<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
(Mark one)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended October 10, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-4455
------------------------
DOLE FOOD COMPANY, INC.
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(Exact name of registrant as specified in its charter)
HAWAII 99-0035300
-------------------------------- --------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
31365 OAK CREST DRIVE
WESTLAKE VILLAGE, CALIFORNIA 91361
---------------------------------------------------------------------------
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (818) 879-6600
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes /X/ No / /
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
SHARES OUTSTANDING AT
CLASS OCTOBER 31, 1998
- -------------------------------------------------- -------------------------
<S> <C>
Common Stock, No Par Value 59,240,339
</TABLE>
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<PAGE>
DOLE FOOD COMPANY, INC.
INDEX
<TABLE>
<CAPTION>
PAGE
NUMBER
-------------
<S> <C> <C> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Statements of Income -- quarters and three quarters ended October 10,
1998 and October 4, 1997........................................................... 3
Consolidated Balance Sheets -- October 10, 1998 and January 3, 1998................ 5
Consolidated Statements of Cash Flow -- three quarters ended October 10, 1998 and
October 4, 1997.................................................................... 6
Notes to Consolidated Financial Statements......................................... 7
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations......................................................................... 9
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K................................................... 12
Signatures......................................................................... 13
</TABLE>
2
<PAGE>
PART I.
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DOLE FOOD COMPANY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN 000S, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
QUARTER ENDED
--------------------------
OCTOBER 10, OCTOBER 4,
1998 1997
------------ ------------
<S> <C> <C>
Revenue............................................................................... $ 1,209,794 $ 1,178,301
Cost of products sold................................................................. 1,035,312 1,022,144
------------ ------------
Gross margin........................................................................ 174,482 156,157
Selling, marketing and administrative expenses........................................ 133,981 110,096
------------ ------------
Operating income.................................................................... 40,501 46,061
Interest income....................................................................... 2,321 2,456
Other income (expense) -- net......................................................... (3,129) 45
------------ ------------
Earnings before interest and taxes.................................................. 39,693 48,562
Interest expense...................................................................... 20,731 18,719
------------ ------------
Income before income taxes.......................................................... 18,962 29,843
Income taxes.......................................................................... 3,400 5,400
------------ ------------
Net income............................................................................ $ 15,562 $ 24,443
------------ ------------
------------ ------------
Net income per common share
Basic............................................................................... $ 0.26 $ 0.41
Diluted............................................................................. 0.26 0.40
------------ ------------
------------ ------------
Diluted average number of common shares outstanding................................... 60,704 60,502
------------ ------------
------------ ------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE>
DOLE FOOD COMPANY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN 000S, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE QUARTERS ENDED
--------------------------
OCTOBER 10, OCTOBER 4,
1998 1997
------------ ------------
<S> <C> <C>
Revenue............................................................................... $ 3,385,764 $ 3,251,097
Cost of products sold................................................................. 2,864,063 2,752,196
------------ ------------
Gross margin........................................................................ 521,701 498,901
Selling, marketing and administrative expenses........................................ 324,707 291,833
------------ ------------
Operating income.................................................................... 196,994 207,068
Interest income....................................................................... 5,652 5,876
Other income (expense) -- net......................................................... (5,229) 4,754
------------ ------------
Earnings before interest and taxes.................................................. 197,417 217,698
Interest expense...................................................................... 50,599 50,683
------------ ------------
Income before income taxes.......................................................... 146,818 167,015
Income taxes.......................................................................... 26,400 30,100
------------ ------------
Net income............................................................................ $ 120,418 $ 136,915
------------ ------------
------------ ------------
Net income per common share
Basic............................................................................... $ 2.00 $ 2.29
Diluted............................................................................. 1.98 2.27
------------ ------------
------------ ------------
Diluted average number of common shares outstanding................................... 60,788 60,349
------------ ------------
------------ ------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4
<PAGE>
DOLE FOOD COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(IN 000S)
<TABLE>
<CAPTION>
OCTOBER 10, JANUARY 3,
1998 1998
------------ ------------
<S> <C> <C>
(UNAUDITED) (AUDITED)
CURRENT ASSETS
Cash and short-term investments..................................................... $ 153,212 $ 31,202
Receivables -- net.................................................................. 535,027 534,844
Inventories
Finished products................................................................. 128,471 149,933
Raw material and work in progress................................................. 145,719 142,623
Growing crop costs................................................................ 42,825 46,207
Packing materials................................................................. 26,890 24,803
Operating supplies and other...................................................... 110,843 105,126
------------ ------------
454,748 468,692
Prepaid expenses.................................................................... 49,207 48,438
------------ ------------
Total current assets.............................................................. 1,192,194 1,083,176
Investments........................................................................... 73,126 69,248
Property, plant and equipment -- net.................................................. 1,127,288 1,024,247
Goodwill -- net....................................................................... 204,481 65,941
Other assets.......................................................................... 253,266 221,283
------------ ------------
TOTAL ASSETS...................................................................... $ 2,850,355 $ 2,463,895
------------ ------------
------------ ------------
CURRENT LIABILITIES
Notes payable....................................................................... $ 26,441 $ 11,290
Current portion of long-term debt................................................... 4,994 2,326
Accounts payable and accrued liabilities............................................ 689,746 662,823
------------ ------------
Total current liabilities......................................................... 721,181 676,439
Long-term debt........................................................................ 1,040,320 754,849
Other long-term liabilities........................................................... 301,559 328,293
Minority interests.................................................................... 50,884 37,842
Commitments and contingencies.........................................................
