<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
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.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/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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</TABLE>
<PAGE>
CASTLE & COOKE, INC.
10900 WILSHIRE BOULEVARD
LOS ANGELES, CA 90024
- --------------------------------------------------------------------------------
March 31, 2000
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 Dole World
Headquarters, One Dole Drive, Westlake Village, California, at 10:00 a.m. on
May 9, 2000.
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.
As you will see from the Proxy Statement, you are being asked to vote on the
nominees for the Board of Directors and to approve the selection of Arthur
Andersen LLP as the Company's independent accountants and auditors for the 2000
fiscal year.
We hope that you will be able to attend the meeting. However, whether or not
you plan to attend in person, your vote is important, so please complete, sign,
date and return the enclosed proxy card(s) promptly. 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,
/s/ David H. Murdock
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 9, 2000
------------------------
The Annual Meeting of Stockholders of CASTLE & COOKE, INC. (the "Company")
will be held at Dole World Headquarters, One Dole Drive, Westlake Village,
California, at 10:00 a.m. on May 9, 2000 for the following purposes:
(1) To elect eight (8) 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 approve Arthur Andersen LLP as the Company's independent public
accountants and auditors for the 2000 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 16, 2000 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,
/s/ Roberta Wieman
Roberta Wieman
CORPORATE SECRETARY
March 31, 2000
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
SOON 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 Dole World Headquarters, One Dole Drive, Westlake Village, California, at
10:00 a.m. on May 9, 2000, and at any adjournments thereof. The Company's
principal executive offices are located at 10900 Wilshire Boulevard, Los
Angeles, California 90024, 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, 2000. The
Company's 1999 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 16, 2000 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,
17,052,946 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, and the Common Stock is held by approximately 8,664 holders
of record as of that date.
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 proxy card that is properly signed and returned to the
Company and not revoked will be voted in accordance with the instructions on the
card.
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, by such
stockholder's submission of a properly signed, later-dated proxy, or by its vote
in person at the Annual Meeting. 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 approval of Arthur
Andersen LLP as the Company's independent public accountants and auditors for
the 2000 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
1
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vote at the meeting will be required with respect to the election of directors
and the approval of Arthur Andersen LLP as the Company's independent public
accountants and auditors.
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. Abstentions are counted as shares present at the meeting for
purposes of a quorum and have the effect of votes cast against any matter as to
which they are specified. "Broker nonvotes" mean shares that are not voted on a
particular matter by a broker because the broker has no authority to vote on the
matter without instructions. Broker nonvotes on a proposal will be treated as
present for purposes of a quorum and will have the effect of a vote against
Proposal 2, and will have the effect of withholding authority for the election
of directors in Proposal 1.
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 proxy card, except as described above for broker nonvotes.
Each share of Common Stock entitles its holder to one vote on each matter to
be voted on at the Annual Meeting. Under the Company's Articles of
Incorporation, stockholders are not entitled to cumulate their votes in the
election of directors.
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:
- the name, age, business address and residence address of each such
intended nominee;
- the principal occupation or employment of each such intended nominee;
- the number of shares of capital stock of the Company beneficially owned by
each such intended nominee; and
- 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.
To be timely, any nomination 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 9, 2000.
Any 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 Company's 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 such Bylaws, the nomination shall be void.
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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's Common Stock as of March 16, 2000 unless otherwise noted.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) PERCENT OF CLASS(2)
- ------------------------------------ ----------------------- -------------------
<S> <C> <C>
David H. Murdock ....................... 4,643,933(3) 27.23%
10900 Wilshire Boulevard
Los Angeles, CA 90024
Franklin Resources, Inc. ............... 1,700,000(4) 9.97%
777 Mariners Island Boulevard
San Mateo, CA 94404
Tweedy, Browne Company LLC ............. 1,158,769(5) 6.79%
52 Vanderbilt Avenue
New York, NY 10017
Ingalls & Snyder, LLC .................. 1,081,033(6) 6.34%
61 Broadway
New York, NY 10006
Dimensional Fund Advisors, Inc. ........ 1,187,900(7) 6.97%
1299 Ocean Avenue
Santa Monica, CA 90401
</TABLE>
- ------------------------
(1) Unless otherwise indicated in these notes, 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 17,052,946
shares of Common Stock outstanding on March 16, 2000, plus in the case of
Mr. Murdock, stock options granted to him under the Company's Amended and
Restated 1995 Stock Option and Award Plan (the "1995 Plan") to purchase
115,667 shares, which number includes all such options that are exercisable
within 60 days following February 29, 2000.
