien Youth
Foundation.
Lodwrick M. Cook......... 1996 69 Co-Chairman of Global Grossing Ltd., an undersea fiber optic
cable company, since January 1998; Vice Chairman and Managing
Director, Pacific Capital Group, Inc., an investment company,
since September 1997; Chairman Emeritus of ARCO, and Chairman
and Chief Executive Officer of ARCO from January 1986, retiring
as CEO in June 1994 and as Chairman in June 1995. Mr. Cook is
also a member of the Board of Directors of Ocean Energy, Inc.
and Bank One Louisiana.
Edward M. Carson......... 1996 68 Retired Chairman of the Board and Chief Executive Officer of
First Interstate Bancorp. Chairman of the Board and Chief
Executive Officer of First Interstate Bancorp from June 1990
until May 1995. Mr. Carson is also a member of the Board of
Directors of Wells Fargo Bank, Terra Industries, Inc., Aztar
Corporation and Schuff Steel Company.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION
OF EACH OF THE NOMINEES DESCRIBED ABOVE.
5
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS
There are three standing committees of the Board of Directors of the
Company: the Executive Committee; the Audit Committee; and the Corporate
Compensation and Benefits Committee. The Board does not have a nominating
committee.
The primary purposes of the Executive Committee are (1) to exercise, during
intervals between meetings of the Board and subject to certain limitations, all
of the powers of the full Board; (2) to monitor and advise the Board on
strategic business and financial planning matters for the Company; and (3) to
deal with matters relating to the directors of the Company. The Executive
Committee makes nominations of candidates for election to the Board. The present
members of the Executive Committee are Mr. David Murdock, Mr. Lodwrick Cook and
Mr. Edward Carson. The Executive Committee did not meet during the 1997 fiscal
year.
The Audit Committee is comprised entirely of directors who are not officers
or employees of the Company. It is responsible for monitoring and reviewing
accounting methods adopted by the Company, internal accounting procedures and
controls and audit plans. The Audit Committee receives directly the reports of
the Company's independent public accountants and the internal audit staff. It
meets periodically with both the independent public accountants and internal
auditors to review audit results and the adequacy of the Company's system of
internal controls. The Audit Committee also recommends to the Board the
selection of the Company's independent public accountants and auditors. The
present members of the Audit Committee are Mr. Edward Carson, Mr. Edward Hogan
and Mr. Dell Trailor. The Audit Committee held two meetings during the 1997
fiscal year.
The Corporate Compensation and Benefits Committee (the "Compensation
Committee") is comprised entirely of directors who are not current or former
officers or employees of the Company. It is responsible for ensuring that the
officers and key management personnel of the Company are effectively compensated
with salaries, supplemental compensation and benefits that are equitable and
competitive. In addition, the Compensation Committee serves as the "named
fiduciary" (as defined in the Employee Retirement Income Security Act of 1974,
as amended) of certain employee pension and welfare benefit plans with
responsibility for the adoption, operation, administration and amendment of such
plans and the administration of the Company's discretionary stock award plans.
The present members of the Compensation Committee are Mr. Lodwrick Cook, Mr.
Edward Hogan and Mr. Dell Trailor. The Compensation Committee held five meetings
during the 1997 fiscal year.
MEETINGS OF THE BOARD OF DIRECTORS
During the 1997 fiscal year there were six regularly scheduled meetings of
the Board of Directors. Each of the incumbent directors attended at least 75% of
the aggregate number of Board meetings and meetings of committees on which they
serve.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company ("Non-Employee Directors")
are compensated for their services according to a standard arrangement
authorized by the Board of Directors. Non-Employee Directors receive an annual
retainer fee of $10,000 payable quarterly in cash and $10,000 in share credits
under the Company's Directors Deferred Stock Compensation Plan (the "DSC Plan"),
a deferred compensation, stock-indexed plan payable solely in shares of the
Company's Common Stock as described below. Additional cash fees of $1,000 are
paid to each Non-Employee Director for each regularly scheduled meeting of the
Board that he or she attends, and a fee of $500 is paid for each telephonic
meeting of the Board in which the Non-Employee Director participates. In
addition, Non-Employee Director members of the Company's committees are
compensated at the rate of $1,000 for each committee meeting actually attended,
and the Non-Employee Director chairperson of a committee receives an additional
annual amount of $2,500. The reasonable expenses incurred by each Non-Employee
Director in
6
<PAGE>
connection with his or her duties as a director and member of a committee, if
applicable, are also reimbursed by the Company, including certain expenses
incurred by Non-Employee Directors' spouses in accompanying Non-Employee
Directors to one Board meeting each year. Board members who are officers or
employees of the Company do not receive compensation for their services as
directors.
Under the DSC Plan, on June 1, 1997, each eligible director received, and
will receive on June 1 of each subsequent year during the term of the Plan,
share credits equal to the number of shares of Common Stock that $10,000 would
then buy (based on an average pricing formula). All share credits are fully
vested when granted. Share credits constitute bookkeeping entries that will be
settled and paid in an equivalent number of shares of Common Stock upon the
director's termination of service on the Board. A director may irrevocably elect
to receive the number of shares of Common Stock equal to his or her accrued
share credits in a lump-sum or in equal annual installments over a period of up
to five years after termination of service. However, notwithstanding installment
elections, if a director dies or the director is disabled or a change in control
occurs, his or her share credits will be paid in a lump-sum when the director's
service ends. During the period that the director's interest is represented by
share credits, a director will have no voting, dividend or other rights of a
shareholder with respect to the shares to be issued in his or her name, but will
be entitled to additional share credits representing dividend equivalents based
on cash dividends and distributions (if any) on the underlying shares (converted
to share credits based on the market value of shares on the applicable dividend
or distribution payment dates). The number of share credits and shares subject
to the DSC Plan are subject to appropriate adjustment in the event of a stock
split, recapitalization, or other reorganization or similar events.
