<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
DOLE FOOD COMPANY, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[SIG]
DOLE FOOD COMPANY, INC.
31365 OAK CREST DRIVE
WESTLAKE VILLAGE, CALIFORNIA 91361
April 7, 1999
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Dole Food Company, Inc. (the "Company") which will be held at the Hyatt Westlake
Plaza Hotel, 880 South Westlake Boulevard, Westlake Village, California at 10:00
a.m. on Thursday, May 13, 1999.
This booklet includes the Notice of Annual Meeting and the Proxy Statement,
which contain information about the formal business to be acted on by the
stockholders. The meeting will also feature a report on the operations of your
Company, followed by a question and discussion period.
We hope that you will be able to attend the meeting. However, whether or not
you plan to attend in person, please complete, sign, date and return the
enclosed proxy card(s) promptly to ensure that your shares will be represented.
If you do attend the meeting and wish to vote your shares personally, you may
revoke your proxy.
Sincerely yours,
[SIG]
David H. Murdock
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
<PAGE>
DOLE FOOD COMPANY, INC.
31365 OAK CREST DRIVE
WESTLAKE VILLAGE, CALIFORNIA 91361
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1999
---------------------
The Annual Meeting of Stockholders of DOLE FOOD COMPANY, INC. (the
"Company") will be held at the Hyatt Westlake Plaza Hotel, 880 South Westlake
Boulevard, Westlake Village, California at 10:00 a.m. on Wednesday, May 13, 1999
for the following purposes:
1. To elect seven (7) directors of the Company, each to serve until the
next Annual Meeting of Stockholders and until his or her successor has been duly
elected and qualified;
2. To elect Arthur Andersen LLP as the Company's independent public
accountants and auditors for the 1999 fiscal year; and
3. To transact such other business as may properly come before the meeting
or any adjournments thereof.
The Board of Directors has fixed March 30, 1999 as the record date for the
determination of stockholders entitled to vote at the Annual Meeting or any
adjournments of the meeting.
By Resolution of the Board of
Directors,
[SIG]
J. Brett Tibbitts
CORPORATE SECRETARY
April 7, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE,
SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD(S).
<PAGE>
DOLE FOOD COMPANY, INC.
31365 OAK CREST DRIVE
WESTLAKE VILLAGE, CALIFORNIA 91361
------------------------
PROXY STATEMENT
------------------------
This Proxy Statement is furnished to stockholders by the Board of Directors
of Dole Food Company, Inc. (the "Company") in connection with the solicitation
of proxies for use at the Annual Meeting of Stockholders to be held at the Hyatt
Westlake Plaza Hotel, 880 South Westlake Boulevard, Westlake Village, California
at 10:00 a.m. on Thursday, May 13, 1999, and at any adjournments thereof. The
Company's principal executive offices are located at 31365 Oak Crest Drive,
Westlake Village, California, and its telephone number is (818) 879-6600.
This Proxy Statement, Notice of Annual Meeting and the accompanying proxy
card(s) are being first mailed to stockholders on or about April 8, 1999. The
Company's 1998 Annual Report is being mailed to stockholders concurrently with
this Proxy Statement. The Annual Report is not to be regarded as proxy
soliciting material or as a communication by means of which any solicitation of
proxies by the Company is to be made.
GENERAL INFORMATION
RECORD DATE:
The Board of Directors has fixed March 30, 1999 as the Record Date for the
determination of stockholders entitled to vote at the Annual Meeting or any
adjournments thereof. On the Record Date, 57,048,894 shares of the Company's
Common Stock were outstanding and entitled to vote at the meeting. The Common
Stock is the only class of stock of the Company that is outstanding and entitled
to vote at the Annual Meeting.
MULTIPLE PROXY CARDS:
Stockholders who own shares registered in different names or at different
addresses will receive more than one proxy card. YOU MUST SIGN AND RETURN EACH
OF THE PROXY CARDS RECEIVED TO ENSURE THAT ALL OF THE SHARES OWNED BY YOU ARE
REPRESENTED AT THE ANNUAL MEETING.
ABILITY TO REVOKE PROXY:
Any stockholder who gives a proxy has the power to revoke it at any time
before it is exercised by delivering to the Corporate Secretary a written notice
of revocation either in person or by mail. Attendance at the Annual Meeting will
not in itself constitute revocation of the proxy.
VOTING OF PROXIES:
Unless contrary instructions are given, the persons designated as proxy
holders in the accompanying proxy card(s) (or their substitutes) will vote "FOR"
the election of the Board of Directors' nominees, "FOR" the election of Arthur
Andersen LLP as the Company's independent public accountants and auditors for
the 1999 fiscal year, and in the proxy holders' discretion with regard to any
other matters (of
1
<PAGE>
which the Company is not now aware) that may be properly presented at the
meeting, and all matters incident to the conduct of the meeting.
QUORUM:
The presence at the meeting, in person or by proxy, of a majority of the
shares of Common Stock outstanding on the Record Date will constitute a quorum.
The affirmative vote of the holders of at least a majority of such quorum will
be required with respect to the election of directors and the election of Arthur
Andersen LLP as the Company's independent public accountants and auditors.
ABSTENTIONS/"BROKER NON-VOTES":
Votes cast by proxy or in person at the Annual Meeting will be counted by
the persons appointed by the Company to act as the inspectors of election for
the meeting. The inspectors of election will treat shares represented by proxies
that reflect abstentions or include "broker non-votes" as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum. Abstentions or "broker non-votes" do not constitute a vote "for" or
"against" any matter and thus will be disregarded in any calculation of "votes
cast". However, abstentions and "broker non-votes" will have the effect of a
negative vote if an item requires the approval of a majority of a quorum or of a
specified proportion of all issued and outstanding shares.
OTHER MATTERS:
Each share of Common Stock entitles the holder thereof to one vote on each
matter to be voted on at the Annual Meeting. Under the Company's By-Laws,
stockholders are not entitled to cumulate their votes in the election of
directors. The By-Laws also provide that the presiding officer at the meeting
may adjourn a meeting at which a quorum is present if a matter to be acted upon
at the meeting requires the affirmative vote of more than a majority of a quorum
at the meeting and the number of shares actually voted (and not abstaining) at
such meeting is insufficient to approve of such matter.
NOMINATIONS FOR DIRECTORS:
The Company's By-Laws provide that nominations of candidates for election to
the Company's Board of Directors may only be made by the Board or by a
stockholder entitled to vote at the meeting. Any such stockholder who intends to
nominate a candidate for election to the Board must deliver a notice to the
Corporate Secretary setting forth (i) the name, age, business address and
residence address of the nominee; (ii) the principal occupation or employment of
the nominee; (iii) the number of shares of capital stock of the Company
beneficially owned by the nominee; and (iv) such other information concerning
the nominee as is required under the rules of the Securities and Exchange
Commission (the "SEC"). Such notice also must include a signed consent of the
nominee to serve as a director of the Company, if elected. To be timely, any
such notice with respect to the upcoming Annual Meeting must be delivered to the
Corporate Secretary, Dole Food Company, Inc., 31365 Oak Crest Drive, Westlake
Village, California 91361, no later than 30 days prior to meeting, or April 13,
1999. Any such notice with respect to any subsequent Annual Meeting must be
delivered to the Corporate Secretary not less than 30 days prior to the date of
that Meeting.
2
<PAGE>
OWNERSHIP OF COMMON STOCK
CERTAIN BENEFICIAL OWNERS
The following table sets forth, to the best knowledge of the Company,
information as to each person who beneficially owned more than 5% of the
Company's Common Stock as of March 31, 1999 (unless otherwise noted).
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER OWNERSHIP (1) CLASS (2)
- ------------------------------------------------------------------------------------- --------------- -----------
<S> <C> <C>
David H. Murdock..................................................................... 12,394,074(3) 21.6%
31365 Oak Crest Drive
Westlake Village, CA 91361
FMR Corporation...................................................................... 5,664,699(4) 9.9%
82 Devonshire Street
Boston, MA 02109
Capital Research & Management Co..................................................... 4,260,000(5) 7.5%
333 South Hope Street, 55(th) Floor
Los Angeles, CA 90071
Dodge & Cox.......................................................................... 4,155,258(6) 7.3%
One Sansome Street, 35(th) Floor
San Francisco, CA 94104
Oppenheimer Group, Inc............................................................... 3,052,090(7) 5.3%
Oppenheimer Tower
World Financial Center
New York, NY 10281
</TABLE>
- ------------------------
(1) Unless otherwise indicated, each person has sole voting and dispositive
power with respect to the shares shown.