(3) Mr. Murdock has both voting and dispositive power over all except 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/A filed as of January 13, 2000, 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.
(5) Based on a report filed on Schedule 13D dated January 8, 1999, as amended by
Schedule 13D/A dated December 1, 1999, filed on behalf of Tweedy, Brown
Company LLC ("TBC"), TBK Partners, L.P. ("TBK") and Vanderbilt Partners,
L.P. ("Vanderbilt"), TBC was the beneficial owner of 1,158,769 shares ("TBC
Shares"), TBK was the beneficial owner of 107,300 shares ("TBK Shares") and
Vanderbilt ceased to be the beneficial owner of more than 5% of the
Company's Common Stock on November 15, 1999, pursuant to disposition of
shares in open market transactions, and does not beneficially own directly
any shares. TBC reported that it has sole dispositive power over all of the
TBC Shares, and that such shares are held in the accounts of various
customers of TBC, with respect to which accounts TBC had investment
discretion, and with respect to some of which TBC had sole or shared voting
power. TBC reported having sole voting power over 1,110,788 shares held in
certain
3
<PAGE>
TBC accounts, and that certain members of TBC may be deemed to have sole
voting power as to certain shares as more fully set forth in the
Schedule 13D, as amended. TBK reported having sole voting and sole
dispositive power over the TBK Shares. Each of TBC, TBK and Vanderbilt
disclaimed beneficial ownership of the shares held by the other. The
aggregate number of shares with respect to which TBC, TBK and Vanderbilt
could be deemed to be the beneficial owners as of the date of the report is
1,266,069 shares.
(6) Based on a report on Schedule 13G/A filed as of February 5, 2000, Ingalls &
Snyder LLC had sole voting and dispositive power over 27,600 of these shares
and shared dispositive power over 1,053,433 of these shares.
(7) Based on a report on Schedule 13G filed as of February 4, 2000, Dimensional
Fund Advisors, Inc. ("DFA") reported sole voting and sole dispositive power
over these shares. DFA reported that it was an investment advisor that
furnished investment advice to four investment companies, and served as
investment manager to certain other commingled group trusts and separate
accounts (these investment companies' trusts and accounts being "Funds").
All reported securities were owned by the Funds, and DFA disclaimed
beneficial ownership of them.
4
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PROPOSAL 1
ELECTION OF DIRECTORS
GENERAL
The Board of Directors is currently comprised of eight (8) members. The
Board of Directors nominated the eight (8) incumbents named below for election
to the Board of Directors at the Annual Meeting 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 as proxies (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 judgment.
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 29,
2000. Messrs. Carson, Cook, Hogan and Dallas are unaffiliated with the Company
and its subsidiaries. Each nominee's age is given as of March 31, 2000.
<TABLE>
<CAPTION>
YEAR ELECTED/APPOINTED PRINCIPAL OCCUPATION, POSITIONS WITH THE COMPANY
NAME AS A DIRECTOR AGE AND SUBSIDIARIES AND OTHER INFORMATION
- ---------------------------- ---------------------- -------- ------------------------------------------------
<S> <C> <C> <C>
David H. Murdock 1995 76 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, including the manufacture of
textile-related products, and industrial and
building products.
</TABLE>
5
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<TABLE>
<CAPTION>
YEAR ELECTED/APPOINTED PRINCIPAL OCCUPATION, POSITIONS WITH THE COMPANY
NAME AS A DIRECTOR AGE AND SUBSIDIARIES AND OTHER INFORMATION
- ---------------------------- ---------------------- -------- ------------------------------------------------
<S> <C> <C> <C>
Patrick J. Birmingham 1999 62 Senior Vice President of the Company since
February 1998. President and Chief Executive
Officer of Castle & Cooke Homes Hawaii, Inc. (a
subsidiary of the Company conducting residential
real estate business in Hawaii), Castle & Cooke
Properties, Inc. (a subsidiary of the Company
conducting real estate business in Hawaii) and
Lanai Company, Inc. (a subsidiary of the Company
conducting the resorts business on Lanai) since
February 2000. President and Chief Operating
Officer of Lanai Company, Inc. from February
1998 to January 2000. Mr. Birmingham retired
from ITT Sheraton Corporation in October 1995,
where he served as Senior Vice President and
Director of International Development, ITT
Sheraton Corporation, 1995; and Senior Vice
President and President of Europe, Africa and
Middle East Division, ITT Sheraton Corporation,
1993 to 1994. Mr. Birmingham is also a member of
the Board of Directors of Pleasant Travel
Service and The Hogan Family Foundation, Inc.,
and a member of the Advisory Board of Directors
of Pleasant Holidays, LLC.