Common shareholders' equity
Common stock........................................................................ 319,884 320,707
Additional paid-in capital.......................................................... 143,164 174,058
Retained earnings................................................................... 355,847 259,456
Accumulated other comprehensive loss................................................ (82,484) (87,749)
------------ ------------
Total common shareholders' equity................................................. 736,411 666,472
------------ ------------
TOTAL LIABILITIES AND EQUITY...................................................... $ 2,850,355 $ 2,463,895
------------ ------------
------------ ------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5
<PAGE>
DOLE FOOD COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
(IN 000S)
<TABLE>
<CAPTION>
THREE QUARTERS ENDED
-----------------------
OCTOBER 10, OCTOBER 4,
1998 1997
----------- ----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income............................................................................... $ 120,418 $ 136,915
Adjustments to net income
Depreciation and amortization........................................................ 88,181 88,044
Provision for deferred income taxes.................................................. 10,289 11,764
Change in operating assets and liabilities
Receivables -- net................................................................... 32,198 28,632
Inventories.......................................................................... 28,583 81,041
Prepaid expenses and other assets.................................................... (4,252) (18,642)
Accounts payable and accrued liabilities............................................. (64,468) (54,961)
Internal Revenue Service payment related to prior years' audits...................... (17,145) --
Other................................................................................ (16,783) (27,406)
----------- ----------
Cash flow provided by operating activities............................................... 177,021 245,387
----------- ----------
INVESTING ACTIVITIES
Capital additions........................................................................ (97,735) (78,426)
Proceeds from sales of property, plant & equipment....................................... 10,054 38,256
Businesses acquired -- net of acquired cash.............................................. (195,196) (11,206)
Sales (purchases) of investments -- net.................................................. (1,133) 9,446
----------- ----------
Cash flow used in investing activities................................................... (284,010) (41,930)
----------- ----------
FINANCING ACTIVITIES
Short-term debt borrowings (repayments)--net............................................. 5,061 (15,535)
Long-term debt borrowings (repayments)--net.............................................. 273,758 (166,770)
Cash dividends paid...................................................................... (18,103) (18,122)
Issuance of common stock................................................................. 10,368 6,406
Repurchase of common stock............................................................... (42,085) --
----------- ----------
Cash flow provided by (used in) financing activities..................................... 228,999 (194,021)
----------- ----------
Increase in cash and short-term investments.............................................. 122,010 9,436
Cash and short-term investments at beginning of period................................... 31,202 34,342
----------- ----------
Cash and short-term investments at end of period......................................... $ 153,212 $ 43,778
----------- ----------
----------- ----------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6
<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
10, 1998 and January 3, 1998 (audited), its results of operations for the
quarters and three quarters ended October 10, 1998 and October 4, 1997 and
its cash flow for the three quarters then ended. For additional information,
refer to the notes to the Company's audited consolidated financial
statements for the year ended January 3, 1998.
Interim results are subject to significant seasonal variations and are not
necessarily indicative of the results of operations for a full year. The
Company's fresh fruit and vegetable operations are sensitive to a number of
factors including weather conditions and their effect on industry volumes,
prices, product quality and costs. Operations are also sensitive to
fluctuations in currency exchange rates in both sourcing and selling
locations. While the Company has historically not attempted to hedge foreign
currency fluctuations, it occasionally enters into forward contracts related
to specific foreign currency denominated purchase commitments and sales.
As of October 10, 1998, the Company had contracted to purchase German marks
to facilitate payment for two German-made refrigerated container vessels at
a weighted average exchange rate of DM1.78 to $1.00 for a total notional
value of $98.3 million. These fixed-rate contracts will be settled during
the fourth quarter of 1999, and as of October 10, 1998, their fair value was
approximately $108.6 million. Additionally, during the third quarter of
1998, the Company contracted to deliver Japanese yen collected from sales in
that country at a weighted average exchange rate of JPY136.60 to $1.00 for a
total notional value of $21.2 million. These fixed-rate contracts will be
settled during the fourth quarter of 1998, and as of October 10, 1998, their
fair value was approximately $17.3 million.
Certain prior year amounts have been reclassified to conform with the 1998
presentation.
2. During the first three quarters of 1998, the Company declared dividends of
$24.0 million on its common stock of which $18.1 million was paid. The
dividends declared during the first three quarters of 1998 include regular
quarterly dividends of 10 cents per share for the four quarters of 1998. For
the same period of 1997, the Company declared and paid dividends of $18.1
million representing regular quarterly dividends of 10 cents per share.
3. The Company paid interest of $49.9 million in the first three quarters of
1998 and $53.0 million for the same period in 1997. The Company paid income
taxes of $36.9 million for the first three quarters of 1998, which included
$17.1 million paid to the Internal Revenue Service related to prior years'
audits. The Company is currently pursuing a refund of this payment. The
Company paid income taxes (net of refunds received) of $14.3 million for the
first three quarters of 1997.
4. The Company recognized comprehensive income which consisted of net income
and unrealized foreign currency translation gains (losses) as follows (in
millions):
<TABLE>
<CAPTION>
QUARTER ENDED THREE QUARTERS ENDED
-------------------------- ------------------------
OCTOBER 10, OCTOBER 4, OCTOBER 10, OCTOBER 4,
1998 1997 1998 1997
------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net income...................................................... $ 15.6 $ 24.4 $ 120.4 $ 136.9
Foreign currency translation gain (loss)........................ 11.5 (9.2) 5.3 (22.9)
----- ----- ----------- -----------
Comprehensive income............................................ $ 27.1 $ 15.2 $ 125.7 $ 114.0
----- ----- ----------- -----------
----- ----- ----------- -----------
</TABLE>
7
<PAGE>
DOLE FOOD COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
5. The weighted average number of common shares outstanding before the dilutive
effect of stock options at average prices were 60,238,000 and 59,989,000 for
the quarters ended, and 60,262,000 and 59,928,000 for the three quarters
ended, October 10, 1998 and October 4, 1997, respectively.
6. During the first three quarters of 1998, the Company acquired and invested
in operations in Latin America, North America and Europe with an aggregate
cash purchase price, net of cash acquired, of $195.2 million. The
acquisitions were comprised primarily of the purchases of three flower
businesses. The Company purchased an additional flower operation and made an
initial payment of approximately 50% of the related total cash price. Each
of the acquisitions was accounted for as a purchase and, accordingly, the
purchase price was allocated to the net assets acquired. A preliminary
allocation of purchase price resulted in approximately $130 million of
goodwill, which will be amortized over 30 years. Net income from acquired
operations included in the Company's results for the three quarters ended
October 10, 1998 was not significant.
7. On October 6, 1998, the Company issued $300 million of seven-year, 6.375%
notes for which it received cash proceeds of $297.2 million. The Company
used a portion of the cash proceeds to repay amounts outstanding under its
$400 million, five-year revolving credit facility. Such credit facility
borrowings were primarily incurred to fund business acquisitions made during
the third quarter.
8. During the latter part of October 1998, Hurricane Mitch significantly
damaged the Company's operations in Honduras, Guatemala and Nicaragua. The
Company's production areas in these countries total approximately 40,000
acres of bananas, of which approximately half is company-owned. This area,
which represents approximately 25% of the Company's worldwide banana
production, has been damaged in varying degrees of severity and will require
significant rehabilitation. The Company also sustained damage to its
Honduran beverage operation, including its sugar and palm oil plantations.
The Company maintains various types of insurance coverage on the impacted
areas and is currently discussing recovery under these policies with its
insurance carriers. The Company anticipates taking a charge of $50 million
to $70 million during the fourth quarter related to damage sustained.
During November 1998, the Company acquired businesses including 60% of SABA
Trading, A.B. and made a second payment on the purchase of a flower
operation for an aggregate cash price of approximately $125 million. Each
acquisition will be accounted for as a purchase and, accordingly, the
purchase price will be allocated to the net assets acquired.