(2) The percentages set forth above are calculated on the basis of the number of
outstanding shares of Common Stock set forth under "General Information",
plus in the case of Mr. Murdock, stock options granted to him under the
Company's stock option plans to purchase 295,912 shares, which number
includes all such options that are exercisable within 60 days following the
Record Date (March 30, 1999).
(3) See "Security Ownership of Directors and Executive Officers" at page 4.
(4) Based on a report on Schedule 13G/A dated February 1, 1999, FMR Corp. and/or
its affiliates had sole voting power over 606,599 of such shares and sole
dispositive power over all such shares. The number of shares reported also
include 96,400 of the Traces(TM/SM) which are described in footnote 5 on
page 4.
(5) Based on a report on Schedule 13G dated February 8, 1999, Capital Research &
Management Co. and/or its affiliates reported sole dispositive power over
all such shares.
(6) Based on a report on Schedule 13G dated February 10, 1999, Dodge & Cox
and/or its affiliates had sole voting power over 3,741,658 of such shares,
shared voting power over 53,000 of such shares and sole dispositive power
over all such shares.
(7) Based on a report on Schedule 13G dated February 9, 1999, Oppenheimer Group,
Inc. and/or its affiliates reported shared voting power and shared
dispositive power over all such shares.
3
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to shares of
the Company's Common Stock beneficially owned (or deemed to be beneficially
owned), unless otherwise indicated, by the Company's directors, its Named
Executive Officers (as defined under "Compensation of Executive Officers") and
by all directors and executive officers of the Company as a group, as of March
31, 1999:
<TABLE>
<CAPTION>
PERCENT
OF
AMOUNT AND NATURE OUTSTANDING
OF BENEFICIAL SHARES
NAME AND ADDRESS OF BENEFICIAL OWNER (1) OWNERSHIP (2) (3)
- -------------------------------------------------- -------------------------- ---------
<S> <C> <C>
David H. Murdock.................................. 12,394,074(4)(5) 21.6%
Elaine L. Chao.................................... 8,285(6)(7)(8) *
Mike Curb......................................... 41,580(6)(7)(9) *
David A. DeLorenzo................................ 136,303(4)(10)(12) *
Richard M. Ferry.................................. 13,115(6)(7) *
James F. Gary..................................... 25,302(6)(7)(11) *
Zoltan Merszei.................................... 9,851(6)(7) *
Lawrence A. Kern.................................. 41,535(4)(12) *
Peter M. Nolan.................................... 30,609(4) *
J. Brett Tibbitts................................. 29,956(4)(10) *
All Directors and Executive Officers as a Group
(17 Individuals)................................ 12,849,318(4)(6)(7)(10)(12) 22.3%
</TABLE>
- ------------------------
* Represents less than 1% of the class of securities.
(1) The mailing address for each of the individuals listed is Dole Food Company,
Inc., 31365 Oak Crest Drive, Westlake Village, California 91361.
(2) Unless otherwise indicated, each person has sole voting and dispositive
power with respect to the shares shown. Some directors and executive
officers share the voting and dispositive power over their shares with their
spouses as community property, joint tenants or tenants in common.
(3) The percentages set forth above are calculated on the basis of the number of
outstanding shares of Common Stock set forth under "General Information",
plus, where applicable, all stock options granted under the Company's stock
option plans that are exercisable within 60 days following the Record Date
(March 30, 1999).
(4) The individuals and group indicated beneficially own the following number of
shares of Common Stock that may be purchased upon the exercise of employee
stock options exercisable on the Record Date (March 30, 1999) or within 60
days thereafter: Mr. Murdock, 295,912; Mr. DeLorenzo, 112,668; Mr. Kern,
35,422; Mr. Nolan, 30,509; Mr. Tibbitts, 27,428; and all directors and
executive officers as a group, 619,866.
(5) Mr. Murdock customarily maintains revolving lines of credit in conjunction
with his various business activities, under which borrowings and security
vary from time to time, and pursuant to which he provides collateral owned
by him, including his shares in the Company. His reported holdings include:
(i) 10,776,982 shares of Common Stock owned by David H. Murdock as Trustee
for the David H. Murdock Living Trust, dated May 28, 1986, including between
2,394,587 and 2,875,000 shares pledged as security relating to a forward
purchase contract ("Traces(TM/SM)") obligating the Trust to deliver cash or
up to that number of shares on August 15, 1999, (the Trust currently owns
431,000 of the Traces(TM/SM) which were purchased in late 1998 and early
1999); (ii) 1,240,310 shares of Common Stock owned by Flexi-Van Leasing,
Inc., a corporation wholly-owned by Mr. Murdock; and (iii) 80,870 shares of
Common Stock owned by Mr. Murdock's sons.
4
<PAGE>
(6) The individuals indicated each beneficially own the following number of
shares of Common Stock that were granted pursuant to the Company's
Non-Employee Directors Stock Option Plan and that may be purchased upon the
exercise of stock options exercisable on the Record Date (March 30, 1999) or
within 60 days thereafter: Ms. Chao, 4,606; Mr. Curb, 4,606; Mr. Ferry,
4,606; Mr. Gary, 4,606; and Mr. Merszei, 1,500.
(7) The individuals indicated each beneficially own the following number of
vested stock units credited under the Non-Employee Directors Deferred Stock
and Cash Compensation Plan as described on page 9 under "Remuneration of
Directors": Ms. Chao, 2,664; Mr. Curb, 2,660; Mr. Ferry, 5,209; Mr. Gary,
1,028; and Mr. Merszei, 2,560. Stock units do not have voting rights or
represent a right to acquire Common Stock within 60 days following the
Record Date, because directors may elect and have elected to defer amounts
otherwise payable on a termination of service. The units are payable solely
in Common Stock, carry an investment risk of ownership and accrue dividend
equivalents in the form of additional stock units.
(8) Reported holdings include 620 shares held in Ms. Chao's profit sharing plan
and 395 shares held in Ms. Chao's money purchase account.
(9) Reported holdings include 400 shares of Common Stock held by Mr. Curb as
custodian for the benefit of his children.
(10) The individual and group beneficially own the following number of vested
stock units credited under the Company's Stock Ownership Enhancement
Program: Mr. DeLorenzo, 9,327 stock units; Mr. Tibbitts, 713 stock units;
and all directors and officers as a group, 12,781 stock units. This Program
enables executives to defer compensation that would otherwise be realized on
option exercises and at some specified future date receive the deferred
compensation in the form of Company Common Stock. Assuming certain
requirements are met, the executive participates in the Program by
alternatively exercising the option and instead of receiving Common Stock,
receives a certain number of "stock units" derived by dividing the price of
the Common Stock on the date of the exercise into the amount by which the
exercised option was "in the money." Stock units do not have voting rights
or represent a right to acquire Common Stock within 60 days following the
Record Date, because officers may elect and have elected to defer amounts
otherwise payable on a termination of service. The units are payable solely
in Common Stock, carry an investment risk of ownership and accrue dividend
equivalents in the form of additional stock units.
(11) Reported holdings include 2,000 shares of Common Stock held in Mr. Gary's
pension plan and 17,668 shares of Common Stock held in the Gary LLC, a
limited liability corporation of which Mr. Gary is the general manager and
over which Mr. Gary has investment control.
(12) Reported holdings include shares of Common Stock held for certain officers
by the Company's Tax Deferred Investment Plan pursuant to Section 401(k) of
the Internal Revenue Code of 1986 as amended ("Internal Revenue Code").
5
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The Articles of Association of the Company provide that the Board of
Directors shall consist of not less than five nor more than twenty persons. The
Company's By-Laws currently provide for seven members of the Board of Directors.
The Board of Directors has recently voted to recommend the election of the
following individuals, all of whom are incumbents, for a term of one year and
until their successors are duly elected and qualified:
Elaine L. Chao James F. Gary
Mike Curb Zoltan Merszei
David A. DeLorenzo David H. Murdock
Richard M. Ferry
Each of the current members of the Board was elected by stockholders at the
last Annual Meeting held on May 13, 1998.
Unless authority to do so is withheld, the persons named in each proxy card
(or their substitutes) will vote the shares represented thereby "FOR" the
election of the director nominees named above. In case any of such nominees
becomes unable to serve or unavailable for election to the Board of Directors,
which is not anticipated, the persons named as proxies (or their substitutes)
have full discretion and authority to vote for any other nominee of the Board.
