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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM 10-Q
(Mark one)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the quarterly period ended October 4, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-4455
____________________________________
DOLE FOOD COMPANY, INC.
(Exact name of registrant as specified in its charter)
HAWAII 99-0035300
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
31365 OAK CREST DRIVE
WESTLAKE VILLAGE, CALIFORNIA 91362
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (818) 879-6600
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Shares Outstanding at October 31, 1997
--------------------- --------------------------------------
Common Stock, without 60,028,064
par value
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DOLE FOOD COMPANY, INC.
INDEX
Page
Number
------
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Statements of Income -- quarter and three quarters
ended October 4, 1997 and October 5, 1996...................... 3
Consolidated Balance Sheets -- October 4, 1997 and
December 28, 1996.............................................. 5
Consolidated Statements of Cash Flow -- three quarters ended
October 4, 1997 and October 5, 1996............................ 6
Notes to Consolidated Financial Statements..................... 7
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.................. 8
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings.............................................. 9
ITEM 6. Exhibits and Reports on Form 8-K............................... 10
Signatures................................................ 13
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PART I.
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DOLE FOOD COMPANY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in 000s, except per share amounts)
Quarter Ended
---------------------------
October 4, October 5,
1997 1996
------------ ------------
REVENUE $ 1,178,301 $ 1,093,586
Cost of products sold 1,022,144 937,625
------------ ------------
Gross margin 156,157 155,961
Selling, marketing and administrative
expenses 110,096 108,072
------------ ------------
Operating income 46,061 47,889
Interest expense (18,719) (19,903)
Interest income 2,456 2,997
Other income (expense) - net 45 (2,917)
------------ ------------
Income before income taxes 29,843 28,066
Income taxes (5,400) (5,100)
------------ ------------
NET INCOME $ 24,443 $ 22,966
------------ ------------
------------ ------------
Net income per common share $ 0.40 $ 0.38
------------ ------------
------------ ------------
Average number of common shares outstanding 60,502 60,630
------------ ------------
------------ ------------
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
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DOLE FOOD COMPANY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in 000s, except per share amounts)
Three Quarters Ended
--------------------------
October 4, October 5,
1997 1996
------------ ------------
REVENUE $ 3,251,097 $ 2,949,215
Cost of products sold 2,752,196 2,486,672
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Gross margin 498,901 462,543
Selling, marketing and administrative
expenses 291,833 276,310
------------ ------------
Operating income 207,068 186,233
Interest expense (50,683) (53,287)
Interest income 5,876 6,600
Other income - net 4,754 2,609
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Income before income taxes 167,015 142,155
Income taxes (30,100) (25,600)
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NET INCOME $ 136,915 $ 116,555
------------ ------------
------------ ------------
Net income per common share $ 2.27 $ 1.93
------------ ------------
------------ ------------
Average number of common shares outstanding 60,349 60,472
------------ ------------
------------ ------------
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
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DOLE FOOD COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(in 000s)
October 4, December 28,
1997 1996
(Unaudited) (Audited)
------------ ------------
CURRENT ASSETS
Cash and short-term investments $ 43,778 $ 34,342
Receivable - net 489,673 518,266
Inventories
Finished products 144,476 169,280
Raw materials and work in progress 129,356 198,306
Growing crop costs 32,464 46,887
Packing materials 28,520 23,213
Operating supplies and other 110,195 88,366
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445,011 526,052
Prepaid expenses 42,427 47,164
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Total current assets 1,020,889 1,125,824
Investments 71,280 72,930
Property, plant and equipment - net 980,944 1,024,135
Long-term receivables - net 65,844 69,861
Other assets 219,606 194,057
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$ 2,358,563 $ 2,486,807
------------ ------------
------------ ------------
CURRENT LIABILITIES
Notes payable $ 9,943 $ 20,478
Current portion of long-term debt 2,087 1,497
Accounts payable and accrued liabilities 598,083 639,955
------------ ------------
Total current liabilities 610,113 661,930
Long-term debt 730,947 903,807
Other long-term liabilities 327,955 341,798
Minority interests 37,722 29,712
Common shareholders' equity
Common stock 320,852 320,476
Additional paid-in capital 173,675 167,645
Retained earnings 242,072 123,280
Cumulative foreign currency translation
adjustment (84,773) (61,841)
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Total common shareholders' equity 651,826 549,560
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$ 2,358,563 $ 2,486,807
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SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
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DOLE FOOD COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
(in 000s)
Three Quarters Ended
-------------------------
October 4, October 5,
1997 1996
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OPERATING ACTIVITIES
Net Income $ 136,915 $ 116,555
Adjustments to net income
Depreciation and amortization 88,044 84,883
Equity earnings, net of distributions (3,251) (2,258)
Provision for deferred income taxes 11,764 13,727
Gain on sale of assets (6,243) (3,383)
Change in operating assets and liabilities
Receivables, net 28,632 (28,576)
Inventories 81,041 45,268
Prepaid expenses and other assets (18,642) (1,208)
Accounts payable and accrued liabilities (54,961) (28,475)
Other (17,912) (13,928)
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Cash flow provided by operating activities 245,387 182,605
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INVESTING ACTIVITIES
Capital additions (78,426) (71,004)
Proceeds from sales of property, plant & equipment 38,256 23,731
Businesses acquired, net of acquired cash (11,206) (39,178)
Sales (purchases) of investments, net 9,446 (6,789)
---------- ----------
Cash flow used in investing activities (41,930) (93,240)
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FINANCING ACTIVITIES
Short-term debt repayments, net (15,535) (7,243)
Long-term debt repayments, net (166,770) (114,878)
Cash dividends paid (18,122) (18,011)
Issuance of common stock 6,406 9,673
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Cash flow used in financing activities (194,021) (130,459)
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Increase (decrease) in cash and short-term
investments 9,436 (41,094)
Cash and short-term investments at beginning
of period 34,342 72,151
---------- ----------
Cash and short-term investments at end of period $ 43,778 $ 31,057
---------- ----------
---------- ----------
Interest paid $ 52,988 $ 53,900
Income taxes paid, net of refunds 14,260 (6,815)
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
DOLE FOOD COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. In the opinion of management, the accompanying unaudited consolidated
financial statements of Dole Food Company, Inc. (the "Company") include all
adjustments necessary to present fairly its financial position as of October
4, 1997 and October 5, 1996, and its results of operations for the quarter
and three quarters then ended, and cash flow for the three quarters then
ended. Interim results are subject to significant seasonal variations and are
not necessarily indicative of the results of operations for a full year.
For additional information, refer to the notes to the Company's audited
consolidated financial statements for the year ended December 28, 1996.
2. The Company declared and paid dividends on its common stock of
approximately $18.1 million and $18 million during the first three quarters
of 1997 and 1996, respectively. The cash dividends represent the regular
quarterly dividend of 10 cents per share.
3. In February 1997, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards No. 128 (SFAS 128), "Earnings
Per Share", which is effective for fiscal years ending after December 15,
1997. SFAS 128 replaces disclosure of primary and fully diluted earnings per
share with basic and diluted earnings per share. Application of SFAS 128
would not have had a material effect on the Company's earnings per share for
the quarter or three quarters ended October 4, 1997 and October 5, 1996.
<PAGE>
DOLE FOOD COMPANY, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Cash flow provided by operating activities increased to $245.4 million for the
first three quarters of 1997 from $182.6 million for the comparable period of
the prior year, an increase of $62.8 million. The improvement in cash flow
provided by operating activities is primarily attributable to the operating
performance of the Company and the closure of its dried fruit operations in
Fresno, California.
RESULTS OF OPERATIONS
Net income for the first three quarters of 1997 increased 17.5% to $136.9
million, $2.27 per share, from $116.6 million, $1.93 per share, for the first
three quarters of 1996. Net income for the third quarter of 1997 increased to
$24.4 million, $0.40 per share, from $23.0 million, $0.38 per share, for the
third quarter of 1996.
Revenue for the first three quarters of 1997 increased 10% to $3,251.1 million
from $2,949.2 million for the same period in 1996. Revenue for the third
quarter of 1997 was $1,178.3 million, an increase of approximately 8% compared
to revenue for the same quarter of the prior year. Banana volumes increased
approximately 20% and 25% for the three quarters and the third quarter,
respectively. Banana revenue growth was somewhat mitigated by slightly lower
average pricing and the adverse impact of the stronger dollar against several
major currencies in which the Company transacts sales. Also contributing to
increased revenue for the three quarters was volume growth of approximately 20%
in value-added, precut salads.
Operating income was $207.1 million for the first three quarters of 1997
compared to $186.2 million for the first three quarters of 1996, an increase of
$20.9 million. Operating income for the third quarter of 1997 was $46.1
million compared to operating income of $47.9 million for the third quarter of
1996. Despite the adverse impact of the stronger dollar on revenues, operating
income as a percentage of revenue has remained constant at 6% and 4% for the
first three quarters and third quarter, respectively, of 1996 and 1997.
Interest expense, net of interest income, decreased 4% for the first three
quarters of 1997 and for the third quarter of 1997 compared to the same periods
of the prior year as a result of lower average debt levels. The growth in
earnings and the resulting impact on operating cash flow allowed the Company to
reduce net debt by $192.2 million during the first three quarters of 1997.
Other income, net of other expense, consists primarily of earnings from equity
investments, gains and losses on the sale of property and minority interest
expense. The increase in other income, net of other expense, for the first
three quarters and the third quarter of 1997 is due to an increase in gain on
sale of property and increased earnings from equity investments.
<PAGE>
PART II. OTHER INFORMATION
DOLE FOOD COMPANY, INC.
ITEM 1. LEGAL PROCEEDINGS
In the Company's Form 10-Q for the quarter ended June 14, 1997, the Company
described certain lawsuits that had been filed in Texas against some of the
manufacturers of a formerly widely used agricultural chemical called DBCP,
the Company and several of its competitors. In these lawsuits, a large
number of foreign nationals allege personal injuries caused by contact with
DBCP. The plaintiffs claim that during the 1960's and 1970's they were
employees of Company subsidiaries, competitors and independent local growers.
In October 1995, four of the six cases pending in Texas state courts were
removed to Texas federal court and dismissed by the Texas federal court on
the grounds that the plaintiff's home countries are the more appropriate
forums for the claims. This dismissal involved approximately 75% of the Texas
plaintiffs, many of whom have now filed claims in their home countries of
Costa Rica, Ecuador, Honduras, Nicaragua and the Philippines. Plaintiffs
have appealed the federal court ruling. The two remaining Texas state court
cases were removed to Texas federal court, one of which has since been
dismissed. Such dismissal has been appealed. Similar DBCP actions were
filed in Louisiana state court in June 1995 by plaintiffs from some of the
same foreign countries. The Louisiana cases were removed to federal court
but were remanded in September 1996. The DBCP manufacturers have reported
that they have settled with the vast majority of the Texas and Louisiana
plaintiffs. In May 1996, additional DBCP actions were filed in Mississippi
state court. These cases have been removed to federal court. In October
1997, two DBCP class actions were filed in Hawaii state court and have since
been removed to federal court. As to all such matters, the Company has
denied liability and asserted substantial defenses. In the opinion of
management, after consultation with outside counsel, the pending lawsuits are
not expected to have a material adverse effect on the Company's financial
position or results of operations.
The Company is involved from time to time in various claims and legal actions
incident to its operations, both as plaintiff and defendant. In the opinion
of management, after consultation with outside counsel none of the claims or
actions to which the Company is a party is expected to have a material
adverse effect on the Company's financial position or results of operations.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS:
Exhibit
No.
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10.1 The Company's 1982 Stock Option and Award Plan, as amended
through July 31, 1997.
10.2 The Company's 1991 Stock Option and Award Plan, as amended
through July 31, 1997.
10.3 The Company's Non-Employee Directors Deferred Stock and Cash
Compensation Plan, as amended through October 1, 1997.
10.4 The Company's Stock Ownership and Enhancement Program.
11 Computations of earnings per common share
27 Financial data schedule
(b) No reports on Form 8-K were filed for the quarter
ended October 4, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DOLE FOOD COMPANY, INC.
Registrant
November 11 , 1997 By /s/ HARVEY J. HEIMBUCH
------------------------------
Harvey J. Heimbuch
Vice President - Controller
and Chief Accounting Officer
<PAGE>
DOLE FOOD COMPANY, INC.
1982 STOCK OPTION AND AWARD PLAN, AS AMENDED JULY 31, 1997
1. PURPOSE
The purpose of the 1982 Stock Option and Award Plan (the
"Plan") is to encourage ownership of shares of the common stock of Castle &
Cooke, Inc. (the "Corporation") by key employees of the Corporation and its
subsidiaries and to give such employees added incentive to continue in the
employ of the Corporation or of its subsidiaries and to promote the success
of the businesses of such corporations. Accordingly, the Corporation will,
from time to time, during the term of the Plan, with respect to such
employees as may be selected in the manner hereinafter provided, (1) grant
options to purchase shares of common stock of the Corporation, (2) award
restricted stock, and (3) award performance shares, or any of the foregoing
subject to the conditions hereinafter provided.
2. ADMINISTRATION
(a) The Plan will be administered by the Corporate
Compensation and Management Development Committee, which shall constitute a
stock option committee (the "Committee"), which shall consist of not less
than three members, each of whom shall be a member of the Board of Directors
of the Corporation and none of whom while serving as such shall be eligible
to participate in the Plan. Subject to the foregoing, the Board of Directors
of the Corporation may fix the number of members and appoint the members of
the Committee. Any or all of the members of the Committee may but need not
be a member or members of the Committee under the stock option plans of the
Corporation. The Board of Directors may from time to time remove members
from, or add members to, the Committee. Vacancies on the Committee,
howsoever caused, shall be filled by the Board of Directors. The Committee
shall select one of its members as Chairman, and shall hold meetings at such
times and places as it may determine, subject to such rules as to procedures
not inconsistent with the provisions of the Plan. A majority of the
authorized number of members of the Committee shall constitute a quorum for
the transaction of business. Action approved in writing by a majority of the
members of the Committee then serving shall be the valid acts of the
Committee without a meeting.
(b) Subject to the provisions of the Plan, the Committee is
authorized to interpret it, to prescribe, amend and rescind rules and
regulations relating to it, and to make all other determinations necessary or
advisable for its administration. Any determination, decision or action of
the Committee in connection with construction, interpretation,
administration, or application of the Plan shall be final, conclusive and
binding upon all persons participating in the Plan and any person validly
claiming under or through persons participating in the Plan.
3. SHARES SUBJECT TO PLAN
(a) An aggregate of 2,500,000 shares of the common stock of
the Corporation may be issued pursuant to the Plan, subject to adjustment as
provided in paragraph 8.
(b) Options to purchase or awards for up to an aggregate of
such number of shares of the common stock of the Corporation may be granted
hereunder at any time and from time to time within ten (10) years from the
date the Plan is adopted or within ten (10) years from the date the Plan is
approved by the stockholders of the Corporation, whichever is earlier. No
option or award shall be granted hereunder after the termination of said
ten-year period.
(c) In case any option, options, award, or awards granted
hereunder shall at any time or from time to time expire, be surrendered, for
any reason be cancelled or forfeited without being exercised in whole or in
part, then the shares thereby released from such option, options, award, or
awards shall again be available hereunder, and an option, options, award, or
awards relating to all or any part of such shares may be granted hereunder at
any time and from time to time thereafter, subject to the limitations stated
in subparagraph (b) of this paragraph 3.
(d) The shares subject to the Plan may be authorized but
unissued shares of the common stock of the Corporation or shares of common
stock held in the treasury of the Corporation.
<PAGE>
(e) The provision of this paragraph 3 are subject to the
limitations stated in paragraph 4, 5 and 6 hereof.
4. STOCK OPTIONS AND OPTIONEES
(a) Options and Optionees:
(1) Options to purchase shares of common stock of the
Corporation will be granted only to persons who are key
employees of the Corporation or of a subsidiary, as determined
by the Committee. The term "key employees" shall include
officers as well as other employees of the Corporation and
subsidiaries and shall include directors who are also
employees of the Corporation or of a subsidiary.
(2) Neither the members of the Committee nor any member
of the Board of Directors of the Corporation who is not an
employee of the Corporation or of a subsidiary shall be
eligible to receive an option under this Plan.
(3) The Committee, subject to the limitations of the
Plan, shall determine the key employees to whom an option or
options shall be granted, whether or not an option shall be an
incentive stock option, the number of shares with respect to
which an option shall be granted, and the time or times when
such options shall be granted. Any or all of such options may
be designated as incentive stock options as defined in Section
422A of the Internal Revenue Code of 1954, as amended (the
"Code").
(4) Two or more options may be granted hereunder to any
optionee, as may be determined from time to time by the
Committee.
(5) No option shall be granted hereunder to any optionee
unless at the time of the granting thereof such optionee shall
be a key employee of the Corporation or of a subsidiary,
including an employee who is a director.
(6) After the Committee approves the granting of an
option, the Committee shall notify the optionee of such action
and of the number of shares covered by the option and the
option price, and whether such option is an incentive stock
option.
(7) In case of an incentive stock option:
[a] No such option shall be granted to any person who at
the time such option is to be granted owns, directly or
beneficially, stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the
Corporation or of a subsidiary.
[b] For options granted on or before December 31, 1986,
the aggregate fair market value (determined as of the time the
option is granted) of the stock for which any employee may be
granted incentive stock options in any calendar year (under
all plans of the Corporation and subsidiaries under which
incentive stock options may be granted) shall not exceed
$100,000 plus any 'unused limit carryover', as the term is
defined in Section 422A(c) (4) of the Code; for options
granted after December 31, 1986, the aggregate fair market
value (determined as of the time the option is granted) of the
stock with respect to which incentive stock options are
exercisable for the first time by an optionee during any
calendar year may not exceed $100,000.
[c] Any option granted on or before December 31, 1986 by
its terms shall not be exercisable while there is outstanding
(within the meaning of Section 422A (c) (7) of the Code) any
incentive stock option which was granted before the granting
of such option to such optionee to purchase stock of the
Corporation. This restriction shall not apply to any option
granted after December 31, 1986, on a current or deferred
basis, provided that if the payment is deferred, stock units
may be credited in respect thereof and earn dividend
equivalents or other compensation in respect thereof, and the
number of shares issued in respect of the deferral and such
units may include the sum of the number of shares under
alternative (ii) and the number of shares issued in respect of
the dividend equivalents.
2
<PAGE>
(8) Each recipient of an option granted under the
Plan shall be required, at the time of the grant to execute an
option agreement with Corporation incorporating the terms and
conditions applicable to the granted option. The date on
which the Committee approves the granting of an option shall
be considered for all purposes as the date on which such
option is granted.
(b) Option Price: The option price of shares covered by any
option granted pursuant to the Plan shall be one hundred percent (100%) of the
fair market value of shares of the common stock of the Corporation on the day
of the granting of the option or such higher price as the Committee may
determine.
(c) Option Period-Exercise of Option:
(1) The option period of each option hereunder shall be
a period of not more than ten (10) years from the date the
option is granted. An option shall not be exercisable after
the expiration of the option period.
(2) Subject to the provisions of this subparagraph (c),
each option granted hereunder shall become exercisable at such
times and over such period as shall be determined by the
Committee.
(3) If and to the extent that the optionee shall have
earned the right to exercise the options, or any portion or
portions thereof, the optionee may thereafter exercise the
same in whole or in part at any time and from time to time
prior to the expiration of the option period; provided,
however, that the provisions of subparagraph (c) (4) of this
paragraph 4 shall govern in the event that the optionee ceases
to be an employee of the Corporation or any of its
subsidiaries prior to the expiration of the option period.
(4) An option shall terminate and may no longer be
exercised if the optionee ceases to be an employee of the
Corporation or any of its subsidiaries, except that (i) if his
employment shall have been terminated for any reason other
than death or disability, then he may at any time within a
period of three months after such termination exercise the
option to the extent that the option was exercisable by him on
the date of the termination of his employment; (ii) if the
optionee is disabled (within the meaning of Section 105 (d)
(4) of the Code) while an employee of the Corporation or any
of its subsidiaries, then, to the extent that the optionee was
entitled to exercise the option on the date of his disability,
the option may be exercised within one year after his date of
disability; or (iii) if the optionee dies while an employee of
the Corporation or any of its subsidiaries, then the option
may at any time it could have been exercised by the optionee
(assuming he was an employee at such time) be exercised by his
estate or by the person or persons who shall have acquired the
right to exercise the option by bequest or inheritance.
Notwithstanding the prior sentence, no option shall be
exercisable after the expiration date of such option.
(5) Each option hereunder shall not be subject to
exercise other than by the optionee or, in the case of death,
by his estate or by the person or persons who shall have
acquired the right to exercise the option by bequest or
inheritance.
(6) Except as otherwise specifically provided by
subparagraph (c) (4) of this paragraph 4, each option
hereunder shall not be subject to exercise, in whole or in
part, by the optionee, unless at all times during the period
beginning with the date of the granting of the option and
ending on the day three months before the date of such
exercise of the option, the optionee was an employee of the
Corporation or of any of its subsidiaries.