8
<PAGE>
DOLE FOOD COMPANY, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Revenue for the third quarter of 1998 increased 3% to $1,209.8 million from
$1,178.3 million for the same period of 1997. Revenue for the first three
quarters of 1998 increased 4% to $3,385.8 million from $3,251.1 million for the
first three quarters of 1997. For the third quarter of 1998, revenues increased
due to European distribution businesses acquired in the fourth quarter of 1997,
flower businesses acquired during 1998, and favorable volume and pricing in the
Honduran beverage operation. The revenue increases during the third quarter were
partially offset by a downturn in the banana business late in the quarter
primarily due to the collapse of the Russian market.
Revenue for the first three quarters of 1998 as compared with the same
period of 1997 increased primarily due to European distribution businesses
acquired in the fourth quarter of 1997, strong banana pricing in Europe and Asia
during the second quarter of 1998 due to lower industry volume, favorable volume
and pricing in the Honduran beverage operation, and third quarter revenues from
flower businesses acquired during 1998. Revenue increases were partially offset
by weaker pricing in the North American banana market as the result of high
industry volume during the first and third quarters. Revenue for the first three
quarters of 1997 included $82.6 million related to the Company's dried fruit
facility located in Fresno, California, which was closed during 1997. There were
no revenues related to the closed facility during 1998. Excluding the Fresno
facility, revenue increased 7% for the first three quarters of 1998 as compared
to the same period of 1997. As revenue from the closed facility during the third
quarter of 1997 was minimal, the closure did not significantly affect the
comparability of third quarter revenues.
Selling, marketing and administrative expenses as a percentage of revenue
for the third quarter of 1998 increased to 11% from 9% in the third quarter of
1997. For the first three quarters of 1998, selling, marketing and
administrative expenses as a percentage of revenue increased to 10% from 9%
during the same period of 1997. The third quarter and first three quarters of
1998 were largely impacted by an expansion of the Company's Honduran beverage
operation to meet increased consumer product demand. The third quarter of 1998
was also impacted by receivable write-offs related to the collapse of the
Russian banana market as well as higher promotional costs in the banana business
as a result of market supply conditions. Additionally, the Company experienced a
change in its product mix whereby businesses with higher gross margins and
higher selling, general and administrative expenses comprised a larger portion
of its operating results. These businesses included the Honduran beverage
operation, the value-added vegetable business and the flower businesses acquired
during 1998.
Interest expense remained stable for the first three quarters of 1998 as
compared to the first three quarters of 1997. During the first half of 1998,
interest expense was lower than the same period of 1997 due to lower average
debt levels. For the third quarter of 1998, interest expense increased 11% as
compared to the third quarter of 1997 primarily due to acquisitions of flower
businesses at the end of the second quarter and during the third quarter of
1998.
Other income (expense)-net consists primarily of minority interest expense
and gains and losses on the sale of property. In 1997, other income included a
gain from the sale of an investment.
Net income for the third quarter of 1998 decreased 36% to $15.6 million, or
$0.26 per diluted share, from $24.4 million, or $.40 per diluted share, for the
same period of 1997. Net income for the first three quarters of 1998 decreased
12% to $120.4 million, or $1.98 per diluted share, from $136.9 million, or $2.27
per diluted share, for the first three quarters of 1997. The decrease in
earnings for the third quarter of 1998 as compared with the third quarter of
1997 was primarily due to the collapse of the Russian banana market combined
with higher costs caused by the El Nino weather pattern. Earnings for the first
three quarters of 1998 as compared with the same period of 1997 decreased
primarily due to third quarter impacts combined
9
<PAGE>
with weaker first quarter pricing in the North American banana market as a
result of high industry volume. Decreases in the first and third quarters were
partially offset by strong banana pricing in Europe and Asia during the second
quarter of 1998 due to lower industry volume and increased volume and pricing in
the Honduran beverage operation for the first three quarters of 1998.
During the latter part of October 1998, Hurricane Mitch significantly
damaged the Company's operations in Honduras, Guatemala and Nicaragua. The
Company's production areas in these countries total approximately 40,000 acres
of bananas, of which approximately half is company-owned. This area, which
represents approximately 25% of the Company's worldwide banana production, has
been damaged in varying degrees of severity and will require significant
rehabilitation. The Company also sustained damage to its Honduran beverage
operation, including its sugar and palm oil plantations. While the final effects
of the damage sustained, the resulting effect on pricing in worldwide banana
markets, and the future impact on operating results in the Honduran beverage
business are not currently known, the Company anticipates taking a charge in the
fourth quarter of approximately $50 million to $70 million. The Company
maintains various types of insurance coverage on the impacted areas and is
currently discussing recovery under these policies with its insurance carriers.
During the first three quarters of 1998, pineapple growing regions in Asia
continued to experience drought conditions related to the El Nino weather
pattern. The drought has caused a decrease in supply used for processed
pineapple operations for both the Company and the canned pineapple industry.
Product shortages are anticipated to continue into 1999. The Company is
responding by reducing costs including advertising and promotional spending.
The Company has assessed the effect of year 2000 on its computer software
and hardware. Remediation has been completed at certain of the Company's
operating units with most of the remaining operating units currently undergoing
tests of remediated systems and software. Normal software version upgrades and
hardware replacements remain on schedule to solve a large part of the remaining
issues by the Company's internal target date of December 1998. The Company has
now identified certain specific upgrade projects and personal computer
replacements that will be completed during the first half of 1999. Remediation
efforts related to companies acquired during 1998 are scheduled to be completed
by June 1999. All remaining remediation work continues with a December 1998
target date. The Company is also in the process of confirming year 2000
compliance with key vendors and service providers, including suppliers of
embedded technology. Once completed, the Company will develop a contingency plan
related to its key vendors and service providers. Based on work performed to
date, the Company believes that the total cost to remediate will not be material
to its results of operations, liquidity or capital resources.
The preceding discussion contains forward-looking statements regarding the
Company's timetable for solving its year 2000 issues, costs to remediate, and
the ultimate impact on its finances, that involve a number of risks and
uncertainties. The potential risks and uncertainties that could cause actual
results to differ materially include the continuing availability of key
information technology personnel and consultants, the ability of third parties
to complete their own year 2000 remediations on time, and, if necessary, the
ability of the Company to identify and implement contingency plans.
In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 131, "Disclosures about Segments
of an Enterprise and Related Information" ("SFAS 131"). In February 1998, and in
June 1998, the FASB issued Statements of Financial Accounting Standards No. 132,
"Employers' Disclosures about Pensions and Other Post Retirement Benefits"
("SFAS 132") and No. 133, "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS 133"), respectively. In accordance with SFAS 131 and SFAS
132, the Company is currently evaluating the additional business segments and
pension and other postretirement benefit disclosures to be reported in its 1998
Annual Report on Form 10-K. Since these statements require additional disclosure
only, they will have no effect on the financial condition or results of
operations of the Company. The Company is also assessing the impact of
accounting for derivative instruments in accordance with SFAS 133. The Company's
derivative transactions are limited to hedging of certain foreign currency
denominated purchase
10
<PAGE>
commitments and receivables. The Company will adopt the statement during the
first quarter of 2000. Such adoption is not expected to have a material impact
on the Company's financial condition or results of operations.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow provided by operating activities decreased to $177.0 million for
the first three quarters of 1998 from $245.4 million for the comparable period
of the prior year. The decrease was primarily due to lower net earnings, a
payment to the Internal Revenue Service related to prior years' audits and the
1997 closure of the Company's dried fruit facility located in Fresno,
California. The Company is currently pursuing a refund of the payment to the
Internal Revenue Service. During the first three quarters of 1997, the Company
experienced a decrease in its working capital requirements as a result of the
closure of its Fresno dried fruit facility. The liquidation of inventory and
other operating and fixed assets related to this closed facility provided
approximately $70 million of cash flow during the first three quarters of 1997.