The following brief statements contain biographical information with respect
to each of the nominees for election as a director, including their principal
occupations for at least the past five years, as of March 18, 1999.
<TABLE>
<CAPTION>
YEAR
ELECTED
AS A
NAME DIRECTOR AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ------------------------------ ---------- ------ ---------------------------------------------
<S> <C> <C> <C>
David H. Murdock.............. 1985 75 Chairman of the Board, Chief Executive
Officer and Director of the Company since
July 1985. Chairman of the Board, Chief
Executive Officer and Director of Castle &
Cooke, Inc. since October 1995. Since June
1982, Chairman of the Board and Chief
Executive Officer of Flexi-Van Leasing, Inc.,
a Delaware corporation wholly-owned by Mr.
Murdock. Sole owner and developer of the
Sherwood Country Club in Ventura County,
California, and numerous other real estate
developments; also sole stockholder of
numerous corporations engaged in a variety of
business ventures and in the manufacture of
textile-related products, and industrial and
building products.
David A. DeLorenzo............ 1991 52 President and Chief Operating Officer of the
Company since March 1996. President of Dole
Food Company-International from September
1993 to March 1996. Executive Vice President
of the Company from July 1990 to March 1996.
Director of the Company since February 1991.
President of Dole Fresh Fruit Company from
September 1986 to June 1992.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
YEAR
ELECTED
AS A
NAME DIRECTOR AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ------------------------------ ---------- ------ ---------------------------------------------
<S> <C> <C> <C>
Elaine L. Chao................ 1993 45 Distinguished Fellow at The Heritage
Foundation since August 1996. President and
Chief Executive Officer of United Way of
America from November 1992 until August 1996.
Director of the United States Peace Corps
from October 1991 to November 1992. Deputy
Secretary of the United States Department of
Transportation from March 1989 to October
1991. Chairman of the United States Federal
Maritime Commission from March 1988 to March
1989. Deputy Administrator of the United
States Maritime Administration from April
1986 to March 1988. Vice
President-Syndications of the BankAmerica
Capital Markets Group from November 1984 to
April 1986. Ms. Chao also serves on the Board
of Directors of Millipore Corporation,
Protective Life Corporation, Raymond James
Financial, Inc. and Vencor, Inc.
Mike Curb..................... 1985 54 Chairman of the Board of Curb Records, Inc.,
a record company, and Curb Entertainment
International Corp., an entertainment
company. Mr. Curb served as Lieutenant
Governor of the State of California from 1978
to 1982, and served as Chairman of the
National Conference of Lieutenant Governors
during 1982. Mr. Curb served as Chairman of
the Republican National Finance Committee
from August 1982 to January 1985. He is also
a director of various community
organizations.
Richard M. Ferry.............. 1991 61 Chairman of the Board and Director of
Korn/Ferry International, Inc., an
international executive search firm. Mr.
Ferry also serves on the Board of Directors
of Avery Dennison Corporation, Pacific Life
Insurance Company and Mrs. Fields' Original
Cookies, Inc., as well as a number of
privately held and not-for-profit
corporations.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
YEAR
ELECTED
AS A
NAME DIRECTOR AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ------------------------------ ---------- ------ ---------------------------------------------
<S> <C> <C> <C>
James F. Gary................. 1974 78 Chairman Emeritus of Pacific Resources, Inc.,
an energy company headquartered in Honolulu
("PRI"). Mr. Gary was President and/or
Chairman and Chief Executive Officer of PRI
and its predecessor from 1967 to 1984, and
Chairman of the Board of PRI in 1985. He is
Past Chairman of the Hawaii Community
Foundation and is Chairman of the Board of
Directors of Inter Island Petroleum, Inc.,
Hawkins Oil & Gas, Inc., Kennedy Associates,
Inc. and Episcopal Homes of Hawaii, Inc. as
well as several other privately held
corporations and a number of community
organizations. He was a member of the
University of Hawaii Board of Regents from
1981 to 1989 and currently serves on the
International Advisory Board of the Salk
Institute (San Diego) and as a Regent on the
International Advisory Board of
Harris-Manchester College at the University
of Oxford.
Zoltan Merszei................ 1996 76 Former Chairman, President and Chief
Executive Officer of the Dow Chemical Company
(retired in 1979). Former Vice Chairman and
President of Occidental Petroleum Corporation
(retired in 1989). Mr. Merszei currently
serves as a technical consultant to a variety
of United States and foreign corporations.
Mr. Merszei also serves on the Board of
Directors of the Budd Company, Hong Leong
Corporation, Thyssen Budd Automotive
Corporation and Thyssen Henschel America,
Inc.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF
EACH OF THE NOMINEES DESCRIBED ABOVE.
COMMITTEES OF THE BOARD OF DIRECTORS
There are three standing committees of the Board of Directors: the
Executive, Finance and Nominating Committee ("Executive Committee"); the Audit
Committee; and the Corporate Compensation and Benefits Committee ("Compensation
Committee").
EXECUTIVE COMMITTEE:
The present members of the Executive Committee are David H. Murdock,
Chairman, Mike Curb and Richard M. Ferry. The primary purposes of the Committee
are (1) to exercise, during intervals between meetings of the Board of Directors
and subject to certain limitations, all of the powers of the full Board; (2) to
monitor and advise the Board on strategic business and financial planning for
the Company; and (3) to deal with matters relating to the directors of the
Company. During the 1998 fiscal year, the committee did not meet, but acted by
unanimous written consent. The Executive Committee will consider nominees, if
any, for the election to the Board of Directors who are recommended by
stockholders in accordance with the provisions of the Company's By-Laws, which
provisions are described above under "General Information".
8
<PAGE>
AUDIT COMMITTEE:
The Audit Committee is comprised entirely of directors who are not employees
or former employees of the Company. The present members of the Audit Committee
are Richard M. Ferry, Chairman, Elaine L. Chao and James F. Gary. The Committee
is responsible for monitoring and reviewing accounting methods adopted by the
Company, internal accounting procedures and controls, and audit plans. The Audit
Committee receives directly the reports of the Company's independent public
accountants and internal audit staff. It meets periodically both with the
independent public accountants and internal auditors to review audit results and
the adequacy of the Company's system of internal controls. The Audit Committee
also recommends to the Board the selection of the Company's independent public
accountants and auditors. During the 1998 fiscal year, the Committee held four
meetings.
COMPENSATION COMMITTEE:
The Compensation Committee is comprised entirely of directors who are not
employees or former employees of the Company. The present members of the
Compensation Committee are James F. Gary, Chairman, Mike Curb and Zoltan
Merszei. This Committee is responsible for reviewing the compensation and
benefits policies and practices of the Company and overseeing its employee stock
and cash incentive plans. During the 1998 fiscal year, the Committee held three
meetings.
MEETINGS OF THE BOARD OF DIRECTORS
During the 1998 fiscal year, there were six meetings of the Board of
Directors. The incumbent directors attended at least 75% of the aggregate number
of meetings of the Board of Directors and of the committees on which they
served.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that executive
officers, directors, and holders of more than 10% of a company's registered
class of securities file reports of their ownership of a company's securities
with the SEC. Based on a review of these reports or written representations from
certain reporting persons that no Forms 5 were required, the Company believes
that its reporting persons complied with all applicable filing requirements.
REMUNERATION OF DIRECTORS
Directors who are not employees of the Company ("Non-Employee Directors")
are compensated for their services as follows:
- An annual retainer fee of $24,000, payable in equal quarterly
installments.
- A fee of $2,000 for each regularly scheduled meeting of the Board of
Directors attended, and a fee of $500 for each telephonic meeting of the
Board of Directors in which the Non-Employee Director participates.
- A fee of $1,000 for each committee meeting attended, and a fee of $2,500
per year is paid to chairpersons of the Audit and Compensation Committees.
- An annual stock option grant of 1,500 options pursuant to the Non-Employee
Directors Stock Option Plan approved by stockholders in 1995. The options
become exercisable in three equal annual installments and have a ten-year
term, subject to earlier termination upon termination of service. (On
February 17, 1998, Non-Employee Directors received an annual grant of
1,500 options at an exercise price of $54.812 (the market price)).
9
<PAGE>
Pursuant to the Company's Non-Employee Directors Deferred Stock and Cash
Compensation Plan, one-half of each Non-Employee Director's annual retainer fee
is automatically allocated to stock units payable solely in Common Stock
following a director's termination of service. Non-Employee Directors may elect
to receive their remaining compensation in cash or to defer all or part of their
remaining compensation in additional stock units or deferred cash accounts.