7
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to shares of
the Company's Common Stock beneficially owned (or deemed to be beneficially
owned) as of February 28, 1998, by the Company's directors, its Named Executive
Officers (as defined under "Compensation of Executive Officers") and by all
current directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT OF
BENEFICIAL OWNER(1) OWNERSHIP(2) OUTSTANDING SHARES(3)
- ------------------------------------------------------------------- ---------------------- ---------------------
<S> <C> <C>
David H. Murdock................................................... 4,567,267(4)(6) 22.80%
Lodwrick M. Cook................................................... 1,500(5) *
Edward J. Hogan.................................................... 10,000(5) *
Dell Trailor....................................................... 25,000(5) *
Edward M. Carson................................................... 2,500(5) *
Lynne Scott Safrit................................................. 14,500(6) *
Wallace S. Miyahira................................................ 38,746(6) *
Bruce M. Freeman................................................... 17,334(6) *
Edward C. Roohan................................................... 11,667(6) *
All Directors and Executive Officers as a Group
(13 persons, including those named above)........................ 4,717,330(6) 23.43%
</TABLE>
- ------------------------
* Represents less than 1% of the class of securities.
(1) The mailing address for each of the individuals listed is Castle & Cooke,
Inc., 10900 Wilshire Boulevard, Los Angeles, California 90024.
(2) Unless otherwise indicated in these notes, each person has sole voting and
dispositive power with respect to the shares shown. Some directors and
executive officers may share the voting and dispositive power over their
shares with their spouses as community property, joint tenants or tenants in
common, and some of them may hold the shares through revocable living trusts
of which they are trustees solely for their benefit during their lifetimes
or through family trusts of which they are a trustee and under which they
and immediate family members are beneficiaries and/or trustees.
(3) The percentages set forth above are calculated within the meaning of Rule
13d-3(d)(1) under the Securities Exchange Act of 1934 on the basis of
19,996,288 shares of Common Stock outstanding on March 9, 1998, plus, where
applicable, stock options granted under the Company's stock option plans
that are exercisable within 60 days following February 28, 1998.
(4) Mr. Murdock customarily maintains revolving lines of credit in conjunction
with his various business activities, under which borrowings and security
vary from time to time, and pursuant to which he provides collateral owned
by him, including his Company securities. His reported holdings include
4,501,310 shares of Common Stock held by Flexi-Van Leasing, Inc., a
corporation wholly-owned by Mr. Murdock, and 26,956 shares of Common Stock
held by or for the benefit of Mr. Murdock's sons (over which Mr. Murdock has
neither voting nor dispositive control).
(5) In addition to these amounts, each of the individuals indicated has 1,238.51
share units credited to his account pursuant to the DSC Plan. See
"Compensation of Directors" above.
(6) Shares reported include shares subject to non-transferable, non-voting
employee stock options. The individuals and group indicated beneficially own
the following number of shares of Common Stock that may be purchased upon
the exercise of employee stock options exercisable on February 28, 1998, or
within 60 days thereafter: Mr. Murdock, 39,001; Mr. Miyahira, 36,946; Ms.
Scott Safrit, 14,000; Mr. Freeman, 12,334; Mr. Roohan, 6,667; and all
directors and executive officers as a group, 135,251.
8
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth, as to the Chief Executive Officer and the
other four most highly-compensated executive officers of the Company (the "Named
Executive Officers"), information concerning the compensation paid by the
Company and certain related entities (including all subsidiaries) for services
in all capacities rendered to or for the benefit of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION ------------------------------
------------------------------------------------------ SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND BONUS $ COMPENSATION OPTIONS COMPENSATION
PRINCIPAL YEAR SALARY($) (3) ($)(4) (#)(6) $(7)
- ------------------------------ ------- ---------- ---------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
David H. Murdock(5)........... 1997 421,152(1) 230,000(1) -- 31,000 0
Chairman & CEO 1996 400,010(1) 125,000(1) -- 43,000 0
1995 -- -- -- -- 0
Bruce M. Freeman.............. 1997 250,000 122,300 -- 11,000 4,750
Senior Vice President 1996 250,000 110,000 -- 13,000 4,500
1995(2) 250,000 100,000 -- 0 4,500
Wallace S. Miyahira........... 1997 325,000 45,000 -- 25,000 4,750
President--Hawaii 1996 226,576 48,800 -- 20,000 4,500
Residential and Commercial
Operations 1995(2) 220,492 30,000 -- 0 4,500
Lynne Scott Safrit(5)......... 1997 150,000 82,600 -- 12,000 4,750
President--North American
Commercial 1996 150,000 96,800 -- 15,000 3,635
Operations 1995 150,000 75,000 -- 0 0
Edward C. Roohan.............. 1997 125,000 40,000 -- 6,000 3,125
Vice President and Chief
Financial Officer 1996 125,000 30,000 -- 7,000 4,500
1995(2) 115,943 40,000 -- -- 4,500
</TABLE>
- ------------------------
(1) Amounts reported do not include cash compensation paid to Mr. Murdock by
Dole for these years. Cash compensation paid by Dole to Mr. Murdock in 1995
prior to the distribution to its stockholders of all of the common stock of
the Company on December 28, 1995 (the "Distribution") was: $700,000
(salary) plus $787,500 (bonus).
(2) Amounts reported as cash compensation to Mr. Freeman, Mr. Miyahira and Mr.
Roohan for the 1995 fiscal year include amounts paid by Castle & Cooke
Homes, Inc. ("CKI"), formerly a publicly-traded company that was 82% owned
by Dole.
(3) Bonus amounts shown reflect payments made in the subsequent year with
respect to performance for the identified year.