On October 6, 1998, the Company issued $300 million of seven-year, 6.375%
notes for which it received cash proceeds of $297.2 million. The Company used a
portion of the cash proceeds to repay amounts outstanding under its $400
million, five year revolving credit facility. Such credit facility borrowings
were primarily incurred to fund business acquisitions made during the third
quarter. As of October 10, 1998, there were no borrowings outstanding under the
credit facility. The remaining cash proceeds were primarily used to fund
acquisitions during the fourth quarter.
During the first three quarters of 1998, the Company expended $195.2 million
of net cash for business acquisitions. This amount was comprised primarily of
the acquisitions of three flower businesses as well as an additional flower
operation for which the Company made an initial payment of approximately 50% of
the related total cash price. The remaining purchase price will be paid during
the fourth quarter of 1998. The acquisitions were primarily funded by cash flow
from operations and debt.
During November 1998, the Company acquired businesses including 60% of SABA
Trading, A.B. and made a second payment on the purchase of a flower operation
for an aggregate cash price of approximately $125 million. The acquisitions were
funded primarily by the remaining cash proceeds from the Company's issuance of
bonds during the third quarter of 1998. The Company is currently negotiating
additional business acquisitions which, when combined with the final payment for
the most recently acquired flower operation, will total approximately $20
million. If completed, the acquisitions would be funded primarily with debt and
would be completed during the fourth quarter of 1998.
Capital expenditures of $97.7 million for the first three quarters of 1998
were for the acquisition and improvement of productive assets and were funded
largely by operating cash flow.
During the first three quarters of 1998, the Company repurchased 1,165,200
of its common shares at a cost of $42.1 million. Approximately 1.8 million
shares remain authorized for repurchase under the Company's stock repurchase
program.
This filing contains forward-looking statements based on current
expectations that involve a number of risks and uncertainties. The potential
risks and uncertainties that could cause the Company's actual results to differ
materially from those expressed or implied herein include weather related
phenomena; market responses to industry volume pressures; economic crises in
developing countries; quotas, tariffs and other governmental actions; changes in
currency exchange rates; product supply and pricing; and computer conversion and
Year 2000 issues.
11
<PAGE>
PART II.
OTHER INFORMATION
DOLE FOOD COMPANY, INC.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
<TABLE>
<CAPTION>
EXHIBIT PAGE
NO. NUMBER
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<C> <S> <C>
4.1 Indenture dated as of July 15, 1993 between the Company and Chase Manhattan Bank and
Trust Company, National Association (formerly Chemical Trust Company of California).
Incorporated by reference to Exhibit 4 to the Company's Current Report on Form 8-K,
event date July 15, 1993, File no. 1-4455.
4.2 Officer's Certificate (without exhibits), dated October 6, 1998, establishing the
terms of the Company's 6.375% Notes due October 1, 2005. Incorporated by reference to
Exhibit 4.1 to the Company's Current Report on Form 8-K, event date July 15, 1993,
File no. 1-4455.
10.1 The Company's 1996 Non-Employee Directors Deferred Stock and Cash Compensation Plan,
as amended October 9, 1998. 15
27 Financial data schedule 31
</TABLE>
(b) The Company filed under cover of Form 8-K, Item 7, event date October 6,
1998, certain exhibits, including the Underwriting Agreement and Pricing
Agreement and Officers' Certificate relating to the Company's 6.375%
Notes due October 1, 2005.
12
<PAGE>
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.
<TABLE>
<S> <C> <C>
DOLE FOOD COMPANY, INC.
Registrant
By /s/ JAMES A. DYKSTRA
-----------------------------------------
James A. Dykstra
November 24, 1998 Controller and Chief Accounting Officer
</TABLE>
13
<PAGE>
Exhibit 10
DOLE FOOD COMPANY, INC.
NON-EMPLOYEE DIRECTORS
DEFERRED STOCK
AND
CASH COMPENSATION PLAN
(AS AMENDED OCTOBER 9, 1998)
<PAGE>
NON-EMPLOYEE DIRECTORS
DEFERRED STOCK
AND
CASH COMPENSATION PLAN
(AS AMENDED OCTOBER 9, 1998)
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I TITLE, PURPOSE AND AUTHORIZED SHARES........................................1
ARTICLE II DEFINITIONS.................................................................1
ARTICLE III PARTICIPATION...............................................................3
ARTICLE IV DEFERRAL MANDATES AND ELECTIONS.............................................4
4.1. Mandatory Deferral...................................................4
4.2. Elections............................................................4
ARTICLE V DEFERRAL ACCOUNTS...........................................................4
5.1. Cash Account.........................................................4
5.2. Stock Unit Account...................................................5
5.3. Dividend Equivalent Credits to Stock Unit Account ...................6
5.4. Immediate Vesting and Accelerated Crediting..........................6
5.5. Distribution of Benefits.............................................6
5.6. Adjustments in Case of Changes in Common Stock.......................7
5.7. Company's Right to Withhold..........................................7
5.8. Stockholder Approval.................................................8
ARTICLE VI ADMINISTRATION..............................................................8
6.1. The Administrator ...................................................8
6.2. Committee Action.....................................................8
6.3. Rights and Duties ...................................................8
6.4. Indemnity and Liability..............................................9
ARTICLE VII PLAN CHANGES AND TERMINATION................................................9
7.1. Amendments...........................................................9
7.2. Term.................................................................9
</TABLE>
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<TABLE>
<S> <C>
ARTICLE VIII MISCELLANEOUS..............................................................10
8.1. Limitation on Eligible Directors' Rights............................10
8.2. Beneficiaries.......................................................10
8.3. Benefits Not Assignable; Obligations Binding Upon Successors........10
8.4. Governing Law; Severability.........................................11
8.5. Compliance With Laws................................................11
8.6. Plan Construction...................................................11
8.7. Headings Not Part of Plan ..........................................11
8.8. Relationship to the 1993 Deferred Compensation Plan.................11
8.9. Irrevocability of Payout Elections..................................11
</TABLE>
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NON-EMPLOYEE DIRECTORS
DEFERRED STOCK
AND
CASH COMPENSATION PLAN
(AS AMENDED OCTOBER 9, 1998)
ARTICLE I
TITLE, PURPOSE AND AUTHORIZED SHARES
This Plan shall be known as "Dole Food Company, Inc. Non-Employee
Directors Deferred Stock and Cash Compensation Plan". The purpose of this Plan
is to attract, motivate and retain experienced and knowledgeable directors of
the Company by permitting them to defer compensation and affording them the
opportunity to link that compensation to an equity interest in the Company. The
total number of shares of Common Stock that may be delivered pursuant to awards
under this Plan is 100,000, subject to adjustments contemplated by Section 5.6.
