Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
Dole Food Company, Inc.
(Name of Registrant as Specified In Its Charter)
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control number.
You are cordially invited to attend the Annual Meeting of
Stockholders of Dole Food Company, Inc., which will be held at
Dole World Headquarters, One Dole Drive, Westlake Village,
California at 1:00 p.m. local time on Thursday,
May 19, 2011.
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 at the Annual Meeting. I urge
you to read the accompanying Proxy Statement thoroughly, which
includes the Board of Directors’ recommendations on each
proposal. The Annual Meeting will also feature a report on the
operations of Dole and a discussion period at which management
will respond to appropriate questions.
We hope that you will be able to attend the Annual Meeting.
However, whether or not you plan to attend in person, we ask
that you promptly complete, sign, date and return the proxy or
voting instruction card(s) mailed to you to ensure that your
shares will be represented. If you do attend the Annual Meeting
and wish to vote your shares personally, you may revoke your
proxy at or prior to the Annual Meeting.
1. To elect two directors to hold office for a term of
three years;
2. To ratify the appointment of Deloitte & Touche
LLP as the Company’s independent registered public
accounting firm for the fiscal year ending December 31,2011;
3. To hold an advisory vote on the Company’s executive
compensation;
4. To hold an advisory vote on the frequency of stockholder
advisory votes on the Company’s executive compensation; and
5. To act upon such other business as may properly come
before the Annual Meeting.
Record Date
The stockholders of record at the close of business on Friday,
March 25, 2011, will be entitled to attend and vote at the
Annual Meeting and any adjournment or postponement thereof.
Proxy Voting
It is important that your shares of common stock be represented
and voted at the Annual Meeting. You should have received either
a proxy card or a voting instruction card by mail along with the
Notice Regarding Internet Availability of Proxy Materials. If
you hold your shares directly you should have received a proxy
card. If you are not the named holder of your shares you should
have received a voting instruction card. You can vote your
shares by completing and returning your proxy card or voting
instruction card to the Company or to your broker, as
applicable. Voting instructions are printed on your proxy card
or voting instruction card and are included in the accompanying
Proxy Statement. You can revoke your proxy at any time prior to
its exercise at the Annual Meeting by following the instructions
in the Proxy Statement.
These proxy materials are being provided in connection with
the 2011 Annual Meeting of Stockholders of Dole Food Company,
Inc. (the “Company”). This Proxy Statement and the
Company’s 2010 Annual Report to Stockholders were first
made available to stockholders on April 8, 2011. The Notice
Regarding Internet Availability of Proxy Materials for the
Annual Meeting, along with a proxy card or voting instruction
card, were first mailed to stockholders on April 8, 2011,
which notice contained instructions on how to access the
Company’s proxy materials, including this Proxy Statement
and the Annual Report. This Proxy Statement contains important
information for you to consider when deciding how to vote on the
matters to be brought before the Annual Meeting. Please read it
carefully.
ABOUT THE
ANNUAL MEETING
Who is
soliciting my vote?
The Board of Directors of the Company is soliciting your vote in
connection with the 2011 Annual Meeting of Stockholders.
What is
the purpose of the Annual Meeting?
The Annual Meeting will be the Company’s regular, annual
meeting of stockholders. You will be voting on the following
matters at the Annual Meeting:
1. Election of two directors to hold office for a term of
three years;
2. Ratification of the appointment of Deloitte &
Touche LLP as the Company’s independent registered public
accounting firm for the fiscal year ending December 31,2011;
3. An advisory vote on the Company’s executive
compensation;
4. An advisory vote on the frequency of stockholder
advisory votes on the Company’s executive
compensation; and
5. Any other business that may properly come before the
Annual Meeting.
How does
the Board of Directors recommend I vote?
The Board of Directors recommends a vote:
1. For the election of Elaine L. Chao and
Sherry Lansing as directors;
2. For the ratification of the appointment of
Deloitte & Touche LLP as the Company’s
independent registered public accounting firm for the fiscal
year ending December 31, 2011;
3. For the advisory resolution approving the
Company’s executive compensation; and
4. For holding an advisory vote on the
Company’s executive compensation every three
years.
The Board of Directors set March 25, 2011 as the record
date for the Annual Meeting (the “Record Date”). All
stockholders who owned common stock of the Company at the close
of business on the Record Date may attend and vote at the Annual
Meeting.
How many
votes can be cast by stockholders?
Each share of common stock is entitled to one vote. There is no
cumulative voting. There were 88,587,310 shares of common
stock outstanding and entitled to vote on the Record Date.
How many
votes must be present to hold the Annual Meeting?
A quorum must be present at the Annual Meeting in order to hold
the Annual Meeting and conduct business. A “quorum” is
a majority of the outstanding shares of common stock as of the
Record Date. Your shares are counted as present at the Annual
Meeting if either you are present at the Annual Meeting and vote
in person, or a proxy card or voting instruction card has been
properly submitted by you or on your behalf to the Company or
your broker, as applicable. Both abstentions and broker
non-votes are counted as present for the purpose of determining
the presence of a quorum. A “broker non-vote” is a
share of common stock that is beneficially owned by a person or
entity and held by a broker or other nominee, but for which the
broker or other nominee lacks the discretionary authority to
vote on certain matters or has not received a completed voting
instruction card providing voting instructions from the
beneficial owner in respect of these specific matters.
How many
votes are required to elect directors and approve the other
proposals?
Directors are elected by a plurality. Therefore, the two
nominees that receive the most votes will be elected.
Abstentions and broker non-votes are not counted for purposes of
the election of directors and, therefore, will have no effect on
the outcome of such election.
The ratification of the selection of Deloitte & Touche
LLP as the Company’s independent registered public
accounting firm requires the affirmative vote of a majority of
the shares of common stock present, in person or by proxy, at
the Annual Meeting and entitled to vote. Abstentions have the
same effect as a vote against the proposal.
The approval of the advisory resolution on the Company’s
executive compensation requires the affirmative vote of a
majority of the shares of common stock present, in person or by
proxy, at the Annual Meeting and entitled to vote. Abstentions
have the same effect as a vote against the advisory resolution.
Broker non-votes will have no effect on the outcome of the
advisory vote. The results of this vote are not binding on the
Board of Directors.
The advisory vote on the frequency of advisory votes on the
Company’s executive compensation will be determined based
on a plurality of the votes cast. Therefore, the option that
receives the most votes will be recommended by the stockholders
to the Board of Directors. Abstentions and broker non-votes are
not counted for purposes of the advisory vote on frequency of
advisory votes on the Company’s executive compensation and,
therefore, will have no effect on the outcome of the proposal.
The results of this vote are not binding on the Board of
Directors.
David H. Murdock, the Company’s Chairman, holds through his
various affiliates approximately 58.4% of the Company’s
common stock. Mr. Murdock has indicated that he will vote
his shares in favor of Proposal 1 for the director nominees
named in this Proxy Statement, in favor of Proposals 2 and
3, and for Proposal 4, in favor of holding an advisory vote
on the Company’s executive compensation every three years.
If Mr. Murdock votes as he has indicated, his vote is
sufficient to satisfy the quorum and voting requirements
necessary to adopt the proposals set forth in this Proxy
Statement.
How do I
vote by proxy?
You should have received either a proxy card or a voting
instruction card with the Notice Regarding Internet Availability
of Proxy Materials. If you hold your shares directly you should
have received a proxy card. If you are not the named holder of
your shares (i.e., you hold your shares through a broker or
other nominee) you should have
received a voting instruction card. You can vote your shares by
completing and returning your proxy card or voting instruction
card to the Company or to your broker, as applicable, in the
envelope provided. Please see your proxy card or voting
instruction card, as applicable, for more information on how to
vote.
What if I
don’t vote for some of the items listed on my proxy card or
voting instruction card?
If you return your signed proxy card or voting instruction card
in the enclosed envelope but do not mark selections, it will be
voted in accordance with the recommendations of the Board of
Directors. In connection therewith, the Board of Directors has
designated David H. Murdock, David A. DeLorenzo and C. Michael
Carter as proxies. If you indicate a choice with respect to any
matter to be acted upon on your proxy card or voting instruction
card, your shares will be voted in accordance with your
indicated choice.
If you are a beneficial owner and hold your shares through a
broker or other nominee and do not return your voting
instruction card to your broker, the broker or other nominee has
the ability to vote your shares on each matter at the Annual
Meeting for which he or she has the requisite discretionary
authority. Under applicable rules, brokers have discretion to
vote on routine matters, such as the ratification of the
selection of independent registered public accounting firms.
However, because of recent changes to these rules, the
uncontested election of directors is no longer considered a
routine matter. Therefore, brokers do not have discretion to
vote on the uncontested election of directors. Brokers also do
not have discretion to vote on the two advisory votes regarding
the Company’s executive compensation.
Who pays
for the proxy solicitation and how will the Company solicit
votes?
The Company bears the expense of printing and mailing proxy
materials. In addition to this solicitation of proxies by mail,
the Company’s directors, officers and other employees may
solicit proxies by personal interview, telephone, facsimile or
email. These individuals will not be paid any additional
compensation for any such solicitation. The Company will request
brokers and other nominees who hold shares of common stock in
their names to furnish proxy materials to the beneficial owners
of such shares. The Company will reimburse such brokers and
other nominees for their reasonable expenses incurred in
forwarding solicitation materials to such beneficial owners.