(4) Does not include perquisites which total the lesser of $50,000 or 10% of the
reported annual salary plus bonus for any year.
(5) Mr. Murdock is also the Chairman and Chief Executive Officer of Dole and was
also Chairman and Chief Executive Officer of CKI in 1995. Mr. Murdock and
Ms. Scott Safrit also hold positions with certain business entities owned by
Mr. Murdock that are not controlled directly or indirectly by Dole or the
Company. Such other entities pay compensation and provide fringe benefits to
Mr. Murdock for his services to them. Commencing January 1, 1996, Mr.
Murdock and Ms. Scott Safrit were paid for their services to the Company by
the Company; in addition to their salaries, they participated in bonus
programs with other executive officers of the Company. During 1995, 1996 and
1997, Ms. Scott Safrit served as President of Mega Management Company, Inc.
("Mega"), a corporation wholly owned by Mr. Murdock. All compensation
reflected with respect to Ms. Scott Safrit in the above table for 1995 was
paid by Mega. During 1996 and 1997, Mega did not pay compensation to Ms.
Scott Safrit; however, Mega reimbursed the Company for services provided by
Ms. Scott Safrit to Mega during 1996 and 1997. See "Certain Transactions."
(6) Reported amounts include grants of options "at market" by the Company in
1996 and 1997 and by Dole in 1995 as to Dole options that were converted, as
further described below. In connection with the Distribution, certain
adjustments were made to outstanding employee stock options (the "Dole
Options") under Dole's 1982 Stock Option and Award Plan (the "1982 Dole
Plan") and 1991 Stock Option and Award Plan (the "1991 Dole Plan"). Dole
Options held by persons who were employees of the Company after the
Distribution were exchanged in 1996 for options to purchase shares of the
Company's Common Stock ("Converted Options"). Reported amounts for Mr.
Murdock do not include unconverted Dole Options. The 55,595 Dole Options
held by Mr. Murdock, the only Named Executive Officer option holder who
remained an employee of Dole while also becoming an employee of the Company
after the Distribution, were not exchanged for Converted Options. The
conversion amounts for all other outstanding Dole Options that were held by
employees of the Company were determined on January 5,
9
<PAGE>
1996 by multiplying the original number of Dole Option shares by 2.3597 and
the original exercise price of the Dole Options was divided by 2.3597. The
conversion was made pursuant to the anti-dilution provisions of the 1982
Dole Plan and 1991 Dole Plan. The intent of the conversion exchange
adjustment was to preserve and not to increase or decrease benefits under
the outstanding option grants. The vesting provisions (with prior service to
Dole counting for vesting purposes) and remaining duration of the Converted
Options were unchanged by the conversion. Reported amounts for 1996 do not
include Converted Options granted in connection with the Distribution. These
Converted Options (on an "as converted" basis) are reported in the Summary
Compensation Table for the year corresponding to the year in which the
original Dole Options were granted.
(7) The amounts shown in this column include contributions by the Company (for
1996 and 1997) under the Company's tax deferred investment plans and by Dole
(for 1995) under Dole's tax deferred investment plans for the benefit of the
individuals listed, but do not include payments made to Mr. Murdock under
Dole's defined benefit pension plan. See "Pension Plans."
10
<PAGE>
OPTION GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------------------
PERCENT POTENTIAL REALIZABLE VALUE
NUMBER OF OF TOTAL AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS OF STOCK PRICE
UNDERLYING GRANTED TO APPRECIATION FOR OPTION
OPTIONS EMPLOYEES IN EXERCISE OR TERMS(1)
GRANTED LAST FISCAL BASE EXPIRATION ---------------------------------
NAME (2)(3) YEAR PRICE/($/SH) DATE(4) 0%($) 5%($) 10%($)
- --------------------------- ----------- ------------- ----------- -------------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
David H. Murdock........... 31,000 20.7% $ 16.375 Feb. 3, 2007 $ 0 319,132 808,680
Wallace S. Miyahira........ 25,000 16.7% $ 16.375 Feb. 3, 2007 $ 0 257,365 652,161
Lynne Scott Safrit......... 12,000 8.0% $ 16.375 Feb. 3, 2007 $ 0 123,535 313,037
Bruce M. Freeman........... 11,000 7.3% $ 16.375 Feb. 3, 2007 $ 0 113,240 286,951
Edward C. Roohan........... 6,000 4.0% $ 16.375 Feb. 3, 2007 $ 0 61,768 156,519
</TABLE>
- ------------------------
(1) The amounts under the columns labeled "5%" and "10%" are included pursuant
to certain rules promulgated by the SEC and are not intended to forecast
future appreciation, if any, in the price of the Company's Common Stock. As
set forth in note 3 below, the option grants vest over a three year period.
The reported amounts are based on the assumption that the named persons hold
the options granted for their full ten-year term. The actual value of the
options will vary in accordance with the market price of the Company's
Common Stock. The column headed "0%" is included to demonstrate that the
options were granted at fair market value and optionees will not recognize
any gain without an increase in the stock price, which increase benefits all
stockholders commensurately.
(2) Stock options were granted under the Company's 1995 Stock Option and Award
Plan (the "1995 Plan"). Options under the 1995 Plan may result in payments
following the resignation, retirement or other termination of employment
with the Company or its subsidiaries or as a result of a change in control
of the Company. Vested options under the 1995 Plan may be exercised within a
period of twelve months following a termination by reason of total
disability, death or retirement, and three months following a termination
for other reasons. The 1995 Plan permits the Compensation Committee, which
administers the 1995 Plan, to accelerate, extend or otherwise modify
benefits payable under the applicable awards in various circumstances,
including a termination of employment or change in control. Under the 1995
Plan, if there is a change in control of the Company (as defined in the 1995
Plan), all options become immediately exercisable unless the Compensation
Committee otherwise determines.