(7) Any option may be exercised by giving, in such form
as the Committee shall have prescribed or approved, written
notice of the exercise thereof to the Corporation at its
principal office in Honolulu, State of Hawaii, which written
notice shall specify the number of shares as to which the
option is exercised, accompanied by full payment in accordance
with subparagraph (c) (8) of this paragraph 4 to the
Corporation of the purchase price under the option of the
shares purchased upon such exercise of the option; except in
the case of the election of an alternative settlement method
as provided hereafter in this subparagraph (7):
3
<PAGE>
[a] The Committee, in its discretion, may provide that
any option by its terms may permit the optionee to elect any
of the alternative settlement methods set forth in item (c)
below.
[b] The Committee, in its discretion, may at the request
of an optionee holding an option under the Plan which does not
by its terms include the right to elect any of such
alternative settlement methods, permit the election of any of
such alternative methods by the optionee.
[c] The alternative settlement methods are: (i) payment
of cash by the Corporation to the optionee equal to the excess
of the fair market value of one share over the option price
times the number of shares as to which the option is
exercised; (ii) issuance by the Corporation to the optionee of
the number of full shares having an aggregate value not
greater than the cash amount calculated under alternative (i);
(iii) any combination of payment of cash by the Corporation
and issuance of full shares having an aggregate fair market
value not greater than the cash amount calculated under
alternative (i).
[d] An alternative settlement method may be exercised
only when the fair market value of the shares subject to the
option exceeds the price of the option, except that in the
case of a deferred payment alternative, the option shares
shall remain reserved for issuance on payment of stock units
credited and to be credited in respect of the alternative
settlement on a deferred basis.
Exercise of an option in any manner, including an exercise
involving an election of an alternative settlement method, shall result in a
decrease in the number of shares which thereafter may be available, both for
purposes of the Plan and for sale to any one optionee, by the number of
shares as to which the option is exercised. Election of an alternative
settlement method involving the receipt of cash shall be subject to prior
approval by the Committee at the time of such election.
(8) [a] Full payment for shares purchased upon the
exercise in whole or in part of an option granted hereunder
shall be made at the time of such exercise thereof. No shares
so purchased shall be issued until full payment therefor has
been made. An optionee as such shall have no rights as a
stockholder until the purchase of shares upon the exercise in
whole or in part of the option and the issuance of such shares
upon full payment therefor.
[b] Payment by an optionee may be made (i) in cash,
(ii) by tendering shares owned by the optionee having a fair
market value equal to the cash exercise price applicable to such
option, or (iii) by a combination of (i) and (ii).
(9) No person shall have any rights as a stockholder
with respect to any shares covered by an option until the date
the stock certificate is issued evidencing ownership of the
shares. No adjustment shall be made for dividends (ordinary
or extraordinary), whether in cash, securities or other
property or distributions or other rights for which the record
date is prior to the date such stock certificate is issued,
except as provided in paragraph 8 hereof.
5. RESTRICTED STOCK AWARDS
(a) General:
(1) All units awarded under this paragraph 5
("Restricted Stock") shall be subject to the following terms
and conditions and to such other terms and conditions, not
inconsistent with the Plan, as shall be prescribed by the
Committee in its sole discretion.
(2) Awards of Restricted Stock may be granted only to
key employees qualifying for the granting of options under
paragraph 4(a). Each unit of Restricted Stock shall be deemed
the equivalent of one share of common stock of the Corporation.
(b) Restricted Period. Units of Restricted Stock awarded to
key employees may not be sold, assigned, transferred, pledged or otherwise
encumbered during a period of not less than one year commencing on the date
of
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<PAGE>
the award and ending on such later date as the Committee may designate at the
time of the award ("Restricted Period"), subject to the following:
(1) Except as otherwise provided by the Committee at the
time of an award of Restricted Stock, if a key employee's
employment with the Corporation and its subsidiaries is
terminated by reason of his death, disability (as determined
by the Committee), or a retirement which entitles him to
pension benefits other than a deferred vested pension under a
pension plan then maintained by the Corporation or a
subsidiary, then the Restricted Period shall end as of the
date of such termination with respect to such number of units
(disregarding any fractional units) of Restricted Stock
granted to him under each prior award as is proportionate to
the ratio of (i) the number of whole calendar months elapsed
between the date of the award and the date of such termination
to (ii) the number of whole calendar months in the original
Restricted Period.
(2) The Committee may, at the time of an award or at any
time thereafter, reduce or terminate the Restricted Period
otherwise applicable to all or any portion of any Restricted
Stock award; provided, however, that no such reduction under
the subparagraph (b) (2) shall be applicable to Restricted
Stock held by a key employee who voluntarily terminates his
employment within one year of the date such Restricted Stock
was awarded. For purposes of this subparagraph (b) (2),
termination of employment by reason of disability (as
determined by the Committee) or mandatory retirement shall not
be deemed a voluntary termination.
Subject to the provisions of paragraphs (c) and (g) below, at
the end of the Restricted Period for any units of Restricted Stock, shares
will be issued free of all restrictions to the key employee, or, in the event
of his death, to the beneficiary or beneficiaries designated by the key
employee under this Plan or, if none, to his estate. Delivery of shares in
accordance with the preceding sentence shall be made within the thirty day
period following the end of the Restricted Period.
(c) Forfeitures. Except as otherwise provided in
subparagraph (b) of this paragraph 5 and subject to the rights of the
Committee under subparagraph (b) of this paragraph 5, a key employee shall
forfeit all units of Restricted Stock if his employment with the Corporation
and its subsidiaries is terminated prior to the last day of the applicable
Restricted Period.
(d) Issuance of Stock. Shares representing units of
Restricted Stock shall not be issued until the end of the Restricted Period.
(e) Restricted Stock Agreement. The key employee shall enter
into an agreement with the Corporation in a form specified by the Committee
agreeing to the terms and conditions of the award and such other matters as
the Committee shall, in its sole discretion, determine.
(f) Stockholder Rights. A key employee shall not be entitled
to the rights of a stockholder with respect to his units of Restricted Stock
(including, but not limited to, the right to vote shares and to receive
dividends) until the shares relating thereto are issued to him.
(g) Substitution of Rights. Prior to the end of the
Restricted Period with respect to any units of Restricted Stock awarded to a
key employee, the Committee may, with the consent of the key employee,
substitute an unsecured obligation of the Corporation to pay cash (on such
reasonable terms and conditions as the Committee may, in its sole discretion,
determine) in lieu of its obligation under this paragraph 5 to deliver
unrestricted shares.
(h) Dividends. Cash dividends shall not be payable to a key
employee with respect to units of Restricted Stock. Stock dividends shall be
treated as additional units of Restricted Stock and shares relating thereto
shall be issued to the key employee at the same time that shares to which
such stock dividend relates are issued to the key employee.
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6. PERFORMANCE SHARE AWARDS
(a) General:
(1) All units awarded under this paragraph 6
("Performance Shares") shall be subject to the following terms
and conditions and to such other terms and conditions, not
inconsistent with the Plan, as shall be prescribed by the
Committee in its sole discretion.
(2) Awards of Performance Shares may be granted only to
key employees qualifying for the granting of options under
paragraph 4(a).
(b) Performance Shares. Awards under this paragraph 6 shall
be granted to a key employee in the form of Performance Shares, which shall
be credited to a Performance Shares account to be maintained for such key
employee. Each Performance Share shall be deemed to be the equivalent of one
share of common stock of the Corporation. The award of Performance Shares
under the Plan shall not entitle the recipient to any dividend or voting
rights or any other rights of a shareholder with respect to such Performance
Shares.
(c) Granting of Awards. Grants of awards of Performance
Shares shall be made by the Committee at such time or times during the term
of the Plan as it shall determine. The Committee shall establish a growth in
common stock earnings per share objective or objectives which must be
achieved over a designated performance measurement period for each grant.
The Committee shall have the right to approve different objectives and
different performance measurement periods or both for different key
employees. The length of the performance measurement period shall be for not
less than three years nor extend beyond the date of termination of the Plan.
(d) Right to Payment of Performance Shares:
(1) A key employee shall have no right to receive
payment for any part of his Performance Shares and all of his
Performance Shares shall be forfeited unless he remains in the
employ of the Corporation or of a subsidiary at all times from
the date of the grant of the award of Performance Shares
through the earlier of (i) the last day of the performance
measurement period, (ii) his death, or (iii) his disability
(as determined by the Committee). The Committee may, if in
its sole opinion circumstances warrant such action, approve
payment of any or all of the Performance Shares which would
otherwise be forfeited.
(2) The extent to which a key employee receives payment
for all or part of the Performance Shares awarded to him shall
be determined by the Committee in its sole discretion based on
whether the growth in common stock earnings per share
objectives established by the Committee in the granting of the
award of such Performance Shares have been met.
(3) Payment for Performance Shares shall be based on the
fair market value of shares on the last day of the performance
measurement period.
(e) Form and Timing of Payment. No payments for Performance
Shares shall be made to key employees prior to the end of a performance
measurement period, except in the case of termination of employment due to
death, total disability, or such other circumstances as the Committee deems
acceptable. Payments for Performance Shares to the holder thereof shall, in
the sole discretion of the Committee, be wholly in cash or wholly in shares
of common stock of the Corporation, or partly in cash and partly in shares in
such proportion as the Committee deems appropriate. Payment for Performance
Shares shall be made as soon as practicable after the end of the performance
measurement period or such earlier event, as the case may be, which
determines the key employee's right to receive such payment.
(f) Performance Share Agreement. The key employee shall
enter into an agreement with the Corporation in a form specified by the
Committee agreeing to the terms and conditions of the award and such other
matters as the Committee, in its sole discretion, shall determine.
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7. NON-TRANSFERABILITY
An option or award granted hereunder to any key employee shall
not be assignable or transferable by the key employee other than by will or
the laws of descent and distribution. During the lifetime of an optionee,
the option shall be exercisable only by such optionee. Provisions to this
effect shall be set forth in each option or award agreement executed in
accordance herewith.
8. REORGANIZATION, CHANGE IN CONTROL, ETC.
(a) In the event that there shall at any time or from time to
time be a successor to the Corporation by reason of a corporate merger,
consolidation, acquisitions of property or stock, reorganization, or
liquidation, such successor shall assume the Plan then outstanding hereunder
and all stock options then outstanding shall become fully exercisable upon
such event.
(b) In the event that there shall at any time or from time to
time be any change in the common stock of the Corporation, through stock
dividend, stock split, or other change in corporate structure of the
Corporation, the aggregate number of shares subject to the Plan, and the
number of shares and the price or prices per share of the shares subject to
options or awards then outstanding pursuant to the Plan, shall be
appropriately adjusted by the Committee.
(c) In the event of a "Change in Control" of the Corporation
(as defined below), all options shall become fully exercisable and the
Restricted Period shall terminate with respect to all units of Restricted
Stock as of the date of such Change in Control. "Change in Control of the
Corporation" shall mean a change in control of a nature that would be
required to be reported in response to Item 5(f) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934 as in
effect on August 13, 1982 or, if Item 5(f) is no longer in effect, any
regulations issued by the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934 which serve similar purposes; provided that,
without limitation, such a change in Control shall be deemed to have occurred
if and when (i) any "person" (as such term is used in Sections 13 (d) and 14
(d) (2) of the Securities Exchange Act of 1934) is or becomes a beneficial
owner, directly or indirectly, of securities of the Corporation representing
twenty-five percent (25%) or more of the combined voting power of the
Corporation's then outstanding securities, other than any such person who was
the beneficial owner of securities of the Corporation representing 20% or
more of the combined voting power of the Corporation's outstanding securities
as of October 10, 1988, or (ii) individuals who were members of the Board of
Directors of the Corporation immediately prior to a meeting of the
stockholders of the Corporation involving a contest for the election of
Directors shall not constitute a majority of the Board of Directors following
such election.
(d) For the purpose of subparagraphs (a) (1), (a) (2), (a)
(5), (c)(2), (c) (3), (c)(4), and (c)(6) of paragraph 4 hereof, an optionee
shall be deemed to be employed by the Corporation or by any of its
subsidiaries while he is employed by a corporation issuing or assuming a
stock option in a transaction described in subparagraph (a) or subparagraph
(b) of this paragraph 8 or by a parent or subsidiary of such corporation.
For the purposes of this subparagraph (d) the parent-subsidiary relationship
shall be determined at the time of such transaction.
(e) Fractional shares resulting from any adjustment in
options or awards pursuant to this paragraph may be settled as the Committee
shall determine, but in no case shall fractional shares be issued.
(f) Notice of any adjustment shall be given by the
Corporation to each holder of an option or award which shall have been so
adjusted.
(g) The grant of an option or award pursuant to the Plan
shall not affect in any way the right or power of the Corporation to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to merge or to consolidate or to dissolve, liquidate or
sell, or transfer all or any of its business or assets.
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9. USE OF PROCEEDS
The proceeds received by the Corporation from the sale of
shares purchased upon the exercise of options granted hereunder will be used
for general corporate purposes.
10. APPROVAL BY STOCKHOLDERS
The Plan shall be submitted to the stockholders of the
Corporation for their approval within twelve (12) months after the date the
Plan is adopted by the Board of Directors of the Corporation. If the Plan
shall not be approved by the stockholders of the Corporation within twelve
(12) months after the date the Plan is adopted by said Board of Directors,
then, at the end of said period, the Plan shall automatically be and become
cancelled and terminated. Notwithstanding anything to the contrary herein, no
options or awards (including dividends paid or payable on shares subject to
an award) granted pursuant to the Plan shall be exercisable or payable unless
and until the stockholders of the Corporation have approved the Plan.
11. TERMINATION AND AMENDMENT
(a) Notwithstanding the provisions of paragraph 3(b), all
authority of the Committee with respect to options or awards hereunder,
including (subject to share limits) the authority to amend outstanding
options and awards shall continue after the term of the Plan, so long as any
option or award remains outstanding. The Committee shall have the authority
to permit an alternative settlement or deferred payment ("deferral") of or in
respect of options and awards (through surrender, exchange or otherwise)
under any other deferred compensation plan of the Corporation authorized by
the Committee and approved or ratified by the Board. Any such settlement or
deferral shall not be deemed a new award hereunder so long as all shares
issuable in respect thereof do not exceed the aggregate number of shares
subject to the options or awards so settled or paid thereby. The authority
of the Committee shall continue in respect of any settlement or deferral so
authorized.
(b) The Chief Executive Officer of the Corporation may at any
time amend the Plan as may be necessary or advisable to conform the Plan with
any regulations that might be promulgated by the United States Treasury
Department under or relating to Section 422A of the Code; provided, however,
that no amendment of the Plan by said Chief Executive Officer without
approval of the Board of Directors of the Corporation and of the stockholders
of the Corporation shall (i) increase the maximum number of shares of common
stock issuable under the Plan, (ii) materially increase the benefits accruing
to participants under the Plan, (iii) extend any option for a period longer
than ten (10) years after the date of grant, (iv) materially modify the
eligibility requirements for participation in the Plan, or (v) render any
member of the Committee eligible to participate in the Plan at any time while
such member is serving on said Committee.
(c) The Board of Directors of the Corporation may at any time
amend or terminate the Plan; provided, however, that no amendment of the Plan
by the Board of Directors without approval of the stockholders shall (i)
increase the maximum number of shares of common stock issuable under the
Plan, (ii) materially increase the benefits accruing to participants under
the Plan, (iii) extend any option for a period longer than ten (10) years
after the date of grant, (iv) materially modify the eligibility requirements
for participation in the Plan, or (v) render any member of the Committee
eligible to participate in the Plan at any time while said member is serving
on said Committee.
(d) Except as provided in paragraph 10 hereof, options
granted hereunder prior to any termination of the Plan may nevertheless be
exercised thereafter in accordance with their terms and provisions,
consistent with the terms and provisions of the Plan. Except as provided as
aforesaid, neither the Corporation, the Chief Executive Officer, the Board of
Directors, the stockholders nor the Committee shall have any right or power
at any time to bring about any amendment, modification or alteration or any
cancellation or accelerated termination of any options previously granted
pursuant to the Plan, without the express written consent of the optionee or
any person validly claiming under or through the optionee.
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12. MISCELLANEOUS
Nothing herein or in any options or awards granted hereunder
shall be deemed to affect any options heretofore granted or assumed by the
Corporation and now outstanding.
13. WITHHOLDING TAX
The Corporation shall have the right to withhold with respect
to any payments made under the Plan any taxes required to be withheld because
of such payments.
14. DEFINITIONS
(a) The term "incentive stock option," as used herein, shall
have the same meaning as "incentive stock option" as defined in Section
422A(b) of the Code.
(b) The term "Plan," as used herein, shall mean the stock
option and award plan provided for herein. The term "adoption of the Plan"
and similar terms, as used herein, shall mean the approval of the Plan by the
Board of Directors of the Corporation. Copies of the Plan prepared after the
adoption thereof shall show the date of the adoption thereof.
(c) The term "Committee," as used herein, shall mean the
Stock Option Committee provided for in subparagraph (a) of paragraph 2 hereof
as the same shall be constituted from time to time.
(d) The term "the Corporation," as used herein, shall mean
Castle & Cooke, Inc. and also any successor thereto pursuant to the
provisions of subparagraph (a) of paragraph 8 hereof.
(e) The term "subsidiary" and the term "subsidiaries," as
used herein, shall have the same meaning as the term "subsidiary corporation"
as defined in Section 425 of the Code. The term "parent corporation," as
used herein, shall have the same meaning as defined in said Section 425.
(f) The term "shares," as used herein, shall mean shares of
the common stock of the Corporation as said shares are constituted at the
date of the adoption of the Plan, and shall include such shares as may become
subject to issuance in accordance with the terms of the Plan. The term
"shares" shall also mean and include any substitute or additional shares
which may be or become subject to the Plan pursuant to a transaction
described in paragraph 8 hereof.
(g) (1) The term "fair market value" means the highest price
of any stock exchange sale of shares on (i) the day of the
granting of the option for purposes of paragraph 4(b), (ii) on
the date of exercise of the option for purposes of paragraph
4(c)(7)[c], (iii) on the day immediately prior to the date of
payment for purposes of paragraph 4(c)(8), and (iv) the last
day of the performance measurement period for purposes of
6(d)(3). If there shall be no stock exchange sale of shares
on the applicable date, then the fair market value shall be
the highest price of any stock exchange sale of shares on the
last preceding day on which there had been a stock exchange
sale of shares.
(2) The term "stock exchange sale of shares" means (i)
any sale of shares on the New York Stock Exchange or the
Pacific Stock Exchange, or on any other stock exchange on
which the shares may be listed or (ii) any sale of shares
reported on any composite tape.
Plan Adopted Effective: August 13, 1982.
Plan Amended Effective: July 1, 1985, March 3, 1987, February
25, 1988 and July 31, 1997.
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DOLE FOOD COMPANY, INC.
1991 STOCK OPTION AND AWARD PLAN
(AS AMENDED AND RESTATED THROUGH JULY 31, 1997)
<PAGE>
DOLE FOOD COMPANY, INC.
1991 STOCK OPTION AND AWARD PLAN
(AS AMENDED AND RESTATED THROUGH JULY 31, 1997)
TABLE OF CONTENTS
I. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . 1
II. GENERAL AND ADMINISTRATIVE PROVISIONS. . . . . . . . . . . . . 5
2.1 Purpose . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Administration. . . . . . . . . . . . . . . . . . . . . 5
2.3 Participation . . . . . . . . . . . . . . . . . . . . . 6
2.4 Stock Subject to this Plan. . . . . . . . . . . . . . . 6
2.5 Grant and Maximum Term of Awards. . . . . . . . . . . . 7
2.6 Exercise of Awards. . . . . . . . . . . . . . . . . . . 7
III. OPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1 Grants. . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2 Option Price. . . . . . . . . . . . . . . . . . . . . . 7
3.3 Option Period . . . . . . . . . . . . . . . . . . . . . 8
3.4 Exercise of Options . . . . . . . . . . . . . . . . . . 8
3.5 Limitations on Grant of Incentive Stock Options . . . . 8
IV. STOCK APPRECIATION RIGHTS. . . . . . . . . . . . . . . . . . . 9
4.1 Grants. . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2 Exercise of Stock Appreciation Rights . . . . . . . . .10
4.3 Payment . . . . . . . . . . . . . . . . . . . . . . . .10
V. RESTRICTED STOCK AWARDS. . . . . . . . . . . . . . . . . . . .11
5.1 Grants. . . . . . . . . . . . . . . . . . . . . . . . .11
5.2 Restrictions. . . . . . . . . . . . . . . . . . . . . .11
VI. PERFORMANCE SHARE AWARDS . . . . . . . . . . . . . . . . . . .11
6.1 Grants. . . . . . . . . . . . . . . . . . . . . . . . .11
6.2 Section 162(m) Performance-Based Share Awards . . . . .12
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VII. STOCK UNITS. . . . . . . . . . . . . . . . . . . . . . . . . .13
7.1 Grants. . . . . . . . . . . . . . . . . . . . . . . . .13
7.2 Other Provisions. . . . . . . . . . . . . . . . . . . .13
VIII. OTHER PROVISIONS . . . . . . . . . . . . . . . . . . . . . . .14
8.1 Rights of Eligible Employees, Participants
and Beneficiaries . . . . . . . . . . . . . . . . . . .14
8.2 Adjustments Upon a Reorganization or Changes
in Capitalization . . . . . . . . . . . . . . . . . . .15
8.3 Effect of Termination of Employment . . . . . . . . . .17
8.4 Acceleration of Awards Upon an Event; Other
Changes in Awards . . . . . . . . . . . . . . . . . . .18
8.5 Compliance; Government Regulations. . . . . . . . . . .18
8.6 Tax Withholding.. . . . . . . . . . . . . . . . . . . .19
8.7 Amendment, Termination and Suspension.. . . . . . . . .19
8.8 Privileges of Stock Ownership; Nondistributive Intent .20
8.9 Effective Date of this Plan . . . . . . . . . . . . . .20
8.10 Term of this Plan . . . . . . . . . . . . . . . . . . 21
8.11 Governing Law . . . . . . . . . . . . . . . . . . . . 21
8.12 Limitations as to Executive Officers. . . . . . . . . .21
8.13 Captions. . . . . . . . . . . . . . . . . . . . . . . .22
8.14 No Fractional Interest. . . . . . . . . . . . . . . . .22
8.15 Non-Exclusivity of Plan.. . . . . . . . . . . . . . . .22
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DOLE FOOD COMPANY, INC.