Can I
change or revoke my vote after I return my proxy card or voting
instruction card?
Yes. Even if you sign and return the proxy card or voting
instruction card in the form accompanying this Proxy Statement,
you retain the power to revoke your proxy or change your vote.
You can revoke your proxy or change your vote at any time before
it is exercised at the Annual Meeting. If you hold your shares
directly, you may revoke your proxy by giving written notice to
the Corporate Secretary of the Company, specifying such
revocation. You may also change your vote by timely delivering a
valid, later-dated proxy card to the Company or by voting in
person at the Annual Meeting. If you do not hold your shares in
your name, you may change your vote by complying with the
instructions set forth in your voting instruction card. However,
please note that if you would like to vote at the Annual Meeting
and you are not the stockholder of record, you must request,
complete and deliver a proxy from your broker or other nominee.
Important
Notice Regarding the Availability of Proxy Materials for the
Stockholder
Meeting to be Held on May 19, 2011.
Stockholders will be asked to elect two directors to serve on
the Board of Directors at the Annual Meeting. The Company’s
Certificate of Incorporation provides that the Board of
Directors shall consist of not fewer than five nor more than
13 directors, with the exact number to be fixed by the
Board of Directors. The Board of Directors has fixed the current
number of directors at seven.
The Company’s Certificate of Incorporation divides the
Board of Directors into three classes, as nearly equal in number
as possible, with the terms of office of the directors of each
Class ending in different years. Each of Class I and
Class II has two directors and Class III has three
directors. The terms of directors in Classes I, II,
and III end at the annual meetings in 2013, 2011, and 2012,
respectively.
The Board of Directors has nominated Elaine L. Chao and Sherry
Lansing for election as Class II directors for three-year
terms expiring at the 2014 annual meeting. When elected,
directors hold office for a three-year term and until the
election and qualification of their respective successors in
office or until any such director’s earlier resignation or
removal.
Please see “Directors and Executive Officers —
Nominees and Continuing Directors” below for information
about the nominees for election as directors and the current
members of the Board of Directors who will continue serving
following the Annual Meeting and their respective business
experience and other pertinent information.
Directors are elected by a plurality. Therefore, the two
nominees who receive the most votes will be elected. Proxies
cannot be voted for a greater number of persons than the number
of nominees named. There is no cumulative voting. If you sign
and return the accompanying proxy card or voting instruction
card, your shares will be voted for the election of the two
nominees recommended by the Board of Directors unless you choose
to abstain or vote against either of the nominees. If either
nominee for any reason is unable to serve or will not serve,
proxies may be voted for such substitute nominee as the proxy
holder may determine. The Company is not aware of any nominee
who will be unable to or will not serve as a director.
The Board of Directors unanimously recommends that you vote
FOR the
election of Elaine L. Chao and Sherry Lansing as directors.
Proposal No. 2 —
Ratification of the Appointment of Deloitte & Touche
LLP
The Audit Committee of the Company’s Board of Directors has
selected Deloitte & Touche LLP to audit the
consolidated financial statements of the Company as of
December 31, 2011, and for the fiscal year then ending. At
the Annual Meeting, stockholders will be asked to ratify this
selection. Deloitte & Touche LLP has audited the
Company’s financial statements beginning with the fiscal
year ended December 28, 2002.
The Company has been advised by Deloitte & Touche LLP
that the firm has no relationship with the Company or its
subsidiaries other than that arising from the firm’s
engagement as auditors and tax advisors. The Company has also
been advised that representatives of Deloitte & Touche
LLP will be present at the Annual Meeting where they will have
an opportunity to make a statement if they so desire and will be
available to respond to appropriate questions.
The affirmative vote of a majority of the shares of common stock
present, in person or by proxy, at the Annual Meeting is
necessary to ratify the appointment of Deloitte &
Touche LLP as the Company’s independent registered public
accounting firm for the fiscal year ending December 31,2011. Abstentions have the same effect as a vote against the
proposal.
The Board of Directors unanimously recommends that you vote
FOR the ratification of the selection of
Deloitte & Touche LLP as the Company’s
independent registered public accounting firm for the fiscal
year ending December 31, 2011.
Proposal No. 3 —
Advisory Resolution on Executive Compensation
Dole is asking stockholders to approve an advisory resolution on
the Company’s executive compensation as reported in this
Proxy Statement. As described in “Compensation Discussion
and Analysis” below, the Corporate Compensation and
Benefits Committee has structured the executive compensation
program to achieve the following key objectives:
•
Provide a total rewards package to Dole’s executives that
is competitive with both general industry and food and consumer
products companies;
Align the Named Executive Officers’ (as defined in
“Compensation Discussion and Analysis” below)
incentives with the long-term interests of Dole;
•
Enable Dole to attract and retain top quality
management; and
•
Motivate management to set and achieve aggressive goals in their
respective areas of responsibility.
We urge stockholders to read “Compensation Discussion and
Analysis” below, which describes in more detail how
Dole’s executive compensation policies and procedures
operate and are designed to achieve the Company’s
compensation objectives, as well as “Summary Compensation
Table” and related compensation tables included in
“Executive Compensation” below which provide detailed
information on the compensation of the Named Executive Officers.
The Corporate Compensation and Benefits Committee and the Board
of Directors believe that the policies and procedures
articulated in “Compensation Discussion and Analysis”
below are effective in achieving the Company’s goals and
that the compensation of its executive officers reported in this
Proxy Statement has supported and contributed to the
Company’s success.
In accordance with recently adopted Section 14A of the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and as a matter of good corporate governance, Dole
is asking stockholders to approve the following advisory
resolution at the Annual Meeting:
RESOLVED, that the stockholders of Dole Food Company, Inc. (the
“Company”) approve, on an advisory basis, the
compensation of the Company’s named executive officers set
forth in the Compensation Discussion and Analysis, the Summary
Compensation Table and the related compensation tables and
narrative in the Proxy Statement for the Company’s 2011
Annual Meeting of Stockholders.
This advisory resolution, commonly referred to as a
“say-on-pay”
resolution, is non-binding on the Board of Directors. Although
non-binding, the Board and the Corporate Compensation and
Benefits Committee will carefully review and consider the voting
results when evaluating our executive compensation program.
The Board of Directors unanimously recommends that you vote
FOR the advisory resolution on executive
compensation.
Proposal No. 4 —
Advisory Resolution on the Frequency of the Future Advisory
Votes on Executive Compensation
In Proposal No. 3 above, the Company is asking
stockholders to vote on an advisory resolution on executive
compensation, and the Company will provide this type of advisory
vote at least once every three years. Pursuant to recently
adopted Section 14A of the Exchange Act, in this
Proposal Number No. 4 the Company is asking
stockholders to vote on whether future advisory votes on
executive compensation should occur every year, every two years
or every three years.
After careful consideration, the Board of Directors recommends
that future advisory votes on executive compensation occur every
three years (triennially). The Company believes that this
frequency is appropriate for a number of reasons, including:
•
A longer frequency is consistent with long-term
objectives; and
•
Dole’s compensation programs are designed to reward
long-term performance, and a triennial vote corresponds with the
three-year performance period under the Company’s long-term
incentive awards.
For the foregoing reasons, Dole encourages stockholders to
evaluate its executive compensation programs over a multi-year
horizon and to review the Named Executive Officers’
compensation over the past three fiscal years as reported in the
Summary Compensation Table. In addition, Dole believes that a
triennial advisory vote on executive compensation reflects the
appropriate time frame for the Corporate Compensation and
Benefits Committee and the Board of Directors to evaluate the
results of the most recent advisory vote on executive
compensation, to discuss the implications of that vote with
stockholders to the extent needed, to develop and implement any
adjustments to the Company’s executive compensation
programs that may be appropriate in light of a past advisory
vote on executive compensation, and for stockholders to see and
evaluate the Corporate Compensation and Benefits
Committee’s
actions in context. In this regard, because the advisory vote on
executive compensation occurs after the Company has already
implemented its executive compensation programs for the current
year, and because the different elements of compensation are
designed to operate in an integrated manner and to complement
one another, the Company expects that in certain cases it may
not be appropriate or feasible to fully address and respond to
any one year’s advisory vote on executive compensation by
the time of the following year’s annual meeting of
stockholders.
The Board of Directors was aware of and took into account views
that some in the public arena have expressed in support of
conducting an annual advisory vote on executive compensation.
Dole is aware that some in the public arena believe that annual
advisory votes will enhance or reinforce accountability.
However, the Company has in the past been, and will in the
future continue to be, proactively engaged with its stockholders
on a number of topics and in a number of forums. Thus, Dole
views the advisory vote on executive compensation as an
additional, but not exclusive, opportunity for its stockholders
to communicate with the Company regarding their views on the
Company’s executive compensation programs. In addition,
because the Company’s executive compensation programs are
designed to operate over the long-term and to enhance long-term
performance, the Company is concerned that an annual advisory
vote on executive compensation could lead to a near-term
perspective inappropriately bearing on its executive
compensation programs. Although the Company believes that
holding an advisory vote on executive compensation every three
years will reflect the right balance of considerations in the
normal course, Dole will periodically reassess that view and can
provide for an advisory vote on executive compensation on a more
frequent basis if changes in its compensation programs or other
circumstances suggest that such a vote would be appropriate.