(3) These Options vest in three equal annual installments on the first, second
and third anniversaries of the grant, which was made February 4, 1997.
(4) These Options were granted for a term of ten (10) years, subject to earlier
termination in certain events such as termination of employment (see note 2
above). The Company's 1995 Plan contemplates customary adjustments if a
reorganization event occurs.
11
<PAGE>
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUE
The following table and the notes thereto set forth for the Named Executive
Officers, information with respect to options for the Company's Common Stock
settled under the 1995 Plan during the 1997 fiscal year and the number and value
of unexercised in-the-money options for the Company's Common Stock held as of
the end of fiscal 1997. The Company has not granted any SARs.
AGGREGATED OPTION EXERCISES AND
FISCAL YEAR-END OPTION VALUE (1997 FISCAL YEAR)
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY OPTIONS
UNDERLYING AT
SHARES OPTIONS AT FY-END(#) FY-END($)
ACQUIRED ON EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) VALUE REALIZED($) UNEXERCISABLE(#)(1) UNEXERCISABLE($)(2)
- -------------------------- ----------- ----------------- ----------------------------- ----------------------
<S> <C> <C> <C> <C>
David H. Murdock.......... 0 0 14,334/59,666 65,406/148,256
Wallace S. Miyahira....... 14,454 52,902 21,945/38,333 20,448/74,913
Lynne Scott Safrit........ 0 0 5,000/22,000 22,815/52,386
Bruce M. Freeman.......... 0 0 4,334/19,666 19,776/45,736
Edward C. Roohan.......... 0 0 2,334/10,666 10,650/24,669
</TABLE>
- ------------------------
(1) As discussed in note 6 to the Summary Compensation Table, some of these
stock options, called the Converted Options, replace options originally
granted under the 1982 Dole Plan and the 1991 Dole Plan. Under the 1995
Plan, each of these options has a term of ten years from the applicable
grant date of the option under the applicable Dole Plan, subject to earlier
termination in certain events related to termination of employment described
below. These options may result in payments following the resignation,
retirement or other termination of employment with the Company or its
subsidiaries or as a result of a change in control, recapitalization or
reorganization of the Company. Vested options under the 1995 Plan may be
exercised within a period of twelve months following a termination by reason
of total disability, death or retirement, and three months following a
termination for other reasons, except that options replacing 1982 Dole Plan
options may be exercised following an employee optionee's death for the
remainder of their term. The 1995 Plan permits the Compensation Committee,
which administers the Plan, to accelerate, extend and otherwise modify
benefits payable under the applicable awards in various circumstances,
including a termination of employment or a change in control. Under the 1995
Plan, if there is a change in control of the Company, all options become
immediately exercisable unless the Compensation Committee otherwise
determines.
(2) This amount represents solely the difference between the market value on the
last trading day of the 1997 fiscal year of those unexercised options which
had an exercise price below such market price (i.e., "in-the-money options")
and the respective exercise prices of such options. No assumptions or
representations regarding the "value" of such options are made or intended.
12
<PAGE>
PENSION PLANS
The Company maintains a noncontributory pension plan which provides
benefits, following retirement at age 65 or older with one or more years of
credited service (or age 55 with five or more years of credited service), to
certain salaried, non-union employees of the Company, including executive
officers of the Company. This plan provides a monthly pension to supplement
personal savings and Social Security benefits. The following table shows as of
January 1, 1998, the estimated annual benefits payable under the pension plan in
which the Named Executive Officers participated in 1997. As of January 1, 1997,
employees of Lanai Company, Inc., a subsidiary of the Company, including Ms.
Scott Safrit, ceased accruing further pension benefits. In lieu of this, Ms.
Scott Safrit received supplemental contributions to her 401(k) plan account
equal to two percent (2%) of her annual base salary and bonus payments, subject
to limitations imposed by the Internal Revenue Code as described below.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
REMUNERATION 10 15 20 25 30 35
- ---------------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$200,000................................ $ 22,000 $ 33,000 $ 47,300 $ 61,600 $ 75,900 $ 90,200
$300,000................................ $ 33,000 $ 49,500 $ 70,950 $ 92,400 $ 113,850 $ 135,300
$400,000................................ $ 44,000 $ 66,000 $ 94,600 $ 123,200 $ 151,800 $ 180,400
$500,000................................ $ 55,000 $ 82,500 $ 118,250 $ 154,000 $ 189,750 $ 225,500
$600,000................................ $ 66,000 $ 99,000 $ 141,900 $ 184,800 $ 227,700 $ 270,600
$700,000................................ $ 77,000 $ 115,500 $ 165,550 $ 215,600 $ 265,650 $ 315,700
$800,000................................ $ 88,000 $ 132,000 $ 189,200 $ 246,400 $ 303,600 $ 360,800
$900,000................................ $ 99,000 $ 148,500 $ 212,850 $ 277,200 $ 341,550 $ 405,900
$1,000,000.............................. $ 110,000 $ 165,000 $ 236,500 $ 308,000 $ 379,500 $ 451,000
</TABLE>
The table shows the estimated annual retirement benefits payable as straight
life annuities, assuming normal retirement at age 65, to persons in specified
final average compensation and years of service classifications. The plan has no
offsets for Social Security. The table shows amounts prior to offsets for
benefits payable from other plans. Covered compensation under the plan includes
base pay, bonus, performance incentives (if any) and severance pay.