ARTICLE II
DEFINITIONS
Whenever the following terms are used in this Plan they shall have the
meaning specified below unless the context clearly indicates to the contrary:
ACCOUNT or ACCOUNTS shall mean one or more of the Eligible Director's
Cash Account and Stock Unit Account or Accounts, as the context requires.
AVERAGE FAIR MARKET VALUE shall mean the average of the Fair Market
Values of a share of Common Stock during the last 10 trading days preceding the
applicable Award Date.
AWARD DATE shall mean (a) with reference to accruals under Section 4.1,
March 31 and June 30 of the applicable Year, and (b) with reference to elections
under Section 4.2, (1) in the case of cash deferrals for Meeting and Other Fees,
the date of the meeting or other event for which the Compensation is payable,
(2) in the case of cash deferrals for the Retainer, the last day of the
applicable quarter, and (3) in the case of Stock Unit credits, the Pay Date;
except as provided in Section 5.4.
BOARD shall mean the Board of Directors of the Company.
CASH ACCOUNT shall mean the bookkeeping account maintained by the
Company on behalf of a Participant who elects to defer his or her Compensation
in cash pursuant to Section 4.2 and unless the context otherwise requires shall
include any Rollover Account.
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CHANGE IN CONTROL EVENT shall have the meaning specified for such term
under the 1995 Non-Employee Director Stock Option Plan.
CODE shall mean the Internal Revenue Code of 1986, as amended.
COMMON STOCK shall mean the Common Stock of the Company, subject to
adjustment pursuant to Section 5.6.
COMMITTEE shall mean the Board or a Committee of the Board acting in
accordance with Article VI.
COMPANY shall mean Dole Food Company, Inc., a Hawaii corporation, and
its successors and assigns.
COMPENSATION shall mean the Retainer and Meeting and Other Fees.
DIVIDEND EQUIVALENT shall mean the amount of cash dividends or other
cash distributions paid by the Company on that number of shares of Common Stock
equivalent to the number of Stock Units then credited to a Participant's Stock
Unit Account, which amount shall be allocated as additional Stock Units to the
Participant's Stock Unit Account, as provided in Section 5.3.
EFFECTIVE DATE shall mean April 1, 1996.
ELIGIBLE DIRECTOR shall mean a member of the Board who is not an
officer or employee of the Company and who is compensated in the capacity as a
director and (with reference to any outstanding Account balance under this Plan)
any person who has an Account balance under this Plan by reason of his or her
prior status as an Eligible Director.
EXCHANGE ACT shall mean the Securities Exchange Act of 1934, as amended
from time to time.
FAIR MARKET VALUE shall mean on any date the closing price of the
Common Stock on the Composite Tape, as published in the Western Edition of The
Wall Street Journal, of the principal securities exchange or market on which the
Common Stock is so listed, admitted to trade, or quoted on such date, or, if
there is no trading of the Common Stock on such date, then the closing price of
the Common Stock as quoted on such Composite Tape on the next preceding date on
which there was trading in such shares. If the Common Stock is not so listed,
admitted or quoted, the Committee may designate such other exchange, market or
source of data as it deems appropriate for determining such value for purposes
of this Plan.
INTEREST RATE shall mean the rate (quoted as an annual rate) that is
120% of the federal long-term rate for compounding on a quarterly basis,
determined and published by the Secretary of the United States Department of
Treasury under Section 1274(d) of the Code, for the month in which interest is
credited.
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MEETING AND OTHER FEES shall mean all meeting fees (including committee
meeting fees) and other fees except for the Retainer that are payable by the
Company to an Eligible Director for services as a director of the Company.
PARTICIPANT shall mean any person who has an Account balance under this
Plan.
PAY DATE shall mean the date Compensation or dividends would otherwise
have been paid.
PLAN shall mean the Dole Food Company, Inc. Non-Employee Directors
Deferred Stock and Cash Compensation Plan, as amended.
RECORD DATE shall mean the date, as determined by the Board of the
Company, on which a shareholder must own shares in order to be entitled to a
dividend.
RETAINER shall mean the annual retainer payable by the Company to an
Eligible Director.
ROLLOVER ACCOUNT shall mean the bookkeeping account maintained by the
Company on behalf of an Eligible Director with respect to his or her prior
account balance under the Company's 1993 Board of Directors Deferred
Compensation Plan that has been transferred to this Plan pursuant to Section
8.8.
STOCK UNIT OR UNIT shall mean a non-voting unit of measurement which is
deemed for bookkeeping purposes to be equivalent to one outstanding share of
Common Stock of the Company solely for purposes of this Plan.
STOCK UNIT ACCOUNT shall mean the bookkeeping account maintained by the
Company on behalf of each Eligible Director which is credited with Stock Units
in accordance with Section 5.2.
YEAR shall mean the calendar year.
ARTICLE III
PARTICIPATION
Each Eligible Director shall participate under Section 4.1 of this Plan
with respect to the entire amount of Retainer that would otherwise be payable to
the director from January 1 through June 30 of each Year (or, for 1996, from
April 1 through September 30). Each Eligible Director may elect to defer under
and subject to Section 4.2 of this Plan his or her remaining Compensation for
the applicable Year.
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ARTICLE IV
DEFERRAL MANDATES AND ELECTIONS
4.1. MANDATORY DEFERRAL.
The Stock Unit Account of each Eligible Director shall be credited on
each March 31 and June 30 with a number of Units determined by dividing the
amount of the Retainer otherwise payable to the Eligible Director from January 1
(or the date service commences) through March 31 and from April 1 (or the date
service commences) June 30 of the applicable Year by the Average Fair Market
Value of the Common Stock on the Award Date.(1)
4.2. ELECTIONS.
(a) TIME AND TYPES OF ELECTIONS. On or before December 31 of each Year
(or, in the case of a person who first becomes an Eligible Director during the
Year, within 30 days after election to office), each Eligible Director may make
an irrevocable election to defer:
(1) IN CASH all or part of the remaining Compensation not
otherwise deferred pursuant to Section 4.1 or 4.2(a)(2) (subject to section
4.2(b) hereof) payable for services to be rendered by the Eligible Director
during the next Year (or remainder of the Year, as the case may be);
(2) IN STOCK UNITS all or part of the remaining Compensation not
otherwise deferred pursuant to Section 4.1 or 4.2(a)(1) (subject to Section
4.2(b) hereof) payable to the Eligible Director for services to be rendered
during the next Year (or remainder of the Year, as the case may be).