1991 STOCK OPTION AND AWARD PLAN
(as amended and restated through July 31, 1997)
I. DEFINITIONS.
1.1 DEFINITIONS.
(a) "AWARD" shall mean an Option (which may be designated as a
Nonqualified Stock Option or an Incentive Stock Option and which may
include as an incident thereto Stock Units), a Stock Appreciation Right, a
Deferred Stock Alternative, a Restricted Stock Award or Performance Share
Award, in each case granted under this Plan.
(b) "AWARD AGREEMENT" shall mean a written agreement setting forth
the terms of an Award.
(c) "AWARD DATE" shall mean the date upon which the Committee took
the action granting an Award or such later date as is prescribed by the
Committee.
(d) "AWARD PERIOD" shall mean the period beginning on an Award Date
and ending on the expiration date of such Award.
(e) "BENEFICIARY" shall mean the person, persons, trust or trusts
entitled by will or the laws of descent and distribution to receive the
benefits specified under this Plan in the event of a Participant's death.
(f) "BOARD" shall mean the Board of Directors of the Corporation.
(g) "CHANGE IN CONTROL" shall be deemed to have occurred if (a) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act, but excluding any person described in and satisfying the conditions of
Rule 13d-1(b)(1) thereunder), other than a person who is the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act) of more than 20% of
the outstanding shares of Common Stock at the time of the adoption of this
Plan (or any affiliate, successor, heir, descendent or related party of or
to any such person), becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Corporation representing 20% or more of the combined voting power of the
Corporation's then outstanding securities; or (b) during any period of two
consecutive years, individuals who at the beginning of such period
constitute the Board cease for any reason to constitute at least a majority
thereof, unless the election, or the nomination for election by the
Corporation's stockholders, of each new Board member was approved by a vote
of at least three-fourths of the Board members then still in office who
were Board members at the beginning of such period.
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(h) "CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(i) "COMMISSION" shall mean the Securities and Exchange Commission.
(j) "COMMITTEE" shall mean the Corporate Compensation and Benefits
Committee appointed by the Board and consisting of two or more Board
members, each of whom, during such time as one or more Participants may be
subject to Section 16 of the Exchange Act, shall be a Disinterested
Director.
(k) "COMMON STOCK" shall mean the Common Stock of the Corporation.
(l) "COMPANY" shall mean the Corporation and/or its Subsidiaries.
(m) "CORPORATION" shall mean Dole Food Company, Inc., a Hawaii
corporation, and its successors.
(n) "DEFERRED STOCK ALTERNATIVE" means a deferred payment alternative
payable in Common Stock or cash or other consideration, as determined by
the Committee, based on the number of Stock Units credited to a
Participant's Stock Unit Account.
(o) "DISINTERESTED DIRECTOR" shall mean a member of the Board who is
a Non-Employee Director as defined in Rule 16b-3 and an "outside director"
as defined in regulations under Section 162(m) of the Code, as amended from
time to time.
(p) "ELIGIBLE EMPLOYEE" shall mean an officer or key employee of the
Company.
(q) "EVENT" shall mean any of the following:
(1) Approval by the stockholders of the Corporation of the
dissolution or liquidation of the Corporation;
(2) Approval by the stockholders of the Corporation of an
agreement to merge or consolidate, or otherwise reorganize, with or
into one or more entities which are not Subsidiaries, as a result of
which less than 50% of the outstanding voting securities of the
surviving or resulting entity are, or are to be, owned by former
stockholders of the Corporation;
(3) Approval by the stockholders of the Corporation of the sale
of substantially all of the Corporation's business and/or assets to a
person or entity which is not a Subsidiary; or
(4) A Change in Control.
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(r) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(s) "FAIR MARKET VALUE" shall mean the closing price of the stock on
the Composite Tape, as published in the Western Edition of The Wall Street
Journal, of the principal national securities exchange on which the stock
is so listed or admitted to trade, on such date, or, if there is no trading
of the stock on such date, then the closing price of the stock as quoted on
such Composite Tape on the next preceding date on which there was trading
in such shares; provided, however, that if the stock is not listed or
admitted to trade on a national securities exchange, the Committee may
designate such other exchange, market or source of data as it deems
appropriate for determining such value for Plan purposes.
(t) "INCENTIVE STOCK OPTION" shall mean an Option which is designated
as an incentive stock option within the meaning of Section 422 of the Code,
the award of which contains such provisions as are necessary to comply with
that section.
(u) "NONQUALIFIED STOCK OPTION" shall mean an Option which is
designated as a Nonqualified Stock Option.
(v) "OPTION" shall mean an option to purchase Common Stock under this
Plan. An Option shall be designated by the Committee as a Nonqualified
Stock Option or an Incentive Stock Option.
(w) "PARTICIPANT" shall mean an Eligible Employee who has been
granted an Award.
(x) "PERFORMANCE SHARE AWARD" shall mean an award of shares of Common
Stock, issuance of which is contingent upon attainment of performance
objectives specified by the Committee, and the vesting of which may be
subject to other restrictions, or an award of shares as a bonus for
achievement of objectives or otherwise exceptional individual performance
or business results.
(y) "PERSONAL REPRESENTATIVE" shall mean the person or persons who,
upon the disability or incompetence of a Participant, shall have acquired
on behalf of the Participant, by legal proceeding or otherwise, the power
to exercise the rights and receive the benefits specified in this Plan.
(z) "PLAN" shall mean the Dole Food Company, Inc. 1991 Stock Option
and Award Plan, as from time to time amended.
(aa) "QDRO" shall mean an order requiring the transfer of an Award or
portion thereof pursuant to a state domestic relations law to the spouse,
former spouse, child or other dependent of a Participant.
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(bb) "RESTRICTED STOCK" shall mean those shares of Common Stock issued
pursuant to a Restricted Stock Award which are subject to the restrictions
set forth in the related Award Agreement.
(cc) "RESTRICTED STOCK AWARD" shall mean an award of a fixed number of
shares of Common Stock to the Participant subject, however, to payment of
such consideration, if any, and such forfeiture provisions, as are set
forth in the Award Agreement.
(dd) "RETIREMENT" shall mean retirement from active service as an
employee or officer of the Company on or after obtaining age 55 with ten or
more years of service or age 65.
(ee) "RULE 16b-3" shall mean Rule 16b-3 promulgated by the Commission
pursuant to the Exchange Act effective November 1, 1996, or any successor
provision, as amended from time to time.
(ff) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended from time to time.
(gg) "STOCK APPRECIATION RIGHT" shall mean a right to receive a number
of shares of Common Stock or an amount of cash, or a combination of shares
and cash, determined as provided in Section 4.3.
(hh) "STOCK UNIT" shall mean a non-voting unit of measurement which is
deemed for bookkeeping purposes to be equivalent to one outstanding share
of Common Stock of the Company (subject to adjustment) solely for purposes
of this Plan.
(ii) "STOCK UNIT ACCOUNT" shall mean the bookkeeping account
maintained by the Company on behalf of each Participant who is credited
with Stock Units in accordance with Article VIII, which account may be
payable in cash, stock and/or other consideration, as the Committee may
determine.
(jj) "SUBSIDIARY" shall mean any corporation or other entity a
majority or more of the outstanding voting stock or voting power of which
is beneficially owned directly or indirectly by the Corporation.
(kk) "TOTAL DISABILITY" shall mean a "permanent and total disability"
within the meaning of Section 22(e)(3) of the Code.
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II. GENERAL AND ADMINISTRATIVE PROVISIONS.
2.1 PURPOSE.
The purpose of this Plan is to promote the success of the Company
and the interest of its stockholders by providing a means to attract
and retain key employees by providing them long-term incentives to
improve the financial performance of the Company.
2.2 ADMINISTRATION.
(a) COMMITTEE. This Plan shall be administered by and Awards shall
be authorized by the Committee. Action of the Committee with
respect to the administration of this Plan shall be taken pursuant
to a majority vote or by the unanimous written consent of its
members. If action by the Committee is taken by written consent,
the action shall be deemed to have been taken at the time specified
in the consent or, if none is specified, at the time of the last
signature. The Committee may delegate administrative functions to
individuals who are officers or employees of the Company.
(b) PLAN AWARDS; INTERPRETATION; POWERS OF THE COMMITTEE. Subject
to the express provisions of this Plan, the Committee shall have the
authority to construe and interpret this Plan and any agreements
defining the rights and obligations of the Company and Participants
under this Plan; to further define the terms used in this Plan; to
prescribe, amend and rescind rules and regulations relating to the
administration of this Plan; to determine the duration and purposes
of leaves of absence which may be granted to Participants without
constituting a termination of their employment for purposes of this
Plan; to determine who is an Eligible Employee and the particular
Eligible Employees who will receive Awards; to grant Awards to
Eligible Employees, determine the price at which securities will be
offered or awarded and the amount of securities to be offered or
awarded; to determine the other specific terms and conditions of
such Awards, including performance criteria and goals, consistent
with the express limits of this Plan, establish the installments (if
any) in which such Awards shall become exercisable or shall vest, or
determine that no delayed exercisability or vesting is required, and
establish the events of termination or reversion of such Awards; to
approve the forms of Award Agreements (which need not be identical
either as to type of award or among Participants); to cancel,
modify, or waive the Corporation's rights with respect to, or
modify, discontinue, suspend, or terminate any or all outstanding
Awards held by Eligible Employees, subject to any required consent
under Section 8.7; to accelerate or extend the exercisability or
extend the term of any or all such outstanding Awards within the
maximum ten-year term of Awards under Section 2.5; and to make all
other determinations necessary or advisable for the administration
of this Plan. The determinations of the Committee on the foregoing
matters shall be conclusive.
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(c) BINDING DECISIONS. Any action taken by, or inaction of, the
Corporation, any Subsidiary, the Board or the Committee relating to
this Plan shall be within the absolute discretion of that entity or
body and shall be conclusive and binding upon all persons. No
member of the Board or Committee, or officer of the Corporation or
Subsidiary, shall be liable for any such action or inaction of the
entity or body, of another person or, except in circumstances
involving bad faith, of himself or herself. Subject only to
compliance with the express provisions hereof, the Board and
Committee may act in their absolute discretion in matters related to
this Plan. In making any determination or in taking or not taking
any action under this Plan, the Committee or the Board, as the case
may be, may obtain and may rely upon the advice of experts,
including professional advisors to the Corporation. No director,
officer or agent of the Company shall be liable for any such action
or determination taken or made or omitted in good faith.
(d) CHANGES TO COMMITTEE. Subject to the requirements of Section
1.1(j), the Board, at any time it so desires, may increase or
decrease the number of members of the Committee, may remove from
membership on the Committee all or any portion of its members, and
may appoint such person or persons as it desires to fill any vacancy
existing on the Committee, whether caused by removal, resignation or
otherwise.
2.3 PARTICIPATION. Awards may be granted only to Eligible
Employees. An Eligible Employee who has been granted an Award may,
if otherwise eligible, be granted additional Awards if the Committee
shall so determine. Members of the Board who are not officers or
employees of the Company, and members of the Committee, shall not be
eligible to receive Awards.
2.4 STOCK SUBJECT TO THIS PLAN.
(a) AVAILABLE SHARES. The stock to be offered under this Plan
shall be shares of the Corporation's authorized but unissued Common
Stock. The maximum number of shares of Common Stock that may be
issued pursuant to Awards granted under this Plan shall not exceed
the sum of 5,000,000 shares, subject to adjustments (including the
adjustments for the distribution of shares of Castle & Cooke, Inc.
in December 1995) as set forth in Section 8.2. If any Option and
any related Stock Appreciation Right shall lapse or terminate
without having been exercised in full, or any Common Stock subject
to a Restricted Stock Award which does not vest or any Common Stock
subject to a Performance Share Award which has not been issued or
become issuable, the unpurchased or unvested shares subject thereto
shall again be available for reissue for purposes of this Plan.
(b) INDIVIDUAL MAXIMUM. The maximum number of shares subject to
Options or Stock Appreciation Rights that during any calendar year
are granted to any one person shall be limited to 500,000 and the
maximum number of shares in the aggregate subject to all Awards that
during any calendar year are granted to any
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individual under this Plan shall be 750,000. Tandem or alternative
Awards shall be counted only once for these purposes, unless otherwise
required by Section 162(m). Any Awards that are cancelled or repriced
during the year shall be counted against this limit, to the extent
required by Section 162(m).
(c) ADJUSTMENTS. Each of the foregoing numerical limits in this
Section 2.4 shall be subject to adjustments as contemplated by this Section
2.4 and Section 8.2.
2.5 GRANT AND MAXIMUM TERM OF AWARDS.
Subject to the express provisions of this Plan, the Committee has the
authority to grant Awards. The grant of an Award is made on the Award
Date. The maximum term of an Award is 10 years; provided, however, that any
payment of cash or delivery of stock pursuant to an Award may be delayed
until a future date if specifically authorized by the Committee pursuant to
Article VII or otherwise, by resolution, written consent or other writing.
2.6 EXERCISE OF AWARDS.
An Option or Stock Appreciation Right shall be deemed to be exercised
when the Corporation receives written notice of such exercise from the
Participant, together with payment of the purchase price made in accordance
with Section 3.2, except as may be necessary or advisable to be made
following delivery of written notice of exercise in accordance with Section
3.2.
III. OPTIONS.
3.1 GRANTS.
One or more Options may be granted to any Eligible Employee. Each
Option so granted shall be designated in the applicable Award Agreement by
the Committee as either a Nonqualified Stock Option or an Incentive Stock
Option.
3.2 OPTION PRICE.
(a) MINIMUM PRICE. The purchase price per share of the Common Stock
covered by each Option shall be determined by the Committee, but in the
case of Incentive Stock Options shall not be less than 100% (110% in the
case of a Participant who owns more than 10% of the total combined voting
power of all classes of stock of the Company) of the Fair Market Value of
the Common Stock on the date the Incentive Stock Option is granted. The
purchase price of any shares purchased shall be paid in full at the time of
each purchase in one or a combination of the following methods: (i) in
cash, by electronic funds transfer, or by certified or cashier's check
payable to the order of the Corporation; (ii) if authorized by the
Committee or specified in the applicable Award Agreement, by a promissory
note of the Participant consistent with
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the requirements of Section 8.5; or (iii) by delivery of shares of Common
Stock of the Corporation already owned by the Participant; provided,
however, the Committee may in its absolute discretion limit the
Participant's ability to exercise an Option by delivering shares, and
(without limiting the generality of the foregoing) any shares delivered
which were initially acquired upon exercise of a stock option must have
been owned by the Participant at least six months as of the date of
delivery. Shares of Common Stock used to satisfy the exercise price of
an Option shall be valued at their Fair Market Value on the date of
exercise.
(b) CASHLESS EXERCISE. In addition to the payment methods described
in Section 3.2(a), the Option (or the Committee) may provide that the
Option can be exercised and payment made by delivering a properly executed
exercise notice together with irrevocable instructions to a broker to
promptly deliver to the Corporation the amount of sale proceeds necessary
to pay the exercise price and, unless otherwise disallowed by the
Committee, any applicable tax withholding under Section 8.6. The
Corporation shall not be obligated to deliver certificates for the shares
unless and until it receives full payment of the exercise price therefor
and any related withholding obligations have been satisfied.
3.3 OPTION PERIOD.
Each Option and all rights or obligations thereunder shall expire on
such date as shall be determined by the Committee, but not later than 10
years after the Award Date, and shall be subject to earlier termination as
provided in or pursuant to Section 8.2 or 8.3.
3.4 EXERCISE OF OPTIONS.
Except as otherwise provided in or pursuant to Sections 8.2, 8.3 and
8.4, an Option may become exercisable, in whole or in part, on the date or
dates specified in the Award Agreement and thereafter shall remain
exercisable until the expiration or earlier termination of the Option. No
shares issuable upon exercise of an Option shall be exercisable until at
least six months after the Award Date. The Committee may, at any time
after grant of the Option and from time to time, increase the number of
shares purchasable at any time so long as the total number of shares
subject to the Option is not increased. No Option shall be exercisable
except in respect of whole shares. Not less than 100 shares of Common
Stock may be purchased at one time unless the number purchased is the total
number at the time available for purchase under the terms of the Option.
3.5 LIMITATIONS ON GRANT OF INCENTIVE STOCK OPTIONS.
(a) $100,000 LIMIT. To the extent that the aggregate Fair Market
Value of stock with respect to which incentive stock options first become
exercisable by a Participant in any calendar year exceeds $100,000, taking
into account both Common Stock subject to Incentive Stock Options under
this Plan and stock subject to incentive
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stock options under all other plans of the Company, such options shall be
treated as nonqualified stock options. For purposes of determining
whether the $100,000 limit is exceeded, the Fair Market Value of stock
subject to options shall be determined as of the date the options are
awarded. In reducing the number of options treated as incentive stock
options to meet the $100,000 limit, the most recently granted options
shall be reduced first. To the extent a reduction of simultaneously
granted options is necessary to meet the $100,000 limit, the Corporation
may, in the manner and to the extent permitted by law, designate which
shares of Common Stock are to be treated as shares acquired pursuant to
the exercise of an Incentive Stock Option under this Plan.
(b) OTHER TERMS. There shall be imposed in any Award Agreement
relating to Incentive Stock Options such terms and conditions as are
required in order that the Option be an "incentive stock option" as that
term is defined in Section 422 of the Code.
(c) 10% OWNERS. No Incentive Stock Option may be granted to any
person who, at the time the Incentive Stock Option is granted, owns (or is
deemed to own) shares of outstanding Common Stock possessing more than 10%
of the total combined voting power of all classes of Common Stock of the
Company, unless the exercise price of such Option is at least 110% of the
Fair Market Value of the Common Stock subject to the Option and such Option
by its terms is not exercisable after the expiration of five years from the
date such Option is granted.
IV. STOCK APPRECIATION RIGHTS.
4.1 GRANTS.
In its discretion, the Committee may grant Stock Appreciation Rights
concurrently with the grant of Options or thereafter with respect to an
outstanding Option, on such terms as set forth by the Committee in the
Award Agreement for such Option, including in circumstances involving a
Change in Control or other Event or a termination of employment, or in
anticipation thereof. A Stock Appreciation Right shall extend to all or a
portion of the shares covered by the related Option. A Stock Appreciation
Right shall entitle the Participant who holds the related Option, upon
exercise of the Stock Appreciation Right and surrender of the related
Option, or portion thereof, to the extent the Stock Appreciation Right and
related Option each were previously unexercised, to receive payment of an
amount determined pursuant to Section 4.3. Any Stock Appreciation Right
granted in connection with an Incentive Stock Option shall contain such
terms as may be required to comply with the provisions of Section 422 of
the Code and the regulations promulgated thereunder.
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4.2 EXERCISE OF STOCK APPRECIATION RIGHTS.
(a) TIME/VALUE. A Stock Appreciation Right shall be exercisable only
at such time or times, and to the extent, that the related Option shall be
exercisable and only when the Fair Market Value of the stock subject to the
related Option exceeds the Option price of the related Option.
(b) SHARE ACCOUNTING. In the event that a Stock Appreciation Right
is exercised, the number of shares of Common Stock subject to the related
Option shall be charged against the maximum amount of Common Stock that may
be issued or transferred pursuant to Awards under this Plan. The number of
shares subject to the Stock Appreciation Right and the related Option of
the Participant shall also be reduced by such number of shares.