During 1998, deferred cash accounts in the plan were credited with an interest
rate of approximately 7.4%.
The reasonable expenses incurred by each director in connection with his or
her duties as a director are also reimbursed by the Company, including the
expenses incurred by directors' spouses in accompanying the directors to one
Board meeting each year. A Board member who is also an employee of the Company
does not receive compensation for service as a director.
COMPENSATION OF EXECUTIVE OFFICERS
Except as noted, the following table sets forth for the Company's fiscal
years ended January 2, 1999, January 3, 1998, December 28, 1996 in prescribed
format, the compensation for services in all capacities to the Company and its
subsidiaries of those persons who were at January 2, 1999: the Chief Executive
Officer and the other four most highly compensated executive officers of the
Company and its subsidiaries (the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION AWARDS
ANNUAL COMPENSATION -------------------------------
------------------------------------------------ RESTRICTED ALL
OTHER STOCK SECURITIES OTHER
NAME AND BONUS $ ANNUAL AWARD(S) UNDERLYING COMP.
PRINCIPAL POSITION YEAR SALARY $ (1) (2) COMP. $ (3) $ OPTIONS (#) $ (4)
- ------------------------------ ----- ------------ ---------- ------------- -------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
David H. Murdock (5).......... 1998 $ 800,000 $0 $0 $0 75,000 $0
Chairman & CEO 1997 $ 757,692 $612,150 $0 $0 40,000 $0
1996 $ 700,000 $630,000 $0 $0 90,000 $0
David A. DeLorenzo............ 1998 $ 557,692 $0 $0 $0 50,000 $4,800
President & COO 1997 $ 531,731 $291,500 $0 $0 20,000 $4,750
1996 $ 500,000 $300,000 $201,793(6) $0 40,000 $4,500
Lawrence A. Kern (7).......... 1998 $ 276,923 $225,000 $0 $0 8,200 $4,800
President - Dole Fresh 1997 $ 261,058 $206,250 $0 $0 8,000 $4,750
Vegetables
Peter M. Nolan (8)............ 1998 $ 238,462 $187,500 $0 $0 7,200 $4,800
President - Dole Packaged 1997 $ 249,519 $176,250 $0 $0 7,200 $4,750
Foods
J. Brett Tibbitts............. 1998 $ 252,308 $0 $0 $0 8,900 $4,800
Vice President - Corporate 1997 $ 253,654 $145,750 $0 $0 5,600 $4,750
General Counsel & Corporate 1996 $ 220,000 $120,000 $0 $0 7,500 $4,500
Secretary
</TABLE>
- ------------------------
(1) 1997 salaries reflect that the Company's 1997 fiscal year contained 53
weeks. The Company's 1998 and 1996 fiscal years contained 52 weeks.
(2) Bonus amounts shown reflect payments made in the subsequent year with
respect to performance for the identified year.
(3) Does not include perquisites which total the lesser of $50,000 or 10% of the
reported annual salary and bonus for any year.
10
<PAGE>
(4) The amounts shown in this column include contributions by the Company under
the Company's tax deferred investment plans for the benefit of the
individuals listed, but do not include payments made to Mr. Murdock under
the Company's defined benefit pension plan. (See "Pension Plans" at page
14.)
(5) Mr. Murdock also holds positions with certain business entities he owns that
are not controlled directly or indirectly by the Company, which other
entities pay compensation and may provide fringe benefits to Mr. Murdock for
his services. Mr. Murdock is also Chairman and Chief Executive Officer of
Castle & Cooke, Inc., which pays compensation and benefits to him. The Audit
Committee of the Board of Directors has approved Mr. Murdock's having such
other employment arrangements.
(6) The reported amount includes: (i) a pre-tax "gross up" of $201,793 for 1996
associated with a relocation loan in 1991, and inclusive within such amount,
(ii) imputed interest on the balance of that loan of $7,810 for 1996
(representing an imputed rate of 7.81% per annum, the applicable federal
rate at the time the loan was made). However, Mr. DeLorenzo received no cash
compensation associated with such imputed interest, and such amount was not
considered additional taxable compensation to Mr. DeLorenzo under the
Internal Revenue Code. Mr. DeLorenzo paid off the loan in full in 1996.
(7) Mr. Kern became an executive officer in October 1997.
(8) Mr. Nolan became an executive officer in October 1997.
EMPLOYMENT, SEVERANCE AND CHANGE OF CONTROL ARRANGEMENTS
Some of the Company's benefit plans (including the 1991 Stock Option and
Award Plan, as amended, and the 1998 Combined Annual and Long-Term Incentive
Plan for Executive Officers ("1998 Plan")) provide for an acceleration of
benefits and various other customary adjustments if a change in control or other
reorganization occurs. Pursuant to the 1998 Plan, if a participant's employment
is terminated for certain reasons, pro-rata payments may be made prior to the
completion of the applicable year or cycle, provided the Compensation Committee
determines that the applicable performance goals have been met through the date
of such termination or event and provided that the amount of any early payout is
proportionately reduced to reflect the time value of the early payout.
OPTION/SAR GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------------------
PERCENT OF POTENTIAL REALIZABLE
TOTAL VALUE AT ASSUMED ANNUAL
NUMBER OF OPTIONS/SARS RATES OF STOCK
SECURITIES GRANTED TO EXERCISE OR PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES IN BASE PRICE OPTION TERM (1)(2)
OPTIONS/SARS LAST FISCAL ($/SH) EXPIRATION ---------------------------------------
NAME GRANTED(#) (3)(4) YEAR (3)(4) DATE (5) 0%($) 5%($) 10%($)
- ---------------------------- ----------------- -------------- ----------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
David H. Murdock............ 75,000 12.5% $ 52.312 2/10/08 0 $ 2,467,425 $ 6,252,975
David A. DeLorenzo.......... 50,000 8.3% $ 52.312 2/10/08 0 $ 1,644,950 $ 4,168,650
Lawrence A. Kern............ 8,200 1.4% $ 52.312 2/10/08 0 $ 269,772 $ 683,659
Peter M. Nolan.............. 7,200 1.2% $ 52.312 2/10/08 0 $ 236,873 $ 600,286
J. Brett Tibbitts........... 8,900 1.5% $ 52.312 2/10/08 0 $ 292,801 $ 742,020
</TABLE>
- ------------------------
* Fair Market Value of Common Stock on December 31, 1998, was $30.00, the last
trading day of the Company's 1998 fiscal year.
(1) The total gain to all stockholders would be $1,876,851,563 at 5% annual
appreciation and $4,756,394,488 at 10% annual appreciation. The gain for the
above officers represents less than 1% of the gain to all stockholders.
11
<PAGE>
(2) The amounts under the columns labeled "5%" and "10%" are included pursuant
to certain rules promulgated by the SEC and are not intended to forecast
future appreciation, if any, in the price of the Company's Common Stock.
Such amounts are based on the assumption that the named persons hold the
options granted for their full ten-year term. The actual value of the
options will vary in accordance with the market price of the Company's
Common Stock. The column headed "0%" is included to demonstrate that the
options were granted at fair market value and optionees will not recognize
any gain without an increase in the stock price, which increase benefits all
stockholders commensurately. Except as noted in footnote 4 below, the terms
of the option grants require a 20% increase over the exercise price before
any vesting occurs.
(3) Stock options were granted under the Company's 1991 Stock Option and Award
Plan, as amended (the "1991 Plan"). Options under the 1991 Plan may result
in payments following the resignation, retirement or other termination of
employment with the Company or its subsidiaries or as a result of a change
in control of the Company (as defined in the 1991 Plan). Vested options
under the 1991 Plan may be exercised within a period of 12 months following
a termination by reason of death, disability or retirement, and three months
following a termination for other reasons. The 1991 Plan permits the
Compensation Committee, which administers the 1991 Plan, to accelerate,
extend or otherwise modify benefits payable under the applicable awards in
various circumstances, including a termination of employment or change in
control. Under the 1991 Plan, if there is a change in control of the
Company, all options become immediately exercisable.
(4) Options vest according to a schedule reflecting specific stock appreciation
hurdles. Except as noted, none of the options set forth in the table vest
until the stock price reaches $62.75, a 20% increase over the exercise price
which reflects the market price of the Company's Common Stock on the date of
grant. Options will vest in 25% increments upon achieving or exceeding
specified price hurdles (ranging from $62.75 to $70.625) for a period of 30
consecutive trading days. To preserve the favorable accounting treatment to
the Company generally associated with these stock option grants, any options
which have not previously vested will become fully vested three (3) months
before the end of the 10 year term.