The accrued benefit under the plan is 1.1% of final average annual
compensation multiplied by years of service, plus .33% of final average annual
compensation multiplied by years of service in excess of 15 years. Benefits
accrued as of September 30, 1992 under a prior benefit formula serve as minimum
entitlements. The ages, credited years of service and covered compensation as of
December 31, 1997 for individuals named in the Summary Compensation Table are as
follows: Mr. Murdock (age 74)--2 years, $651,152; Ms. Scott Safrit (age 39)--2
years, $246,800; Mr. Miyahira (age 65)--14 years, $377,500; Mr. Freeman (age
48)--4 years, $372,300; and Mr. Roohan (age 34)--4 years, $165,000. Effective
January 1, 1996, Mr. Murdock became eligible to participate in the Company's
non-contributory pension and supplemental pension benefit plan(s) which, because
of Mr. Murdock's age, will provide pension benefits to him in 1998 of
approximately $9,760. Mr. Murdock's benefits under the Company plans are based
on his service with the Company following the Distribution.
The Internal Revenue Code places an annual maximum limit of $125,000 (at
December 31, 1997) on the benefits available to an individual under pension
plans. Furthermore, the Internal Revenue Code places an annual maximum limit of
$160,000 (at December 31, 1997) on compensation which may be considered in
determining a participant's benefit under qualified retirement programs. If an
individual's benefit under the plans exceeds the $125,000 limit or compensation
exceeds the $160,000 limit, the excess will be paid by the Company from an
unfunded excess and supplemental benefit plan.
13
<PAGE>
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED, THAT MIGHT INCORPORATE FUTURE FILINGS, INCLUDING THIS
PROXY STATEMENT, IN WHOLE OR IN PART, THE FOLLOWING COMPENSATION COMMITTEE
REPORT AND THE FOLLOWING PERFORMANCE GRAPH SHALL NOT BE INCORPORATED BY
REFERENCE, EXCEPT TO THE EXTENT THE COMPANY EXPRESSLY INCORPORATES SUCH REPORT
OR GRAPH BY SPECIFIC REFERENCE THERETO. THE REPORT AND GRAPH SHALL NOT BE DEEMED
SOLICITING MATERIAL OR OTHERWISE DEEMED FILED UNDER EITHER OF SUCH ACTS.
CORPORATE COMPENSATION AND BENEFITS COMMITTEE REPORT TO STOCKHOLDERS
COMPENSATION PHILOSOPHY
The Company's compensation philosophy is to: a) closely relate the
compensation of the Company's executive officers to measures of Company
performance that contribute to increased value for the Company's stockholders;
and b) provide a total pay package sufficiently competitive to attract and
retain quality executives.
GOALS
To assure that compensation policies appropriately consider the value the
Company creates for stockholders, the Company's compensation philosophy for
executive officers takes into account the following goals:
- Executive officer compensation must be focused on enhancing stockholder
value;
- Compensation must reflect a competitive and performance-oriented
environment that motivates executive officers to achieve a high level of
individual, business unit and corporate results in the business
environment in which they operate;
- Incentive-based compensation should be related to the performance of each
executive officer against financial and strategic performance goals that
contribute to value creation; and
- The Company's compensation policies must enable the Company to attract
and retain top quality management.
The Compensation Committee periodically reviews the components of
compensation for the Company's executive officers on the basis of this
philosophy. Further, as the situation warrants, the Company also retains the
services of a qualified executive compensation consulting firm to provide
recommendations to the Compensation Committee to enhance the linkage of
executive officer compensation to the above goals and to obtain information as
to how the Company's compensation of executive officers compares with peer
companies.
EXECUTIVE COMPENSATION COMPONENTS
The major components of compensation for executive officers are base salary,
annual bonuses and stock option grants. The Company periodically evaluates the
competitiveness of its executive compensation program relative to comparable
publicly-traded companies.
A group of 16 real estate development companies (the "peer group") was used
to review compensation for the Company's Named Executive Officers. The peer
group was identified by the Company's executive compensation consulting firm
through a comparability screening process that considered such variables as
total assets, revenue size, and product line diversity. Broader published
surveys of real estate development and hotel operations companies, as well as
the real estate industry in general, are used to evaluate the competitiveness of
total compensation for other Company executives.
The aggregate pay package for executive officers of the Company, consisting
of salary, annual bonus and long-term incentives, principally in the form of
stock options, generally was structured to approximate
14
<PAGE>
the 50th to 75th percentile of the Company's peer group based on an analysis
conducted by the Company's executive compensation consultant in 1997.
Each component of the total executive compensation package emphasizes a
different aspect of the Company's compensation philosophy:
- BASE SALARY. Base salaries for executive officers (other than the
Chairman and CEO whose salary is discussed below) are initially set upon
hiring by the Chairman and CEO (subject to periodic review by the
Compensation Committee) based on recruiting requirements (i.e., market
demand), competitive pay practices, individual experience and breadth of
knowledge, internal equity considerations, and other objective and
subjective factors.
Increases to base salary are made by or upon the recommendation of the
Chairman and CEO and are determined primarily on an evaluation of
competitive data and the individual's performance and contribution to the
Company. Salary reviews for senior executives typically occur at
intervals greater than twelve months.
- ANNUAL INCENTIVES. The Company relies to a large degree on annual
incentive compensation to attract, retain and reward executive officers
of outstanding abilities and to motivate them to perform to the full
extent of these abilities.
Executive officers are eligible for annual cash bonuses under an
executive annual incentive plan. These annual cash bonuses are determined
after evaluating business and individual results, with reference to a
formulaic model and other criteria. Under the formulaic model, target
bonus opportunities for executive officers other than the Chairman and
CEO, range from 35% to 50% of base salary (75% in the case of the
Chairman and CEO) and maximum bonus opportunities are twice those
amounts. Actual bonuses depend on the Company's performance relative to
performance targets set in the first quarter for the applicable year.
Specific target percentages for each individual are determined on the
basis of competitive bonus levels (as a percent of salary), level of
responsibility, ability to influence results on a corporate or business
unit level, and on occasion, subjective factors.