(c) ADJUSTMENTS. If a Stock Appreciation Right extends to less than
all the shares covered by the related Option and if a portion of the
related Option is thereafter exercised, the number of shares subject to the
unexercised Stock Appreciation Right shall be reduced only if and to the
extent that the remaining number of shares covered by such related Option
is less than the remaining number of shares subject to such Stock
Appreciation Right.
4.3 PAYMENT.
(a) AMOUNT. Upon exercise of a Stock Appreciation Right and
surrender of an exercisable portion of the related Option, the Participant
shall be entitled to receive payment of an amount determined by
multiplying:
(i) the difference obtained by subtracting the Option price per
share of Common Stock under the related Option from the Fair Market
Value of a share of Common Stock on the date of exercise of the Stock
Appreciation Right, by
(ii) the number of shares with respect to which the Stock
Appreciation Right shall have been exercised.
(b) FORM. The Committee, in its sole discretion, may provide for
payment upon exercise under Section 4.3(a) to be solely in cash, solely in
shares of Common Stock (valued at Fair Market Value on the date of exercise
of the Stock Appreciation Right), or partly in such shares and partly in
cash, or may leave the election to the Participant, subject to any
applicable legal requirements. Absent a determination to the contrary by
the Committee, all Stock Appreciation Rights shall be settled in cash as
soon as practicable after exercise. The exercise price for the Stock
Appreciation Right shall be the exercise price of the related Option.
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(c) VARIANCE. Notwithstanding the foregoing, the Committee may, in
the Award Agreement, determine the specific form of payment or may provide
for a different specified amount of cash or stock or a combination thereof
to be delivered upon exercise of a Stock Appreciation Right.
V. RESTRICTED STOCK AWARDS.
5.1 GRANTS.
Subject to Section 2.4, the Committee may, in its discretion, grant
one or more Restricted Stock Awards to any Eligible Employee. Each
Restricted Stock Award Agreement shall specify the number of shares of
Common Stock to be issued to the Participant, the date of such issuance,
the price, if any, to be paid for such shares by the Participant and the
restrictions imposed on such shares, which restrictions shall not terminate
earlier than six months after the Award Date.
5.2 RESTRICTIONS.
Unless the Committee otherwise expressly provides in the Award
Agreement, during the restricted period Restricted Stock Awards shall be
subject to the following restrictions:
(a) the shares may not be sold, assigned, transferred, pledged or
otherwise disposed of or encumbered, either voluntarily or involuntarily,
until such shares have vested;
(b) the holder shall have voting rights but shall not be entitled to
dividends in respect of the restricted shares until they have vested, at
which time accrued and paid dividends on such shares shall also vest;
(c) any cash paid by a holder to acquire restricted shares shall be
returned to the holder, without interest, if the restricted shares do not
vest; and
(d) shares of Restricted Stock (and any related dividends) that are
subject to restrictions at the time of termination of employment, or are
subject to other conditions to vesting that have not been satisfied by the
time specified in the applicable Award Agreement, shall not vest and shall
be returned to the Corporation.
VI. PERFORMANCE SHARE AWARDS.
6.1 GRANTS.
The Committee may, in its discretion, grant Performance Share Awards
to Eligible Employees based upon: the appreciation in the Fair Market
Value, book value or other
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measure of value of the Common Stock; the performance of the Company
based on earnings or cash flow; or such other factors as the Committee
shall determine. In making such determinations, the Committee shall
consider (among other factors deemed relevant to the specific award
type), the Eligible Employee's contributions to the Company,
responsibilities and other compensation. A Performance Share Award
Agreement shall specify the number of shares of Common Stock subject to
the Performance Share Award, the price, if any, to be paid for such
shares by the Participant and the required amount of appreciation in the
Fair Market Value, book value or other measure of value of Common Stock,
the required amount of change in the performance of the company based on
earnings or cash flow of the Company or specified Subsidiary or other
factors and other conditions determined by the Committee upon which
issuance to the Participant shall be based, which issuance shall not be
less than six months after the Award Date. To the extent a Performance
Share Award constitutes an equity security (as this phrase is defined in
Rule 16a-1 under the Exchange Act) issued by the Corporation and is paid
in shares of Common Stock or cash, the number of shares of Common Stock
subject to such Performance Share Award shall be charged against the
maximum amount of Common Stock that may be issued pursuant to Awards
under this Plan.
6.2 SECTION 162(m) PERFORMANCE-BASED SHARE AWARDS.
Without limiting the generality of the foregoing, and in addition to
awards granted under other provisions of this Plan, other performance-based
awards within the meaning of Section 162(m) of the Code ("PERFORMANCE-BASED
AWARDS"), whether in the form of restricted stock, performance stock,
phantom stock or other rights, the vesting of which depends on the
performance of the Company on a consolidated, segment, subsidiary or
division basis with reference to net earnings (before or after tax), cash
flow, return on equity or on assets or on net investment, or cost
containment or reduction, or any combination thereof (the "performance
criteria") relative to preestablished performance goals, may be granted
under this Plan. The applicable business criteria and specific performance
goal or goals ("targets") must be approved by the Committee in advance of
any applicable deadline under the Code and while the performance relating
to such targets remains substantially uncertain. The applicable
performance measurement period may be not less than one nor more than ten
years. Performance targets may be adjusted to mitigate the unbudgeted
impact of material, unusual or nonrecurring gains and losses, accounting
changes or other extraordinary events not foreseen at the time the targets
were set.
(a) ELIGIBLE CLASS. The eligible class of persons for Awards under
this Section 6.2 shall be executive officers of the Company.
(b) MAXIMUM AWARD. In no event shall grants made in any calendar
year to any one person under this Section 6.2 relate to more than 500,000
shares or a cash amount of more than $10 million.
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(c) COMMITTEE CERTIFICATION. Before any Performance-Based Award
under this Section 6.2 is paid, the Committee must certify that the
material terms of the Performance-Based Award were satisfied.
(d) TERMS AND CONDITIONS OF AWARDS. The Committee will have
discretion to determine the restrictions or other limitations of the
individual Awards under this Section 6.2, including the authority to reduce
Awards, payouts or vesting or to pay no Awards, in its sole discretion, if
the Committee preserves such authority at the time of grant by language to
this effect in its authorizing resolutions or otherwise.
VII. STOCK UNITS.
7.1 GRANTS.
Subject to such rules and procedures as the Committee may establish
from time to time, the Committee may, in its discretion, authorize a Stock
Unit Award or the crediting of Stock Units pursuant to the terms of this
Plan and any applicable deferred compensation plan maintained by the
Company, permit an Eligible Employee to irrevocably elect to defer or
receive in Stock Units all or a portion of any Award hereunder, or may
grant Stock Units in lieu of, in exchange for, in respect of, or in
addition to any other Award under this Plan or any other stock option plan
or deferred compensation plan of the Company. The specific terms,
conditions and provisions relating to each Stock Unit grant or election,
including the form of payment to be made at or following the vesting
thereof, shall be set forth in or pursuant to the Participant's Alternative
Exercise Agreement or other agreement and the relevant Company deferred
compensation plan, in form substantially as approved by the Committee.
7.2 OTHER PROVISIONS.
The Committee shall determine, among other terms of a Stock Unit grant
or Award, the form of payment of Stock Units, whether in cash, Stock, or
other consideration (including any other Award) or any combination thereof,
the valuation of the Stock Units or any non-cash payment for purposes of
the Award, and the applicable vesting and payout provisions of the Stock
Units. The Committee in the applicable Award Agreement or the relevant
Company deferred compensation plan may permit the Participant to elect the
form and time of payout of vested Stock Units on such conditions or subject
to such procedures as the Committee may impose, and may permit Stock Unit
offsets or other provision for payment of any applicable taxes that may be
due on the crediting, vesting or payment in respect of the Stock Units.
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VIII. OTHER PROVISIONS.
8.1 RIGHTS OF ELIGIBLE EMPLOYEES, PARTICIPANTS AND BENEFICIARIES.
(a) NO AWARD COMMITMENT. Status as an Eligible Employee shall not
be construed as a commitment that any Award will be made under this
Plan to an Eligible Employee or to Eligible Employees generally.
(b) NO EMPLOYMENT COMMITMENT. Nothing contained in this Plan (or
in Award Agreements or in any other documents related to this Plan
or to Awards) shall confer upon any Eligible Employee or Participant
any right to continue in the employ of the Company or constitute any
contract or agreement of employment, or interfere in any way with
the right of the Company to reduce such person's compensation or
other benefits or to terminate the employment of such Eligible
Employee or Participant, with or without cause, but nothing
contained in this Plan or any document related thereto shall affect
any other contractual right of any Eligible Employee or Participant.
(c) NO TRANSFER OF AWARDS.
(i) LIMIT ON EXERCISE. Except as provided herein and subject
to Section 8.12, Awards may be exercised only by, and amounts
payable or shares issuable pursuant to an Award shall be paid
only to (or for the account of), the Participant or, if the
Participant has died, the Participant's Beneficiary or, if the
Participant has suffered a Disability, the Participant's
Personal Representative, if any, or if there is none, the
Participant. Subject to Sections 8.1(c)(ii), 8.5 and 8.12, the
Committee may by express written authorization permit exercise
by and payment to certain persons or entities related to the
Participant who are permitted transferees of the Participant
without consideration, or such other persons as the Committee
deems appropriate, pursuant to such conditions and procedures
as the Committee in writing may establish and set forth in or
by amendment to an Award Agreement.
(ii) LIMIT ON TRANSFER. No option, right or other Award
granted under this Plan including, without limitation, any
undistributed performance share or share of Restricted Stock
that has not vested, shall be transferrable by the Participant
or shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance or charge
(other than to the Corporation), except (i) by will or the laws
of descent and distribution, or (ii) pursuant to any other
exception to transfer restrictions expressly permitted by the
Committee and set forth in the Award Agreement (or an amendment
thereto), and (iii) in the case of Awards comprising Incentive
Stock Options, as permitted by the Code. Any attempted
transfer in violation of these provisions shall be void and
shall be disregarded.
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(c) DESIGNATION OF BENEFICIARY. The designation of a Beneficiary
shall not constitute a transfer prohibited by the foregoing provisions.
(d) PLAN NOT FUNDED. Awards payable under this Plan shall be payable
in shares or from the general assets of the Corporation, and no special or
separate reserve, fund or deposit shall be made to assure payment of such
Awards. No Participant, Beneficiary or other person shall have any right,
title or interest in any fund or in any specific asset (including shares of
Common Stock) of the Company by reason of any Award granted hereunder.
Neither the provisions of this Plan (or of any documents related hereto),
nor the creation or adoption of this Plan, nor any action taken pursuant to
the provisions of this Plan shall create, or be construed to create, a
trust of any kind or a fiduciary relationship between the Company and any
Participant, Beneficiary or other person. To the extent that a
Participant, Beneficiary or other person acquires any rights in respect of
an Award hereunder, such rights shall be no greater than the rights of any
unsecured general creditor of the Company.
8.2 ADJUSTMENTS UPON A REORGANIZATION OR CHANGES IN CAPITALIZATION.
(a) GENERAL. If the outstanding shares of Common Stock are changed
into or exchanged for cash or a different number or kind of shares,
securities, or other property, or if additional shares or new or different
securities or, other property are distributed with respect to the
outstanding shares of the Common Stock, through a merger, combination,
consolidation, or other reorganization or a recapitalization,
reclassification, stock split, stock dividend, reverse stock split, stock
consolidation, dividend or distribution of property to the stockholders of
the Corporation which in the judgment of the Committee materially affects
the value of the Common Stock, or if some other capital change or
adjustment affecting the Common Stock shall be made, the Committee, shall
in such manner and to such extent as it deems an appropriate, equitable,
and proportionate, adjust the number and kind of securities, obligations or
other consideration (including cash or other property) that are (is)
subject to or may be delivered under this Plan and pursuant to outstanding
Awards and in any applicable performance standards, and (if applicable)
subsequent Awards, subject (i) in the case of a transaction that the
Corporation does not survive as a legal entity to any required approval of
the surviving or successor entity (or a parent or subsidiary thereof); (ii)
in the case of a transaction to be accounted for as a pooling of interests,
to any applicable limitations under generally accepted accounting
principles; and (iii) to the provisions of Section 8.4 below. A
corresponding adjustment to the consideration payable with respect to
Awards granted prior to any such change and to the price, if any, to be
paid in connection with Restricted Stock Awards or Performance Share Awards
shall also be made. Corresponding adjustments shall be made with respect
to Stock Appreciation Rights related to Options based upon the adjustments
made to the Options to which they are related. Further, in the case of an
extraordinary dividend or other distribution, recapitalization,
reclassification, reorganization, merger, consolidation, combination, sale
of assets, split up, exchange, or spin off, the Committee may make
provision for a cash payment or for the substitution or exchange of any or
all outstanding Awards or the
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cash, securities, or property deliverable to the holder of any or all
outstanding Awards based upon the distribution or consideration payable
to holders of the Common Stock of the Corporation upon or in respect of
such event; provided, however, in each case, that with respect to Awards
of Incentive Stock Options, no such adjustment shall be made which would
cause the Plan to violate Section 424(a) of the Code or any successor
provisions thereto without the written consent of holders materially
adversely affected thereby. In any of such events, the Committee may
take such action sufficiently prior to such event if it deems such action
necessary or appropriate to permit the Participant to realize the
benefits intended to be conveyed with respect to the underlying shares in
the same manner as is or will be available to stockholders generally.
(b) SECTION 16 DEFERRAL. Adjustments to Awards granted to
Participants may be suspended or deferred for so long as the Committee
determines that such adjustments adversely affect the ability of persons
subject to the reporting and liability provisions of Section 16 of the
Exchange Act to avoid liability under Section 16 of the Exchange Act.
(c) ASSUMPTION; SUBSTITUTION; OTHER SETTLEMENT ADJUSTMENTS. Whether
or not an Award is vested at the time of an Event, the Committee, prior to
the Event but subject to any applicable limitations (in the case of a
transaction to be accounted for as a pooling of interests) under generally
accepted accounting principles, may in its discretion further provide in
respect of any or all outstanding Awards:
(i) for the assumption of the outstanding Awards by a successor
entity, or a parent or subsidiary thereof, with appropriate
adjustments to the type of securities or property to be delivered, or
(ii) for the substitution for the outstanding Awards of new
Awards covering securities, obligations or consideration (including
cash or other property), or any combination thereof, of or from the
Corporation or a successor entity, or a parent or subsidiary thereof,
in either case with appropriate, proportionate, equitable adjustments
as to number and kind of securities, obligations and/or other
consideration deliverable in respect of the vesting or on exercise of
an Award and the applicable exercise or other prices and conditions in
respect thereof; or
(iii) for the payment of the fair value of the outstanding
Awards in complete settlement of all rights of the Participant
thereunder; and
(iv) if such provision is made under this Section 8.2(c), the
Committee as constituted prior to the Event also may terminate the
original Award upon such assumption, substitution or payment.
(d) OTHER BENEFITS. In addition, the Committee may grant such
additional rights in the foregoing circumstances as the Committee deems to
be in the best interest
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<PAGE>
of the Participants and the Corporation in order to preserve for the
Participants the benefits of their Awards.
(e) RELIANCE. In adjusting Awards to reflect the changes described
in this Section 8.2, or in determining that no such adjustment is
necessary, the Committee may rely upon the advice of independent counsel
and accountants of the Corporation, and the determination of the Committee
shall be conclusive.
8.3 EFFECT OF TERMINATION OF EMPLOYMENT.
Unless the Committee otherwise expressly provides in or by amendment
to the Award Agreement:
(a) OPTIONS--RESIGNATION; DISMISSAL WITHOUT CAUSE. If the
Participant's employment by the Company terminates for any reason other
than Retirement, Total Disability or death, the Participant shall have,
subject to earlier termination pursuant to or as contemplated by Section
3.3, three months from the date of termination of employment to exercise
any Option to the extent it shall have become exercisable on the date of
termination of employment, and any Option to the extent not exercisable on
that date shall terminate.
(b) OPTIONS--RETIREMENT, DISABILITY OR DEATH. If the Participant's
employment by the Company terminates as a result of Retirement, Total
Disability, or death, the Participant or Participant's Personal
Representative or his or her Beneficiary, as the case may be, shall have,
subject to earlier termination pursuant to or as contemplated by Section
3.3, 12 months from the date of termination of employment to exercise any
Option to the extent it shall have become exercisable by the date of
termination of employment, and any Option to the extent not exercisable on
that date shall terminate.
(c) SARS. Each Stock Appreciation Right granted concurrently with an
Option shall have the same termination provisions and exercisability
periods as the Option to which it relates. The exercisability period of a
Stock Appreciation Right shall not exceed that provided in Section 3.3 or
in the related Award Agreement and the Stock Appreciation Right shall
expire at the end of such exercisability period.
(d) RESTRICTED AND PERFORMANCE SHARES. In the event of a termination
of employment with the Company for any reason, (i) shares of Common Stock
subject to the Participant's Restricted Stock Award shall be forfeited in
accordance with the provisions of the related Award Agreement to the extent
such shares have not become vested on that date; and (ii) shares of Common
Stock subject to the Participant's Performance Share Award shall be
forfeited in accordance with the provisions of the related Award Agreement
to the extent such shares have not been issued or become issuable on that
date.
17
<PAGE>
(e) ADJUSTMENT. In the event or in anticipation of a termination of
employment with the Company for any reason, other than discharge for cause,
the Committee may, in its discretion (subject to the provisions of Sections
2.5, 3.4, 5.1 and 6.1 and 8.5, 8.7 and 8.12) accelerate exercisability or
vesting or extend the exercisability or vesting period of an Award, or
make other changes to or provide for alternative settlement of an
Award.
(f) CHANGE IN OWNERSHIP OF SUBSIDIARY. If an entity ceases to be a
Subsidiary, such action shall be deemed for purposes of this Section 8.3 to
be a termination of employment of each employee of that entity who does not
continue as an employee of another entity within the Company.
(g) STOCK UNITS. Each Alternative Exercise Agreement or other Award
Agreement in respect of Stock Units shall include the applicable benefit
distribution and termination provisions for the grant or Award and shall
specify the form of payment and may incorporate (to the extent applicable)
terms of this Plan, another Award and/or any other deferred compensation
plan under which it is governed.
8.4 ACCELERATION OF AWARDS UPON AN EVENT; OTHER CHANGES IN AWARDS.
Unless prior to an Event the Committee determines that, upon its
occurrence, there shall be no acceleration of Awards or determines those
Awards which shall be accelerated and the extent to which they shall be
accelerated, upon the occurrence of an Event (i) each Option and each
related Stock Appreciation Right shall become immediately exercisable to
the full extent theretofore not exercisable, (ii) Restricted Stock shall
immediately vest free of restrictions, and (iii) the number of shares
covered by each Performance Share Award and Stock Unit Account shall be
issued to the Participant. Acceleration of Awards shall comply with
applicable regulatory requirements, including without limitation Rule 16b-3
and Section 422 of the Code.
8.5 COMPLIANCE; GOVERNMENT REGULATIONS.
This Plan, the granting and vesting of Awards under this Plan and the
offer, issuance or delivery of shares of Common Stock (and/or the payment
of money or other property or securities) pursuant to this Plan or Awards
are subject to compliance with all applicable federal and state laws, rules
and regulations and to such approvals by any listing, regulatory or
governmental agency (including without limitation "no action" positions of
the Commission) as may, in the opinion of counsel for the Corporation, be
necessary or advisable in connection therewith. In connection with any
stock issuance or transfer, the person acquiring the shares shall, if
requested by the Corporation, give assurances satisfactory to counsel to
the Corporation in respect of such matters as the Corporation may deem
necessary or desirable to assure compliance with all applicable legal
requirements.
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<PAGE>
8.6 TAX WITHHOLDING.
Upon the disposition by a Participant or other person of shares of
Common Stock acquired pursuant to the exercise of an Incentive Stock Option
prior to satisfaction of the holding period requirements of Section 422 of
the Code, or upon the exercise of a Nonqualified Stock Option, the exercise
of a Stock Appreciation Right, or distribution from or in respect of a
Stock Unit Account, the vesting of a Restricted Stock Award, or the payment
of a Performance Share Award, the Company shall have the right to (i)
require such Participant or such other person to pay by cash, or certified
or cashier's check payable to the Company, the amount of any taxes which
the Company may be required to withhold with respect to such transaction or
(ii) deduct from amounts paid in cash the amount of any taxes which the
Company may be required to withhold with respect to such cash amounts. The
above notwithstanding, in any case where a tax is required to be withheld
in connection with the issuance, transfer or vesting of shares of Common
Stock under this Plan, the Participant may elect, pursuant to such rules
and subject to such conditions as the Committee may establish (which
conditions may require its specific approval, on a case-by-case basis), to
have the Company reduce the number of such shares issued or transferred by
the appropriate number of shares to accomplish such withholding. The
Committee may impose conditions on the payment of any withholding
obligation necessary in the case of persons subject to the reporting and
liability provisions of Section 16 of the Exchange Act to enable them to
avoid liability under Section 16 of the Exchange Act or to secure the
benefits otherwise available under any applicable exemptive or other rule
thereunder with respect to a "plan" or particular award or action related
thereto. In any event, the Corporation shall not be obligated to issue or
deliver shares and/or distribute cash to the Participant upon exercise or
vesting of any Award, unless such withholding (or offset) as of or prior to
the date of such issue or delivery is sufficient to cover all such sums due
or which may be due with respect to such exercise or vesting.