(b) PERMITTED AMOUNTS; ELECTIONS. The portions of the remaining
Retainer and Meeting and Other Fees subject to deferral shall be limited to
increments of 25%, 50%, 75% or 100%. All elections shall be in writing on forms
provided by the Company. If an election is made under this Section 4.2 and is
not revoked or changed by the end of the applicable deferral period with respect
to the next applicable period, the election will be deemed a continuing one.
ARTICLE V
DEFERRAL ACCOUNTS
5.1. CASH ACCOUNT.
If an Eligible Director has made a cash election under Section 4.2, the
Company shall establish and maintain a Cash Account for the Eligible Director
under this Plan, which Account
- ----------------------
For 1996, the applicable period under Section 4.1 was April 1 through
September 30, and the elective deferral period under Section 4.2 was
October 1 through December 31.
4
<PAGE>
shall be a memorandum account on the books of the Company. An Eligible
Director's Cash Account shall be credited as follows:
(a) As of the date the Compensation would have been otherwise payable,
the Company shall credit the Eligible Director's Cash Account with an amount
equal to the portion of the Retainer (for the third and fourth quarters only)
and Meeting and Other Fees so deferred by the Eligible Director; and
(b) As of the last day of each calendar quarter, the Eligible
Director's Cash Account shall be credited with earnings on the balance credited
to such account as of the last day of the preceding quarter, plus earnings (from
the applicable date of crediting under Section 5.1) on any additional amounts
deferred during the current quarter, at a rate equal to the Interest Rate for
the applicable period during which the amounts were so deferred (i.e., the
entire quarter or portion thereof, as the case may be).
5.2. STOCK UNIT ACCOUNT.
(a) MANDATORY DEFERRALS. Deferrals pursuant to Section 4.1 shall be
credited on the applicable Award Date to the Stock Unit Account of the Eligible
Director. The number of Units credited shall be determined by dividing the
dollar amount of the Retainer so deferred and payable to the Eligible Director
by the Average Fair Market Value of a share of Common Stock as of the applicable
March 31 or June 30 of the applicable year.
(b) ELECTIVE DEFERRALS. If an Eligible Director has made a Stock Unit
election under Section 4.2, the Committee shall, as of the Pay Date, credit the
Eligible Director's Stock Unit Account with an amount of Units determined by
dividing the applicable portion of the Eligible Director's Retainer and Meeting
and Other Fees by the Average Fair Market Value of a share of Common Stock as of
the Pay Date.
(c) ELECTION TO TRANSFER FROM CASH ACCOUNT TO STOCK UNIT ACCOUNT. If an
Eligible Director has an existing Cash Account balance as of the end of the
immediately preceding Year, he or she may make an irrevocable election, in the
form prescribed by Exhibit A hereto (or such other form as the Committee may
from time to time approve) to transfer all or an amount of at least $5,000 (in
whole dollars) of such accrued Cash Account balance (i.e., an amount other than
with respect to any amounts credited or accrued during the then current Year) to
his or her Stock Unit Account. The Company shall credit the Eligible Director's
Stock Unit Account with an amount of Stock Units determined by dividing the
amount from the Cash Account elected to be so transferred by the Average Fair
Market Value of a share of Common Stock as of the first business day after the
Corporate Secretary of the Company receives a written notice of the election.
Stock Units so credited shall at all times be fully vested and shall be
distributed according to the election originally filed with regard to the Cash
Account from which the amount was transferred. Stock Units credited pursuant to
the Section 5.2(c) shall be subject to all provisions of the Plan governing
Stock Units (except as expressly otherwise provided) and shall no longer be
subject to provisions relating solely to the Cash Account.
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<PAGE>
(d) LIMITATIONS ON RIGHTS ASSOCIATED WITH UNITS. An Eligible Director's
Stock Unit Account shall be a memorandum account on the books of the Company.
The Units credited to an Eligible Director's Stock Unit Account shall be used
solely as a device for the determination of the number of shares of Common Stock
to be eventually distributed to such Eligible Director in accordance with this
Plan. The Units shall not be treated as property or as a trust fund of any kind.
No Eligible Director shall be entitled to any voting or other stockholder rights
with respect to Units granted or credited under this Plan. The number of Units
credited (and the Common Stock to which the Eligible Director is entitled under
this Plan) shall be subject to adjustment in accordance with Section 5.6.
5.3. DIVIDEND EQUIVALENT CREDITS TO STOCK UNIT ACCOUNT.
As of the Pay Date, an Eligible Director's mandatory and any elective
Stock Unit Accounts shall be credited with additional Units in an amount equal
to the amount of the Dividend Equivalents representing dividends paid on that
number of shares equal to the aggregate Stock Units in the Participant's Stock
Unit Account as of the Record Date divided by the Average Fair Market Value of a
share of Common Stock as of the Pay Date, provided that if the Participant has
made a transfer election under Section 5.2(c) during such preceding six months,
the accruals of earnings under Section 5.1(b) shall be made through the date the
transfer occurred on the amount transferred, and Dividend Equivalents on the
Stock Units resulting from the transfer shall be credited in additional Stock
Units as provided in this Section 5.3.
5.4. IMMEDIATE VESTING AND ACCELERATED CREDITING.
(a) UNITS AND OTHER AMOUNTS VEST IMMEDIATELY. All Units or other
amounts credited to one or more of an Eligible Director's Stock Unit or Cash
Accounts (including any Rollover Account) shall be at all times fully vested.
(b) ACCELERATION OF CREDITING OF ACCOUNTS. The crediting of the
rights of each Eligible Director in respect of Accounts shall be accelerated if
an Eligible Director ceases to be a member of the Board. In such case: (1) the
amount of cash that would have been credited as of the next quarter end shall be
prorated based on the number of full weeks of service during the applicable
period; and (2) the number of Units that would have been credited to the
Eligible Director's Stock Unit Accounts as of the next quarter end shall be
prorated based on the number of full weeks of service during the applicable
period. For these purposes, the Award Date shall be deemed to be the date of
termination of service.
5.5. DISTRIBUTION OF BENEFITS.
(a) COMMENCEMENT OF BENEFIT DISTRIBUTION. Each Eligible Director shall
be entitled to receive a distribution of his or her Accounts upon his or her
termination of service on the Board. Notwithstanding the foregoing, the
distribution of each Eligible Director's Rollover Account shall be governed by
Section 8.8.