The Company understands that its stockholders may have a
different view as to what is an appropriate frequency for
advisory votes on executive compensation, and will carefully
review the voting results. Stockholders will be able to specify
one of four choices for this proposal on the proxy card: three
years, two years, one year or abstain. Stockholders are not
voting to approve or disapprove the Board’s recommendation.
This advisory vote on the frequency of future advisory votes on
executive compensation is non-binding on the Board of Directors.
Notwithstanding the Board’s recommendation and the outcome
of the stockholder vote, the Board may in the future decide to
conduct advisory votes on a more frequent basis and may vary its
practice based on factors such as discussions with stockholders
and the adoption of material changes to compensation programs.
The Board of Directors unanimously recommends that you vote
to conduct future advisory votes on executive compensation
EVERY THREE YEARS.
The following table sets forth the names and ages of the
nominees for election as directors and the current members of
the Board of Directors who will continue serving following the
Annual Meeting, as well as background information relating to
each individual’s business experience, qualifications,
attributes and skills and why the Board of Directors and
Nominating and Corporate Governance Committee believe each
individual is a valuable member of the Board of Directors. The
persons who have been nominated for election and are to be voted
upon at the Annual Meeting are listed first, with continuing
directors following thereafter.
Nominees
Director
Name and Experience
Class
Since
Elaine L. Chao, Director. Ms. Chao, 58, was the
nation’s 24th Secretary of Labor from 2001 to 2009,
and the first Asian Pacific American woman in our country’s
history to be appointed to the President’s cabinet. From
1996 to 2001, and presently, Ms. Chao was and is a
Distinguished Fellow at the Heritage Foundation, an educational
and research organization based in Washington, D.C. From
1992 to 1996, she was President and Chief Executive Officer of
United Way of America where she restored public trust and
confidence to an organization tarnished by scandal. From 1991 to
1992, she served as Director of the Peace Corps. From 1989 to
1991, she was the Deputy Secretary of Transportation, the second
in charge of a department with a budget of $30 billion and
workforce of 110,000. Prior to that, she worked as Vice
President of syndications at BankAmerica Capital Markets Group
and Citicorp. Ms. Chao previously served on the Board of
Directors of Dole from 1993 to 2001. She had also previously
served on the Boards of Northwest Airlines, National Association
of Security Dealers, Raymond James Financial, and C.R. Bard.
Ms. Chao is Chairman of the Nominating and Corporate
Governance Committee of Dole’s Board of Directors, and she
also serves on its Corporate Compensation and Benefits Committee.
II
2009
The Nominating and Corporate Governance Committee and the Board
of Directors believe that Ms. Chao’s vast experience
as the leader of many large scale organizations allows her to
provide great insight into the effectiveness of a company such
as Dole with operations around the world. Ms. Chao also
brings a very diverse background to the Board. Not only has she
held leadership positions in the finance industry, but she has
also achieved great success as a leader in both the public
service and charitable sectors. Ms. Chao’s experience
as Secretary of Labor also gives the Board an important
perspective on workforce issues, an invaluable asset for a
company with approximately 37,600 full-time permanent
employees and 36,700 full-time seasonal or temporary
employees worldwide. Because the Company has frequent
interactions with governments, on both the local and national
level, having a director with such high-level, extensive
experience in government gives the Board unique insight on these
matters that it would not otherwise have. Ms. Chao also has
experience as a public company director.
Sherry Lansing, Director. Ms. Lansing, 66, is the
Founder and Chair of the Sherry Lansing Foundation, a
philanthropic organization focusing on cancer research, health
and education. From 1992 to 2005, she was the Chair of the
Motion Picture Group of Paramount Pictures where she oversaw the
release of more than 200 films, including Academy
Award®
winners Forrest Gump, Braveheart and Titanic. From 1984 to 1990,
she operated her own production company, Lansing Productions,
and co-founded Jaffe/Lansing Productions. In 1980, she became
the film industry’s first woman to oversee all aspects of a
studio’s motion picture production when she was appointed
President of Production at 20th Century Fox.
Ms. Lansing has served as a director of Qualcomm
Incorporated (NASDAQ: QCOM) since 2006, and RealD (NYSE: RLD)
since 2010. She holds additional trustee, chair and advisory
positions with the Friends of Cancer Research, the American
Association of Cancer Research, the Carter Center and Stop
Cancer, a non-profit philanthropic group she founded in
partnership with Dr. Armand Hammer. Ms. Lansing is
also Vice Chair of the University of California Regents and
serves as the Chair of the University Health Services Committee.
She has earned the Woodrow Wilson Award for Corporate
Citizenship, the Distinguished Community Service Award from
Brandeis University, the Alfred P. Sloan, Jr. Memorial Award,
the Horatio Alger Humanitarian Award and an honorary doctorate
in fine arts from the American Film Institute. Ms. Lansing
serves on the Audit Committee and the Corporate Compensation and
Benefits Committee of Dole’s Board of Directors.
II
2009
The Nominating and Corporate Governance Committee and the Board
of Directors believe that Ms. Lansing’s success as an
entrepreneur, as well as her vast experience as a leader in
Hollywood and in the philanthropic community, give her a unique
perspective as to how large organizations work.
Ms. Lansing’s experiences in such a fast-paced
business are key to helping the Board react to changing trends
and consumer preferences in today’s market. Through her
charitable work, Ms. Lansing has also shown a great
interest in health and nutrition, issues that are crucial to the
Company’s goals and mission. Ms. Lansing’s
commitment to volunteer work mirrors the Company’s
commitment to the communities in which it operates.
Ms. Lansing also has experience as a public company
director.
Continuing
Directors
Director
Name and Experience
Class
Since
Andrew J. Conrad, Director. Mr. Conrad, 47, was a
co-founder of the National Genetics Institute, a provider of
advanced genetics testing services for blood screening, medical
testing and clinical research, and has been its Chief Scientific
Officer since 1992. The National Genetics Institute is now a
subsidiary of Laboratory Corporation of America Holdings (NYSE:
LH), where Mr. Conrad is Executive Vice President, Chief
Scientific Officer. Mr. Conrad is Chairman of the Corporate
Compensation and Benefits Committee of Dole’s Board of
Directors, and he also serves on its Audit Committee and its
Nominating and Corporate Governance Committee.
I
2003
The Nominating and Corporate Governance Committee and the Board
of Directors believe that Mr. Conrad’s scientific
background (he received his Ph.D. in Cell Biology and has more
than 85 publications in scientific and medical journals) makes
him an invaluable member of the Board of Directors, as
Mr. Conrad is the only member of the Board with a technical
scientific background. Science is a significant consideration in
the Company’s business, not only in the initial stages of
growing product and ensuring its freshness from packaging to
purchase by the end user, but also in the Company’s focus
on consumer health and well-being. Mr. Conrad provides
great insight to the Board on these and other scientific
matters. Mr. Conrad has served as a director of the Company
for more than seven years.
Justin M. Murdock, Director. Mr. Justin M. Murdock,
38, has been Senior Vice President of Investments of
Castle & Cooke, Inc., which is wholly owned by David
H. Murdock, since 2004, and prior to that its Vice President of
Investments since 2001; and previously, from 1999, Vice
President of Mergers and Acquisitions of Pacific Holding
Company, a sole proprietorship of David H. Murdock.
Mr. Justin M. Murdock is also Chairman of the Board and CEO
of NovaRx, a privately held clinical-stage biopharmaceutical
company dedicated to the discovery, development and
commercialization of novel cell-based therapeutic vaccines for
the treatment of cancer, a position he has held since October
2006. He served on the Audit Committee of Dole’s Board of
Directors until his planned departure on October 13, 2010,
owing to the necessity of having a wholly-independent Audit
Committee by the first anniversary of the Company’s initial
public offering. He served as Dole’s Vice President, New
Products and Corporate Development from November 2004 to
January 28, 2011, but stepped down to devote his full time
and energies to his duties as CEO of NovaRx. Mr. Justin M.
Murdock is the son of David H. Murdock, the Company’s
Chairman of the Board and also a Director.
I
2003
The Nominating and Corporate Governance Committee and the Board
of Directors believe that Mr. Justin M. Murdock’s past
experience and insight as the Company’s Vice President, New
Products and Corporate Development contribute greatly to the
Board’s knowledge of the Company’s customers and
consumers as well as its product development and marketing
activities. His investment expertise developed through his
positions with Castle & Cooke also provides the Board
with insight into matters of global finance. As the youngest
member of the Board, his input also gives the Board a greater
understanding of the Company’s younger consumers.
David A. DeLorenzo, President and Chief Executive Officer
and Director. Mr. DeLorenzo, 64, rejoined Dole as its
President and Chief Executive Officer in June 2007.