(5) Options were granted for a term of 10 years, subject to earlier termination
in certain events such as termination of employment. (See footnote 3 above.)
AGGREGATED OPTION/SAR EXERCISES IN THE LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUE
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING VALUE OF UNEXERCISED
OPTIONS/SARS AT IN-THE-MONEY OPTIONS
SHARES FY-END(#) (1) AT FY-END ($)
ACQUIRED ON --------------- --------------------
EXERCISE VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE(#) UNEXERCISABLE($) (2)
- ------------------------------------------------------------ ----------- --------------- --------------- --------------------
<S> <C> <C> <C> <C>
David H. Murdock............................................ 53,560 $ 285,368 295,912/150,000 $391,804/$0
David A. DeLorenzo.......................................... 59,300(3) $1,567,345(3) 112,668/85,000 $ 56,272/$0
Lawrence A. Kern............................................ 0 0 35,422/23,200 $ 74,195/$0
Peter M. Nolan.............................................. 0 0 30,509/20,100 $ 64,787/$0
J. Brett Tibbitts........................................... 2,465(3) $ 54,534(3) 27,428/16,850 $ 50,127/$0
</TABLE>
- ------------------------
(1) The Company has two stock option plans under which awards are outstanding:
the 1982 Plan and the 1991 Plan. Options under the 1991 Plan are described
in footnote 3 to the table entitled "Option/SAR Grants In The Last Fiscal
Year". All options available under the 1982 Plan have been granted. Vested
options under the 1982 Plan may result in payments following resignation,
retirement or other
12
<PAGE>
termination of employment with the Company or its subsidiaries or as a
result of a change in control of the Company. Options under the 1982 Plan
may be exercised within a period of 12 months following a disability, by the
optionee's estate at any time the option could have been exercised by the
optionee (if the optionee dies while an employee of the Company) and within
a period of three months following a termination for all other reasons.
Under the 1982 Plan, if there is a change in control of the Company (as
defined in the 1982 Plan), all options become immediately exercisable.
(2) This amount represents solely the difference between the market value
($30.00) on the last trading day of the Company's fiscal year, December 31,
1998, of those unexercised options which had an exercise price below such
market price (i.e., "in-the-money options") and the respective exercise
prices of the options. No assumptions or representations regarding the
"value" of such options are made or intended.
(3) As a result of the exercise of the 9,300 options, Mr. DeLorenzo received
4,581 stock units under the Company's Stock Ownership Enhancement Program.
As a result of the exercise of 1,661 options, Mr. Tibbitts received 705
stock units under the Program. The stock units represent deferred option
gain compensation, are payable solely in Common Stock following a specified
date in the future and earn dividend equivalents in the form of additional
stock units. For a description of this plan, see footnote 10 on page 5.
LONG-TERM INCENTIVE PLAN-
AWARDS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
ESTIMATED PAYOUT OPPORTUNITY (CYCLE 1) ESTIMATED PAYOUT OPPORTUNITY (CYCLE 2)
-------------------------------------------------- -------------------------------------------------
PERFORMANCE FORMULA FORMULA FORMULA PERFORMANCE FORMULA FORMULA FORMULA
NAME PERIOD MINIMUM(2) TARGET(3) MAXIMUM(3) PERIOD MINIMUM(2) TARGET(3) MAXIMUM(3)
- ------------------------- -------------- ---------- -------- ----------- -------------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David H. Murdock......... 1998-1999 $16,667 $201,333 $518,667 1998-2000 $16,667 $533,333 $1,666,667
David A. DeLorenzo....... 1998-1999 $12,500 $151,000 $389,000 1998-2000 $12,500 $400,000 $1,250,000
Lawrence A. Kern......... 1998-1999 $4,375 $52,850 $136,150 1998-2000 $4,375 $140,000 $ 437,500
Peter M. Nolan........... 1998-1999 $3,646 $44,042 $113,458 1998-2000 $3,646 $116,667 $ 364,583
J. Brett Tibbitts........ 1998-1999 $2,208 $26,677 $ 68,723 1998-2000 $2,208 $70,667 $ 220,833
</TABLE>
- ------------------------
(1) The reported long-term awards represent unvested amounts determined for one
two-year performance period (1998-1999) ("Cycle 1"), and one three-year
performance period (1998-2000) ("Cycle 2"). The applicable business criteria
for awards granted in 1998 were earnings per share at the consolidated level
(50% weighting) and relative total stockholder return ("RTSR") measured
against a peer group of companies in the Mid Cap Foods Index (50%
weighting). The reported payout opportunities reflect the formula driven
adjustment to the payment opportunities for each year in the performance
cycle that will be made based on the consistency of performance relative to
applicable performance targets over the entire cycle. If the average
performance during the performance cycle is below target, the payment
opportunities will be reduced, and if the average performance is above
target, the payment opportunities will be increased. Subject to other
conditions of the award (including continued service), one-third of the
Cycle 1 awards and one-third of the Cycle 2 awards vest in early 2000 and
2001, respectively, with one-third of the remaining payment opportunity
vesting each respective year thereafter. Awards may become immediately
payable in the event of termination of service or a change in control. The
formula-determined amount of an award may be reduced by the Compensation
Committee based upon an evaluation of individual performance criteria and/or
other objective and subjective factors. Because of these contingencies and
other conditions, the specific benefits to be paid to participants are not
determinable in advance.
13
<PAGE>
(2) Requires attainment of minimum target performance in one of the business
criteria in one of the years in the applicable performance cycle.
(3) Formula Target and Formula Maximums include the effect of actual 1998
results on aggregate payment opportunities, and thus are different from the
chart in the 1998 proxy statement dated April 6, 1998 which did not contain
full-year 1998 results. Amounts presented assume no increase in base
salaries after 1998.
If minimum target performance is not achieved on either of the business
criteria in all of the years of a cycle, no amount will be payable for that
award cycle. Also, there will be no award payout in respect of the RTSR
criterion for a particular cycle if performance of the Company is less than the
50th percentile of the companies in the MidCap Foods Index during the cycle.
The business criteria and performance targets relative to any business
criterion for a given fiscal year in a cycle may vary from cycle to cycle, as
the Committee prospectively establishes those factors for new cycles in which
the same fiscal year is included under the 1998 Plan.
PENSION PLANS
The Company maintains a number of noncontributory pension plans which
provide benefits, following retirement at age 65 or older with one or more years
of credited service (or age 55 with five or more years of credited service), to
salaried, non-union employees of the Company on U.S. payrolls, including
executive officers of the Company. Each plan provides a monthly pension to
supplement personal savings and Social Security benefits. The following table
shows the estimated annual benefits payable under the Company's corporate
pension plan in which the Named Executive Officers participated in 1998:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
----------------------------------------------------------
REMUNERATION 15 20 25 30 35
- ----------------------------------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$300,000............................................. $ 49,500 $ 70,950 $ 92,400 $ 113,850 $ 135,300
$400,000............................................. $ 66,000 $ 94,600 $ 123,200 $ 151,800 $ 180,400
$500,000............................................. $ 82,500 $ 118,250 $ 154,000 $ 189,750 $ 225,500
$600,000............................................. $ 99,000 $ 141,900 $ 184,800 $ 227,700 $ 270,600
$700,000............................................. $ 115,500 $ 165,550 $ 215,600 $ 265,650 $ 315,700
$800,000............................................. $ 132,000 $ 189,200 $ 246,400 $ 303,600 $ 360,800
$900,000............................................. $ 148,500 $ 212,850 $ 277,200 $ 341,550 $ 405,900
$1,000,000........................................... $ 165,000 $ 236,500 $ 308,000 $ 379,500 $ 451,000
$1,100,000........................................... $ 181,500 $ 260,150 $ 338,800 $ 417,450 $ 496,100
$1,200,000........................................... $ 198,000 $ 283,800 $ 369,600 $ 455,400 $ 541,200
$1,300,000........................................... $ 214,500 $ 307,450 $ 400,400 $ 493,350 $ 586,300
$1,400,000........................................... $ 231,000 $ 331,100 $ 431,200 $ 531,300 $ 631,400
$1,500,000........................................... $ 247,500 $ 354,750 $ 462,000 $ 569,250 $ 676,500
</TABLE>
The above table shows the estimated annual retirement benefits payable as
straight life annuities without offsets for Social Security or other amounts
under this plan, assuming retirement at age 65, to persons in specified
compensation and years of service classifications. The plan covers the following
types of compensation paid by the Company: base pay, bonus, performance
incentives (if any) and severance pay.