(b) MANNER OF DISTRIBUTION. The benefits payable under this Plan shall
be distributed to the Eligible Director (or, in the event of his or her death,
the Eligible Director's
6
<PAGE>
Beneficiary) in a lump sum, or, subject to Section 8.9, as permitted by this
Section 5.5(b). Each Eligible Director may elect in writing on forms provided by
the Company at the time of making his or her deferral election under Article IV
or (subject to Section 8.9) at least 12 months in advance of the date benefits
become distributable under Section 5.5(a) to receive a distribution of his or
her benefits in up to five annual installments. Such installment payments shall
commence as of the date benefits become distributable under Section 5.5(a).
Notwithstanding the foregoing, if the balance remaining in an Eligible
Director's Cash Account is less than $5,000 or, if the number of Units remaining
in the Eligible Director's Stock Unit Accounts is less than 100, then such
remaining balances shall be distributed in a lump sum.
(c) EFFECT OF CHANGE IN CONTROL EVENT. Notwithstanding Sections 5.5(a)
and (b), if a Change in Control Event and a termination of service has occurred
or shall occur, the Eligible Director's Accounts (including accelerated benefits
under Section 5.4(b)) shall be distributed immediately in a lump sum.
(d) FORM OF DISTRIBUTION. Stock Units credited to an Eligible
Director's Stock Unit Account, including those Stock Units credited under
Section 5.2(c), shall be distributed in an equivalent whole number of shares of
the Company's Common Stock. Fractions shall be disregarded. Amounts credited to
an Eligible Director's Cash Account, including any Rollover Account not
transferred to Stock Units under Section 5.2(c), shall be distributed in cash.
5.6. ADJUSTMENTS IN CASE OF CHANGES IN COMMON STOCK.
If any stock dividend, stock split, recapitalization, merger,
consolidation, combination or other reorganization, exchange of shares, sale of
all or substantially all of the assets of the Company, split-up, split-off,
spin-off, extraordinary redemption, liquidation or similar change in
capitalization or any distribution to holders of the Company's Common Stock
(other than cash dividends and cash distributions) shall occur, proportionate
and equitable adjustments consistent with the effect of such event of
stockholders generally (but without duplication of benefits if Dividend
Equivalents are credited) shall be made in the number and type of shares of
Common Stock or other securities, property and/or rights contemplated hereunder
and of rights in respect of Units and Accounts credited under this Plan so as to
preserve the benefits intended.
5.7. COMPANY'S RIGHT TO WITHHOLD.
The Company shall satisfy any state or federal income tax withholding
obligation arising upon distribution of an Eligible Director's Accounts by
reducing the amount of cash or the number of shares of Common Stock otherwise
deliverable to the Eligible Director, as the case may be. The appropriate number
of shares required to satisfy such tax withholding obligation in the case of
Stock Units will be based on the Fair Market Value of a share of Common Stock on
the day prior to the date of distribution. If the Company, for any reason,
cannot satisfy the withholding obligation in accordance with the preceding
sentence, the Eligible Director shall pay or provide for payment in cash of the
amount of any taxes which the Company may be required to withhold with respect
to the benefits hereunder.
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<PAGE>
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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<PAGE>
controversy and the Committee's determination of benefits payable to Eligible
Directors shall be conclusive. In performing its duties, the Committee shall be
entitled to rely on information, opinions, reports or statements prepared or
presented by: (i) officers or employees of the Company whom the Committee
believes to be reliable and competent as to such matters; and (ii) counsel (who
may be employees of the Company), independent accountants and other persons as
to matters which the Committee believes to be within such persons' professional
or expert competence. The Committee shall be fully protected with respect to any
action taken or omitted by it in good faith pursuant to the advice of such
persons. The Committee may delegate ministerial, bookkeeping and other
non-discretionary functions to individuals who are officers or employees of the
Company.
6.4. INDEMNITY AND LIABILITY.
All expenses of the Committee shall be paid by the Company and the
Company shall furnish the Committee with such clerical and other assistance as
is necessary in the performance of its duties. No member of the Committee shall
be liable for any act or omission of any other member of the Committee nor for
any act or omission on his or her own part, excepting only his or her own
willful misconduct or gross negligence. To the extent permitted by law, the
Company shall indemnify and save harmless each member of the Committee against
any and all expenses and liabilities arising out of his or her membership on the
Committee, excepting only expenses and liabilities arising out of his or her own
willful misconduct or gross negligence, as determined by the Board.
ARTICLE VII
PLAN CHANGES AND TERMINATION
7.1. AMENDMENTS.
The Board shall have the right to amend this Plan in whole or in part
from time to time or may at any time suspend or terminate this Plan; PROVIDED,
however, that, except as contemplated by Section 5.8, no amendment or
termination shall cancel or otherwise adversely affect in any way, without his
or her written consent, any Eligible Director's rights with respect to Stock
Units and Dividend Equivalents credited to his or her Stock Unit Accounts
(assuming solely for such purposes a voluntary termination of services as of the
date of such amendment or termination) or to any amounts previously credited (or
that in such circumstances would be credited) to his or her Cash Account,
including any Rollover Account. Any amendments authorized hereby shall be stated
in an instrument in writing, and all Eligible Directors shall be bound thereby
upon receipt of notice thereof.
7.2. TERM.
It is the current expectation of the Company that this Plan shall be
continued for a period of 10 years after the Effective Date, but continuance of
this Plan is not assumed as a contractual obligation of the Company. In the
event that the Board of Directors decides to discontinue or terminate this Plan,
it shall notify the Committee and Participants in this Plan of its action in
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writing, and this Plan shall be terminated at the time therein set forth. All
Participants shall be bound thereby. In such event, the then credited benefits
of a Participant (including any accelerated benefits under Section 5.4) shall be
distributed at the time(s) and in the manner elected and provided under Section
5.5.
ARTICLE VIII
MISCELLANEOUS
8.1. LIMITATION ON ELIGIBLE DIRECTORS' RIGHTS.
Participation in this Plan shall not give any person the right to
continue to serve as a member of the Board or any rights or interests other than
as herein provided. No Participant shall have any right to any payment or
benefit hereunder except to the extent provided in this Plan. This Plan shall
create only a contractual obligation on the part of the Company as to such
amounts and shall not be construed as creating a trust. This Plan, in and of
itself, has no assets. Participants shall have only the rights of a general
unsecured creditor of the Company with respect to amounts credited and benefits
payable, if any, on their Cash Accounts and rights no greater than the right to
receive the Common Stock (or equivalent value) as a general unsecured creditor.
8.2. BENEFICIARIES.
(a) BENEFICIARY DESIGNATION. Upon forms provided by and subject to
conditions imposed by the Company, each Participant may designate in writing the
Beneficiary or Beneficiaries (as defined in Section 8.2(b)) whom such
Participant desires to receive any amounts payable under this Plan after his or
her death. The Company and the Committee may rely on the Participant's
designation of a Beneficiary or Beneficiaries last filed in accordance with the
terms of this Plan.