Mr. DeLorenzo originally joined Dole in 1970. He was
President of Dole Fresh Fruit Company from September 1986 to
June 1992, President of Dole from July 1990 to March 1996,
President of Dole Food Company-International from September 1993
to March 1996, President and Chief Operating Officer of Dole
from March 1996 to February 2001, and Vice Chairman of Dole from
February 2001 through December 2001, at which time
Mr. DeLorenzo became a consultant for Dole under contract
for the period from January 2002 through January 2007. From 2006
to 2007, Mr. DeLorenzo served as Non-Executive Chairman of
the Board of Versacold Inc. (formerly listed on the Toronto
Stock Exchange: ICE_u.TO). Mr. DeLorenzo serves on the
Executive Committee of Dole’s Board of Directors.
III
1991
The Nominating and Corporate Governance Committee and the Board
of Directors believe that Mr. DeLorenzo’s vast and
diverse history with the Company, from both an operational
standpoint and that of a member of management, are vital to the
Board’s collective knowledge of the Company’s day to
day operations. Mr. DeLorenzo also provides great insight
as to how the Company grew into the organization that it is
today. His institutional knowledge is an invaluable asset to the
Board in effecting its oversight of the Company and its path
into the future. Mr. DeLorenzo’s presence on the Board
also allows for a seamless flow of information and ideas between
the Board and management.
David H. Murdock, Chairman of the Board and Director.
Mr. Murdock, 87, joined Dole as Chairman of the Board and
Chief Executive Officer in July 1985, and continued as
Dole’s Chief Executive Office until June 2007.
Mr. Murdock was also Dole’s President from February
2004 to July 2004. He has been Chairman of the Board, Chief
Executive Officer and Director of Castle & Cooke,
Inc., a Hawaii corporation, since October 1995 (Mr. Murdock
has beneficially owned all of the capital stock of
Castle & Cooke, Inc. since September 2000). Since June
1982, he has been Chairman of the Board and Chief Executive
Officer of Flexi-Van Leasing, Inc., a Delaware corporation
wholly owned by Mr. Murdock. Mr. Murdock also is the
owner/developer of numerous real estate developments and is the
owner of Castle & Cooke Mortgage Company, a Delaware
corporation. Mr. Murdock also is the sole stockholder of
numerous corporations engaged in a variety of business ventures
and in the manufacture of industrial and building products.
Mr. Murdock is Chairman of the Executive Committee of
Dole’s Board of Directors. Mr. Murdock is the father
of Justin M. Murdock, who served as the Company’s Vice
President, New Products and Corporate Development until
January 28, 2011 and is also a Director.
III
1985
The Nominating and Corporate Governance Committee and the Board
of Directors believe that Mr. Murdock’s presence on
the Board has been vital to the Company’s growth and
success over the past 26 years. Mr. Murdock’s
passion for healthy living has given the Company direction and
focus through his period of leadership. Mr. Murdock’s
vast experiences and successes in the business world are also an
invaluable asset to the Board as it evaluates not only the
Company’s present circumstances, but the direction it will
head in the future.
Dennis M. Weinberg, Director. Mr. Weinberg, 58, was
one of the founding Directors for WellPoint (NYSE:WLP), a health
benefits company. From February 2002 to May 2006,
Mr. Weinberg served as President and Chief Executive
Officer of ARCUS Enterprises, a WellPoint business development
company. Mr. Weinberg served for nearly 20 years in a
variety of CEO, Group President, and Executive Vice President
positions with WellPoint and its various affiliates. Prior to
WellPoint, Mr. Weinberg held a variety of business
consulting positions with the accounting firm of Touche-Ross and
Company (currently Deloitte & Touche) in Chicago.
Before that, he was General Manager for the CTX Products
Division of Pet, Inc., which division designed and manufactured
commercial computerized processing equipment. At that time, Pet,
Inc. was owned by I.C. Industries, Inc. Mr. Weinberg is
Chairman and General Member of the development companies of
FRW1, LLC, KNIC, LLC and SkyView Development, LLC.
Mr. Weinberg has served as a Director and Chairman of the
Audit Committee of Salem Communications Corporation
(NASDAQ:SALM) since 2005. Mr. Weinberg served as a Director
and Audit Committee Chairman of Health Management, Inc
(NASDAQ:HMI) from 1995 to 1997. He is the co-founder of
Cornerstone Network Associates and Life Skills for American
Families, and was a Director of The Health Insurance Association
of America, The CEO Forum, Pepperdine University Center for the
Family, National Coalition for the Protection of Families and
Children, and a number of other non-profit organizations.
Mr. Weinberg is Chairman of the Audit Committee of
Dole’s Board of Directors, and he also serves on its
Nominating and Corporate Governance Committee.
III
2009
The Nominating and Corporate Governance Committee and the Board
of Directors believe that Mr. Weinberg’s wide array of
experiences in the business world give the Board a unique
perspective on not only its business, but the broader economy as
well. Mr. Weinberg’s collective experiences as an
executive of other companies allow him to better appreciate the
day to day issues management faces, thereby allowing for better
communications between the Board and management.
Mr. Weinberg’s experience is also significant to the
Board in understanding today’s complex and ever-changing
accounting rules and regulations. It is very important to the
Company to have an Audit Committee chair with substantial
experience on other public company audit committees.
Mr. Weinberg also has experience as a public company
director.
Set forth below are the names and ages of the executive officers
of the Company who do not also serve as directors, as well as
background information relating to each individual’s
business experience.
C. Michael Carter, Executive Vice President, General
Counsel and Corporate Secretary. Mr. Carter, 67, became
Dole’s Senior Vice President, General Counsel and Corporate
Secretary in July 2003, Executive Vice President, General
Counsel and Corporate Secretary in July 2004, and a director of
Dole in April 2003. Mr. Carter joined Dole in October 2000
as Vice President, General Counsel and Corporate Secretary.
Prior to his employment by Dole, Mr. Carter had served as
Executive Vice President, General Counsel and Corporate
Secretary of Pinkerton’s, Inc. Prior to Pinkerton’s,
Mr. Carter held positions at Concurrent Computer
Corporation, RJR Nabisco, Inc., The Singer Company and the law
firm of Winthrop, Stimson, Putnam and Roberts (now Pillsbury
Winthrop Shaw Pittman LLP). Mr. Carter resigned as a
director of Dole upon the listing of the Company’s common
stock on the New York Stock Exchange.
Joseph S. Tesoriero, Executive Vice President and Chief
Financial Officer. Mr. Tesoriero, 57, became Dole’s
Vice President and Chief Financial Officer in July 2004 and
Executive Vice President and Chief Financial Officer in February
2010. Mr. Tesoriero joined Dole as Vice President of Taxes
in October 2002. Prior to his employment by Dole,
Mr. Tesoriero was Senior Vice President of Tax at Global
Crossing. Mr. Tesoriero also held tax positions at Coleman
Camping Equipment, Revlon Cosmetics and International Business
Machines.
THE BOARD
OF DIRECTORS
Director
Independence
As part of its Corporate Governance Guidelines, the Board of
Directors has adopted Director Independence Standards, which are
attached to the Company’s Corporate Governance Guidelines
as Attachment A and are available on the Company’s website
at www.dole.comby following the links to “Company
Information,”“Investors” and “Corporate
Governance.” The Board of Directors has affirmatively
determined that each of Mses. Chao and Lansing and
Messrs. Conrad and Weinberg is independent as defined in
accordance with the listing standards of the New York Stock
Exchange (the “NYSE”) and the Company’s
Independence Standards. To be considered
“independent,” a director must be determined by the
Board of Directors to have no relevant material relationship
with the Company, other than as a director of the Company. In
making its determination concerning the absence of a material
relationship, the Board of Directors adheres to the test for
independence included in the NYSE listing standards.
Leadership
Structure
Generally
The leadership structure of the Board of Directors is centered
around the concept of an appropriate balance between management
and the Board of Directors. The Board believes that it is in the
best interests of the Company for the Board to make a
determination regarding whether or not to separate the roles of
Chairman and CEO based upon the circumstances. The Board
believes that presently it is in the best interests of the
Company that the executive officer positions of Chairman of the
Board and CEO are separate. The Board believes that this
separation is presently appropriate as it allows the CEO to
focus on leading the Company while the Chairman can focus on
leading the Board in its consideration of strategic issues and
monitoring corporate governance and other stockholder issues.
Regularly scheduled executive sessions of the directors are held
without those directors who are also executive officers of the
Company. These directors shall designate one of their number to
preside at each session, although it need not be the same
director at each session. Meetings of these directors encourage
open discussion. Having a designated presiding director for each
meeting helps focus these meetings as well as provides a channel
for communicating the results of the meetings to the full Board.
In addition, at least once each year, the independent directors
should have a scheduled executive session without the other
directors present.
The Board has oversight responsibility with respect to the
Company’s risk management. The Board has delegated certain
duties with respect to risk oversight for the Company to the
Audit Committee. One of the Audit Committee’s purposes
under its charter is to identify and review with senior
corporate management issues concerning the key areas of business
and financial risk to which the Company is exposed. In this
context “business and financial risk” is broadly
construed to include risks, of whatever nature or source:
(1) to the achievement of the Company’s strategic or
tactical objectives and its financial plans; (2) to
management effectiveness; (3) to the Company’s
reputation or legal position; and (4) to the Company’s
financial condition, results of operations or cash flows. The
Audit Committee charter specifically requires that the committee
review and discuss the Company’s practices with respect to
risk assessment and risk management, including a review with
legal counsel of significant litigation or other legal matters
affecting the Company. The Audit Committee reports back to the
full Board with respect to its assessments.