8.7 AMENDMENT, TERMINATION AND SUSPENSION.
(a) PLAN CHANGES. The Board may, at any time, terminate or, from
time to time, amend, modify or suspend this Plan (or any part hereof),
including without limitation, amendments or modifications as may be
necessary to enable Participants to avoid liability under Section 16 of the
Exchange Act or to secure the benefits otherwise available under any
applicable exemptive or other rule thereunder with respect to a "plan" or
particular award or action related thereto. In addition, the Committee
may, from time to time, amend or modify any provision of this Plan, except
Section 8.2 or 8.4. No Awards may be granted during any suspension of this
Plan or after its termination, but the Committee shall retain jurisdiction
hereunder in respect of Awards granted prior thereto and may consistent
with the terms hereof modify such Awards (including provision for deferred
payment of vested awards consistent with the other terms of this Plan),
unless the Board otherwise provides.
(b) CHANGES TO OUTSTANDING AWARDS. The Committee may, with the
consent of the Participant as to any adverse change, make such
modifications of the
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<PAGE>
terms and conditions of such Participant's Award as it shall deem
advisable. The Committee, with the consent of the Participant, may also
amend the terms of any Option to provide that the purchase price under
the Option of the shares remaining subject to the original Award shall be
reestablished at a price not less than 100% of the Fair Market Value of
the Common Stock on the effective date of the amendment. No modification
of any other term or provision of any Option which is amended in
accordance with the foregoing shall be required, although the Committee
may, in its discretion, make such further modifications of any such
Option as are not inconsistent with or prohibited by this Plan. Changes
pursuant to Section 8.2 or 8.4 are not limited by or subject to this
Section 8.7(b).
(c) STOCKHOLDER APPROVAL. If an amendment would (i) materially
increase the benefits accruing to Participants under this Plan, (ii)
materially increase the aggregate number of securities which may be issued
under this Plan, or (iii) materially modify the requirements of eligibility
for participation in this Plan, the amendment shall be approved by the
Board and, to the extent then required by Section 424 of the Code or as may
be necessary or desirable to avoid liability under Section 16 of the
Exchange Act or to secure the benefits otherwise available under any
applicable exemptive or other rule thereunder with respect to a "plan" or
particular award or action related thereto or required by any other
applicable law, or any successor provision thereto, by the requisite number
of stockholders.
(d) EFFECT OF PLAN AMENDMENT ON OUTSTANDING AWARD. Any amendment,
suspension or termination of this Plan shall not, without specific action
of the Board or the Committee and the consent of the Participant as to any
adverse change, in any way modify, amend, alter or impair any rights or
obligations under any Award previously granted under this Plan.
8.8 PRIVILEGES OF STOCK OWNERSHIP; NONDISTRIBUTIVE INTENT.
A Participant shall not be entitled to the privilege of stock
ownership as to any shares of Common Stock not actually issued to him or
her. Upon the issuance and transfer of shares to the Participant, unless a
registration statement is in effect under the Securities Act and applicable
state securities law relating to such issued and transferred Common Stock
and there is available for delivery a prospectus meeting the requirements
of Section 10 of the Securities Act, the Common Stock may be issued and
transferred to the Participant only if he or she represents and warrants in
writing to the Corporation that the shares are being acquired for
investment and not with a view to the resale or distribution thereof.
8.9 EFFECTIVE DATE OF THIS PLAN.
The effective date of this Plan was May 15, 1991. Material amendments
to this Plan effective February 1, 1996, were approved by the stockholders
of the Corporation at annual meeting on May 9, 1996. Amendments effective
January 29, 1997 and July 31, 1997 were approved by the Board of Directors
and did not require stockholder
20
<PAGE>
approval, nor did they adversely affect any Award holder's rights or
benefits under this Plan.
8.10 TERM OF THIS PLAN.
Unless previously terminated by the Board, this Plan shall terminate
at the close of business on May 14, 2001, and no Awards shall be granted
under it thereafter, but such termination shall not affect any Award
theretofore granted or the authority of the Committee with respect to
Awards then outstanding.
8.11 GOVERNING LAW.
This Plan and the documents evidencing Awards and all other related
documents shall be governed by, and construed in accordance with, the laws
of the State of California. If any provision shall be held by a court of
competent jurisdiction to be invalid and unenforceable, the remaining
provisions of this Plan shall continue to be fully effective.
8.12 LIMITATIONS AS TO EXECUTIVE OFFICERS.
(a) RULE 16b-3; BIFURCATION. It is the intent of the Corporation
that transactions or events in respect of Awards hereunder satisfy and be
interpreted in a manner that in the case of Participants who are or may be
subject to Section 16 of the Exchange Act satisfies the applicable
requirements of Rule 16b-3 so that such persons (unless they otherwise
agree) will be entitled to the benefits of Rule 16b-3 or other exemptive
rules under Section 16 of the Exchange Act and will not be subjected to
avoidable liability there-under. If any provision of this Plan or of any
Award would otherwise frustrate or conflict with the intent expressed
above, that provision to the extent possible shall be interpreted and
deemed amended so as to avoid such conflict. Notwithstanding anything to
the contrary in this Plan, the provisions of this Plan may at any time be
bifurcated by the Board or the Committee in any manner so that certain
provisions of any Award Agreement (or this Plan) intended (or required in
order) to satisfy the applicable requirements of Rule 16b-3 are only
applicable to Section 16 Persons and to those Awards to Section 16 Persons
intended to satisfy the requirements of Rule 16b-3.
(b) SECTION 162(m). It is the further intent of the Corporation that
Options or SARs with an exercise or base price not less than Fair Market
Value on the date of grant and performance awards under Section 6.2 of this
Plan that are granted to or held by a Section 16 Person shall (if so
designated by the Committee) qualify as performance-based compensation
under Section 162(m) of the Code, and this Plan shall be interpreted
consistent with such intent.
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<PAGE>
8.13 CAPTIONS.
Captions and headings are given to the sections and subsections of
this Plan solely as a convenience to facilitate reference. Such headings
shall not be deemed in any way material or relevant to the construction or
interpretation of this Plan or any provision thereof.
8.14 NO FRACTIONAL INTEREST.
No fractional shares of stock shall be issued under this Plan, but
fractional interests may be accumulated or paid in cash.
8.15 NON-EXCLUSIVITY OF PLAN.
Nothing in this Plan shall limit or be deemed to limit the authority
of the Board or the Committee to grant awards or authorize any other
compensation, with or without reference to the Common Stock, under any
other plan or authority.
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<PAGE>
<PAGE>
DOLE FOOD COMPANY, INC.
NON-EMPLOYEE DIRECTORS
DEFERRED STOCK
AND
CASH COMPENSATION PLAN
(AS AMENDED OCTOBER 1, 1997)
<PAGE>
NON-EMPLOYEE DIRECTORS
DEFERRED STOCK
AND
CASH COMPENSATION PLAN
(AS AMENDED OCTOBER 1, 1997)
TABLE OF CONTENTS
Page
ARTICLE I TITLE, PURPOSE AND AUTHORIZED SHARES . . . . . . . . . . . . .1
ARTICLE II DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE III PARTICIPATION. . . . . . . . . . . . . . . . . . . . . . . . .4
ARTICLE IV DEFERRAL MANDATES AND ELECTIONS. . . . . . . . . . . . . . . .4
4.1. Mandatory Deferral . . . . . . . . . . . . . . . . . .4
4.2. Elections. . . . . . . . . . . . . . . . . . . . . . .4
ARTICLE V DEFERRAL ACCOUNTS. . . . . . . . . . . . . . . . . . . . . . .5
5.1. Cash Account . . . . . . . . . . . . . . . . . . . . .5
5.2. Stock Unit Account . . . . . . . . . . . . . . . . . .5
5.3. Dividend Equivalent Credits to Stock Unit Account . .6
5.4. Immediate Vesting and Accelerated Crediting. . . . . .6
5.5. Distribution of Benefits . . . . . . . . . . . . . . .6
5.6. Adjustments in Case of Changes in Common Stock . . . .7
5.7. Company's Right to Withhold. . . . . . . . . . . . . .7
5.8. Stockholder Approval . . . . . . . . . . . . . . . . .8
ARTICLE VI ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . .8
6.1. The Administrator . . . . . . . . . . . . . . . . . .8
6.2. Committee Action . . . . . . . . . . . . . . . . . . .8
6.3. Rights and Duties . . . . . . . . . . . . . . . . . .8
6.4. Indemnity and Liability. . . . . . . . . . . . . . . .9
i
<PAGE>
ARTICLE VII PLAN CHANGES AND TERMINATION . . . . . . . . . . . . . . . . .9
7.1. Amendments . . . . . . . . . . . . . . . . . . . . . .9
7.2. Term . . . . . . . . . . . . . . . . . . . . . . . . .9
ARTICLE VIII MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . 10
8.1. Limitation on Eligible Directors' Rights . . . . . . 10
8.2. Beneficiaries. . . . . . . . . . . . . . . . . . . . 10
8.3. Benefits Not Assignable; Obligations
Binding Upon Successors. . . . . . . . . . . . . . 10
8.4. Governing Law; Severability. . . . . . . . . . . . . 11
8.5. Compliance With Laws . . . . . . . . . . . . . . . . 11
8.6. Plan Construction. . . . . . . . . . . . . . . . . . 11
8.7. Headings Not Part of Plan . . . . . . . . . . . . . 11
8.8. Relationship to the 1993 Deferred
Compensation Plan. . . . . . . . . . . . . . . . . 11
8.9. Irrevocability of Payout Elections . . . . . . . . . 12
ii
<PAGE>
NON-EMPLOYEE DIRECTORS
DEFERRED STOCK
AND
CASH COMPENSATION PLAN
(AS AMENDED MARCH 20, 1997)
ARTICLE I
TITLE, PURPOSE AND AUTHORIZED SHARES
This Plan shall be known as "Dole Food Company, Inc. Non-Employee
Directors Deferred Stock and Cash Compensation Plan". The purpose of this
Plan is to attract, motivate and retain experienced and knowledgeable
directors of the Company by permitting them to defer compensation and
affording them the opportunity to link that compensation to an equity
interest in the Company. The total number of shares of Common Stock that may
be delivered pursuant to awards under this Plan is 100,000, subject to
adjustments contemplated by Section 5.6.
ARTICLE II
DEFINITIONS
Whenever the following terms are used in this Plan they shall have the
meaning specified below unless the context clearly indicates to the contrary:
ACCOUNT or ACCOUNTS shall mean one or more of the Eligible Director's
Cash Account and Stock Unit Account or Accounts, as the context requires.
AVERAGE FAIR MARKET VALUE shall mean the average of the Fair Market
Values of a share of Common Stock during the last 10 trading days preceding
the applicable Award Date.
AWARD DATE shall mean (a) with reference to accruals under Section 4.1,
March 31 and June 30 of the applicable Year, and (b) with reference to
elections under Section 4.2, (1) in the case of cash deferrals for Meeting
and Other Fees, the date of the meeting or other event for which the
Compensation is payable, (2) in the case of cash deferrals for the Retainer,
the last day of the applicable quarter, and (3) in the case of Stock Unit
credits, the Pay Date; except as provided in Section 5.4.
BOARD shall mean the Board of Directors of the Company.
CASH ACCOUNT shall mean the bookkeeping account maintained by the Company
on behalf of a Participant who elects to defer his or her Compensation in
cash pursuant to Section 4.2 and unless
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<PAGE>
the context otherwise requires shall include any Rollover Account.
CHANGE IN CONTROL EVENT shall have the meaning specified for such term
under the 1995 Non-Employee Director Stock Option Plan.
CODE shall mean the Internal Revenue Code of 1986, as amended.
COMMON STOCK shall mean the Common Stock of the Company, subject to
adjustment pursuant to Section 5.6.
COMMITTEE shall mean the Board or a Committee of the Board acting in
accordance with Article VI.
COMPANY shall mean Dole Food Company, Inc., a Hawaii corporation, and its
successors and assigns.
COMPENSATION shall mean the Retainer and Meeting and Other Fees.
DIVIDEND EQUIVALENT shall mean the amount of cash dividends or other cash
distributions paid by the Company on that number of shares of Common Stock
equivalent to the number of Stock Units then credited to a Participant's
Stock Unit Account, which amount shall be allocated as additional Stock Units
to the Participant's Stock Unit Account, as provided in Section 5.3.
EFFECTIVE DATE shall mean April 1, 1996.
ELIGIBLE DIRECTOR shall mean a member of the Board who is not an officer
or employee of the Company and who is compensated in the capacity as a
director and (with reference to any outstanding Account balance under this
Plan) any person who has an Account balance under this Plan by reason of his
or her prior status as an Eligible Director.
EXCHANGE ACT shall mean the Securities Exchange Act of 1934, as amended
from time to time.
FAIR MARKET VALUE shall mean on any date the closing price of the Common
Stock on the Composite Tape, as published in the Western Edition of The Wall
Street Journal, of the principal securities exchange or market on which the
Common Stock is so listed, admitted to trade, or quoted on such date, or, if
there is no trading of the Common Stock on such date, then the closing price
of the Common Stock as quoted on such Composite Tape on the next preceding
date on which there was trading in such shares. If the Common Stock is not
so listed, admitted or quoted, the Committee may designate such other
exchange, market or source of data as it deems appropriate for determining
such value for purposes of this Plan.
INTEREST RATE shall mean the rate (quoted as an annual rate) that is 120%
of the federal long-
2
<PAGE>
term rate for compounding on a quarterly basis, determined and published by
the Secretary of the United States Department of Treasury under Section
1274(d) of the Code, for the month in which interest is credited.
MEETING AND OTHER FEES shall mean all meeting fees (including committee
meeting fees) and other fees except for the Retainer that are payable by the
Company to an Eligible Director for services as a director of the Company.
PARTICIPANT shall mean any person who has an Account balance under this
Plan.
PAY DATE shall mean the date Compensation or dividends would otherwise
have been paid.
PLAN shall mean the Dole Food Company, Inc. Non-Employee Directors
Deferred Stock and Cash Compensation Plan, as amended.
RECORD DATE shall mean the date, as determined by the Board of the
Company, on which a shareholder must own shares in order to be entitled to a
dividend.
RETAINER shall mean the annual retainer payable by the Company to an
Eligible Director.
ROLLOVER ACCOUNT shall mean the bookkeeping account maintained by the
Company on behalf of an Eligible Director with respect to his or her prior
account balance under the Company's 1993 Board of Directors Deferred
Compensation Plan that has been transferred to this Plan pursuant to Section
8.8.
STOCK UNIT OR UNIT shall mean a non-voting unit of measurement which is
deemed for bookkeeping purposes to be equivalent to one outstanding share of
Common Stock of the Company solely for purposes of this Plan.
STOCK UNIT ACCOUNT shall mean the bookkeeping account maintained by the
Company on behalf of each Eligible Director which is credited with Stock
Units in accordance with Section 5.2.
YEAR shall mean the calendar year.
3
<PAGE>
ARTICLE III
PARTICIPATION
Each Eligible Director shall participate under Section 4.1 of this Plan
with respect to the entire amount of Retainer that would otherwise be payable
to the director from January 1 through June 30 of each Year (or, for 1996,
from April 1 through September 30). Each Eligible Director may elect to
defer under and subject to Section 4.2 of this Plan his or her remaining
Compensation for the applicable Year.
ARTICLE IV
DEFERRAL MANDATES AND ELECTIONS
4.1. MANDATORY DEFERRAL.
The Stock Unit Account of each Eligible Director shall be credited on
each March 31 and June 30 with a number of Units determined by dividing the
amount of the Retainer otherwise payable to the Eligible Director from
January 1 (or the date service commences) through March 31 and from April 1
(or the date service commences) June 30 of the applicable Year by the Average
Fair Market Value of the Common Stock on the Award Date.(1)
4.2. ELECTIONS.
(a) TIME AND TYPES OF ELECTIONS. On or before December 31 of each Year
(or, in the case of a person who first becomes an Eligible Director during
the Year, within 30 days after election to office), each Eligible Director
may make an irrevocable election to defer:
(1) IN CASH all or part of the remaining Compensation not otherwise
deferred pursuant to Section 4.1 or 4.2(a)(2) (subject to section 4.2(b)
hereof) payable for services to be rendered by the Eligible Director during
the next Year (or remainder of the Year, as the case may be);
(2) IN STOCK UNITS all or part of the remaining Compensation not
otherwise deferred pursuant to Section 4.1 or 4.2(a)(1) (subject to Section
4.2(b) hereof) payable to the Eligible Director for services to be rendered
during the next Year (or remainder of the Year, as the case may be).
- -----------------
(1) For 1996, the applicable period under Section 4.1 was April 1
through September 30, and the elective deferral period under Section 4.2 was
October 1 through December 31.
4
<PAGE>
(b) PERMITTED AMOUNTS; ELECTIONS. The portions of the remaining
Retainer and Meeting and Other Fees subject to deferral shall be limited to
increments of 25%, 50%, 75% or 100%. All elections shall be in writing on
forms provided by the Company. If an election is made under this Section
4.2 and is not revoked or changed by the end of the applicable deferral
period with respect to the next applicable period, the election will be
deemed a continuing one.
ARTICLE V
DEFERRAL ACCOUNTS
5.1. CASH ACCOUNT.
If an Eligible Director has made a cash election under Section 4.2, the
Company shall establish and maintain a Cash Account for the Eligible Director
under this Plan, which Account shall be a memorandum account on the books of
the Company. An Eligible Director's Cash Account shall be credited as
follows:
(a) As of the date the Compensation would have been otherwise payable,
the Company shall credit the Eligible Director's Cash Account with an amount
equal to the portion of the Retainer (for the third and fourth quarters only)
and Meeting and Other Fees so deferred by the Eligible Director; and
(b) As of the last day of each calendar quarter, the Eligible Director's
Cash Account shall be credited with earnings on the balance credited to such
account as of the last day of the preceding quarter, plus earnings (from the
applicable date of crediting under Section 5.1) on any additional amounts
deferred during the current quarter, at a rate equal to the Interest Rate for
the applicable period during which the amounts were so deferred (i.e., the
entire quarter or portion thereof, as the case may be).
5.2. STOCK UNIT ACCOUNT.
(a) MANDATORY DEFERRALS. Deferrals pursuant to Section 4.1 shall be
credited on the applicable Award Date to the Stock Unit Account of the
Eligible Director. The number of Units credited shall be determined by
dividing the dollar amount of the Retainer so deferred and payable to the
Eligible Director by the Average Fair Market Value of a share of Common Stock
as of the applicable March 31 or June 30 of the applicable year.
(b) ELECTIVE DEFERRALS. If an Eligible Director has made a Stock Unit
election under Section 4.2, the Committee shall, as of the Pay Date, credit
the Eligible Director's Stock Unit Account with an amount of Units determined
by dividing the applicable portion of the Eligible Director's Retainer and
Meeting and Other Fees by the AVERAGE Fair Market Value of a share of Common
Stock as of the Pay Date.
5
<PAGE>
(c) LIMITATIONS ON RIGHTS ASSOCIATED WITH UNITS. An Eligible Director's
Stock Unit Account shall be a memorandum account on the books of the Company.
The Units credited to an Eligible Director's Stock Unit Account shall be used
solely as a device for the determination of the number of shares of Common
Stock to be eventually distributed to such Eligible Director in accordance
with this Plan. The Units shall not be treated as property or as a trust
fund of any kind. No Eligible Director shall be entitled to any voting or
other stockholder rights with respect to Units granted or credited under this
Plan. The number of Units credited (and the Common Stock to which the
Eligible Director is entitled under this Plan) shall be subject to adjustment
in accordance with Section 5.6.
5.3. DIVIDEND EQUIVALENT CREDITS TO STOCK UNIT ACCOUNT.
As of the Pay Date, an Eligible Director's mandatory and any elective
Stock Unit Accounts shall be credited with additional Units in an amount
equal to the amount of the Dividend Equivalents representing dividends paid
on that number of shares equal to the aggregate Stock Units in the
Participant's Stock Unit Account as of the Record Date divided by the Average
Fair Market Value of a share of Common Stock as of the Pay Date.
5.4. IMMEDIATE VESTING AND ACCELERATED CREDITING.
(a) UNITS AND OTHER AMOUNTS VEST IMMEDIATELY. All Units or other
amounts credited to one or more of an Eligible Director's Stock Unit or Cash
Accounts (including any Rollover Account) shall be at all times fully vested.