Each year's accrued benefit under the plan is 1.1% of final average annual
compensation multiplied by years of service, plus .33% of final average annual
compensation multiplied by years of service in excess of 15 years. Benefits
accrued as of March 31, 1992 under the prior benefit formula serve as minimum
14
<PAGE>
entitlements. The credited years of service and ages as of December 31, 1998 for
individuals named in the Summary Compensation Table are as follows: Mr. Murdock
(age 75)--13 years; Mr. DeLorenzo (age 52)-- 28 years; Mr. Kern (age 51)--6
years; Mr. Nolan (age 56)--6 years; and Mr. Tibbitts (age 43)--11 years.
Assuming these individuals remain employed by the Company until age 65 (or
later) and continue to receive compensation equal to their 1998 compensation
from the Company, their annual retirement benefits at age 65 will approximate:
Mr. DeLorenzo--$481,641; Mr. Kern--$98,724; Mr. Nolan--$67,652; and Mr.
Tibbitts--$161,556. As required by the Internal Revenue Code, Mr. Murdock, who
is presently over the age of 70 1/2, is receiving his current annual retirement
benefit under the pension plan of $208,604.
Generally, the Internal Revenue Code places an annual maximum limit of
$130,000 (at December 31, 1998) on the benefits available to an individual under
the Company's pension plans. Furthermore, the Internal Revenue Code places an
annual maximum limit of $160,000 (at December 31, 1998) on compensation which
may be considered in determining a participant's benefit under qualified
retirement programs. If an individual's benefit under a plan exceeds the maximum
annual benefit limit or the maximum compensation limit, the excess will be paid
by the Company from an unfunded excess and supplemental benefit plan.
CERTAIN TRANSACTIONS
TRANSACTIONS WITH CASTLE & COOKE, INC.
On December 28, 1995, the Company distributed to stockholders all of the
common stock of Castle & Cooke, Inc. ("Castle"), the Company's former real
estate and resorts operations (the "Distribution"). Mr. Murdock is also Chairman
and Chief Executive Officer of Castle and beneficially owns approximately 27% of
its outstanding common stock.
As partial consideration to the Company for the Distribution, Castle issued
to the Company a promissory note in the principal amount of $10 million. The $10
million note is payable in December 2000, and bears interest at the rate of 7%
per annum, payable quarterly. Castle incurred $700,000 in interest expenses for
the 1998 calendar year to the Company pursuant to the terms of the $10 million
note.
Pursuant to the Distribution, the Company and Castle also each hold a fifty
percent interest in an airplane, which was formerly owned solely by Dole. The
Company's and Castle's proportionate share of the operating costs for the
aircraft during 1998 were $879,662 and $641,078, respectively. Pursuant to the
agreements governing the Distribution, the Company paid Castle $112,532 for
certain general and administrative expenses provided to the Company by Castle
during 1998, including land management and workers' compensation services.
Castle paid the Company $181,732 for certain general and administrative expenses
for various services provided to Castle by the Company during 1998, including
public relations, merger and acquisition services and asset management. During
1998, the Company leased office space from Castle in Bakersfield, California,
and leased agricultural land on Oahu, Hawaii, and paid Castle $620,911 pursuant
to such leases. The Company also paid Castle $155,261 during 1998 for holding
various meeting and sales functions at Castle's Lanai resort hotels. Castle
purchased $228,889 of products from Dole for its retail store and hotels in
Hawaii, and also paid Dole $27,428 in licensing fees pursuant to a long-term
trademark license agreement. Castle also received a general excise tax refund of
$777,000 from the State of Hawaii that pursuant to the agreements governing the
Distribution was paid to Dole.
HEADQUARTERS TRANSACTIONS
During 1998, Castle and a third party bank (the "Bank") completed a
transaction whereby the Bank purchased approximately ten acres of land from
Castle in Westlake Village, California. This ten acre property was part of a
thirty acre parcel owned by Castle. The Bank is constructing a corporate
headquarters building for Dole on the site (the "Headquarters Site"), and during
1998, Dole and the Bank entered into a lease whereby Dole will lease the
building from the Bank upon its completion. The sales
15
<PAGE>
price between Castle and the Bank for the land was $5,249,107. This price was
negotiated by senior officers of the parties with reference to appraisals done
by independent third parties.
In January, 1999, Dole also paid Castle $2,048,442, which represented a net
payment for certain amounts the parties each owed to the other concerning the
Headquarters Site and the remainder of the Westlake Village property. The net
payment represented: (1) certain payments ($2,668,985) to Castle to reimburse it
for development costs incurred by Castle on the Headquarters Site prior to the
time it was sold to the Bank; (2) certain lease payments ($232,631) to Castle
representing lease periods prior to the time the Headquarters Site was sold to
the Bank; less (3) certain payments ($853,174) to Dole representing development
costs incurred on the portion of the Westlake Village property which continues
to be owned by Castle.
In September 1998, Dole sold a property it owned in North Carolina to a
third party for $3,056,979. (The Company had paid $2,763,000 for the property in
January 1998.) Castle retained the services of this third party as an unrelated,
qualified intermediary in a tax deferred exchange for the Headquarters Site
property discussed above. The sales price was determined by senior officers of
the Company, and represented the cost of the property to Dole, plus a payment of
7% interest from the date of purchase until the closing and reimbursement of
certain expenditures made by Dole on the property.
OTHER TRANSACTIONS
David H. Murdock, the Company's Chairman and Chief Executive Officer, owns,
among other businesses, a transportation equipment leasing company, a private
dining club and a private country club, which supply products and provide
services to numerous customers and patrons. During fiscal 1998, the Company paid
the transportation equipment leasing company $1,982,572 for the rental of
chassis and generator sets, and paid the private dining club and the country
club $88,517 for Company events that took place at these facilities. Mr. Murdock
paid the Company and Castle $250,448 for the incremental cost of utilizing the
airplane referenced above for personal purposes during 1998. Mr. Murdock also
reimbursed the Company $284,572 for certain shared services between the Company
and one of his private companies which maintain offices in the same building
based upon time and space utilized of the shared services. Such transactions in
which Mr. Murdock or his affiliates had an interest were reviewed by the Audit
Committee of the Board of Directors.
16
<PAGE>
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED, THAT MIGHT INCORPORATE FUTURE FILINGS, INCLUDING THIS
PROXY STATEMENT, IN WHOLE OR IN PART, THE FOLLOWING COMPENSATION COMMITTEE
REPORT AND THE FOLLOWING PERFORMANCE GRAPH SHALL NOT BE INCORPORATED BY
REFERENCE INTO ANY SUCH FILINGS OR ANY FUTURE FILINGS, EXCEPT TO THE EXTENT THE
COMPANY EXPRESSLY INCORPORATES SUCH REPORT OR GRAPH BY REFERENCE THEREIN. THE
REPORT AND GRAPH SHALL NOT BE DEEMED SOLICITING MATERIAL OR OTHERWISE DEEMED
FILED UNDER EITHER OF SUCH ACTS.
CORPORATE COMPENSATION AND BENEFITS COMMITTEE
REPORT TO STOCKHOLDERS
COMPENSATION PHILOSOPHY
The Company's compensation philosophy is to relate the compensation of the
Company's executive officers to measures of Company performance that contribute
to increased value for the Company's stockholders.
GOALS
To assure that compensation policies appropriately consider the value the
Company creates for stockholders, the Company's compensation philosophy for
executive officers takes into account the following goals:
- Executive officer compensation must be focused on enhancing stockholder
value
- Compensation must reflect a competitive and performance-oriented
environment that motivates executive officers to achieve a high level of
individual, business unit and corporate results in the business
environment in which they operate
- Incentive-based compensation must be contingent upon the performance of
each executive officer against financial and strategic performance goals
- The Company's compensation policies must enable the Company to attract and
retain top quality management
The Compensation Committee periodically reviews the components of
compensation for the Company's executive officers on the basis of this
philosophy. Further, as the situation warrants, the Compensation Committee also
retains the services of a qualified compensation consulting firm to provide
recommendations to enhance the linkage of executive officer compensation to the
above goals and to obtain information as to how the Company's compensation of
executive officers compares with peer companies.
The United States Internal Revenue Service has promulgated regulations
affecting all publicly held United States corporations (the "162(m)
Regulations") that interpret limits on the tax deductibility of compensation in
excess of $1 million per year for certain executive officers. The Compensation
Committee considers the 162(m) Regulations as one of the factors it reviews with
respect to compensation matters. The Compensation Committee, generally speaking,
intends to limit compensation to amounts deductible under the 162(m)
Regulations, and the Compensation Committee believes that all compensation paid
to executive officers in 1998 is deductible under the 162(m) Regulations.