The Board has also delegated certain duties with respect to risk
oversight for the Company regarding compensation matters to the
Corporate Compensation and Benefits Committee; and the Committee
reports back to the full Board with respect to its assessment.
Meetings
of the Board of Directors
The Board of Directors held five meetings during fiscal year
2010. Each director attended at least 75% of all board and
applicable committee meetings in fiscal year 2010.
Committees
of the Board of Directors
The Board of Directors has a standing Audit Committee, Corporate
Compensation and Benefits Committee, Nominating and Corporate
Governance Committee, and Executive Committee.
Audit
Committee
The Audit Committee, among other things: is responsible for the
appointment, compensation, retention and oversight of the work
of the independent registered public accounting firm; reviews
the results and scope of the audit, audit-related and other
services provided by the independent registered public
accounting firm; monitors and reviews the integrity of the
processes and systems relative to financial information used by
the Board or disseminated to stockholders, the financial
community and regulatory authorities; and reviews the internal
accounting procedures and controls with the Company’s
financial and accounting staff, and receives reports from the
independent registered public accounting firm and management
regarding, and reviews and discusses the adequacy and
effectiveness of, the Company’s internal control over
financial reporting, including any significant deficiencies or
material weaknesses. The Committee is governed by a charter
adopted by the Board of Directors. The charter is available on
the Company’s website at www.dole.comby following
the links to “Company Information,”“Investors” and “Corporate Governance” or
upon written request to the Company, as described in
“Additional Information — Annual Report,
Financial and Other Information” below. The Audit Committee
held seven meetings during fiscal year 2010.
The Audit Committee currently consists of Messrs. Conrad
and Weinberg and Ms. Lansing. Mr. Weinberg is Chairman
of the Committee. The Board of Directors has affirmatively
determined that each member of the Committee is independent
under the listing standards of the NYSE, applicable SEC rules
and the Company’s Independence Standards. Justin M.
Murdock, a non-independent director, served as a fourth member
of the Committee until October 13, 2010. He served on the
Committee pursuant to the transition rules of the NYSE and
pursuant to the exemption provided by SEC
Rule 10A-3(b)(1)(iv)(A)(2)
which permit a minority of the members of a listed issuer’s
audit committee to be exempt from the independence requirements
for one year from the date of the effectiveness of the
registration statement filed in connection with the listed
issuer’s initial public offering. As required,
Mr. Justin Murdock stepped down from the Committee within
one year of the effectiveness of the registration statement
filed in connection with the Company’s initial public
offering in 2009 (the “IPO”) at which point the Audit
Committee was fully-independent as required by SEC and NYSE
rules. Mr. Justin Murdock’s
service on the Committee did not materially adversely affect the
ability of the Committee to act independently or satisfy the
other applicable requirements as the Committee included three
independent directors, and as a result, the Committee could not
act without a majority of the independent members of the
Committee approving such action.
The Board of Directors has also determined that each member of
the Committee is “financially literate” as required by
the listing standards of the NYSE, as such qualification is
interpreted by the Board of Directors in its business judgment.
In addition, the Board of Directors has determined that
Mr. Weinberg qualifies as an “audit committee
financial expert” as defined by the rules and regulations
of the SEC based on Mr. Weinberg’s qualifications and
business experience, as briefly described in “Directors and
Executive Officers — Nominees and Continuing
Directors” above.
Corporate
Compensation and Benefits Committee
The Corporate Compensation and Benefits Committee, among other
things: reviews the Company’s overall compensation
philosophy, structure, policies and programs; reviews and
approves the total compensation for executive officers and other
senior executives; administers the Company’s equity-based
compensation plans; and makes recommendations to the Board with
respect to any amendment or alteration to the Company’s
equity-based compensation plans that are subject to Board
approval. Such oversight includes decisions regarding executive
management salaries, incentive compensation, long-term
compensation plans and equity plans for directors and employees.
The Committee is governed by a charter adopted by the Board of
Directors. The charter is available on the Company’s
website at www.dole.comby following the links to
“Company Information,”“Investors” and
“Corporate Governance” or upon written request to the
Company, as described in “Additional
Information — Annual Report, Financial and Other
Information” below. The Corporate Compensation and Benefits
Committee held five meetings during fiscal year 2010.
The Corporate Compensation and Benefits Committee currently
consists of Mses. Chao and Lansing and Mr. Conrad.
Mr. Conrad is Chairman of the Committee. The Board of
Directors has affirmatively determined that each member of the
Committee is independent under the listing standards of the NYSE
and the Company’s Independence Standards.
Role of Compensation Consultants. As discussed
in “Compensation Discussion and Analysis —
Corporate Compensation and Benefits Committee” below,
during fiscal year 2010 the Company retained Exequity, LLP, a
nationally recognized independent provider of executive
compensation advisory services with no legal or financial
connection to any other service provider. Exequity and its
affiliates do not perform any work for the Company outside of
its role as consultant to the Committee. In 2010, Exequity
supported the Committee by providing competitive data on
compensation and relative performance of peer group companies
(which information allows the Committee to make informed
decisions with the benefit of understanding the factors shaping
the external marketplace for executive compensation);
recommending pay programs; making presentations on regulatory
and legislative matters affecting executive compensation;
providing opinions on the reasonableness of compensation; and
consulting on other matters as requested.
Compensation Committee Interlocks and Insider
Participation. During fiscal year 2010, no member
of the Corporate Compensation and Benefits Committee was an
officer or employee of the Company, was a former officer of the
Company, nor had a relationship with the Company requiring
disclosure as a related party transaction under Item 404 of
Regulation S-K.
None of the Company’s executive officers served on the
compensation committee or board of directors of another entity
whose executive officer(s) served as a director on the
Company’s Board of Directors or on the Corporate
Compensation and Benefits Committee.
Nominating
and Corporate Governance Committee
The Nominating and Corporate Governance Committee is responsible
for, among other things: developing and recommending to the
Board criteria for identifying and evaluating director
candidates; identifying, reviewing the qualifications of, and
recruiting candidates for election to the Board; making
recommendations to the Board concerning the structure,
composition and functions of the Board and its committees; and
developing and reviewing the Company’s governance
principles. The Committee is also responsible for establishing
procedures for the consideration of Board candidates recommended
by stockholders, including potential nominees for election, as
described in “Director Nomination Process” below. The
Committee is governed by a charter adopted by the Board of
Directors. The charter is available on the Company’s
website at www.dole.comby following the links to
“Company Information,”“Investors” and
“Corporate Governance” or upon written request to the
Company, as described in “Additional
Information — Annual Report, Financial and Other
Information” below. The Committee held three meetings
during fiscal year 2010.
The Nominating and Corporate Governance Committee currently
consists of Ms. Chao and Messrs. Conrad and Weinberg.
Ms. Chao is Chairman of the Committee. The Board of
Directors has affirmatively determined that each member of the
Committee is independent under the listing standards of the NYSE
and the Company’s Independence Standards.
Director Nomination Process. The Nominating
and Corporate Governance Committee, with the assistance of a
third-party search firm when deemed necessary by the Committee,
identifies candidates for director nominees. The Committee
considers a number of factors, including the following criteria,
in identifying, evaluating and recommending director nominees to
the Board: the individual’s business experience and skills,
independence, judgment, integrity and the ability to commit
sufficient time and attention to Board activities, and the
absence of potential conflicts with the Company’s
interests. The Committee considers these criteria in the context
of the perceived needs of the Board as a whole and seeks to
achieve a diversity of experience and personal backgrounds on
the Board. The Committee will use the same criteria in
determining whether to recommend stockholder nominations of
candidates for director made pursuant to the procedures set
forth in the Company’s Bylaws and described in
“Additional Information — Stockholder Proposals
and Nominations for Director” below.
Executive
Committee
The Executive Committee acts in the place of the Board, and
exercises the authority and powers of the Board between meetings
of the Board, subject to the Company’s Certificate of
Incorporation and Bylaws and applicable laws, rules and
regulations. The Executive Committee also performs any duties or
responsibilities expressly delegated to the Committee by the
Board from time to time and as are consistent with the purpose
of the Committee and as the Board deems appropriate. The
Committee is governed by a charter adopted by the Board of
Directors. The charter is available on the Company’s
website at www.dole.comby following the links to
“Company Information,”“Investors” and
“Corporate Governance” or upon written request to the
Company, as described in “Additional
Information — Annual Report, Financial and Other
Information” below. The Committee did not meet during
fiscal year 2010.
The Executive Committee currently consists of Messrs. David
H. Murdock and DeLorenzo. Mr. Murdock is Chairman of the
Committee.
Non-Employee
Director Compensation
The table below sets forth information with respect to the
compensation paid to non-employee directors of the Company in
fiscal year 2010.
Change in Pension
Fees Earned
Value and Non-
Or Paid in
Stock
Qualified Deferred
Name(1)
Cash(1)
Awards(2)
Compensation Earnings
Total
Andrew J. Conrad
$
94,000
$
75,008
$
5,754
(3)
$
174,762
Elaine L. Chao
$
88,000
$
75,008
—
$
163,008
Sherry Lansing
$
80,000
$
75,008
—
$
155,008
Dennis M. Weinberg
$
95,000
$
75,008
—
$
170,008
(1)
David H. Murdock, the Company’s Chairman of the Board,
David A. DeLorenzo, President and Chief Executive Officer,
and Justin M. Murdock, former Vice President, New Products and
Corporate Development, are not included in this table because
they are employees of the Company, or in Justin M.