(b) DEFINITION OF BENEFICIARY. A Participant's "Beneficiary" or
"Beneficiaries" shall be the person, persons, trust or trusts (or similar
entity) designated by the Participant or, in the absence of a designation,
entitled by will or the laws of descent and distribution to receive the
Participant's benefits under this Plan in the event of the Participant's death,
and shall mean the Participant's executor or administrator if no other
Beneficiary is identified and able to act under the circumstances.
8.3. BENEFITS NOT ASSIGNABLE; OBLIGATIONS BINDING UPON
SUCCESSORS.
Benefits of a Participant under this Plan shall not be assignable or
transferable and any purported transfer, assignment, pledge or other encumbrance
or attachment of any payments or benefits under this Plan, or any interest
therein, other than by operation of law or pursuant to Section 8.2, shall not be
permitted or recognized. Obligations of the Company under this Plan shall be
binding upon successors of the Company.
10
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8.4. GOVERNING LAW; SEVERABILITY.
The validity of this Plan or any of its provisions shall be construed,
administered and governed in all respects under and by the laws of the State of
California. If any provisions of this instrument shall be held by a court of
competent jurisdiction to be invalid or unenforceable, the remaining provisions
hereof shall continue to be fully effective.
8.5. COMPLIANCE WITH LAWS.
This Plan and the offer, issuance and delivery of shares of Common
Stock and/or the payment of money through the deferral of compensation under
this Plan are subject to compliance with all applicable federal and state laws,
rules and regulations (including but not limited to state and federal securities
law) and to such approvals by any listing, agency or any regulatory or
governmental authority as may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith. Any securities delivered under
this Plan shall be subject to such restrictions, and the person acquiring such
securities shall, if requested by the Company, provide such assurances and
representations to the Company as the Company may deem necessary or desirable to
assure compliance with all applicable legal requirements.
8.6. PLAN CONSTRUCTION.
It is the intent of the Company that transactions pursuant to this Plan
satisfy and be interpreted in a manner that satisfies the applicable
requirements of Rule 16b-3 promulgated under the Exchange Act ("Rule 16b-3") so
that mandatory deferrals and, to the extent elections are timely made, elective
deferrals will be entitled to the benefits of Rule 16b-3 or other exemptive
rules under Section 16 of the Exchange Act and will not be subjected to
avoidable liability thereunder. Any contrary interpretation shall be avoided.
8.7. HEADINGS NOT PART OF PLAN.
Headings and subheadings in this Plan are inserted for reference only
and are not to be considered in the construction of the provisions hereof.
8.8. RELATIONSHIP TO THE 1993 DEFERRED COMPENSATION PLAN.
Subject to Section 5.8, this Plan supersedes in its entirety the 1993
Board of Directors Deferred Compensation Plan (the "1993 Plan"). As of the date
of stockholder approval of this Plan, accrued balances under the 1993 Plan shall
be credited to a Cash Account under this Plan and such balances shall thereafter
be credited in accordance with the provisions of this Plan. Payout elections
under the 1993 Plan shall be conformed to the nearest equivalent under this
Plan.
8.9. LIMITED EXCEPTION TO IRREVOCABILITY OF PAYOUT ELECTIONS.
A Participant may, subject to the approval of the Committee,
prospectively change an election under Section 5.5(b) by a subsequent election
that will take effect at least 12 months after
11
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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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EXHIBIT A
DOLE FOOD COMPANY, INC.
NON-EMPLOYEE DIRECTORS DEFERRED STOCK
AND
CASH COMPENSATION PLAN, AS AMENDED
ACCOUNT TRANSFER ELECTION AGREEMENT
ELECTIONS
I hereby IRREVOCABLY elect to transfer $_______(specify an amount in
whole dollars not less than $5,000) of my Cash Account balance as of last
December 31 to Stock Unit Account. I direct that the above amount shall be
transferred from my deferral elections as follows:
$___________from the Election Agreement for the year_________
$___________from my Rollover Account
ACKNOWLEDGMENT
I hereby acknowledge that I understand and consent to the terms of this
Election Agreement and the Plan, that the transfer is irrevocable, that the
Stock Units to be allocated as a result thereof will be distributed only in an
equivalent whole number of shares of the Company's Common Stock with fractional
shares disregarded, and that, subject to Section 8.9 of the Plan, the manner of
distribution (lump sum or annual installments) and the time of payout will be
governed by my previous Election Agreement listed above (or, as to a Rollover
Account, in accordance with Section 8.8 of the Plan). I understand that my other
elections, including my other deferral elections and all of my distribution
elections, shall remain unchanged and that this election affects only the form
of payment (cash or stock) on amounts transferred and the amounts thereafter
accrued on balances under the terms of the Plan.
SIGNATURE ACCEPTANCE
- --------------------------- Dole Food Company, Inc.
(Director's Signature)
By:
- --------------------------- ------------------------------
(Print Name)
Name:
- --------------------------- ----------------------------
(Date)
Date:
----------------------------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-02-1999<F1>
<PERIOD-START> JAN-04-1998
<PERIOD-END> OCT-10-1998
<CASH> 153,212
<SECURITIES> 0
<RECEIVABLES> 599,654
<ALLOWANCES> 64,627
<INVENTORY> 454,748
<CURRENT-ASSETS> 1,192,194
<PP&E> 1,828,549
<DEPRECIATION> 701,261
<TOTAL-ASSETS> 2,850,355
<CURRENT-LIABILITIES> 721,181
<BONDS> 1,040,320
0
0
<COMMON> 319,884
<OTHER-SE> 416,527
<TOTAL-LIABILITY-AND-EQUITY> 2,850,355
<SALES> 3,385,764
<TOTAL-REVENUES> 3,385,764
<CGS> 2,864,063
<TOTAL-COSTS> 2,864,063
<OTHER-EXPENSES> 329,936
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 50,599
<INCOME-PRETAX> 146,818
<INCOME-TAX> 26,400
<INCOME-CONTINUING> 120,418
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 120,418
<EPS-PRIMARY> 2.00<F2>
<EPS-DILUTED> 1.98<F3>
<FN>
<F1>THE COMPANY'S FISCAL YEAR ENDS ON THE SATURDAY CLOSEST TO DECEMBER 31, FISCAL
YEAR 1998 ENDS JANUARY 2, 1999 AND INCLUDES 52 WEEKS. ALL QUARTERS IN 1998 HAVE
12 WEEKS, EXCEPT THE THIRD QUARTER WHICH HAS 16 WEEKS.
<F2>IN ACCORDANCE WITH SFAS NO. 128, "EARNINGS PER SHARE", THIS ITEM REFLECTS BASIC
EARNINGS PER SHARE.
<F3>IN ACCORDANCE WITH SFAS NO. 128, "EARNINGS PER SHARE", THIS ITEM REFLECTS
DILUTED EARNINGS PER SHARE.
</FN>
</TABLE>