However, changes in the tax laws or interpretations, other priorities or special
circumstances may result in or warrant exceptions.
EXECUTIVE STOCK OWNERSHIP GUIDELINES
To further support the Company's goal of achieving a strong link between
stockholder and executive interests, the Company has adopted stock ownership
guidelines for senior executives. Senior executives have been asked to make
(over a three to five year period of time) and hold investments in Company stock
or stock equivalents valued at between 50% to 100% of their base salaries.
Unexercised stock options are
17
<PAGE>
not counted for purposes of meeting the ownership guidelines. Guidelines
generally will apply to all vice presidents and above, with ownership targets
increasing with level of responsibility.
In order to assist senior executives in meeting the stock ownership
guidelines, the Company, in July 1997, adopted the Stock Ownership Enhancement
Program. This Program enables executives to defer compensation that would
otherwise be realized on option exercises and at some specified future date
receive the deferred compensation in the form of Company Common Stock. Assuming
certain requirements are met, the executive participates in the Program by
alternatively exercising the option and instead of receiving Common Stock,
receives a certain number of "stock units" derived by dividing the price of the
Common Stock on the date of the exercise into the amount by which the exercised
stock option was "in the money". The "stock units" accrue dividend equivalents
and are payable solely in Common Stock following a specified date in the future
which is selected by the executive at the time of exercise.
EXECUTIVE COMPENSATION COMPONENTS
The Company annually evaluates the competitiveness of its executive
compensation program (base salary, annual bonus, and long-term incentives)
relative to comparable publicly traded companies.
A group of 12 food-processing companies (or "peer group") is used to
annually evaluate the compensation for proxy-named officers. The compensation
peer group was identified by the Compensation Committee's executive compensation
consulting firm through a comparability screening process that considered such
variables as revenue size, product line diversity, and geographic scope of
operation. The peer group is reviewed periodically and changes may be made based
on the comparability screening process. Eight of the companies in the S&P Foods
Index met the comparability screening criteria and are included in the
compensation peer group.
Broader published surveys of food processing companies, as well as industry
in general, are used to evaluate the competitiveness of total compensation for
other Company executives.
Based on an analysis conducted by the Compensation Committee's executive
compensation consultant in 1998, the aggregate pay package for executive
officers of the Company, consisting of salary, annual bonus, stock options, and
a target long-term incentive, generally falls between the 50th and 75th
percentile of the Company's peers. Generally speaking, 75th percentile pay
levels can only be achieved if the Company's aggressive goals associated with
its incentive compensation plans are attained. Pay levels for each executive
officer other than the Chairman and CEO largely reflect the recommendation of
the Chairman and CEO based on individual experience and breadth of knowledge,
internal equity considerations, and other subjective factors. The pay package
for the Chairman and CEO for 1998 was based on deliberations of the Compensation
Committee of the Company, as described below under "CEO Compensation".
Each component of the total executive compensation package emphasizes a
different aspect of the Company's compensation philosophy:
- BASE SALARY. Base salaries for executive officers (other than the Chairman
and CEO whose salary is discussed below) are initially set upon hiring by
management (subject to periodic review by the Compensation Committee)
based on recruiting requirements (i.e., market demand), competitive pay
practices, individual experience and breadth of knowledge, internal equity
considerations, and other subjective factors.
Increases to base salary are determined primarily on the basis of
individual performance and contribution to the Company and involve the
application of both quantifiable and subjective criteria. Salary reviews
for senior executives typically occur at intervals greater than twelve
months. Four of the officers named in the Summary Compensation Table
received a base salary increase in 1998.
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- ANNUAL INCENTIVES. The Company relies to a large degree on annual
incentive compensation to attract and retain executive officers of
outstanding abilities and to motivate them to perform to the full extent
of these abilities.
In 1998, executive officers were eligible to participate in the annual
portion of the 1998 Combined Annual and Long-Term Incentive Plans for
Executive Officers ("Annual Award") or a similar incentive plan for a
broader group of officers. While comparable in most respects, features of
the stockholder-approved Annual Award are more rigidly defined than other
incentive plans sponsored by the Company, in an effort to satisfy the
requirements for deductibility under the 162(m) Regulations. All of the
executives listed in the Summary Compensation Table were eligible to
participate in the Annual Award.
Bonus opportunities for executive officers, as a percentage of base
salary, ranged from 25% to 75% (37.5% to 112.5% for the Chairman and CEO),
depending on the Company's performance relative to performance targets set
in the first quarter of the applicable year. Bonuses generally are payable
only if the specified minimum level of performance is realized and may be
increased to maximum levels only if substantially higher performance
levels are attained. Specific target percentages for each individual are
determined on the basis of competitive bonus levels (as a percent of
salary), level of responsibility, and other subjective factors. To provide
greater flexibility, the Compensation Committee may include performance
goals to permit awards at lower levels in appropriate circumstances.
Generally speaking, each individual's maximum annual cash bonus equals
1.5x his or her target award level. The maximum bonus is payable only if
exceptional Company and/or divisional performance levels against
pre-determined goals are achieved.
In 1998, the bonus opportunity for Messrs. Murdock, DeLorenzo, and
Tibbitts was based upon return on average common equity ("ROE"). The
Company did not reach the financial threshold necessary to make any
payments under the Annual Award.
In 1998, the bonus opportunity for Messrs. Kern and Nolan was based upon
the net income-ROI of their business units, Fresh Vegetables and Packaged
Foods--North America, respectively. Both Messrs. Kern and Nolan received
the maximum payable under the Annual Award, or 1.5x their target award
level, due to the performance of their business units.
- LONG-TERM INCENTIVES. The Company provides two forms of long-term
incentive opportunity for senior executives: a stock option plan and a
long-term incentive plan ("Long-Term Award"). Both plans were previously
approved by stockholders.
OPTIONS. Stock option grants represent incentives tied to future stock
appreciation. Stock options are granted periodically to provide executives
with a direct incentive to enhance the value of the Common Stock.
Historically, awards have been granted at the fair market value of the
Common Stock on the date of grant and have generally vested over a
three-year period with a term of ten years.
Since 1995, the Company has imposed specific stock appreciation hurdles
for senior management. None of the options granted in 1998 will vest until
the stock price reaches certain stock price targets (see table entitled
"Option/SAR Grants In The Last Fiscal Year" at page 11). Options will vest
in 25% increments upon achieving or exceeding each specified price hurdle
for a period of thirty consecutive trading days. To preserve the favorable
accounting treatment generally associated with these stock option grants,
options will become fully vested three months before the end of their
ten-year terms if the individual is still employed by the Company.
Options are granted at the discretion of the Compensation Committee (based
substantially on the recommendations of the Chairman and CEO as to grants
for other officers) to key management
19
<PAGE>
positions above a specified salary level. Guidelines for the size of each
grant are generally based on a multiple of base salary divided by the fair
market value of the stock at date of grant, and are consistent with
competitive pay practices.
Guidelines for stock option multiples (which ranged from 0.3x to 4.7x
salary) were derived from a combination of competitive market data and
subjective judgment. In general, the multiples for individual positions
increased with the level of responsibility and the perceived impact of
each position on the strategic direction of the Company. The Chairman's
recommendations for individual option grants also reflected his assessment
of the effect of promotions, individual performance, and other factors. An
individual's outstanding stock options and current stock ownership
generally were not considered when making stock option awards. Individual
option grant multiples in 1998 generally were targeted at the median of
peer companies.
LONG-TERM INCENTIVE PLAN. Under the Long-Term Awards, the underlying
performance measures and payout provisions were designed in a manner which
the Compensation Committee believes will continue to further align
executive officer compensation with stockholder returns on a long-term
basis. The Long-Term Plan uses three year rolling cycles with a look-back
provision at the end of each third year. A participant's payment
opportunity is adjusted up or down based on the average of the performance
over the prior three years. One-third of the participant's adjusted
payment opportunity vests at the end of each third year, with one-third of
the remaining payment vesting annually thereafter. To date, there have
been no payouts under the Long-Term Award.
The Compensation Committee authorized all executive officers to
participate in the Long-Term Award. The payment opportunity under these
awards was based 50% on performance relative to earnings per share ("EPS")
targets, and 50% on performance relative to targets for relative total
stockholder return ("RTSR") as measured against a peer group of companies
in the MidCap Foods Index. The MidCap Foods Index was chosen to evaluate
the Company's performance against a stock market index of food companies
which includes Dole. Full information on the MidCap Foods Index is not
available for periods prior to August 1994; therefore the Company has not
included this index in the Performance Graph on page 22.