Wallace S. Miyahira 1996 67 President--Oahu Residential and Commercial
Operations of the Company from December 1996 to
June 1999 and a Director of the Company since
December 1996. Senior Vice President of the
Company from October 1995 to December 1996.
Senior Vice President of Castle & Cooke Homes,
Inc. (formerly a publicly traded company that
was 82% owned by Dole) 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 December 1996, and President from
December 1996 to June 1999. 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 1996 to June 1999. Mr. Miyahira
retired as an employee and officer of the
Company on June 30, 1999; he continues to serve
as a Director and as a consultant for the
Company.
Lynne Scott Safrit 1995 41 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.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
YEAR ELECTED/APPOINTED PRINCIPAL OCCUPATION, POSITIONS WITH THE COMPANY
NAME AS A DIRECTOR AGE AND SUBSIDIARIES AND OTHER INFORMATION
- ---------------------------- ---------------------- -------- ------------------------------------------------
<S> <C> <C> <C>
Edward M. Carson 1996 70 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, who has been a
Director of the Company since 1996, is also a
member of the Board of Directors of Wells Fargo
Bank, Terra Industries, Inc., Aztar Corporation
and Schuff Steel Company.
Lodwrick M. Cook 1996 71 Co-Chairman of Global Crossing 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, who has
been a Director of the Company since 1996, is
also Chairman of the Board of Directors of
Litex, Inc.
Edward J. Hogan 1996 72 Chairman of the Board and Chief Executive
Officer of Pleasant Holidays, LLC and other
companies engaged in the travel industry. Mr.
Hogan also served on the Board of Directors of
Castle & Cooke Homes, Inc. (formerly a publicly
traded company that was 82% owned by Dole) from
April 1993 until January 1995. Mr. Hogan, who
has been a Director of the Company since 1996,
is also a member of the Board of Directors of
Dollar Thrifty Automotive Group, Inc., ChildHelp
USA, the Hugh O'Brien Youth Foundation, Travel
Industry Association of America and Academy of
Travel and Tourism and Chairman of the Board of
Loyola Marymount University Travel and Tourism
School, The Hogan Family Foundation, Inc.,
Pleasant Travel Service and Gonzaga University
Entrepreneurial School.
William D. Dallas 1999 44 Co-founder and Chairman of First Franklin since
1981; licensed California Real Estate Broker and
a charter member and First Vice President of the
California Association of Mortgage Brokers
(CAMB). Mr. Dallas, a Certified Mortgage Banker,
is a member of the Board of Governors of the
Mortgage Bankers Association of America, a
member of the Board of Directors of Factual Data
Corporation, Affinity Corporation, and Alliance
for the Arts of Thousand Oaks and on the Board
of Regents of California Lutheran University and
the City of Thousand Oaks.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION
OF EACH OF THE NOMINEES DESCRIBED ABOVE.
7
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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 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 1999 fiscal
year.
The Audit Committee is comprised entirely of directors who are not current
or former 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. William Dallas. The Audit Committee held four meetings during the 1999
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. Its objective is to assure 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 serves as the administrator of the Company's discretionary stock
award plans. The present members of the Compensation Committee are Mr. Lodwrick
Cook, Mr. Edward Hogan and Mr. William Dallas. The Compensation Committee held
four meetings during the 1999 fiscal year.
MEETINGS OF THE BOARD OF DIRECTORS
During the 1999 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 (a) such Board meetings and (b) meetings of committees
on which they served during the 1999 fiscal year.
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 Deferred Stock Compensation Plan for Non-Employee Directors
(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 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
8
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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, 1999, 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). The number of units credited on
June 1, 1999 was 664.176. 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, reorganization or similar events.