(b) ACCELERATION OF CREDITING OF ACCOUNTS. The crediting of the rights
of each Eligible Director in respect of Accounts shall be accelerated if an
Eligible Director ceases to be a member of the Board. In such case: (1) the
amount of cash that would have been credited at the next quarter end shall be
prorated based on the number of full weeks of service during the applicable
period; and (2) the number of Units that would have been credited to the
Eligible Director's Stock Unit Accounts as of the next quarter end shall be
prorated based on the number of full weeks of service during the applicable
period. For these purposes, the Award Date shall be deemed to be the date of
termination of service.
5.5. DISTRIBUTION OF BENEFITS.
(a) COMMENCEMENT OF BENEFIT DISTRIBUTION. Each Eligible Director shall
be entitled to receive a distribution of his or her Accounts upon his or her
termination of service on the Board. Notwithstanding the foregoing, the
distribution of each Eligible Director's Rollover Account shall be governed
by Section 8.8.
(b) MANNER OF DISTRIBUTION. The benefits payable under this Plan shall
be distributed to the Eligible Director (or, in the event of his or her
death, the Eligible Director's Beneficiary) in a lump sum, or, subject to
Section 8.9, as permitted by this Section 5.5(b). Each Eligible Director may
elect in
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writing on forms provided by the Company at the time of making his or her
deferral election under Article IV or (subject to Section 8.9) at least 12
months in advance of the date benefits become distributable under Section
5.5(a) to receive a distribution of his or her benefits in up to five annual
installments. Such installment payments shall commence as of the date
benefits become distributable under Section 5.5(a). Notwithstanding the
foregoing, if the balance remaining in an Eligible Director's Cash Account is
less than $5,000 or, if the number of Units remaining in the Eligible
Director's Stock Unit Accounts is less than 100, then such remaining balances
shall be distributed in a lump sum.
(c) EFFECT OF CHANGE IN CONTROL EVENT. Notwithstanding Sections 5.5(a)
and (b), if a Change in Control Event and a termination of service has
occurred or shall occur, the Eligible Director's Accounts (including
accelerated benefits under Section 5.4(b)) shall be distributed immediately
in a lump sum.
(d) FORM OF DISTRIBUTION. Stock Units credited to an Eligible
Director's Stock Unit Account shall be distributed in an equivalent whole
number of shares of the Company's Common Stock. Fractions shall be
disregarded. Amounts credited to an Eligible Director's Cash Account,
including any Rollover Account, shall be distributed in cash.
5.6. ADJUSTMENTS IN CASE OF CHANGES IN COMMON STOCK.
If any stock dividend, stock split, recapitalization, merger,
consolidation, combination or other reorganization, exchange of shares, sale
of all or substantially all of the assets of the Company, split-up,
split-off, spin-off, extraordinary redemption, liquidation or similar change
in capitalization or any distribution to holders of the Company's Common
Stock (other than cash dividends and cash distributions) shall occur,
proportionate and equitable adjustments consistent with the effect of such
event of stockholders generally (but without duplication of benefits if
Dividend Equivalents are credited) shall be made in the number and type of
shares of Common Stock or other securities, property and/or rights
contemplated hereunder and of rights in respect of Units and Accounts
credited under this Plan so as to preserve the benefits intended.
5.7. COMPANY'S RIGHT TO WITHHOLD.
The Company shall satisfy any state or federal income tax withholding
obligation arising upon distribution of an Eligible Director's Accounts by
reducing the amount of cash or the number of shares of Common Stock otherwise
deliverable to the Eligible Director, as the case may be. The appropriate
number of shares required to satisfy such tax withholding obligation in the
case of Stock Units will be based on the Fair Market Value of a share of
Common Stock on the day prior to the date of distribution. If the Company,
for any reason, cannot satisfy the withholding obligation in accordance with
the preceding sentence, the Eligible Director shall pay or provide for
payment in cash of the amount of any taxes which the Company may be required
to withhold with respect to the benefits hereunder.
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5.8 STOCKHOLDER APPROVAL.
This Plan, and all the elections, actions and accruals with respect to
Stock Units and Dividend Equivalents made prior to stockholder approval, were
subject to approval of this Plan by the stockholders of the Company, which
was obtained on May 9, 1996.
ARTICLE VI
ADMINISTRATION
6.1. THE ADMINISTRATOR.
The Committee hereunder shall consist of the Board or a committee of
Directors appointed from time to time by the Board to serve as administrator
of this Plan. Any member of the Committee may resign by delivering a written
resignation to the Board. Members of the Committee shall not receive any
additional compensation for administration of this Plan.
6.2. COMMITTEE ACTION.
A member of the Committee shall not vote or act upon any matter which
relates solely to himself or herself as a Participant in this Plan. Action
of the Committee with respect to the administration of this Plan shall be
taken pursuant to a majority vote or by unanimous written consent of its
members.
6.3. RIGHTS AND DUTIES.
Subject to the limitations of this Plan, the Committee shall be charged
with the general administration of this Plan and the responsibility for
carrying out its provisions, and shall have powers necessary to accomplish
those purposes, including, but not by way of limitation, the following:
(a) To construe and interpret this Plan;
(b) To resolve any questions concerning the amount of benefits payable
to a Participant (except that no member of the Committee shall participate in
a decision relating solely to his or her own benefits);
(c) To make all other determinations required by this Plan;
(d) To maintain all the necessary records for the administration of this
Plan; and
(e) To make and publish forms, rules and procedures for the
administration of this Plan.
The determination of the Committee made in good faith as to any disputed
question or
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controversy and the Committee's determination of benefits payable to Eligible
Directors shall be conclusive. In performing its duties, the Committee shall
be entitled to rely on information, opinions, reports or statements prepared
or presented by: (i) officers or employees of the Company whom the Committee
believes to be reliable and competent as to such matters; and (ii) counsel
(who may be employees of the Company), independent accountants and other
persons as to matters which the Committee believes to be within such persons'
professional or expert competence. The Committee shall be fully protected
with respect to any action taken or omitted by it in good faith pursuant to
the advice of such persons. The Committee may delegate ministerial,
bookkeeping and other non-discretionary functions to individuals who are
officers or employees of the Company.
6.4. INDEMNITY AND LIABILITY.
All expenses of the Committee shall be paid by the Company and the
Company shall furnish the Committee with such clerical and other assistance
as is necessary in the performance of its duties. No member of the Committee
shall be liable for any act or omission of any other member of the Committee
nor for any act or omission on his or her own part, excepting only his or her
own willful misconduct or gross negligence. To the extent permitted by law,
the Company shall indemnify and save harmless each member of the Committee
against any and all expenses and liabilities arising out of his or her
membership on the Committee, excepting only expenses and liabilities arising
out of his or her own willful misconduct or gross negligence, as determined
by the Board.
ARTICLE VII
PLAN CHANGES AND TERMINATION
7.1. AMENDMENTS.
The Board shall have the right to amend this Plan in whole or in part
from time to time or may at any time suspend or terminate this Plan;
PROVIDED, however, that, except as contemplated by Section 5.8, no amendment
or termination shall cancel or otherwise adversely affect in any way, without
his or her written consent, any Eligible Director's rights with respect to
Stock Units and Dividend Equivalents credited to his or her Stock Unit
Accounts (assuming solely for such purposes a voluntary termination of
services as of the date of such amendment or termination) or to any amounts
previously credited (or that in such circumstances would be credited) to his
or her Cash Account, including any Rollover Account. Any amendments
authorized hereby shall be stated in an instrument in writing, and all
Eligible Directors shall be bound thereby upon receipt of notice thereof.
7.2. TERM.
It is the current expectation of the Company that this Plan shall be
continued for a period of 10 years after the Effective Date, but continuance
of this Plan is not assumed as a contractual obligation of
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the Company. In the event that the Board of Directors decides to discontinue
or terminate this Plan, it shall notify the Committee and Participants in
this Plan of its action in writing, and this Plan shall be terminated at the
time therein set forth. All Participants shall be bound thereby. In such
event, the then credited benefits of a Participant (including any accelerated
benefits under Section 5.4) shall be distributed at the time(s) and in the
manner elected and provided under Section 5.5.
ARTICLE VIII
MISCELLANEOUS
8.1. LIMITATION ON ELIGIBLE DIRECTORS' RIGHTS.
Participation in this Plan shall not give any person the right to
continue to serve as a member of the Board or any rights or interests other
than as herein provided. No Participant shall have any right to any payment
or benefit hereunder except to the extent provided in this Plan. This Plan
shall create only a contractual obligation on the part of the Company as to
such amounts and shall not be construed as creating a trust. This Plan, in
and of itself, has no assets. Participants shall have only the rights of a
general unsecured creditor of the Company with respect to amounts credited
and benefits payable, if any, on their Cash Accounts and rights no greater
than the right to receive the Common Stock (or equivalent value) as a general
unsecured creditor.
8.2. BENEFICIARIES.
(a) BENEFICIARY DESIGNATION. Upon forms provided by and subject to
conditions imposed by the Company, each Participant may designate in writing
the Beneficiary or Beneficiaries (as defined in Section 8.2(b)) whom such
Participant desires to receive any amounts payable under this Plan after his
or her death. The Company and the Committee may rely on the Participant's
designation of a Beneficiary or Beneficiaries last filed in accordance with
the terms of this Plan.
(b) DEFINITION OF BENEFICIARY. A Participant's "Beneficiary" or
"Beneficiaries" shall be the person, persons, trust or trusts (or similar
entity) designated by the Participant or, in the absence of a designation,
entitled by will or the laws of descent and distribution to receive the
Participant's benefits under this Plan in the event of the Participant's
death, and shall mean the Participant's executor or administrator if no other
Beneficiary is identified and able to act under the circumstances.
8.3. BENEFITS NOT ASSIGNABLE; OBLIGATIONS BINDING UPON
SUCCESSORS.
Benefits of a Participant under this Plan shall not be assignable or
transferable and any purported transfer, assignment, pledge or other
encumbrance or attachment of any payments or benefits under this Plan, or any
interest therein, other than by operation of law or pursuant to Section 8.2,
shall not be
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permitted or recognized. Obligations of the Company under this Plan shall be
binding upon successors of the Company.
8.4. GOVERNING LAW; SEVERABILITY.
The validity of this Plan or any of its provisions shall be construed,
administered and governed in all respects under and by the laws of the State
of California. If any provisions of this instrument shall be held by a court
of competent jurisdiction to be invalid or unenforceable, the remaining
provisions hereof shall continue to be fully effective.
8.5. COMPLIANCE WITH LAWS.
This Plan and the offer, issuance and delivery of shares of Common Stock
and/or the payment of money through the deferral of compensation under this
Plan are subject to compliance with all applicable federal and state laws,
rules and regulations (including but not limited to state and federal
securities law) and to such approvals by any listing, agency or any
regulatory or governmental authority as may, in the opinion of counsel for
the Company, be necessary or advisable in connection therewith. Any
securities delivered under this Plan shall be subject to such restrictions,
and the person acquiring such securities shall, if requested by the Company,
provide such assurances and representations to the Company as the Company may
deem necessary or desirable to assure compliance with all applicable legal
requirements.
8.6. PLAN CONSTRUCTION.
It is the intent of the Company that transactions pursuant to this Plan
satisfy and be interpreted in a manner that satisfies the applicable
requirements of Rule 16b-3 promulgated under the Exchange Act ("Rule 16b-3")
so that mandatory deferrals and, to the extent elections are timely made,
elective deferrals will be entitled to the benefits of Rule 16b-3 or other
exemptive rules under Section 16 of the Exchange Act and will not be
subjected to avoidable liability thereunder. Any contrary interpretation
shall be avoided.
8.7. HEADINGS NOT PART OF PLAN.
Headings and subheadings in this Plan are inserted for reference only and
are not to be considered in the construction of the provisions hereof.
8.8. RELATIONSHIP TO THE 1993 DEFERRED COMPENSATION PLAN.
Subject to Section 5.8, this Plan supersedes in its entirety the 1993
Board of Directors Deferred Compensation Plan (the "1993 Plan"). As of the
date of stockholder approval of this Plan, accrued balances under the 1993
Plan shall be credited to a Cash Account under this Plan and such balances
shall
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<PAGE>
thereafter be credited in accordance with the provisions of this Plan.
Payout elections under the 1993 Plan shall be conformed to the nearest
equivalent under this Plan.
8.9. LIMITED EXCEPTION TO IRREVOCABILITY OF PAYOUT ELECTIONS.
A Participant may, subject to the approval of the Committee,
prospectively change an election under Section 5.5(b) by a subsequent
election that will take effect at least 12 months after the subsequent
election is received by the Company if, in the opinion of Counsel to the
Company, the subsequent election would not adversely effect the efficacy of
deferrals under the Code in respect of other Participants or this Plan. The
Committee may, subject to Sections 8.5 and 8.6, permit elections that would
not qualify for exemption under Section 16(b) of the Exchange Act, so long as
the availability of any exemption thereunder for other Directors under this
Plan is not compromised.
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DOLE FOOD COMPANY, INC.
STOCK OWNERSHIP ENHANCEMENT PROGRAM
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE I
PURPOSE AND AUTHORIZED SHARES. . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. PURPOSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. SHARES AVAILABLE. . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3. RELATIONSHIP TO PLANS . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE III
PARTICIPATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE IV
ALTERNATIVE EXERCISE OF OPTIONS. . . . . . . . . . . . . . . . . . . . . . . 4
4.1. GENERAL ALTERNATIVE EXERCISE PROCEDURES . . . . . . . . . . . . . 4
4.2. FORM OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . 5
4.3 SPECIAL TRANSITION RULE . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE V
STOCK UNIT ACCOUNTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.1. CREDITING OF STOCK UNITS. . . . . . . . . . . . . . . . . . . . . 5
5.2. DIVIDEND EQUIVALENT CREDITS TO STOCK UNIT ACCOUNT . . . . . . . . 6
5.3. IMMEDIATE VESTING . . . . . . . . . . . . . . . . . . . . . . . . 6
5.4. DISTRIBUTION OF BENEFITS. . . . . . . . . . . . . . . . . . . . . 6
5.5. EMERGENCY BENEFIT. . . . . . . . . . . . . . . . . . . . . . . . 7
5.6. ADJUSTMENTS IN CASE OF CHANGES IN COMMON STOCK.. . . . . . . . . 8
5.7. COMPANY'S RIGHT TO WITHHOLD. . . . . . . . . . . . . . . . . . . 8
ARTICLE VI
ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.1. THE ADMINISTRATOR. . . . . . . . . . . . . . . . . . . . . . . . 9
6.2. COMMITTEE ACTION . . . . . . . . . . . . . . . . . . . . . . . . 9
6.3. RIGHTS AND DUTIES. . . . . . . . . . . . . . . . . . . . . . . . 9
6.4. INDEMNITY AND LIABILITY. . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VII
PROGRAM CHANGES AND TERMINATION. . . . . . . . . . . . . . . . . . . . . . 11
7.1. AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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7.2. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VIII
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
8.1. LIMITATION ON PARTICIPANT'S RIGHTS . . . . . . . . . . . . . . 12
8.2. BENEFICIARY DESIGNATION. . . . . . . . . . . . . . . . . . . . 12
8.3. BENEFITS NOT ASSIGNABLE; OBLIGATIONS BINDING UPON
SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . . . 12
8.4. EMPLOYMENT TAXES . . . . . . . . . . . . . . . . . . . . . . . 12
8.5. GOVERNING LAW; SEVERABILITY. . . . . . . . . . . . . . . . . . 13
8.6. COMPLIANCE WITH LAWS . . . . . . . . . . . . . . . . . . . . . 13
8.7. PROGRAM CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . 13
8.8. HEADINGS NOT PART OF PROGRAM . . . . . . . . . . . . . . . . . 13
EXHIBITS
ALTERNATIVE EXERCISE AGREEMENT . . . . . . . . . . . . . . . . . . . . . A-1
ALTERNATIVE EXERCISE AGREEMENT (TRANSITION PERIOD ONLY) . . . . . . . . . B-1
ii
<PAGE>
DOLE FOOD COMPANY, INC.
STOCK OWNERSHIP ENHANCEMENT PROGRAM
ARTICLE I
PURPOSE AND AUTHORIZED SHARES
1.1. PURPOSES
The purpose of this Program is to encourage eligible executives who
are optionees under the Company's 1982 Stock Option and Award Plan, as
amended (the "1982 Plan") and 1991 Stock Option and Award Plan, as amended
and restated (the "1991 Plan") (together, the "Plans") to comply with the
Company's Stock Ownership Guidelines (the "Guidelines") and to motivate and
retain such executives by permitting them to defer compensation with the
opportunity to continue to link that compensation to an equity interest in
the Company.
1.2. SHARES AVAILABLE
The number of shares of Common Stock issuable under this Program is
limited to the aggregate number of shares of Common Stock that were the
subject of the options under the Plans that are exercised pursuant to Article
IV in exchange for the crediting of Stock Units under this Program. If the
number of shares of Common Stock payable under this Program would exceed the
limit described in the preceding sentence because of the accumulation of
Stock Units in respect of Dividend Equivalents, such excess of shares shall
be issued under the 1991 Plan. Shares representing Already-Owned Shares (as
defined herein) used under this Program may be used in respect of Dividend
Equivalents on the applicable Account, but may not be used for other awards
under the Plans.
1.3. RELATIONSHIP TO PLANS
This Program constitutes a deferred compensation plan providing
alternative settlements under and as contemplated by the 1982 Plan and the
1991 Plan in respect of options respectively granted thereunder. This
Program and all rights under it are provided under and shall be subject to
and construed consistently with the other terms of the 1982 Plan or the 1991
Plan, as the case may be, except as the context otherwise requires.
<PAGE>
ARTICLE II
DEFINITIONS
Whenever the following terms are used in this Program they shall have
the meaning specified below unless the context clearly indicates to the
contrary:
"ACCOUNT" shall mean a Participant's Stock Unit Account.
"ALREADY-OWNED SHARES" shall mean shares of Common Stock owned by an
Eligible Optionee; provided, however, that shares of Common Stock acquired by
an Eligible Optionee from the Company under an option or other employee
benefit plan maintained by the Company or otherwise must be held by the
Eligible Optionee for at least six months in order to qualify as
Already-Owned Shares.
"ALTERNATIVE EXERCISE" shall mean the exercise of all or a portion of an
Option using Already-Owned Shares in exchange for a combination of shares of
Common Stock and Stock Units under this Program.
"ALTERNATIVE EXERCISE AGREEMENT" shall mean an agreement entered into
between the Company and an Eligible Optionee in accordance with Article IV of
this Program pursuant to which the Eligible Optionee elects to defer a
portion of the Option proceeds in the form of Stock Units.
"BENEFICIARY" or "BENEFICIARIES" shall mean the person, persons, trust
or trusts (or similar entity) designated by the Participant or, in the
absence of a designation, entitled by will or the laws of descent and
distribution to receive the Participant's benefits under this Program in the
event of the Participant's death, and shall mean the Participant's executor
or administrator if no other Beneficiary is identified and able to act under
the circumstances.
"BOARD" shall mean the Board of Directors of the Company.
"CHANGE IN CONTROL EVENT" shall have the meaning specified for the term
"Event" under the 1991 Plan.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMMON STOCK" shall mean the Common Stock of the Company, subject to
adjustment pursuant to Section 5.6 of this Program and Section 8.2 of the
1991 Plan and Section 8 of the 1982 Plan, as the case may be.
"COMMITTEE" shall mean the Board or a Committee of the Board acting in
accordance with Article VI.
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"COMPANY" shall mean Dole Food Company, Inc., a Hawaii corporation, and
its successors and assigns.
"CONVERSION DATE" shall mean the date that the Eligible Optionee
exercises all or a portion of an Option in accordance with the Alternative
Exercise procedures under this Program.
"DISTRIBUTION SUBACCOUNT" shall mean any subaccount of a Participant's
Stock Unit Account established to separately account for Stock Units which
are subject to different distribution elections.
"DIVIDEND EQUIVALENT" shall mean the amount of cash dividends or other
cash distributions paid by the Company on that number of shares of Common
Stock equal to the number of Stock Units credited to a Participant's Stock
Unit Account as of the applicable record date for the dividend or other
distribution, which amount shall be credited in the form of additional Stock
Units to the Participant's Stock Unit Account, as provided in Section 5.2.
"EFFECTIVE DATE" shall mean July 31, 1997.
"ELIGIBLE OPTIONEE" shall mean a holder of an Option who is (i) an
executive of the Company or a subsidiary, (ii) subject to the Guidelines and
(iii) a member of a select group of management or highly compensated
employees, as described in Sections 201, 301 and 401 of the Employee
Retirement Income Security Act of 1974, as amended.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"FAIR MARKET VALUE" shall mean on any date the closing price of the
Common Stock on the Composite Tape, as published in the Western Edition of
The Wall Street Journal, of the principal securities exchange or market on
which the Common Stock is so listed, admitted to trade, or quoted on such
date, or, if there is no trading of (or no available closing price of) the
Common Stock on such date, then the closing price of the Common Stock as
quoted on such Composite Tape on the next preceding date on which there was
trading in such shares. If the Common Stock is not so listed, admitted or
quoted, the Committee may designate such other exchange, market or source of
data as it deems appropriate for determining such value for purposes of this
Program.