After year-end, the Compensation Committee concluded that the Company's
performance against the EPS and RTSR performance measures did not meet
minimum threshold requirements and therefore, no accruals will be made to
the participants' award accounts for 1998 under the Long-Term Award
program.
CEO COMPENSATION
The Compensation Committee reviewed Mr. Murdock's compensation relative to
the compensation (base salary, annual and long-term incentives) of the peer
group. It is the Compensation Committee's intent to target aggregate
compensation for Mr. Murdock at approximately the median of the peer group. In
establishing Mr. Murdock's compensation, the Compensation Committee considered
his responsibilities with other companies and determined that Mr. Murdock
devotes the time that is necessary to Dole for the effective performance of his
duties.
Under the terms of the Annual Plan, Mr. Murdock was eligible for an annual
bonus ranging from 37.5% to 112.5% of base salary. Mr. Murdock's total 1998
bonus opportunity was based wholly on ROE. As discussed previously, based upon
1998 results, Mr. Murdock was not eligible for and thus received no bonus.
Acting on the recommendation of the Compensation Committee's consultant, in
1998, the Compensation Committee approved a stock option grant for Mr. Murdock
in the amount of 75,000 options. This grant was made at fair market value on the
date of grant as part of the normal grant process, reflecting a salary multiple
of approximately 4.7x.
20
<PAGE>
Mr. Murdock participated in the Long-Term Award, described above under
LONG-TERM INCENTIVES, and thus is not eligible for any payment based on the
formula-determined award ending in 1998.
The Corporate Compensation and Benefits
Committee
James F. Gary, Chairman
Mike Curb
Zoltan Merszei
21
<PAGE>
PERFORMANCE GRAPH
The following graph indicates the performance of the cumulative total return
to stockholders of the Company's Common Stock (including reinvested dividends)
during the previous five years in comparison to the cumulative total return on
the Standard & Poor's 500 Stock Index and the Standard & Poor's Foods Index.
DOLE FOOD COMPANY, INC
CUMULATIVE TOTAL RETURN STOCK PRICE PERFORMANCE COMPARISON
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DOLE FOOD COMPANY S&P 500 S&P FOODS INDEX
<S> <C> <C> <C>
12/31/93 $100 $100 $100
12/31/94 $87 $101 $112
12/31/95 $156 $139 $143
12/31/96 $153 $171 $169
12/31/97 $208 $228 $242
12/31/98 $138 $294 $262
</TABLE>
- ------------------------
Assumes $100 invested on December 31, 1993 in Dole Food Company Common Stock,
the Standard & Poor's 500 Stock Index and the Standard & Poor's Foods Index and
assumes reinvestment of dividends at the frequency with which dividends are
paid.
22
<PAGE>
PROPOSAL 2
ELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS AND AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors of
the Company has appointed Arthur Andersen LLP as the Company's independent
public accountants and auditors for the 1999 fiscal year ending January 1, 2000,
subject to stockholder approval. Arthur Andersen LLP has served as the Company's
independent public accountants and auditors since 1985.
Services which will be provided to the Company and its subsidiaries by
Arthur Andersen LLP with respect to the 1999 fiscal year include the examination
of the Company's consolidated financial statements, reviews of quarterly
reports, services related to filings with the SEC and consultations on various
tax matters.
A representative of Arthur Andersen LLP will be present at the Annual
Meeting to respond to appropriate questions and to make such statements as he
may desire.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ARTHUR
ANDERSEN LLP AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS AND AUDITORS.
MISCELLANEOUS
OTHER MATTERS
If any other matters properly come before the meeting, it is the intention
of the proxy holders to vote in their discretion on such matters pursuant to the
authority granted in the proxy and permitted under applicable law.
COST OF SOLICITING PROXIES
The expenses of preparing and mailing the Notice of Annual Meeting, the
Proxy Statement and the proxy card(s) will be paid by the Company. In addition
to the solicitation of proxies by mail, proxies may be solicited by directors,
officers and employees of the Company (who will receive no additional
compensation) by personal interviews, telephone, telegraph and facsimile. The
Company has retained D. F. King & Co., Inc. to assist in the solicitation of
proxies. D. F. King & Co., Inc. will be paid approximately $5,500 plus
out-of-pocket expenses, for its services. It is anticipated that banks,
custodians, nominees and fiduciaries will forward proxy soliciting material to
beneficial owners of the Company's Common Stock and that such persons will be
reimbursed by the Company for their expenses incurred in so doing.
PROPOSALS OF STOCKHOLDERS
The 2000 Annual Meeting of Stockholders is presently expected to be held on
or about May 11, 2000. To be considered for inclusion in the Company's Proxy
Statement for the 2000 Annual Meeting, proposals of stockholders intended to be
presented at the Meeting must be received by the Corporate Secretary, Dole Food
Company, Inc., 31365 Oak Crest Drive, Westlake Village, California 91361, no
later than December 8, 1999. In addition, if the Company is not provided with
written notice of a stockholder proposal on or before February 22, 2000, proxies
solicited by the Board of Directors for the 2000 Annual Meeting of Stockholders
will confer discretionary authority to vote on the stockholder proposal if
presented at the Annual Meeting.
ANNUAL REPORTS AND FORMS 10-K
Copies of the Company's Annual Report and Form 10-K for the year ended
January 2, 1999 may be obtained without charge by writing to the Corporate
Secretary, Dole Food Company, Inc., 31365 Oak
23
<PAGE>
Crest Drive, Westlake Village, California 91361 or by telephoning requests to
818-879-6814. The Company's Annual Report and Form 10-K can also be found on the
Company's website: www.dole.com.
By Resolution of the Board of
Directors,
[SIG]
J. Brett Tibbitts
CORPORATE SECRETARY
April 7, 1999
24
<PAGE>
DETACH HERE
- ------------------------------------------------------------------------------
PROXY
PROXY
DOLE FOOD COMPANY, INC.
PROXY FOR COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints DAVID H. MURDOCK, DAVID A. DE LORENZO
and J. BRETT TIBBITTS, and each of them, as Proxies, each with full power of
substitution, and each with all powers that the undersigned would possess if
personally present, to vote all of the shares of Common Stock of Dole Food
Company, Inc. (the "Company") which the undersigned may be entitled to vote
at the Annual Meeting of Stockholders of the Company to be held at the Hyatt
Westlake Plaza, 880 South Westlake Boulevard, Westlake Village, California on
Thursday, May 13, 1999, at 10:00 a.m. local time, and any adjournments
thereof. The undersigned instructs each of said Proxies, or their
substitutes, to vote as specified by the undersigned on the reverse side and
to vote in such manner as they may determine on any other matters which may
properly come before the meeting as indicated in the Notice of Annual Meeting
of Stockholders and Proxy Statement, receipt of which is hereby acknowledged.
Election of Directors. NOMINEES:
Elaine L. Chao, Mike Curb, David A. DeLorenzo, Richard M. Ferry,
James F. Gary, Zoltan Merszei and David H. Murdock.
(IMPORTANT - TO BE SIGNED AND DATED ON REVERSE SIDE)
- ----------- -----------
SEE REVERSE PLEASE VOTE, SIGN, DATE AND PROMPTLY RETURN THIS CARD SEE REVERSE
SIDE IN THE ENCLOSED PREPAID ENVELOPE SIDE
- ----------- -----------
<PAGE>
[GRAPHIC]
DETACH HERE
- ------------------------------------------------------------------------------
/X/ PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS MADE, FOR ITEMS 1 AND 2 AND AS SAID PROXIES DEEM ADVISABLE ON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
The Board of Directors recommends a vote FOR items 1 and 2.
1. Election of Directors:
(see reverse)
FOR WITHHELD
/ / / /
/ /
----------------------------------------
For all nominees except as noted above
2. Elect Arthur Andersen LLP as
independent public accountants and
auditors for the 1999 fiscal year.
FOR AGAINST ABSTAIN
/ / / / / /
MARK HERE / /
FOR ADDRESS
CHANGE AND
NOTE AT LEFT
NOTE: Please sign exactly as your name appears on this proxy
card. If shares are held jointly, each holder should sign. Executors,
administrators, trustees, guardians, attorneys and agents should
give their full titles. If shareholder is a corporation, sign in full
corporate name by the authorized officer.