Mr. Wallace Miyahira, a director and former executive officer of the
Company, retired on June 30, 1999, and continued to serve as a director
following his retirement. The Company entered into a Consulting Agreement with
Mr. Miyahira dated May 19, 1999, as amended by the Addendum to Consulting
Agreement dated February 16, 2000, pursuant to which Mr. Miyahira has provided
consulting services to the Company following his retirement, commencing on
July 1, 1999. The material terms of this Consulting Agreement include the
following:
- a term through the end of 1999, which was extended by the Addendum through
the end of 2000, which term may be further extended on a month to month
basis by mutual agreement of the parties, and is subject to earlier
termination at any time by either party on two weeks written notice;
- provision of consulting services by Mr. Miyahira which primarily focus on
long-range planning and government affairs as they affect the Company, and
such other services as requested by the Company from time to time; and
- compensation of $14,000 per month, plus the applicable Hawaii general
excise tax, for which Mr. Miyahira is expected to provide an average of
approximately 90 hours of service per month during the term.
In connection with Mr. Miyahira's change in status and assumption of
responsibilities as a consultant, the Compensation Committee extended the
post-termination exercise period (but not the term) of Mr. Miyahira's
outstanding vested options form one year after termination of his employment
with the Company to one year after he ceases serving as a Director of the
Company.
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 29, 2000, by the Company's
9
<PAGE>
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>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER(1) BENEFICIAL OWNERSHIP(2) CLASS(3)
- ------------------- ----------------------- ----------
<S> <C> <C>
David H. Murdock............................................ 4,643,933(4)(6) 27.23%
Edward M. Carson............................................ 2,500(5) *
Lodwrick M. Cook............................................ 12,429(5) *
Edward J. Hogan............................................. 10,000(5) *
Patrick J. Birmingham....................................... 10,667(6) *
Wallace S. Miyahira......................................... 54,292(6) *
Lynne Scott Safrit.......................................... 41,834(6) *
William D. Dallas........................................... 1,950(5) *
Bruce M. Freeman............................................ 49,001(6) *
Edward C. Roohan............................................ 41,667(6) *
Harry A. Saunders........................................... 3,834(6) *
All Directors and Executive Officers as a Group
(14 persons, including those named above)................. 4,872,107(6) 28.6%
</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, as amended, on
the basis of 17,052,946 shares of Common Stock outstanding on March 16,
2000, plus, where applicable, stock options granted under the Company's
stock option plans that are exercisable within 60 days following
February 29, 2000.
(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
2,428.637 stock 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 29, 2000, or
within 60 days thereafter: Mr. Murdock, 115,667; Mr. Miyahira, 52,492;
Mr. Birmingham, 10,667; Ms. Safrit 41,334; Mr. Freeman, 44,001; Mr. Roohan,
34,667; Mr. Saunders, 2,834; and all directors and executive officers as a
group, 328,997.
10
<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>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
-------------------------------------------------------- -------------------------
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND BONUS ($) COMPENSATION OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) (2) ($)(3) (#) ($)(4)
- ------------------ -------- --------- --------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
David H. Murdock(5) ......... 1999 439,998(1) 462,000(1) 65,000 0
Chairman & CEO 1998 437,690(1) 330,000(1) 30,000 0
1997 421,152(1) 230,000(1) 31,000
Bruce M. Freeman ............ 1999 273,076 275,000 20,000 4,800
Senior Vice President 1998 250,000 247,500 20,000 4,800
1997 250,000 122,300 11,000 4,750
Patrick J. Birmingham ....... 1999 200,018 150,000 40,229 12,000 4,800
Senior Vice President 1998 196,172 150,000 10,000 0
Harry A. Saunders ........... 1999 205,940 150,000 8,500 4,800
Senior Vice President 1998 208,690 116,400 0
1997 219,743 6,000
Edward C. Roohan ............ 1999 174,231 150,000 15,000 4,800
Vice President & Chief 1998 158,846 87,500 25,000 4,800
Financial Officer 1997 125,000 40,000 6,000 3,125
</TABLE>
- ------------------------
(1) Amounts reported do not include cash compensation paid to Mr. Murdock by
Dole for these years.
(2) Bonus amounts shown reflect payments made in the subsequent year with
respect to performance for the identified year.
(3) Does not include perquisites which do not exceed the lesser of $50,000 or
10% of the reported annual salary plus bonus for any year.
(4) The amounts shown in this column include contributions by the Company under
the Company's tax deferred investment plans for the benefit of the
individuals listed, but do not include payments made to Mr. Murdock under
Dole's defined benefit pension plan. See "Pension Plans."