In 1997, the formula bonus opportunity for executive officers was based
upon a weighted average of earnings before taxes ("EBT") at the
consolidated level (in the case of the Chairman and CEO and three other
persons) or upon earnings before taxes ("EBT") at the business unit level
(in the case of other officers). Bonuses are payable if the specified
minimum level of performance is realized and are increased to maximum
levels only if substantially higher performance levels are attained. In
accordance with Company policy, whether or not specified performance
criteria are achieved, the Compensation Committee has the discretion to
authorize bonuses above or below the formula determined amounts.
In 1997, certain business units did not reach their respective targeted
performance level, but all of the business units reached at least the
minimum threshold performance levels. The Chairman and CEO recommended
and the Compensation Committee approved for executive officers in units
which were below targeted performance but above the minimum performance
levels, bonuses (based on a formula reduction) that were equal to 56% of
their target award level. Other business units exceeded targeted
performance levels. Based upon 1997 results, the executive officers
associated with these units received from 100% to 110% of their target
award level, based principally on the formulaic model. The Chairman and
CEO and three other persons received bonuses from 72% to 91% of their
target award level, based on the weighted average of all the business
units' performance levels.
- LONG-TERM INCENTIVES. The only existing long-term incentive opportunity
for senior executives is the Company's stock option and award plan, which
was approved by the Board of Directors and stockholders prior to the
separation from Dole. In contrast to bonuses that are paid for prior year
15
<PAGE>
accomplishments, stock option grants represent incentives tied to future
stock appreciation. They are intended to provide executives and managers
with a direct incentive to enhance the value of the Common Stock.
Options are granted at the discretion of the Compensation Committee
(based substantially on recommendations of the Chairman and CEO as to
grants for other officers) to persons holding key management positions
above a specified salary level. Management and the Compensation Committee
review information on option levels of other companies provided by the
compensation consultants to assure that the Company's practices are
within an acceptable range of competitive pay practices.
Options were granted at the fair market value of the Common Stock on
February 4, 1997. Options vest over a three-year period, with a maximum
term of ten years. The specific number of option shares in each grant was
generally based on a multiple of base salary, divided by the fair market
value of the stock at the date of grant. In general, the multiples for
executive officers (which ranged from 65% to 197%) increased with the
level of responsibility and the perceived impact of each position on the
strategic direction of the Company. The Chairman's recommendations for
individual option grant decisions reflected his assessment of the effect
of promotions, individual performance, and other factors. An individual's
outstanding stock options and current stock ownership generally were not
considered in making stock option awards.
When combined with salary and target bonuses, the 1997 grants projected
total compensation at approximately the 50th to the 75th percentile of
the peer group companies.
The Compensation Committee conducts an annual review of option grant
recommendations based on competitive data and other factors.
CEO COMPENSATION
The Compensation Committee followed the same general compensation policy
described above for all other executives to determine Mr. Murdock's 1997
compensation.
Under the formula provisions of the executive annual incentive plan, Mr.
Murdock was eligible for an annual bonus for 1997 from 37.5% to 150% of base
salary if the performance of the Company met or exceeded threshold levels
established at the beginning of the year. The 1997 results met the applicable
threshold and the Committee awarded Mr. Murdock a bonus, in accordance with the
formula, of $230,000 or 54% of base salary.
Mr. Murdock's base salary was approved by the Compensation Committee in
February 1997. In connection with its 1997 bonus determinations and salary
review in February, 1998, the Compensation Committee reviewed survey data
prepared by the Company's compensation consultant on base salary and total cash
compensation for the chairman and chief executive officer positions of the
Company's peer group, as well as the aggregate compensation of the top two
executive officers of those companies. The compensation consultant presented its
findings regarding a competitive range of base salary and bonus for the Chairman
and Chief Executive Officer. As a result of this review, the Compensation
Committee concluded that for 1997 Mr. Murdock's base salary was near the median
of the competitive salary range for chairmen and chief executive officers and at
the lower end of that range for total cash compensation, including salary and
bonus. Following this review, the Compensation Committee increased Mr. Murdock's
salary from $425,000 to $440,000 effective February 22, 1998, which it believes
will place him within the median competitive salary range in the peer group for
1998.
Acting on the recommendation of the Company's compensation consultant, in
February 1997, the Compensation Committee approved a stock option grant for Mr.
Murdock in the amount of 31,000 options. This grant, which was made at fair
market value on the date of grant and vests over three years, reflects a salary
multiple of 120% (which was at the 50th percentile of annual stock option grants
for CEOs
16
<PAGE>
within the real estate development peer group used by the consultant). The
Compensation Committee conducts an annual review of option grant recommendations
for the CEO along with its annual review of other option grant recommendations.
In making its compensation decisions, the Compensation Committee took into
account Mr. Murdock's leadership and initiative in refinancing the Company's
debt, in certain lease negotiations and in re-engineering the Oahu residential
operations to better respond to adverse economic conditions. The Compensation
Committee also took into account the fact that Mr. Murdock also serves as
Chairman and Chief Executive Officer of Dole.
SECTION 162(M) CONSIDERATIONS
The Internal Revenue Service has promulgated rules affecting all publicly
held United States corporations (the "162(m) Rules ") that impose limits on the
tax deductibility of compensation in excess of $1 million in any year for
certain executive officers, except for "performance-based compensation" meeting
the conditions of the 162(m) Rules. No covered executive's compensation for
these purposes exceeded $1 million for 1997. Although stock option grants and
performance based bonuses are generally considered performance based, options
and other performance based awards granted after May 21, 1997, are not
considered performance based under the 162(m) Rules. The Compensation Committee
considers the 162(m) Rules as one of the factors it reviews with respect to
compensation matters and generally seeks to limit other non-stock based
compensation to amounts deductible under Section 162(m) of the Code, either by
structuring qualifying performance awards, or by deferral of payment or other
means . However, changes in the tax laws or interpretations, other priorities,
or special circumstances may result in or warrant exceptions to this practice.