Murdock’s case, was an
employee in 2010, and did not receive any compensation for their
service as directors. Compensation for each of
Messrs. David H. Murdock and DeLorenzo is included in
“Summary Compensation Table” below.
(2)
The amounts reported represent the aggregate grant date fair
value for restricted stock granted during the fiscal year, as
calculated in accordance with FASB Accounting Standards
Codification Topic 718. See Note 22 of the Notes to
Consolidated Financial Statements included in the Company’s
Annual Report on
Form 10-K
for fiscal year 2010, filed on March 14, 2011, for
assumptions used in the calculation of the amounts shown and
additional information regarding the Company’s share-based
compensation. Each non-employee director had 7,701 shares
of unvested restricted stock outstanding as of January 1,2011.
(3)
In 2010, interest earnings in excess of 120% of the January 2010
Applicable Federal Rate were $5,754.
Generally.The Company uses cash compensation
and restricted stock grants to attract and retain qualified
non-employee candidates to serve on the Board of Directors. In
setting outside director compensation, the Company considers the
significant amount of time that directors expend in fulfilling
their duties to the Company, as well as the skill sets each
outside director brings as a member of the Board.
Members of the Board of Directors who are not employees of the
Company are entitled to receive an annual cash retainer of
$60,000 and a Board meeting fee of $2,000 for each Board meeting
attended. The fee for telephonic participation is $1,000.
Directors receive $10,000 annually for service as chairman of
committees of the Board in addition to the cash retainer, except
in the case of the Chairman of the Audit Committee who receives
$15,000 annually. Committee meeting fees are $1,000 per meeting
attended, either in person or telephonically. On
November 29, 2010, each non-employee director also received
a grant of a number of whole shares of restricted stock valued
at $75,008, with full vesting on October 28, 2011. On
December 16, 2010, the Board of Directors adopted the
recommendation of the Corporate Compensation and Benefits
Committee to discontinue further annual restricted stock grants
as part of non-employee director compensation and, in lieu
thereof, approved an additional cash payment of $75,000 (or pro
rata portion thereof), payable on the October 28 date next
following the date when the director first became a member of
the Board of Directors or when the latest annual restricted
stock grant first fully vests, whichever is applicable, and
thereafter on the October 28th anniversary date. Each director
is required to be serving as a director on such October 28 date
in order to be eligible to receive the $75,000. Directors who
are employees of the Company do not receive any compensation for
their services as directors.
Justin M. Murdock did not receive any compensation in respect of
his service as a director in fiscal year 2010 because he was an
employee of the Company. He stepped down from his position as
Dole’s Vice President, New Products and Corporate
Development effective January 28, 2011, which he indicated
will enable him to devote his full time and energies to his
duties as CEO of privately-held NovaRx, and will therefore
entitle him to compensation as a non-employee director on a
pro-rated basis for fiscal year 2011.
Deferred Compensation. The Non-Employee
Director Deferred Cash Compensation Plan is a program in which
each non-employee director may defer up to 100% of his or her
total annual retainer and meeting fees. Amounts deferred under
this program are distributed to each non-employee director at
the termination of service as a director, either as a lump-sum,
or in equal annual cash installments over a period not to exceed
five years. None of the non-employee directors elected to defer
the annual retainer or fees in 2010.
Annual Physical. In line with the
Company’s focus on health and wellness, each non-employee
director has an annual executive physical benefit of up to
$6,000 at a facility determined by the Company. Non-employee
directors are responsible for any imputed income taxes due
through use of this benefit.
Contacting
the Board of Directors
Any stockholder, employee or interested party who desires to
communicate with individual directors, a committee of the Board,
the Board of Directors as a group, the directors who are not
also executive officers as a group or the independent directors
as a group, may do so by writing to the Board of Directors,
c/o Corporate
Secretary, Dole Food Company, Inc., One Dole Drive, Westlake
Village, California, 91362, in an envelope marked confidential.
All communications will be received and processed by the
Company’s legal department. Unless indicated otherwise,
communications about accounting, internal control and audits
will be referred to the Audit Committee. Parties may communicate
anonymously if so desired.
All communications required by law or regulation to be relayed
to the Board of Directors are relayed immediately after receipt.
Any communications received by management from stockholders or
other interested parties which have not also been sent directly
to the Board of Directors will be processed as follows:
(1) if the party specifically requests that the
communication be sent to the Board, the communication will then
be promptly relayed to the Board of Directors; and (2) if
the party does not request that the communication be sent to the
Board of Directors, then management will promptly relay to the
Board all communications that management, using its judgment,
determines should be relayed to the Board.
Individuals may also report misconduct, raise issues or simply
ask questions, including with respect to any questionable
accounting, internal control or auditing matters concerning the
Company, without fear of dismissal or retaliation of any kind.
Reports may be made anonymously and confidentially:
2. Through the Company’s Integrity Hotline,
888-236-7527
in the U.S., Canada and Guam, and in other countries at the toll
free number provided on the Company’s website,
www.dole.com, by following the links to “Company
Information,”“Investors,”“Corporate
Governance,”“Code of Conduct” and “Toll
Free International Numbers” or
3. In accordance with the Company’s Audit Committee
Procedures for Handling Accounting and Auditing Complaints and
Concerns, available on the Company’s website at
www.dole.comby following the links to “Company
Information,”“Investors,”“Corporate
Governance” and “Report Accounting Issues.”
Corporate
Governance
The Company monitors developments in the area of corporate
governance and routinely reviews its processes and procedures in
light of such developments. Accordingly, the Company reviews
federal laws affecting corporate governance such as the
Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform
and Consumer Protection Act of 2010 as well as various rules
promulgated by the SEC and the NYSE. The Company has procedures
and practices in place that are designed to enhance and protect
the interests of its stockholders.
Corporate
Governance Guidelines
In furtherance of this practice, the Board of Directors has
approved Corporate Governance Guidelines for the Company. The
Corporate Governance Guidelines address, among other things: the
role and the composition of the Board of Directors, including
membership criteria and leadership; how the Board of Directors
functions, including with respect to prior review of materials,
access to management and advisors, executive sessions of
directors who are not also executive officers; succession
planning for the position of CEO and certain top management
positions and reviews of management; the structure and
functioning of committees of the Board of Directors; and
director independence. The full text of the Corporate Governance
Guidelines is available on the Company’s websitewww.dole.comby following links to “Company
Information,”“Investors” and “Corporate
Governance” or upon written request to the Company, as
described in “Additional Information — Annual
Report, Financial and Other Information” below.
Code of
Conduct
The Board of Directors has also adopted a Code of Conduct
applicable to all of the Company’s employees as well as the
members of the Board of Directors. The Code of Conduct, along
with the Corporate Governance Guidelines, serves as the
foundation for the Company’s system of corporate
governance. Among other things, the Code of Conduct: provides
guidance for maintaining ethical behavior; requires that
employees, including officers and directors comply with
applicable laws and regulations; provides guidance for
protecting confidential information and Company assets;
prohibits conflicts of interest; addresses the Company’s
policies with respect to gifts and political contributions; and
provides mechanisms for reporting violations of the
Company’s policies and procedures, including the Code of
Conduct.
In the event the Company makes any amendment to, or grants any
waiver, including an implicit waiver, from, a provision of the
Code of Conduct that applies to the Company’s principal
executive officer, principal financial officer or principal
accounting officer that requires disclosure under applicable SEC
rules, the Company intends to disclose the amendment or waiver
and the reasons therefor on the Company’s websitewww.dole.comwithin four business days of the date of the
amendment or waiver. The full text of the Code of Conduct is
available on the Company’s websitewww.dole.comby
following links to “Company Information,”“Investors” and “Corporate Governance” or
upon written request to the Company, as described in
“Additional Information — Annual Report,
Financial and Other Information” below.
Audit
Committee Matters
Audit
Committee Report
The Audit Committee reviews the Company’s financial
reporting process on behalf of the Board of Directors.
Management has the primary responsibility with respect to the
financial statements and the reporting process of the Company,
and the Company’s independent registered public accounting
firm is responsible for expressing an opinion on the conformity
of the Company’s audited financial statements to generally
accepted accounting principles. The Audit Committee hereby
reports as follows:
1. The Audit Committee has reviewed and discussed the
audited financial statements for the fiscal year ended
January 1, 2011, with the Company’s management.
2. The Audit Committee has discussed with
Deloitte & Touche LLP, the Company’s independent
registered public accounting firm, the matters required to be
discussed by the Statement on Auditing Standards No. 61, as
amended (AICPA, Professional Standards, Vol. 1, AU
section 380), as adopted by the Public Company Accounting
Oversight Board in Rule 3200T, among other things.
3. The Audit Committee has received the written disclosures
and the letter from Deloitte & Touche LLP required by
the applicable requirements of the Public Company Accounting
Oversight Board regarding the independent registered public
accounting firm’s communications with the Audit Committee
concerning independence, and has discussed with
Deloitte & Touche LLP their independence.