(5) Mr. Murdock is also the Chairman and Chief Executive Officer of Dole.
Mr. Murdock also holds positions with certain business entities owned by him
that are not controlled directly or indirectly by Dole or the Company. Such
other entities pay compensation and provide fringe benefits to Mr. Murdock
for his services to them. Mr. Murdock was paid for his services to the
Company by the Company; in addition to his salary, he participated in bonus
programs with other executive officers of the Company. See "Certain
Transactions."
11
<PAGE>
OPTION GRANTS IN THE LAST FISCAL YEAR
The following table sets forth information concerning stock options for
shares of the Company's common stock granted to each of the Named Executive
Officers during the Company's 1999 fiscal year.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERMS(1)
- -------------------------------------------------------------------------------------- -------------------------------
PERCENT
OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES
OPTIONS IN LAST EXERCISE OR
GRANTED FISCAL BASE EXPIRATION
NAME #(2)(3) YEAR PRICE/($/SH) DATE(4) 0%($) 5%($) 10%($)
- ---- ---------- ---------- ------------ ------------ -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
David H. Murdock............... 65,000 23.64% $16.8125 Feb. 7, 2009 $0 687,264 1,741,662
Edward C. Roohan............... 15,000 5.46% $16.8125 Feb. 7, 2009 $0 158,599 401,922
Bruce M. Freeman............... 20,000 7.28% $16.8125 Feb. 7, 2009 $0 211,466 535,896
Patrick J. Birmingham.......... 12,000 4.37% $16.8125 Feb. 7, 2009 $0 126,879 321,538
Harry A. Saunders.............. 8,500 3.09% $16.8125 Feb. 7, 2009 $0 89,873 227,756
</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%" demonstrates 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 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, or permit the transfer of options to certain related persons or
entities on a case-by-case basis. 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 8, 1999.
(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
recapitalization or reorganization event occurs.
12
<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 1999 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 year 1999. The Company has not granted any SARs.
AGGREGATED OPTION EXERCISES AND
FISCAL YEAR-END OPTION VALUES (1999 FISCAL YEAR)
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SECURITIES UNDERLYING IN-THE-MONEY OPTIONS AT
SHARES UNEXERCISED 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 73,667/95,333 13,438/0
Patrick J. Birmingham... 0 0 3,334/18,666 0/0
Bruce M. Freeman........ 0 0 27,001/36,999 4,063/0
Edward C. Roohan........ 0 0 19,334/33,666 2,188/0
Harry A. Saunders....... 0 0 0/8,500 0/0
</TABLE>
- ------------------------
(1) Some of these stock options, called the Converted Options, replace options
originally granted under Dole's 1982 Stock Option and Award Plan (the "1982
Dole Plan") and 1991 Stock Option and Award Plan (the "1991 Dole Plan"),
which replacement was effected in connection with the Distribution. 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. Options replacing 1982
Dole Plan options may continue to 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 1999 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.
13
<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, 2000, the estimated annual benefits payable under the pension plan in
which the Named Executive Officers participated in 1999.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------------------------------
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, 1999 for certain individuals named in the Summary Compensation
Table are as follows:
<TABLE>
<S> <C> <C> <C> <C>
- - Mr. Murdock (age 76) 4 years $901,998
- - Mr. Freeman (age 50) 6 years $548,077
- - Mr. Roohan (age 36) 6 years $324,231
- - Mr. Saunders (age 49) 24 years $355,940
</TABLE>
Employees of Lanai Company, a subsidiary of the Company, do not now accrue
pension benefits under the plan. In lieu of this, employees of Lanai Company
receive supplemental contributions to their respective 401(k) plan accounts
equal to two percent (2%) of their respective annual base salary and bonus
payments, subject to limitations imposed by the Internal Revenue Code as
described below. Mr. Birmingham, who is an employee of Lanai Company, Inc.,
became eligible to participate in the 401(k) plan in 1999 and received a
supplemental contribution into his 401(k) plan account. Effective January 1,
1996, Mr. Murdock became eligible to participate in the Company's
noncontributory pension and supplemental pension benefit plan(s) which, because
of Mr. Murdock's age, will provide pension benefits to him in 2000 of
approximately $21,100. 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 $130,000 (at
December 31, 1999) on the benefits available to an individual under pension
plans. Furthermore, the Internal Revenue Code
14
<PAGE>
places an annual maximum limit of $160,000 (at December 31, 1999) 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 $130,000 limit or compensation exceeds the $160,000 limit, the
excess will be paid by the Company from an unfunded excess and supplemental
benefit plan.