THE CORPORATE COMPENSATION AND
BENEFITS COMMITTEE
Lodwrick M. Cook, Chairman
Edward J. Hogan, Director
Dell Trailor, Director
17
<PAGE>
PERFORMANCE GRAPH
The Company became a public company as a result of the Distribution. The
following graph compares the cumulative total return to the stockholders of the
Company's Common Stock from December 31, 1995 to December 31, 1997, with the
cumulative total return on the Standard & Poor's 500 Index of widely held common
stocks (the "S&P 500 Index") and a group of peer issuers (the "Peer Group"). The
Peer Group was selected on the basis of being in the same line or lines of
business as the Company. The following companies are the members of the Peer
Group: The Rouse Company; Catellus Development Corporation; Pulte Corporation;
Toll Brothers, Inc.; Lennar Corporation; Forest City Enterprises, Inc.; Newhall
Land & Farming Company; Kaufman & Broad Home Corporation; Avatar Holdings, Inc.;
Del Webb Corporation; Standard-Pacific Corp.; Ryland Group, Inc.; Schuler Homes,
Inc.; Beazer Homes USA, Inc.; Hovnanian Enterprises, Inc.; and Presley
Companies.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CASTLE & COOKE, INC. S&P 500 INDEX PEER GROUP INDEX
<S> <C> <C> <C>
12/31/95 $100 $100 $100
1996 $95 $126 $114
12/31/97 $101 $164 $201
</TABLE>
- ------------------------
Assumes $100 invested on December 31, 1995 in Castle & Cooke, Inc. Common Stock,
the S&P 500 Index and an index comprised of members of the Peer Group (weighted
according to each member's market capitalization). The total returns represent
stock price changes plus the reinvestment of dividends.
18
<PAGE>
CERTAIN TRANSACTIONS
The transactions described below in which Mr. Murdock or his affiliates or
Dole had an interest during 1997 were reviewed by the Audit Committee of the
Board of Directors of the Company.
TRANSACTIONS WITH DOLE
David H. Murdock is Chairman and CEO of the Company and of Dole, and
beneficially owns approximately 18% of the outstanding common stock of Dole.
In connection with the Distribution, the Company and Dole entered into
various agreements to define ongoing relationships, including, without
limitation, an Allocation Agreement, an Aircraft Co-Ownership Agreement and a
Trademark License Agreement. In 1997, pursuant to the Allocation Agreement, the
Company provided services to Dole totaling $110,157, and Dole provided services
to the Company totaling $207,153. In 1997, the Company received a general excise
tax refund of $777,303 from the State of Hawaii which, pursuant to the
Allocation Agreement, the Company paid to Dole in the first quarter of 1998. In
addition, the Company charged Dole rent of $739,381 in 1997 for Dole's use of
office space in buildings owned by the Company in Bakersfield, California and
Honolulu, Hawaii, and for the lease of agricultural land on Oahu, Hawaii. During
1997, the Company purchased in the ordinary course of business $260,448 of
products from Dole for the Company's Lanai resorts and Oahu retail operation. In
1997, pursuant to the Trademark License Agreement, Dole charged Castle $18,779.
In connection with the Distribution, the Company received a 50% undivided
interest in a corporate aircraft that was owned by Dole. Dole retained the other
50% undivided interest in the aircraft. Under the Aircraft Co-Ownership
Agreement, the Company and Dole agreed that each party would be responsible for
the direct costs associated with its use of the aircraft, and that all indirect
costs would be equally shared. The Company's and Dole's shares of such costs for
1997 were $561,237 and $813,006, respectively. Dole generally pays such costs
and the Company reimburses Dole for the Company's share on an ongoing basis.
In connection with the Distribution, and as partial consideration for Dole's
real estate and resorts business, the Company issued to Dole two promissory
notes. One of these, a $200 million Interim Note, was repaid in December 1995.
The second note, a $10 million Term Note, is payable on December 8, 2000 and
bears interest at the rate of 7% per annum, payable quarterly. Interest accrued
and paid by the Company on the Term Note for 1997 was $700,000.
In 1997, Dole also reimbursed the Company $254,987 for costs incurred
related to seeking entitlements to develop property owned by Dole.
TRANSACTIONS WITH OTHER ENTITIES
David H. Murdock, the Company's Chairman and Chief Executive Officer, owns a
real estate management company, which is managed by Ms. Lynne Scott Safrit, a
director and executive officer of the Company. During 1997, this real estate
management company provided certain support services to the Company and the
Company provided certain management services and office accommodations to the
real estate management company resulting in a net amount due from the real
estate management company to the Company of $130,518. This amount was paid to
the Company in the first quarter of 1998. Mr. Murdock also paid the Company and
Dole, as co-owners of the aircraft which is the subject of the Aircraft
Co-Ownership Agreement described above, a total of $132,728 representing the
incremental cost to the Company and Dole for Mr. Murdock's personal use of the
aircraft during 1997. This payment was shared equally by the Company and Dole.
In 1997, the Company purchased $90,630 of construction products directly or
indirectly from companies wholly-owned by Mr. Murdock. These purchases were made
at prices no less favorable than those charged to third parties.
19
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The Company is completing negotiations to enter into transactions with an
unrelated third party for the lease, sale or exchange of approximately 11 acres
of undeveloped land which the Company owns in Westlake Village, California (the
"Westlake Land"). The purchaser of the Westlake Land is expected to lease the
property to Dole for use as Dole's corporate headquarters. Subject to approval
of the purchase price by the Company's Audit Committee and execution of
definitive agreements, the transaction is expected to close in the second
quarter of 1998.