Based on the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the Board
of Directors has approved, that the audited financial statements
be included in the Company’s Annual Report on
Form 10-K
for the fiscal year ended January 1, 2011, for filing with
the SEC.
Respectfully submitted,
Dennis M. Weinberg, Chairman
Andrew J. Conrad
Sherry Lansing
Pre-Approval
Policies and Procedures
The Audit Committee has adopted a written policy for the
pre-approval of audit, audit-related and non-audit services to
be provided by the Company’s independent registered public
accounting firm. In general, the Company’s independent
registered public accounting firm cannot be engaged to provide
any audit or non-audit services unless the engagement is
pre-approved by the Audit Committee in compliance with the
Sarbanes-Oxley Act of 2002. Certain basic services may also be
pre-approved by the Chairman of the Audit Committee under the
policy. However, any service that is not specifically
pre-approved under the policy must be specifically pre-approved
by the Audit Committee if it is to be provided by the
independent registered public accounting firm.
Set forth below are the fees paid by the Company to its
independent registered public accounting firm,
Deloitte & Touche LLP, for the fiscal periods
indicated, all of which were pre-approved by the Audit Committee
(amounts in thousands).
2010
2009
Audit fees
$
4,783
$
7,186
Audit-related fees
225
453
Tax fees
84
244
All other fees
—
—
Total
$
5,092
$
7,883
Audit Fees — Consist of fees for
professional services rendered for the audit of the
Company’s annual consolidated financial statements and
review of financial statements included in the Company’s
Forms 10-Q,
or services that are normally provided by the Company’s
independent registered public accounting firm in connection with
statutory or regulatory filings or engagements for those fiscal
years. Such services include those associated with reports or
other documents filed with the SEC such as the issuance of
consents, filings on
Form 8-K,
responding to SEC comment letters or other inquiries by
regulators related to accounting or disclosure matters, as well
as the issuance of comfort letters related to debt offerings.
Audit fees include fees associated with the audit of the
Company’s internal control over financial reporting.
Additionally, audit fees during 2009 included approximately
$1.5 million for services provided in connection with the
IPO.
Audit-Related Fees — Consist of fees for
services that are reasonably related to the performance of the
audit or review of the Company’s financial statements,
including fees for the performance of audits and attest services
not required by statute or regulations; audits of the
Company’s employee benefit plans; due diligence activities
related to mergers, acquisitions and investments; and accounting
consultations about the application of generally accepted
accounting principles to proposed transactions.
Tax Fees — Consist of fees for tax
compliance, tax planning and tax advice. Corporate tax services
encompass a variety of permissible services, including:
technical tax advice related to U.S. and international tax
matters; assistance with foreign income and withholding tax
matters; assistance with sales tax, value added tax and
equivalent tax related matters in local jurisdictions;
preparation of reports to comply with local tax authority
transfer pricing documentation requirements; and assistance with
tax audits.
EXECUTIVE
COMPENSATION
Compensation
Discussion & Analysis
Summary
Dole’s executive pay programs are designed to provide
competitive pay opportunities for our executives if they execute
the strategic goals and objectives upon which our incentive
programs are based. The majority of executive pay for our Named
Executive Officers comes through incentive-based pay. This is
contingent pay that can only be realized if performance goals
are achieved. These performance goals seek to strike the balance
between short-term performance and sustained multi-year
performance and focus on internal metrics of performance (e.g.,
traditional accounting measures). These goals are selected
because, when achieved, Dole believes they will generally lead
to the creation of stockholder value creation through stock
price appreciation.
In order to ensure that the pay opportunities we provide are
competitive, we engage in annual market benchmarking exercises.
This benchmarking is performed by the Corporate Compensation and
Benefits Committee’s (the “Compensation
Committee”) independent consultant, which benchmarks total
pay opportunities to a group of food and consumer products
companies that approximates the labor market for executive
talent at Dole.
Based on our benchmarking activities we set salaries, bonus
targets and long-term incentive opportunities for our executive
team.
Our annual incentive plan rewards achievement relative to cash
flow, debt management and earnings-related performance. These
performance goals are challenging in nature and were approved by
the Compensation Committee. Opportunities under this bonus plan
are capped so as to limit overall executive rewards and to guard
against potential risk-seeking behavior that may be associated
with unlimited payout opportunities.
Our long-term incentives are provided through a combination of
stock options, performance shares, restricted stock and other
forms of incentive bonuses under the 2009 Stock Incentive Plan
(the “2009 Stock Plan”). Stock options align our
executives with stockholders as they only realize value through
options when the stockholder does. Our performance share plan
provides payout opportunities if three year debt reduction
targets are achieved. Similar to the bonus plan, these goals
were approved by the Compensation Committee, and our payouts are
capped so as to limit total payout opportunity. Our restricted
stock program acts as a stockholder alignment and retention
device as it vests only after three years of service is rendered
to the Company. To further reinforce the alignment between our
executive team and our stockholders, each of the Named Executive
Officers is subject to stock ownership guidelines ranging from
three to five times the executive’s base salary.
Dole strives to develop compensation programs that are in the
best interests of stockholders. To this end we have not engaged
in stock option repricing, and we grant equity awards pursuant
to a fixed schedule (no springloading, no backdating). We do not
provide excessive perquisites, nor do we provide tax
gross-ups on
perquisites (with the exception of the Company’s one-time
reimbursement of certain transfer expenses and taxes noted in
“Perquisite and Other Agreements” below) or the
vesting of equity awards. We do not have any employment
agreements with our executive officers. We do not guarantee any
bonus or incentive plan payments, and we do not pay dividend
equivalents on unvested performance shares.
Objectives
The primary components of pay for Dole’s Named Executive
Officers are base salary, annual incentives and long-term
incentives. These programs are designed to be competitive with
both general industry and food and consumer products companies
and to align the Named Executive Officers’ incentives with
the long-term interests of Dole. The Company’s compensation
policies are intended to enable Dole to attract and retain top
quality management as well as to motivate management to set and
achieve aggressive goals in their respective areas of
responsibility. The compensation setting process consists of
targeting total compensation for each Named Executive Officer
and reviewing each component of compensation both individually
and as a component of overall compensation.
The Company’s “Named Executive Officers” refers
to those officers identified in “Summary Compensation
Table” below. The Company’s Named Executive Officers
for 2010 were: David H. Murdock, Chairman of the Board; David A.
DeLorenzo, President and Chief Executive Officer; C. Michael
Carter, Executive Vice President, General Counsel and Corporate
Secretary; and Joseph S. Tesoriero, Executive Vice President and
Chief Financial Officer.
Corporate
Compensation and Benefits Committee Role
The Compensation Committee meets as often as required during the
year in furtherance of its duties, including an annual review of
compensation for the Named Executive Officers. As discussed in
“The Board of Directors — Committees of the
Board — Corporate Compensation and Benefits
Committee — Role of Compensation Consultants”
above, the Company retained the services of Exequity, LLP, an
executive compensation consulting firm, in fiscal year 2010 to
review periodically the competitiveness of the Company’s
executive compensation programs relative to comparable
companies. Exequity is an independent compensation consulting
firm that reports directly to the Compensation Committee and
does not provide any nonexecutive compensation services to the
Company.
Role of
Named Executive Officers in Compensation Decisions
Mr. Murdock and the Compensation Committee annually review
Mr. DeLorenzo’s performance and receive input from
Mr. DeLorenzo with respect to the performance of
Messrs. Carter and Tesoriero. Neither Mr. Murdock nor
Mr. DeLorenzo provides input on their own compensation.
Recommendations with respect to each component of pay are
presented to the Compensation Committee for approval. The
Compensation Committee can exercise its discretion with respect
to recommendations made for any Named Executive Officer.
Benchmarking
The Compensation Committee compares each component of its pay
program against a group of food and consumer products companies.
The Compensation Committee also compares pay components to other
general industry companies. In order to ensure that the peer
group continued to comprise companies that approximate the labor
market for executive talent for Dole, the following revisions
were made to the peer group in 2010: Hain Celestial Group,
Seneca Foods Corporation, Central Garden & Pet
Company, and Spectrum Brands, Inc. were added and PepsiAmericas
Inc. was removed. The Compensation Committee annually reviews
the peer group for ongoing appropriateness. The current group
comprises 22 companies. Annual revenues range from
approximately $1 billion to $12 billion. Dole’s
revenues fall within the third quartile of this group. For 2010,
the companies in the group were as follows:
Campbell Soup Company
Del Monte Foods Company
The Hershey Company
Seneca Foods Corporation
Central Garden & Pet Company
Dr. Pepper Snapple Group
Hormel Foods Corp.
Smithfield Foods Inc.
Chiquita Brands International, Inc.
Fresh Del Monte Produce Company
Kellogg Company
Spectrum Brands, Inc.
ConAgra Foods, Inc.
General Mills, Inc.
McCormick & Company, Inc.
J.M. Smucker Company
Corn Products International Inc.
H. J. Heinz Company
Ralcorp Holdings Inc.