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. 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 originally identified in 1996 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
15
<PAGE>
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 the 50th to 75th
percentile of the Company's peer group based on an analysis conducted by the
Company's executive compensation consultant in 1999.
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 range from 20% to 50% of base salary
(75% of base salary 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, and bonuses payable are determined within a band of performance
levels relative to the target.
In 1999, 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 than target performance levels are
attained. In accordance with Company policy, whether or not specified
performance criteria are achieved, the Compensation Committee may retain
the discretion to authorize bonuses above or below the formula determined
amounts, subject to limitations imposed by its policies regarding
Section 162(m) (described below).
In 1999, most of the business units reached or exceeded their targeted
performance levels. Using their EBT results, all executive officers
associated with the business units received from 58% to 100% of base
salary, or 116% to 207% of their target award level, based primarily on
the formulaic model with one exception to recognized improved performance
(albeit below target) and expanded responsibilities of its head.
- LONG-TERM INCENTIVES. The only outstanding long-term incentive opportunity
for senior executives is through the Company's stock option and award
plan, which was approved by shareholders at the
16
<PAGE>
annual shareholders meeting on May 12, 1999. In contrast to bonuses that
are paid for prior year 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 8, 1999. 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 average fair
market value on the last day of the month during the previous calendar
year. In general, the multiples for executive officers (which ranged from
106% to 301%) 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 1999 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 1999
compensation.
Under the formula provisions of the executive annual incentive plan,
Mr. Murdock was eligible for an annual bonus for 1999 of 75% to 150% of base
salary if the performance of the Company met or exceeded threshold levels
established at the beginning of the year. The 1999 results exceed the applicable
threshold and the Committee awarded Mr. Murdock a bonus, in accordance with the
formula, of $462,000 or 105% of base salary.
Mr. Murdock's base salary was reviewed by the Compensation Committee in
February 1999. In connection with its 1999 bonus determinations and salary
review in February, 2000, 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. 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 Mr. Murdock's current base salary of $440,000 and his total cash
compensation opportunity, including salary and bonus, are slightly above median
competitive levels for chairmen and chief executive officers. Following this
review, the Compensation Committee did not change Mr. Murdock's salary. The
Compensation Committee believes that his salary, target bonus and stock option
award in 1999 will place him within the 50th and 75th percentile of the peer
group companies.
Acting on the recommendation of the Company's compensation consultant, in
January 1999, the Compensation Committee approved a stock option grant for
Mr. Murdock in the amount of 65,000 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 248% (which was within the 50(th) and 75(th) percentile of annual
stock option
17
<PAGE>
grants for CEOs 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.
SECTION 162(M) CONSIDERATIONS
The Section 162(m) Rules 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. No covered executive's compensation
for these purposes exceed $1 million for 1999. Although stock option grants and
performance-based bonuses are generally considered performance-based, options
granted from May 21, 1997 through May 18, 1999 were not considered performance
based under the Section 162(m) Rules. With the Amended and Restated 1995 Stock
Option and Award Plan (the "1995 Plan") approved by shareholders at the May 18,
1999 shareholder meeting, the Compensation Committee has structured subsequent
option grants and plans to structure future options and other performance-based
or incentive compensation awards to executive officers under the Plan to avoid
limits on deductibility, wherever feasible. The Compensation Committee, however,
considers the Section 162(m) Rules only one of the factors it reviews with
respect to compensation matters; changes in the tax laws or interpretations,
other priorities, special circumstances or the uncertain application of the
Section 162(m) Rules may result in or warrant exceptions to this objective.
THE CORPORATE COMPENSATION AND
BENEFITS COMMITTEE
Lodwrick M. Cook, Chairman
Edward J. Hogan, Director
William Dallas, Director
18
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Murdock, a director and executive officer of the Company, and
Ms. Wieman, an executive officer of the Company, also serve as directors and
executive officers of privately-held entities controlled by Mr. Murdock which do
not have compensation committees. Any compensation from those companies is
within the discretion of the boards of directors of those private companies.
In 1999, Mr. Patrick Birmingham, a director and executive officer of the
Company, served as a director of Pleasant Travel Service and on the Advisory
Board of Directors of Pleasant Holidays, LLC. Mr. Edward Hogan, an executive
officer of the companies, served on the Compensation Committee and as a director
of the Company.