PROPOSAL 2
ELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS AND AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors of
the Company has appointed Arthur Andersen LLP as the Company's independent
public accountants and auditors for the 1998 fiscal year ending December 31,
1998, subject to stockholder approval. Arthur Andersen LLP (and its
predecessors) has served as the Company's (or its predecessor, Dole Food
Company, Inc.) independent public accountants and auditors since 1985.
Services which will be provided to the Company and its subsidiaries by
Arthur Andersen LLP with respect to the 1998 fiscal year include the examination
of the Company's consolidated financial statements, reviews of quarterly
reports, services related to filings with the SEC and consultations on various
tax matters.
A representative of Arthur Andersen LLP will be present at the Annual
Meeting to respond to appropriate questions and to make such statements as he or
she may desire.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ARTHUR
ANDERSEN LLP AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS AND AUDITORS.
MISCELLANEOUS
OTHER MATTERS
If any other matters properly come before the meeting, it is the intention
of the proxy holders to vote in their discretion on such matters pursuant to the
authority granted in the proxy and permitted under applicable law.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that executive
officers, directors, and holders of more than 10% of a company's registered
class of securities file reports of their ownership of a company's securities
with the SEC. Based on a review of these reports, the Company believes that its
reporting persons complied with all applicable Section 16(a) filing
requirements.
COST OF SOLICITING PROXIES
The expenses of preparing and mailing the Notice of Annual Meeting, the
Proxy Statement and the proxy card(s) will be paid by the Company. In addition
to the solicitation of proxies by mail, proxies may be solicited by directors,
officers and employees of the Company (who will receive no additional
compensation) by personal interviews, telephone, telegraph and facsimile. The
Company has retained D. F. King & Co., Inc. to assist in the solicitation of
proxies. D. F. King & Co., Inc. will be paid approximately $5,000, plus
out-of-pocket expenses, for its services. It is anticipated that banks,
custodians, nominees and fiduciaries will forward proxy soliciting material to
beneficial owners of the Company's Common Stock and that such persons will he
reimbursed by the Company for their expenses incurred in so doing.
20
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FORM 10-K AND ANNUAL REPORT TO SHAREHOLDERS
Enclosed with this Proxy Statement is the Annual Report on Form 10-K of the
Company for the 1997 fiscal year. The Annual Report on Form 10-K is enclosed for
the convenience of stockholders only and should not be viewed as part of the
proxy solicitation material. If any person who was a beneficial owner of Common
Stock of the Company on the record date for the 1998 Annual Meeting desires
additional copies of the Company's Annual Report on Form 10-K, the same will be
furnished without charge upon receipt of a written request. The request should
identify the person making the request as a stockholder of the Company as of
March 9, 1998 and should be directed to Debbie Rau, Castle & Cooke, Inc., 10900
Wilshire Blvd., Suite 1600, Los Angeles, CA 90024.
PROPOSALS OF STOCKHOLDERS
The 1999 Annual Meeting of Stockholders is presently expected to be held on
or about May 14, 1999. To be considered for inclusion in the Company's Proxy
Statement for the 1999 Annual Meeting, proposals of stockholders intended to be
presented at the meeting must be received by the Corporate Secretary, Castle &
Cooke, Inc., 10900 Wilshire Boulevard, Los Angeles, California 90024, no later
than December 1, 1998.
By Order of the Board of Directors,
[SIGNATURE]
Roberta Wieman
CORPORATE SECRETARY
March 31, 1998
21
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CAC60F DETACH HERE
CASTLE & COOKE, INC.
PROXY FOR COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints David H. Murdock, Wallace S. Miyahira
and Roberta Wieman, and each of them, as Proxies, each with full power of
substitution and each with all powers that the undersigned would possess if
personally present, to vote all of the shares of Common Stock of Castle &
Cooke, Inc. (the "Company") which the undersigned may be entitled to vote at
the Annual Meeting of Stockholders of the Company to be held at the Hyatt
Westlake Plaza, 880 S. Westlake Boulevard, Westlake Village, California on
Thursday, May 14, 1998 at 10:00 a.m. local time, and any adjournments thereof.
The undersigned instructs each of said Proxies, or their substitutes, to vote
as specified by the undersigned on the reverse side and to vote in such manner
as they may determine on any other matters which may properly come before the
meeting as indicated in the Notice of Annual Meeting of Stockholders and Proxy
Statement, receipt of which is hereby acknowledged.
Election of Directors. NOMINEES:
Edward M. Carson, Lodwrick M. Cook, Edward J. Hogan,
Wallace S. Miyahira, David H. Murdock, Lynne Scott
Safrit and Dell Trailor
(IMPORTANT - TO BE SIGNED AND DATED ON REVERSE SIDE)
PLEASE VOTE, SIGN, DATE AND PROMPTLY RETURN THIS CARD
IN THE ENCLOSED PREPAID ENVELOPE
SEE REVERSE SEE REVERSE
SIDE SIDE
<PAGE>
CAC60F DETACH HERE
/X/ PLEASE MARK
VOTES AS IN
THIS EXAMPLE
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS MADE, FOR ITEMS 1 AND 2 AND AS SAID PROXIES DEEM ADVISABLE
ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE BOARD
OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
1. Election of Directors (see reverse).
FOR WITHHELD
/ / / /
/ /_______________________________
For all nominees as noted above
FOR AGAINST ABSTAIN
2. Elect Arthur Andersen LLP as / / / / / /
independent public accountants
and auditors for the 1998 fiscal
year.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
Note: Please sign exactly as your name appears on this proxy
card. If shares are held jointly, each holder should sign.
Executors, administrators, trustees, guardians, attorneys and
agents should give their full titles. If shareholder is a corporation,
sign in full corporate name by the authorized officer.
Signature__________________ Date_______ Signature__________________ Date_______