"INTEREST RATE" shall mean the rate (quoted as an annual rate) that is
120% of the federal long-term rate for compounding on a quarterly basis,
determined and published by the Secretary of the United States Department of
Treasury under Section 1274(d) of the Code, for the month in which the
interest is credited.
"OPTION" shall mean a stock option granted under the 1982 Plan or the
1991 Plan.
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<PAGE>
"PARTICIPANT" shall mean any person who has Stock Units credited to an
Account under this Program.
"PROGRAM" shall mean this Dole Food Company, Inc. Stock Ownership
Enhancement Program, as it may be amended from time to time.
"STOCK UNIT OR UNIT" shall mean a non-voting unit of measurement which
is deemed solely for bookkeeping purposes to be equivalent to one outstanding
share of Common Stock of the Company (subject to Section 5.6) solely for
purposes of this Program.
"STOCK UNIT ACCOUNT" shall mean the bookkeeping account maintained by
the Company on behalf of each Participant which is credited with Stock Units
in accordance with Section 5.1 and 5.2.
"YEAR" shall mean the calendar year.
ARTICLE III
PARTICIPATION
Each Eligible Optionee may elect to exercise all or a portion of an
Option under and subject to the Alternative Exercise provisions of Article IV
and to be credited with an award of Stock Units under this Program, provided
that the Committee approves such election and the Company enters into an
Alternative Exercise Agreement with the Eligible Optionee pursuant to Article
IV.
ARTICLE IV
ALTERNATIVE EXERCISE OF OPTIONS
4.1. GENERAL ALTERNATIVE EXERCISE PROCEDURES.
Upon Committee approval of an Eligible Optionee's request to make an
Alternative Exercise of all or a portion of an Option, the Eligible Optionee
and the Company shall enter an Alternative Exercise Agreement providing that
the Eligible Optionee will exercise all or a portion of an Option (1) by
using, through attestation or any other method approved by the Committee for
the constructive tender or payment of the exercise price, Already-Owned
Shares ("AOS") having an aggregate Fair Market Value equal to the exercise
price for the number of shares with respect to which the Option is exercised,
(2) retaining the Already-Owned Shares (of which the Eligible Optionee will
remain the beneficial owner), and (3) in lieu of the remainder of the shares
which would otherwise be delivered to the Eligible Optionee (the "Gain
Shares"), receiving a credit of Stock Units to a Stock Unit Account
established for the Eligible Optionee equal in number to the number of Gain
Shares.
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<PAGE>
4.2. FORM OF AGREEMENT.
Each Alternative Exercise Agreement shall be in the form attached
hereto as Exhibit A or any other form approved by the Committee and shall
provide that the portion of the Option subject to the Alternative Exercise
Agreement is not exercisable during the six-month period following the
execution of the Alternative Exercise Agreement. If, however, prior to the
expiration of the six-month period, (1) the Eligible Optionee's employment
with the Company (including any subsidiary) is terminated or (2), unless the
Committee otherwise provides, a Change in Control Event occurs, the
Alternative Exercise Agreement shall terminate and the Option may be
exercised for actual shares of Common Stock in accordance with the terms of
the Option without regard to the Alternative Exercise Agreement. No
Alternative Exercise Agreement shall have the effect of extending the term or
otherwise changing the terms of the Option (except as expressly contemplated
hereby in respect of the consequences of exercise). No Alternative Exercise
Agreement may be amended or terminated except as specifically provided herein.
4.3. SPECIAL TRANSITION RULE.
Notwithstanding the foregoing, with respect to any Option that will
expire within six months of the Effective Date, upon the Committee's approval
and an Eligible Optionee's request to make an Alternative Exercise of an
Option, the Company may enter into an Alternative Exercise Agreement (in the
form of Exhibit B) with such Eligible Optionee as described in Section 4.1,
provided that such Alternative Exercise Agreement is entered into within two
business days after the Effective Date and provided further that the
Alternative Exercise does not occur prior to the date set forth therein.
ARTICLE V
STOCK UNIT ACCOUNTS
5.1. CREDITING OF STOCK UNITS.
(a) CREDITING OF GAIN SHARES. As of the applicable Conversion Date,
an Eligible Optionee's Stock Unit Account shall be credited with the number
of Units described in Article IV.
(b) LIMITATIONS ON RIGHTS ASSOCIATED WITH UNITS. A Participant's
Stock Unit Account shall be a memorandum account on the books of the Company.
The Units credited to a Participant's Stock Unit Account shall be used
solely as a device for the determination of the number of shares of Common
Stock to be eventually distributed to such Participant in accordance with
this Program. The Units shall not be treated as property or as a trust fund
of any kind. No Participant shall be entitled to any voting or other
stockholder rights with respect to Units granted or credited under this
Program. The number of Units credited (and the Common Stock to which the
Participant is entitled under
5
<PAGE>
this Program) shall be subject to adjustment in accordance with Section 5.6
of this Program, Section 8.2 of the 1991 Plan and (to the extent applicable)
Paragraph 8 of the 1982 Plan.
5.2. DIVIDEND EQUIVALENT CREDITS TO STOCK UNIT ACCOUNT.
As of any applicable dividend or distribution payment date, a
Participant's Stock Unit Account shall be credited with additional Units in
an amount equal to the amount of the Dividend Equivalents divided by the Fair
Market Value of a share of Common Stock as of the applicable dividend payment
date. Dividend Equivalents shall be allocated to the same Distribution
Subaccount (if any) as the Stock Units to which they are attributable are
credited. If the limit on the number of shares available under this Program
in respect of Dividend Equivalents is reached, the Company may in its
discretion credit such amounts in cash.
5.3. IMMEDIATE VESTING.
All Units credited to an Eligible Optionee's Stock Unit Account shall be
at all times fully vested.
5.4. DISTRIBUTION OF BENEFITS.
(a) TIME AND MANNER OF DISTRIBUTION. A Participant shall be entitled
to receive a distribution of shares of Common Stock in an amount equal to the
number of Units allocated to his or her Account at such time and in such
manner as elected by the Participant and set forth in the Participant's
Alternative Exercise Agreement. A Participant may elect any of the
distribution commencement dates and methods of distribution (lump sum or
annual installments) set forth in the form of Alternative Exercise Agreement
approved by the Committee. Notwithstanding the foregoing, if the number of
Units remaining in the Eligible Optionee's Stock Unit Account is less than
250, then such remaining balance shall be distributed in a lump sum.
(b) CHANGE IN MANNER OR TIME OF DISTRIBUTION.
(1) A Participant may change the manner of any distribution
election from a lump sum to annual installments (or vice versa) made
with respect to Stock Units credited under any Account or Distribution
Subaccount by filing a written election with the Committee on a form
provided by the Committee; PROVIDED, HOWEVER, that no such election
shall be effective until 12 months after such election is filed with the
Committee, and no such election shall be effective if it is made with
respect to any Account or Distribution Subaccount after benefits with
respect to such Account or Distribution Subaccount have commenced. An
election made pursuant to this Section 5.4(b) shall not affect the date
of the commencement of benefits.
(2) A Participant may elect to further defer the commencement
of any distribution to be made with respect to Stock Units credited
under any Account or
6
<PAGE>
Distribution Subaccount by filing a new written election with the
Committee on a form approved by the Committee; PROVIDED, HOWEVER, that
(A) no such election shall be effective until 12 months after such
election is filed with the Committee, (B) no such new election shall be
effective with respect to any Account or Distribution Subaccount after
benefits with respect to such Account or Distribution Subaccount shall
have commenced, and (C) no more than three new elections shall be valid
as to any Distribution Subaccount. An election made pursuant to this
Section 5.4(b)(2) shall not affect the manner of distribution (I.E.,
lump sum versus installments), the terms of which shall be subject to
Section 5.4(b)(1) above.
(c) EFFECT OF DEATH OR CHANGE IN CONTROL EVENT. Notwithstanding
Sections 5.4(a) and (b), if a Participant dies or, unless the Committee
otherwise provides, a Change in Control Event shall occur, then shares of
Common Stock equal in number to the Stock Units then credited to the
Participant's Stock Unit Accounts shall be distributed immediately in a lump
sum.
(d) FORM OF DISTRIBUTION. Stock Units credited to a Participant's
Stock Unit Account shall be distributed in an equivalent whole number of
shares of the Company's Common Stock. Fractions shall be disregarded, but
may be accumulated and paid in cash with the last distribution in respect of
an Account.
(e) SECTION 162(m) LIMITATION. Notwithstanding the foregoing, if the
Committee determines in good faith that there is a reasonable likelihood that
any benefits paid to a Participant for a taxable year of the Company would
not be deductible by the Company solely by reason of the limitation under
Code Section 162(m), then to the extent reasonably deemed necessary by the
Committee to ensure that the entire amount of any distribution to the
Participant pursuant to this Program is deductible, the Committee may defer
all or any portion of a distribution under this Plan. The amounts so
deferred shall be distributed to the Participant or his or her Beneficiary
(in the event of the Participant's death) at the earliest possible date, as
determined by the Committee in good faith, on which the deductibility of
compensation paid or payable to the Participant for the taxable year of the
Company during which the distribution is made will not be limited by Code
Section 162(m).
5.5. EMERGENCY BENEFIT.
If the Committee, on written petition of the Participant, determines, in
its sole discretion, that the Participant has suffered an unforeseeable
financial emergency, the Company may distribute to the Participant, as soon
as practicable following such determination, a number of shares of Common
Stock up to the balance of the Units credited to his or her Stock Unit
Account as necessary to meet the emergency (the "Emergency Benefit"). For
purposes of the Program, an unforeseeable financial emergency is a severe
financial hardship to the Participant resulting from a sudden and unexpected
illness or accident of the Participant or of a dependent (as defined in
Section 152(a) of the Code) of the Participant, or the loss of the
Participant's property due to casualty or other
7
<PAGE>
similar and extraordinary and unforeseeable circumstances arising as a result
of events beyond the conduct of the Participant. The amount of the benefits
otherwise payable under the Program shall thereafter be adjusted to reflect
the payment of the Emergency Benefit by reducing the number of Stock Units
credited to the Participant's Account. Such adjustments shall be made to any
Distribution Subaccount in any order determined by the Committee in its sole
discretion, and the Participant shall be bound by such determination.
Applications for Emergency Benefits and the determinations thereon by the
Committee shall be in writing, and a Participant may be required to furnish
written proof of the financial emergency.
5.6. ADJUSTMENTS IN CASE OF CHANGES IN COMMON STOCK.
(a) If any stock dividend, stock split, recapitalization, merger,
consolidation, combination or other reorganization, exchange of shares, sale
of all or substantially all of the assets of the Company, split-up,
split-off, spin-off, extraordinary redemption, liquidation or similar change
in capitalization or any distribution to holders of the Company's Common
Stock (other than cash dividends and cash distributions) shall occur,
proportionate and equitable adjustments consistent with the effect of such
event on stockholders generally (but without duplication of benefits if
Dividend Equivalents are credited) shall be made in the number and type of
shares of Common Stock or other securities, property and/or rights
contemplated hereunder and of rights in respect of Units and Accounts
credited under this Program so as to preserve the benefits intended. The
provisions of Section 8.2 of the 1991 Plan and (to the extent applicable)
Paragraph 8 of the 1982 Plan also shall apply to the related Stock Units
granted under the Plans in accordance with this Program.
(b) If such an event results in any rights of stockholders to receive
cash on a deferred basis, a corresponding adjustment shall be made to each
Participant's Account to provide for the right to receive the appropriate
amount of cash at such times and in such manner as otherwise provided under
this Program and/or the applicable election made by the Participant in
accordance with the terms of this Program. Any such right to receive cash
shall be maintained as a cash balance credited to the Participant's Account.
As of the last day of each calendar quarter, the Participant's Account shall
be credited with earnings on the cash balance credited to such Account as of
the last day of the preceding quarter or, if later, the date of such event,
at a rate equal to the Interest Rate.
5.7. COMPANY'S RIGHT TO WITHHOLD.
The Company (including its subsidiaries) may satisfy any state or
federal income tax or employment tax withholding obligation arising upon
distribution of a Participant's Account by reducing the number of shares of
Common Stock otherwise deliverable to the Participant, as the case may be.
The appropriate number of shares required to satisfy such tax withholding
obligation in the case of Stock Units will be based on the Fair Market Value
of a share of Common Stock on the day prior to the date of distribution. If
the Company (including its subsidiaries), for any reason, elects not to (or
cannot) satisfy the withholding obligation in accordance with the preceding
sentence, the Participant shall pay or provide
8
<PAGE>
for payment in cash of the amount of any taxes which the Company (including
its subsidiaries) may be required to withhold with respect to the benefits
hereunder.
ARTICLE VI
ADMINISTRATION
6.1. THE ADMINISTRATOR.
The Committee hereunder shall consist of (a) the Corporate Compensation
and Benefits Committee of the Board or (b) such other committee of the Board,
the members of which consist solely of Non-Employee Directors (as defined in
Rule 16b-3 promulgated under the Exchange Act) and "outside directors" for
purposes of Section 162(m) of the Code, who are appointed from time to time
by the Board to serve as administrator of this Program. Any member of the
Committee may resign by delivering a written resignation to the Board.
Members of the Committee shall not receive any additional compensation for
administration of this Program.
6.2. COMMITTEE ACTION.
Action of the Committee with respect to the administration of this
Program shall be taken pursuant to a majority vote or by unanimous written
consent of its members. A member of the Committee shall not vote or act upon
any matter which relates solely to himself or herself as a Participant in
this Program.
6.3. RIGHTS AND DUTIES.
(a) Subject to the limitations of this Program, the Committee shall
be charged with the general administration of this Program and the
responsibility for carrying out its provisions, and shall have powers
necessary to accomplish those purposes, including, but not by way of
limitation, the following:
(1) To construe and interpret this Program;
(2) To resolve any questions concerning the amount of benefits
payable to a Participant;
(3) To make all other determinations required by this Program;
(4) To maintain all the necessary records for the administration of
this Program and provide at least annual statements of Account to
Participants;
(5) To make and publish forms, rules and procedures for the
administration of this Program; and
9
<PAGE>
(6) To administer the claims procedures set forth below for
presentation of claims by Participants and Beneficiaries for benefits under
this Program, including consideration of such claims, review of claim denials
and issuance of a decision on review:
(A) The Committee shall notify Participants and, where
appropriate, Beneficiaries of their right to claim benefits under these
claims procedures, shall make forms available for filing of such claims,
and shall provide the name of the person or persons with whom such
claims should be filed.
(B) The Committee shall act upon claims as required and
communicate a decision to the claimant promptly and, in any event, not
later than 90 days after the claim is received by the Committee, unless
special circumstances require an extension of time for processing the
claim. If an extension is required, notice of the extension shall be
furnished the claimant prior to the end of the initial 90-day period,
which notice shall indicate the reasons for the extension and the
expected decision date. The extension shall not exceed 90 days. The
claim may be deemed by the claimant to have been denied for purposes of
further review described below in the event a decision is not furnished
to the claimant within the period described in the preceding three
sentences. Every claim for benefits which is denied shall be denied by
written notice setting forth in a manner calculated to be understood by
the claimant (i) the specific reason or reasons for the denial, (ii)
specific reference to any provisions of this Program on which denial is
based, (iii) description of any additional material or information
necessary for the claimant to perfect his claim with an explanation of
why such material or information is necessary, and (iv) an explanation
of the procedure for further review of the denial of the claim under the
Program.
(C) The claimant or his or her duly authorized representative
shall have 60 days after receipt of denial of his or her claim to
request a review of such denial, the right to review all pertinent
documents and the right to submit issues and comments in writing. Upon
receipt of a request for a review of the denial of a benefit claim, the
Committee shall undertake a full and fair review of the denial.
(D) The Committee shall issue a decision not later than 60 days
after receipt of a request for review from a claimant unless special
circumstances, such as the need to hold a hearing, require a longer
period of time, in which case a decision shall be rendered as soon as
possible but not later than 120 days after receipt of the claimant's
request for review. The decision on review shall be in writing and shall
include specific reasons for the decision written in a manner calculated
to be understood by the claimant with specific reference to any
provisions of this Program on which the decision is based.
(b) The Committee shall have full discretion to construe and
interpret the terms and provisions of this Program (but not to increase
amounts payable hereunder) and to resolve any disputed question or
controversy, which interpretation or construction or resolution shall be
final and binding on all parties, including but not limited to the Company
10
<PAGE>
and any Participant or Beneficiary, except as otherwise required by law. The
Committee shall administer such terms and provisions in a nondiscriminatory
manner and in full accordance with any and all laws applicable to the
Program. In performing its duties, the Committee shall be entitled to rely
on information, opinions, reports or statements prepared or presented by:
(1) officers or employees of the Company whom the Committee believes to be
reliable and competent as to such matters; and (2) counsel (who may be
employees of the Company), independent accountants and other persons as to
matters which the Committee believes to be within such persons' professional
or expert competence. The Committee shall be fully protected with respect to
any action taken or omitted by it in good faith pursuant to the advice of
such persons. The Committee may delegate ministerial, bookkeeping and other
non-discretionary functions to individuals who are officers or employees of
the Company.
6.4. INDEMNITY AND LIABILITY.
All expenses of the Committee shall be paid by the Company and the
Company shall furnish the Committee with such clerical and other assistance
as is necessary in the performance of its duties. No member of the Committee
shall be liable for any act or omission of any other member of the Committee
nor for any act or omission on his or her own part, excepting only his or her
own willful misconduct or gross negligence. To the extent permitted by law,
the Company shall indemnify and save harmless each member of the Committee
against any and all expenses and liabilities arising out of his or her
membership on the Committee, excepting only expenses and liabilities arising
out of his or her own willful misconduct or gross negligence, as determined
by the Board.
ARTICLE VII
PROGRAM CHANGES AND TERMINATION
7.1. AMENDMENTS.
The Board shall have the right to amend this Program in whole or in part
from time to time or may at any time suspend or terminate this Program;
provided, however, that no amendment or termination shall cancel or otherwise
adversely affect in any way, without his or her written consent, any Eligible
Optionee's rights with respect to Stock Units and Dividend Equivalents
credited to his or her Stock Unit Accounts. Any amendments authorized hereby
shall be stated in an instrument in writing, and all Eligible Optionees shall
be bound thereby upon receipt of notice thereof. Adjustments pursuant to
Section 5.6 hereof, Section 8.2 of the 1991 Plan or (to the extent
applicable) Paragraph 8 of the 1982 Plan shall not be deemed amendments to
this Program, the Accounts or the rights of Participants.
7.2. TERM.
It is the current expectation of the Company that this Program shall be
continued indefinitely, but continuance of this Program is not assumed as a
contractual obligation of
11
<PAGE>
the Company. In the event that the Board decides to discontinue or terminate
this Program, it shall notify the Committee and Participants in this Program
of its action in writing, and this Program shall be terminated at the time
therein set forth. All Participants shall be bound thereby. In such event,
the then credited benefits of a Participant shall be distributed at the
time(s) and in the manner elected and provided under Section 5.4, subject to
Sections 5.2 and 5.6.
ARTICLE VIII
MISCELLANEOUS
8.1. LIMITATION ON PARTICIPANT'S RIGHTS.
Participation in this Program shall not give any person the right to
continued employment or service or any rights or interests other than as
herein provided. No Participant shall have any right to any payment or
benefit hereunder except to the extent provided in this Program. This
Program creates no fiduciary duty to Participants and shall create only a
contractual obligation on the part of the Company as to such amounts; the
Program shall not be construed as creating a trust. The Program, in and of
itself, has no assets. Participants shall have rights no greater than the
right to receive the Common Stock as a general unsecured creditor in respect
of their Accounts.
8.2. BENEFICIARY DESIGNATION.
Upon forms provided by and subject to conditions imposed by the Company,
each Participant may designate in writing the Beneficiary or Beneficiaries
whom such Participant desires to receive any shares or amounts payable under
this Program after his or her death. The Company and the Committee may rely
on the Participant's designation of a Beneficiary or Beneficiaries last filed
in accordance with the terms of this Program.
8.3. STOCK UNITS AND OTHER BENEFITS NOT ASSIGNABLE; OBLIGATIONS BINDING
UPON SUCCESSORS.
Stock Units and other benefits of a Participant under this Program shall
not be assignable or transferable and any purported transfer, assignment,
pledge or other encumbrance or attachment of any payments or benefits under
this Program, or any interest therein, other than by operation of law or
pursuant to Section 8.2, shall not be permitted or recognized. Obligations
of the Company under this Program shall be binding upon successors of the
Company.