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, 1999, 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 William Lyon Homes (formerly known as "The Presley
Companies").
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CASTLE & COOKE, INC. S & P 500 PEER GROUP INDEX
<S> <C> <C> <C>
1995 $100 $100 $100
1996 $95 $123 $114
1997 $101 $164 $201
1998 $88 $211 $187
1999 $76 $255 $159
</TABLE>
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Historical information regarding The Presley Companies ("TPC"), which
comprises less than 1% of the Peer Group based on market capitalization, has
been adjusted to reflect TPC's merger in late 1999 with William Lyon Homes and a
5 for 1 reverse stock split effected by the TPC in connection with this merger.
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.
CERTAIN TRANSACTIONS
The transactions described below in which Mr. Murdock or his affiliates or
Dole had an interest during 1999 were reviewed and determined to be fair and
reasonable and in the Company's interest by the Audit Committee of the Board of
Directors of the Company.
TRANSACTIONS WITH OR INVOLVING DOLE
On December 28, 1995, Dole distributed to stockholders all of the common
stock of the Company, Dole's former real estate and resorts operations (the
"Distribution"). Mr. Murdock is also Chairman and Chief Executive Officer of
Dole and beneficially owns approximately 24% of its outstanding common stock.
As partial consideration to Dole for the Distribution, the Company issued to
Dole two promissory notes, one of which in the principal amount of $10 million
remains unpaid. The $10 million note is payable December 7, 2000, and bears
interest at the rate of 7% per annum, payable quarterly. The Company incurred
and paid $700,000 in interest expense since January 1, 1999 pursuant to the
terms of the $10 million note.
Pursuant to the Distribution, the Company and Dole each hold a 50% interest
in an airplane, which was formerly owned solely by Dole. 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 and Dole's
proportionate shares of the operating costs for the aircraft during 1999 were
$700,212 and $945,528 respectively. Pursuant to the Distribution agreements,
Dole paid the Company $83,268 for certain general and administrative expenses
provided to Dole by the Company during 1999, including land management, and
workers' compensation services. The Company paid Dole $71,859 for certain
general and administrative expenses for various services provided to the Company
by Dole during 1999, including executive and asset management.
In connection with Dole's occupation during 1999 certain of office space
acquired by the Company in Bakersfield, California and to specify the parties'
respective ongoing responsibilities with respect to such property, Dole and the
Company entered into an agreement dated January 1, 2000. Under the agreement,
Dole agreed to pay the Company an aggregate sum of $1,355,829--$396,949 of which
has been paid and the remaining $958,880 of which is to be paid in monthly
installments through December 2001. Dole also agreed to reimburse the Company
for certain brokerage commissions, if incurred by the Company in re-leasing the
property prior to February 28, 2009, and the Company has agreed to reimburse
Dole for any rents received by the Company on the property from any third
parties for periods through December 31, 2001.
During 1999 Dole also paid the Company $20,299 pursuant to three eight-year
leases commencing in December 1995 for three plots of agricultural land covering
approximately 1600 acres on Oahu, Hawaii. The Company expects to receive similar
annual rents in future years under the leases, subject to changes in property
taxes payable on such properties.
Dole also paid the Company $181,200 during 1999 for holding various meetings
and sales functions at the Company's Lanai resort hotels. The Company purchased
$229,824 of products from Dole for its retail store and hotels in Hawaii, and
also paid Dole $34,356 in licensing fees pursuant to a long-term Trademark
20
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License Agreement. The Company also received a general excise tax refund of
$166,168 that was paid to Dole during 1999 pursuant to the agreement governing
the Distribution.
In 1998, the Company sold to a third party bank (the "Bank") an
approximately ten-acre parcel of undeveloped land in Westlake Village,
California (the "Dole Headquarters Site") for approximately $5,249,000 for
development by the Bank of a corporate headquarters building for Dole. The Dole
Headquarters Site was part of an approximately thirty-acre parcel of land (the
"Lindero Property") owned by the Company. The sales price for the Dole
Headquarters Site was negotiated by senior officers of the Company making use of
appraisals done by independent third parties, and was approved by the Company's
Audit Committee. In addition, Dole reimbursed the Company the sum of $45,134 for
architectural services and related expenses provided to Dole in 1999 in
connection with the construction of the Dole Headquarters Site. In
January 1999, Dole also paid the Company $2,048,442, which represented a net
payment for certain amounts the parties each owed to the other concerning the
Dole Headquarters Site and the remainder of the Lindero Property. The net
payment represented: (1) certain payments ($2,668,985) to the Company to
reimburse it for development costs incurred by the Company on the Dole
Headquarters Site prior to the time it was sold to the Bank; (2) certain lease
payments ($232,631) to the Company representing lease periods prior to the time
the Dole Headquarters Site was sold to the Bank; less (3) certain payments
($853,174) to Dole representing development costs incurred on the portion of the
Lindero Property which continues to be owned by the Company.