8.4. EMPLOYMENT TAXES.
The Company (including its subsidiaries) may satisfy any state or
federal employment tax withholding obligation arising from an Alternative
Exercise of an Option under the Program by deducting such amount from any
amount of compensation payable to the
12
<PAGE>
Participant. Alternatively, the Company (including its subsidiaries) may
require the Participant to deliver to it the amount of any such withholding
obligation as a condition to the Alternative Exercise of the Option.
8.5. GOVERNING LAW; SEVERABILITY.
The validity of this Program or any of its provisions shall be
construed, administered and governed in all respects under and by the laws of
the State of California. If any provisions of this instrument shall be held
by a court of competent jurisdiction to be invalid or unenforceable, the
remaining provisions hereof shall continue to be fully effective.
8.6. COMPLIANCE WITH LAWS.
This Program and the offer, issuance and delivery of shares of Common
Stock and/or the payment in shares through the deferral of compensation under
this Program are subject to compliance with all applicable federal and state
laws, rules and regulations (including but not limited to state and federal
securities law) and to such approvals by any listing, agency or any
regulatory or governmental authority as may, in the opinion of counsel for
the Company, be necessary or advisable in connection therewith. Any
securities delivered under this Program shall be subject to such
restrictions, and the person acquiring such securities shall, if requested by
the Company, provide such assurances and representations to the Company as
the Company may deem necessary or desirable to assure compliance with all
applicable legal requirements.
8.7. PROGRAM CONSTRUCTION.
It is the intent of the Company that transactions pursuant to this
Program satisfy and be interpreted in a manner that satisfies the applicable
requirements of Rule 16b-3 promulgated under the Exchange Act ("Rule 16b-3")
so that to the extent elections are timely made, the crediting of Stock Units
and the distribution of shares of Common Stock with respect to Stock Units
under the Program will be entitled to the benefits of Rule 16b-3 or other
exemptive rules under Section 16 of the Exchange Act and will not be
subjected to avoidable liability thereunder.
8.8. HEADINGS NOT PART OF PROGRAM.
Headings and subheadings in this Program are inserted for reference only
and are not to be considered in the construction of the provisions hereof.
13
<PAGE>
Exhibit A
DOLE FOOD COMPANY, INC.
STOCK OWNERSHIP ENHANCEMENT PROGRAM
ALTERNATIVE EXERCISE AGREEMENT
THIS ALTERNATIVE EXERCISE AGREEMENT ("AGREEMENT") is dated as of the
____ day of _______, 199_, between DOLE FOOD COMPANY, INC. , a Hawaii
corporation (the "Company"), and _____________________ (the "Participant").
In consideration of the services rendered and to be rendered by the
Participant, and other valued consideration, the receipt of which is hereby
acknowledged, the Company and the Participant agree as follows:
1. CAPITALIZED TERMS. Capitalized terms not otherwise defined herein
shall have the meaning assigned to such terms in the Company's Stock Ownership
Enhancement Program (the "Program").
2. ALTERNATIVE EXERCISE OF NON-QUALIFIED STOCK OPTION(S). This
Agreement applies to the following Nonqualified Stock Option ("Option"):
<TABLE>
<CAPTION>
TOTAL NO. OF SHARES NO. OF SHARES SUBJECT TO THIS
OPTION PLAN GRANT DATE SUBJECT TO OPTION ALTERNATIVE EXERCISE ELECTION
----------- ---------- ------------------- -----------------------------
<S> <C> <C> <C>
________________ ___________ ___________________ ___________________________
</TABLE>
The Participant hereby irrevocably agrees to not exercise the Option or, if
applicable, the portion of the Option subject to this Agreement before the
date which is at least six months after the date of this Agreement; provided,
however, that this Agreement shall terminate (and the Participant may
exercise the Option) in the event that, prior to the expiration of the
six-month period, the Participant's employment with the Company is terminated
or, unless the Committee provides otherwise, a Change in Control Event
occurs. The Participant further irrevocably agrees that if he/she desires to
exercise the Option or, if applicable, that portion of the Option subject to
this Agreement, on or after such date, the Participant shall do so on forms
authorized by the Committee, and shall pay the exercise price of the Option
using, through attestation or any other method required by the Committee,
Already-Owned Shares to the Company as provided in Section 4.1 of the Program.
3. AWARD OF STOCK UNITS. The Company hereby agrees to award Stock
Units in accordance with Article IV and Sections 5.1 and 5.2 of the Program
upon and in respect of the Alternative Exercise of the Option.
A-1
<PAGE>
4. TIMING AND MANNER OF DISTRIBUTION OF STOCK UNITS. Subject to any
changes imposed by or allowed under the provision of Sections 5.4 or 5.3 of
the Program, Participant hereby further irrevocably elects to receive a
distribution of his or her vested Stock Units credited under the Program
pursuant to this Agreement, in shares of Common Stock, subject to and in
accordance with the Program and the choice checked and initialed by the
Participant below:
____ A single lump sum deliverable on the first day of January of the
year which is _____ [specify a number not less than 3 nor more
than 10] full years after the year in which the Option is
exercised; or
____ _____ [specify a number not to exceed 10] substantially equal
annual installments commencing on the first business day of
January of the Year which is _____ [specify a number not less
than 3 nor more than 10] full years after the Year in which the
Option is exercised; or
____ A single lump sum deliverable on the first day of the first month
beginning at least 10 business days after the date of termination
of employment; or
____ the first day of January in the year after the date of
termination of employment; or
____ A single lump sum deliverable on the first day of the first year
after the year in which my employment terminates; or
____ ____ [specify number, not to exceed 10] substantially equal
annual installments commencing on [check applicable item]
____ the first day of January in the year after the date of
termination of employment; or
____ the first day of the first month beginning at least 10
business days after the date of termination of employment;
or
A-2
<PAGE>
____ A single lump sum deliverable on the EARLIER OF (a) the first day
of January of the year which is _____ [specify a number not less
than 3 nor more than 10] full years after the year in which the
Option is exercised or (b) [check applicable item]
____ the first day of January in the year after the date of
termination of employment; or
____ the first day of the first month beginning at least 10
business days after the date of termination of employment;
or
____ ____ [specify number, not to exceed 10] substantially equal
annual installments commencing on the EARLIER OF (a) the first
day of January of the year which is _____ [specify a number not
less than 3 nor more than 10] full years after the year in which
the Option is exercised, or (b) [check applicable item]
____ the first day of January in the year after the date of
termination of employment; or
____ the first day of the first month beginning at least 10
business days after the date of termination of employment;
or
____ A single lump sum deliverable on the LATER OF (a) the first day
of January of the year which is _____ [specify a number not less
than 3 nor more than 10] full years after the year in which the
Option is exercised or (b) [check applicable item]
____ the first day of January in the year after the date of
termination of employment; or
____ the first day of the first month beginning at least 10
business days after the date of termination of employment;
or
____ ____ [specify number, not to exceed 10] substantially equal
annual installments commencing on the LATER OF (a) the first day
of January of the year which is _____ [specify a number not less
than 3 nor more than 10] full years after the year in which the
Option is exercised or (b) [check applicable item]
A-3
<PAGE>
____ the first day of January in the year after the date of
termination of employment; or
____ the first day of the first month beginning at least 10
business days after the date of termination of employment;
or
OPTIONEE UNDERSTANDS THAT THIS ELECTION IS IRREVOCABLE (EXCEPT AS EXPRESSLY
PROVIDED IN THE PROGRAM AND THE PLAN), THAT (IN ANY EVENT) REMAINING BALANCES
OF LESS THAN 250 UNITS/SHARES WILL BE PAID IN LUMP SUM, AND THAT THE PROGRAM
AND THE PLAN PROVIDE FOR ADJUSTMENTS AND/OR ACCELERATION OF THE FORM AND TIME
OF PAYOUT IN CERTAIN CIRCUMSTANCES AND MAY BE TERMINATED PROSPECTIVELY BY THE
BOARD.
If any specified payment date is not a business day, the applicable date will
be the next business day thereafter. Delivery of certificates representing
the shares will be made on or as soon as administratively practicable after
the specified delivery date(s). Delivery of certificates will be made to the
Participant's last known address of record unless the Company is otherwise
instructed in writing. Substantial equivalence will be determined in advance
of each distribution date with reference to the then applicable Account or
Distribution Subaccount balance and the remaining distribution schedule.
5. GENERAL TERMS. The exercise of the Option, the award of Stock
Units, the distribution of benefits under the Plans and in accordance with
the Program and this Agreement are subject to, and the Company and the
Participant agree to be bound by, the provisions of the Program and
applicable provisions of the Plan(s), incorporated herein by this reference.
The Participant acknowledges receiving a copy of the Program and each
applicable Plan and understanding its applicable provisions. The Participant
consents to the effects on the Participant's rights under the Option(s) that
result by reason of the provisions hereof. Provisions of the Plan(s) or the
Program that grant further discretionary authority to the Company, the Board
or the Committee shall not create any rights in the Participant, unless such
rights are expressly set forth herein or expressly applied to this Agreement
by subsequent action of the Board or the Committee.
6. EFFECT OF AGREEMENT. This Agreement shall only be effective
with respect to the Alternative Exercise of the Option or the portion of the
Option described in Section 2 above. The Participant and the Company must
enter into a separate Alternative Exercise Agreement in order to provide for
the Alternative Exercise of any portion of the Option not subject to this
Agreement or other stock options held by the Participant.
A-4
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date and year first written above.
DOLE FOOD COMPANY, INC.
"Company"
By:
--------------------------------------
Title:
--------------------------------------
PARTICIPANT
--------------------------------------
(Signature)
--------------------------------------
(Print Name)
--------------------------------------
(Address)
--------------------------------------
(City, State, Zip Code)
--------------------------------------
(Social Security Number)
A-5
<PAGE>
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Alternative
Exercise Agreement, I, _________________, the spouse of the Participant
herein named, do hereby join with my spouse in executing the agreement and do
hereby (a) agree to be bound by all of the terms and provisions thereof, and
of the Dole Food Company, Inc. Stock Ownership Enhancement Program and of the
applicable provisions of the 1982 Plan and/or the 1991 Plan, and (b) consent
to each change in the Participant's rights under the Options that results by
reason of the provisions hereof.
DATED: _______________, 19__. ____________________________
Signature of Spouse
A-6
<PAGE>
EXHIBIT B
TRANSITION PERIOD FORM
DOLE FOOD COMPANY, INC.
STOCK OWNERSHIP ENHANCEMENT PROGRAM
ALTERNATIVE EXERCISE AGREEMENT
THIS ALTERNATIVE EXERCISE AGREEMENT ("AGREEMENT") is dated as of
the ____ day of _______, 199_, between DOLE FOOD COMPANY, INC. , a Hawaii
corporation (the "Company"), and _____________________ (the "Participant").
In consideration of the services rendered and to be rendered by the
Participant, and other valued consideration, the receipt of which is hereby
acknowledged, the Company and the Participant agree as follows:
1. CAPITALIZED TERMS. Capitalized terms not otherwise defined
herein shall have the meaning assigned to such terms in the Company's Stock
Ownership Enhancement Program (the "Program").
2. ALTERNATIVE EXERCISE OF STOCK OPTION(S). This Agreement
applies to the following Nonqualified Stock Option ("Option"):
NO. OF SHARES SUBJECT TO OPTION
OPTION PLAN GRANT DATE TO BE ALTERNATIVEly EXERCISED
----------- ---------- ------------------------------
________________ ___________________ ______________________________
The Participant hereby irrevocably agrees to not exercise the Option or, if
applicable, the portion of the Option subject to this Agreement before August
14, 1997; provided, however, that this Agreement shall terminate (and the
Participant may exercise the Option) in the event that, prior to such date,
Participant's employment with the Company is terminated or, unless the Committee
provides otherwise, a Change in Control Event occurs. The Participant further
irrevocably agrees that if he/she desires to exercise the Option or, if
applicable, that portion of the Option subject to this Agreement, on or after
such date, the Participant shall do so on forms authorized by the Committee, and
shall pay the exercise price of the Option by constructively tendering, through
attestation or any other method required or then permitted by the Committee,
Already-Owned Shares to the Company as provided in Section 4.1 of the Program.
3. AWARD OF STOCK UNITS. The Company hereby agrees to award
Stock Units in accordance with Article IV and Sections 5.1 and 5.2 of the
Program upon and in respect of the Alternative Exercise of the Option.
<PAGE>
4. TIMING AND MANNER OF DISTRIBUTION OF STOCK UNITS. Subject to
any changes imposed by or allowed under the provision of Sections 5.4 or 5.3
of the Program, Participant hereby further irrevocably elects to receive a
distribution of his or her vested Stock Units credited under the Program
pursuant to this Agreement, in shares of Common Stock, subject to and in
accordance with the Program and the choice checked and initialed by the
Participant below:
____ A single lump sum deliverable on the first day of January of the
year which is _____ [specify a number not less than 3 nor more
than 10] full years after the year in which the Option is
exercised; or
____ _____ [specify a number not to exceed 10] substantially equal
annual installments commencing on the first business day of
January of the Year which is _____ [specify a number not less
than 3 nor more than 10] full years after the Year in which the
Option is exercised; or
____ A single lump sum deliverable on the first day of the first month
beginning at least 10 business days after the date of termination
of employment; or
____ A single lump sum deliverable on the first day of January in the
first year after the date of termination of employment; or
____ ____ [specify number, not to exceed 10] substantially equal
annual installments commencing on the first day of the first
month beginning at least 10 business days after the date of
termination of employment; or
____ A single lump sum deliverable on the EARLIER OF (a) the first day
of January of the year which is _____ [specify a number not less
than 3 nor more than 10] full years after the year in which the
Option is exercised or (b) the first day of the first month
beginning at least 10 business days after the date of termination
of employment; or
____ ____ [specify number, not to exceed 10] substantially equal
annual installments commencing on the EARLIER OF (a) the first
day of January of the year which is _____ [specify a number not
less than 3 nor more than 10] full years after the year in which
the Option is exercised or (b) the first day of the first month
beginning at least 10 business days after the date of termination
of employment; or
B-2
<PAGE>
____ A single lump sum deliverable on the LATER OF (a) the first day
of January of the year which is _____ [specify a number not less
than 3 nor more than 10] full years after the year in which the
Option is exercised or (b) the first day of the first month
beginning at least 10 business days after the date of termination
of employment; or
____ ____ [specify number, not to exceed 10] substantially equal
annual installments commencing on the LATER OF (a) the first day
of January of the year which is _____ [specify a number not less
than 3 nor more than 10] full years after the year in which the
Option is exercised or (b) on the first day of the first month
beginning at least 10 business days after the date of termination
of employment.
OPTIONEE UNDERSTANDS THAT THIS ELECTION IS IRREVOCABLE (EXCEPT AS EXPRESSLY
PROVIDED IN THE PROGRAM AND THE PLAN), THAT (IN ANY EVENT) REMAINING BALANCES
OF LESS THAN 250 UNITS/SHARES WILL BE PAID IN LUMP SUM, AND THAT THE PROGRAM
AND THE PLAN PROVIDE FOR ADJUSTMENT AND/OR ACCELERATION OF THE FORM AND TIME
OF PAYOUT IN CERTAIN CIRCUMSTANCES.
If any specified payment date is not a business day, the applicable date will
be the next business day thereafter. Delivery of certificates representing
the shares will be made on or as soon as administratively practicable after
the specified delivery date(s) to the Participant's last known address of
record unless the Company is otherwise instructed in writing. Substantial
equivalence will be determined in advance of each distribution date with
reference to the then applicable Account or Distribution Subaccount balance.
5. GENERAL TERMS. The exercise of the Option, the award of Stock
Units, the distribution of benefits under the Program and this Agreement are
subject to, and the Company and the Participant agree to be bound by, the
provisions of the Program and applicable provisions of the Plan(s),
incorporated herein by this reference. The Participant acknowledges
receiving a copy of the Program and the Plan and understanding its applicable
provisions. Provisions of the Plan(s) or the Program that grant further
discretionary authority to the Company, the Board or the Committee shall not
create any rights in the Participant, unless such rights are expressly set
forth herein or expressly applied to this Agreement by subsequent action of
the Committee.
6. EFFECT OF AGREEMENT. This Agreement shall only be effective
with respect to the Alternative Exercise of the Option or the portion of the
Option described in Section 2 above. The Participant and the Company must
enter into a separate Alternative Exercise Agreement in order to provide for
the Alternative Exercise of any portion of the Option not subject to this
Agreement or other stock options held by the Participant.
B-3
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date and year first written above.
DOLE FOOD COMPANY, INC.
"Company"
By:
-------------------------------------
Title:
-------------------------------------
PARTICIPANT
-------------------------------------
(Signature)
-------------------------------------
(Print Name)
-------------------------------------
(Address)
-------------------------------------
(City, State, Zip Code)
-------------------------------------
(Social Security Number)
B-4
<PAGE>
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Alternative
Exercise Agreement, I, _________________, the spouse of the Participant herein
named, do hereby join with my spouse in executing the Agreement and do hereby
agree to be bound by all of the terms and provisions thereof and of the Dole
Food Company, Inc. Stock Ownership Enhancement Program.
DATED: _______________, 19__. ____________________________
Signature of Spouse
B-5
<PAGE>
EXHIBIT 11
DOLE FOOD COMPANY, INC.
COMPUTATIONS OF EARNINGS PER COMMON SHARE
(Unaudited)
(in 000s, except per share amounts)
Quarter Ended
------------------------
October 4, October 5,
1997 1996
---------- ----------
PRIMARY
Net income applicable to common shares $ 24,443 $ 22,966
---------- ----------
Average number of common shares outstanding
during the period 59,989 60,108
Add:
Shares issuable upon exercise of stock
options at average prices during the
period 513 522
---------- ----------
Total primary shares 60,502 60,630
---------- ----------
Primary earnings per common share $ 0.40 $ 0.38
---------- ----------
---------- ----------
FULLY DILUTED
Net income applicable to common shares $ 24,443 $ 22,966
---------- ----------
Average number of common shares outstanding
during the period 59,989 60,108
Add:
Shares issuable upon exercise of stock
options at higher of average prices or
end of period prices 694 522
---------- ----------
Total fully diluted shares 60,683 60,630
---------- ----------
Fully diluted earnings per common share $ 0.40 $ 0.38
---------- ----------
---------- ----------
<PAGE>
EXHIBIT 11
(CONTINUED)
DOLE FOOD COMPANY, INC.
COMPUTATIONS OF EARNINGS PER COMMON SHARE
(Unaudited)
(in 000s, except per share amounts)
Three Quarters Ended
-------------------------
October 4, October 5,
1997 1996
----------- ----------
PRIMARY
Net income applicable to common shares $ 136,915 $ 116,555
----------- ----------
Average number of common shares outstanding
during the period 59,928 60,017
Add:
Shares issuable upon exercise of stock
options at average prices during the
period 421 455
----------- ----------
Total primary shares 60,349 60,472
----------- ----------
Primary earnings per common share $ 2.27 $ 1.93
----------- ----------
----------- ----------
FULLY DILUTED
Net income applicable to common shares $ 136,915 $ 116,555
----------- ----------
Average number of common shares outstanding
during the period 59,928 60,017
Add:
Shares issuable upon exercise of stock
options at higher of average prices or
end of period prices 694 455
----------- ----------
Total fully diluted shares 60,622 60,472
----------- ----------
Fully diluted earnings per common share $ 2.26 $ 1.93
----------- ----------
----------- ----------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS <F1>
<FISCAL-YEAR-END> JAN-03-1998<F1>
<PERIOD-START> DEC-29-1996<F1>
<PERIOD-END> OCT-04-1997<F1>
<CASH> 43,778
<SECURITIES> 0
<RECEIVABLES> 547,621
<ALLOWANCES> 57,949
<INVENTORY> 445,011
<CURRENT-ASSETS> 1,020,889
<PP&E> 1,591,898
<DEPRECIATION> 610,954
<TOTAL-ASSETS> 2,358,563
<CURRENT-LIABILITIES> 610,113
<BONDS> 730,947
0
0
<COMMON> 320,852
<OTHER-SE> 330,974
<TOTAL-LIABILITY-AND-EQUITY> 2,358,563
<SALES> 3,103,538
<TOTAL-REVENUES> 3,251,097
<CGS> 2,752,196
<TOTAL-COSTS> 2,752,196
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 50,683
<INCOME-PRETAX> 167,015
<INCOME-TAX> 30,100
<INCOME-CONTINUING> 136,915
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 136,915
<EPS-PRIMARY> 2.27
<EPS-DILUTED> 2.26
<FN>
<F1>THE COMPANY'S FISCAL YEAR ENDS ON THE SATURDAY CLOSEST TO DECEMBER 31. FISCAL
YEAR 1997 CONSISTS OF 52 WEEKS AND ENDS ON JANUARY 3, 1998. ALL QUARTERS IN
1997 HAVE 12 WEEKS, EXCEPT THE THIRD QUARTER OF 1997 WHICH HAS 16 WEEKS.
</FN>
</TABLE>