TRANSACTIONS WITH OTHER PERSONS OR ENTITIES
In 1999, Mr. Bruce Freeman, an executive officer of the Company, and the
Company closed the previously reported purchase by Mr. Freeman of a homesite lot
in the Company's Seven Oaks development in Bakersfield, California, at the list
price of $65,000, and paid $3,205 to the Company for consulting services at the
Company's customary rates.
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. Ms. Safrit is compensated by the
Company for her services to the Company, and by the real estate management
company for her services to it. The real estate management company provides
certain support services to the Company which are charged to the Company, and
the Company provides certain management services and office accommodations to
the real estate management company which are charged to the real estate
management company. 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 $30,969, representing the incremental cost to the
Company and Dole for Mr. Murdock's personal use of the aircraft during 1999.
This payment was shared equally by the Company and Dole.
In 1999, the Company purchased $69,199 of construction products in the
ordinary course of business 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.
PROPOSAL 2
APPROVAL 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 2000 fiscal year ending December 31,
2000, 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 2000 fiscal year include the examination
of the Company's consolidated financial statements,
21
<PAGE>
reviews of quarterly reports, services related to filings with the SEC and
consultations on various tax and other 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 APPROVAL 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 to the extent 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, facsimile and
e-mail. 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
$5,500, plus out-of-pocket expenses, for its services. Banks, custodians,
nominees and fiduciaries will forward proxy soliciting material to beneficial
owners of the Company's Common Stock and will be reimbursed by the Company for
their expenses incurred in so doing.
FORM 10-K AND ANNUAL REPORT TO SHAREHOLDERS
Enclosed with this Proxy Statement is a copy of the Company's 1999 Annual
Report. The Annual Report is enclosed for the convenience of stockholders only
and should not be viewed as part of the proxy solicitation material.
Stockholders may obtain without charge copies of the Company's Annual Report and
Form 10-K by calling (310) 208-3636 or writing to:
Investor Relations
Castle & Cooke, Inc.,
10900 Wilshire Blvd., Suite 1600
Los Angeles, CA 90024
PROPOSALS OF STOCKHOLDERS
The 2001 Annual Meeting of Stockholders is presently expected to be held on
or about May 9, 2001. To be considered for inclusion in the Company's Proxy
Statement for the 2001 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, 2000.
22
<PAGE>
A stockholder may wish to have a proposal presented at the 2001 Annual
Meeting of Stockholders, but not to have such proposal included in the Company's
Proxy Statement for the meeting. If notice of the proposal is not received by
the Company at the address above by February 14, 2001, then the proposal will be
deemed untimely under Rule 14a-4(c) under the Securities Exchange Act of 1934,
and the persons entitled to vote proxies solicited by the Board for that meeting
generally will have the right to exercise discretionary voting authority with
respect to the proposal.
By Order of the Board of Directors,
/s/ Roberta Wieman
Roberta Wieman
CORPORATE SECRETARY
March 31, 2000
23
<PAGE>
CCI80A DETACH HERE
PROXY
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, Patrick J. Birmingham
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 Dole World
Headquarters, One Dole Drive, Westlake Village, California on Tuesday, May 9,
2000 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, as permitted by law, 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:
(01) Patrick J. Birmingham, (02) Edward M. Carson, (03) Lodwrick M. Cook,
(04) Edward J. Hogan, (05) Wallace S. Miyahira, (06) David H. Murdock,
(07) Lynne Scott Safrit and (08) William D. Dallas
(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>
CCI80A DETACH HERE
PLEASE MARK
/X/ 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 PERMITTED BY LAW, 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 except as noted above
FOR AGAINST ABSTAIN
2. Approval of Arthur Andersen LLP as
independent public accountants and / / / / / /
auditors for the 2000 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: _________