Dean Foods Company
Hain Celestial Group
Sara Lee Corporation
The Compensation Committee also uses data from general industry
surveys to benchmark pay for executives. These surveys typically
provide total compensation data for standard benchmark jobs. The
Compensation Committee considers a revenue cut of the survey
that approximates Dole in terms of overall size. The general
industry data are viewed by the Compensation Committee as a
secondary reference point in quantifying competitive market
values for executive positions. The Compensation Committee set
base salary and annual incentives at the median of other
similarly sized companies and recognizes that, for 2010,
long-term compensation continues to trail the median.
Total
Direct Pay Compensation
Total direct pay at Dole has three components: base salary,
annual cash incentives and long-term incentive programs.
Dole targeted 2010 total direct pay as follows: for the
Chairman, approximately $2 million; for the President and
Chief Executive Officer, approximately $4.4 million; for
the Executive Vice President, General Counsel and Corporate
Secretary, approximately $1.8 million; and, for the
Executive Vice President and Chief Financial Officer,
approximately $1.6 million. These total direct pay figures
represent “opportunity” and, except for base salary,
are not guaranteed amounts. As described below, a very
significant portion of these value targets (65% — 75%)
comes through incentive plans that are based on performance. If
threshold levels of performance are not achieved, these
incentive awards will not be earned.
Based on a competitive review, total direct pay for all the
Named Executive Officers (excluding the Chairman) falls slightly
below the median benchmarks due to below-median long-term
incentive opportunity.
Under Dole’s current total compensation structure, the
approximate mix of base salary, annual incentive and long-term
incentive programs for the Named Executive Officers (exclusive
of the Chairman) is as follows: 25% — 35% to base
salary; 25% — 30% to annual incentives; and
40% — 45% to long-term incentive programs. In
allocating total compensation among these components of pay, the
Compensation Committee believes the compensation package should
be predominantly performance-based since these individuals have
the greatest ability to affect and influence the financial
performance of the Company.
Base
Salary
The Compensation Committee wants to provide a base salary that
is commensurate with the position in the Company and is
comparable to what other individuals in similarly situated
positions might receive. Base salaries are approximately
25% — 35% of total direct compensation. The
Compensation Committee considers each Named Executive
Officer’s position relative to the market, his
responsibilities and performance in the job. Based on
benchmarking data, no changes were made to the base salaries of
the Named Executive Officers in 2010. Based on market data and
factors noted above, the Compensation Committee decided on the
pay levels noted in “Summary Compensation Table” below.
Annual
Incentives
Dole’s annual discretionary incentive program, the One-Year
Management Incentive Plan (the “One-Year Plan”), has
target bonuses for the Named Executive Officers, as a percentage
of salary, ranging from 85% to 110%. The target bonuses for
fiscal year 2010 for the Named Executive Officers were as
follows: 110% of base salary for Mr. Murdock and
Mr. DeLorenzo and 85% of base salary for Mr. Carter
and Mr. Tesoriero. Payments are generally made if the
specified minimum level of financial performance is realized and
may be increased to maximum levels only if substantially higher
performance levels are attained, subject to the discretion of
the Compensation Committee. For fiscal year 2010 the maximum
opportunity in the annual incentive program was capped at 200%
of target bonus. Payments under the One-Year Plan may be made,
even if the Named Executive Officer is no longer employed by the
Company, if termination results from normal retirement, death or
disability (as defined in the One-Year Plan).
The following table summarizes the target and maximum bonus
amounts for each Named Executive Officer under the One-Year Plan
for fiscal year 2010:
Name
Target Bonus Amount
Maximum Bonus Amount
David H. Murdock
$
1,050,500
$
2,101,000
David A. DeLorenzo
$
1,320,000
$
2,640,000
C. Michael Carter
$
514,250
$
1,028,500
Joseph S. Tesoriero
$
425,000
$
850,000
The annual financial performance goals (discussed in more detail
below) are recommended by management and set by the Compensation
Committee. The financial performance goals are structured to
present a challenging, yet achievable profitability scenario for
the Company. The Compensation Committee sets the minimum, target
and maximum levels such that the relative difficulty of
achieving the target level is consistent from year to year.
Consistent with the approach for allocating total target
compensation among the three components of compensation, target
annual cash incentive levels for the Named Executive Officers
under the One-Year Plan are approximately 25% to 30% of total
direct compensation.
The financial performance goals are the same for each of the
Named Executive Officers and each may earn 100% of his targeted
incentives if the established target for the financial
performance goals are met. The Compensation Committee may
approve discretionary payments to the Named Executive Officers
if the financial performance goals in a given fiscal year are
not attained, in recognition of their respective overall
performance at the Company.
The Compensation Committee selected a combination of cash flow
return on investment (“CFROI”) and the year-end
net-debt-to-EBITDA ratio (“Debt Ratio”) as the
financial performance metrics for annual incentive payments.
CFROI was weighted at 80% in funding the incentive pool because
the Compensation Committee determined that it provides the best
view and the most direct and accurate measurement of annual
consolidated performance. The Debt Ratio is determined by
dividing the net debt at the end of the year by consolidated
earnings before interest, taxes, depreciation and amortization
(“EBITDA”). The Debt Ratio was weighted at 20% in
funding the incentive pool as it is also an important objective
of the Company.
For fiscal 2010, the incentive pool was funded as described
above, 80% funding based on a CFROI target of 11.72% and 20%
funding based on a Debt Ratio target of 3.0. Actual results were
a CFROI of 10.46% and a Debt Ratio of 3.79. For purposes of
setting the targets, CFROI is our annual budgeted EBITDA divided
by budgeted investment. This is the annual budget we use for
operating and planning purposes and is not a special budget used
for compensation purposes.
In determining the achievement of CFROI and Debt Ratio goals in
2010, the Compensation Committee approved the incentive pool
based on CFROI and Debt Ratio, in both cases adjusted for
unusual or non-operational items. 2010 results for both
performance measures were below targets, resulting in an average
pool of approximately 60% of target incentives to the Named
Executive Officers.
Metrics
for Fiscal 2011
The combination of CFROI and Debt Ratio have again been selected
as the financial metrics for fiscal 2011. The Compensation
Committee continues to believe that this combination, and the
greater weighting of CFROI, provides the most direct and
accurate measurement of annual business performance.
Long-Term
Incentives
Historically, Dole provided cash-based long-term incentive
awards pursuant to the Sustained Profit Growth Plan (the
“Growth Plan”), which provided for annual awards, each
with three-year incentive periods. Payments have been made with
respect to the 2008 — 2010 incentive period under the
Growth Plan, which was the final Growth Plan cycle, as described
in greater detail below. Following the Company’s IPO, the
Company replaced the Growth Plan with equity-based long-term
incentives granted under the 2009 Stock Plan, and in 2011, the
Company adopted a self-funded cash long-term incentive program
in the form of incentive bonuses under the 2009 Stock Plan (the
“2011 LTIP”), with payment based on adjusted EBITDA
performance.
Equity
Incentive Awards
During fiscal 2010, the Company granted equity awards to each
Named Executive Officer (other than Mr. Murdock, given his
existing ownership stake). The equity awards were a combination
of restricted stock, stock option and performance share awards.
The table below reflects the grants made to the Named Executive
Officers during fiscal 2010. In an effort to balance the
objectives of stockholder value creation with retention and
share conservation, the Compensation Committee decided to issue
the mix of stock options, restricted stock and performance
shares shown in the proportions described below.
Performance Shares
Name
Stock Options
Restricted Stock
(Target)
David H. Murdock
0
0
0
David A. DeLorenzo
255,000
42,500
42,500
C. Michael Carter
100,000
16,667
16,667
Joseph S. Tesoriero
100,000
16,667
16,667
The grants reflected in the table above were the only grants
made to the Named Executive Officers during fiscal 2010.
The stock options granted to the Named Executive Officers in
fiscal 2010 vest ratably over three years from the date of
grant, subject to continued employment through each vesting date
The fiscal 2010 restricted stock awards vest on the third
anniversary of the date of grant, subject to continued
employment through the vesting date.
The performance shares granted to the Named Executive Officers
in fiscal 2010 will vest based upon the achievement of a net
debt reduction target at the end of the three fiscal year
performance period ending with the Company’s 2013 fiscal
year. Final award amounts will be determined at the end of the
three-year period and will range from 0% — 200% of the
Named Executive Officers’ targeted awards and will be based
on actual results compared against the net debt reduction target
set at the beginning of the three-year period. The net debt
reduction target was not established by the Compensation
Committee at the time of grant, but instead was established at
the Compensation Committee’s February 24, 2011
meeting. Under applicable accounting guidelines, the performance
share awards were considered granted (for accounting purposes)
on February 24, 2011, the date of the applicable
Compensation Committee meeting. As a result, under SEC
compensation disclosure rules, the performance share awards are
not reflected in the Summary Compensation Table and Grant of
Plan-Based Awards Table in this proxy statement, but will
instead be included in those tables in the proxy statement for
the annual meeting for fiscal year 2011.
Although fiscal year 2010 was the first year the performance
share awards were granted, the Compensation Committee intends to
set the performance targets under future performance shares, if
any, such that the relative difficulty of achieving the target
level is consistent from year to year and similar to the level
of difficultly with respect to any prior awards. Maximum award
levels are intended to reflect very ambitious goals which can
only be attained when business results are exceptional, thus
justifying the higher award payments. Similarly, if performance
falls short of specified levels, there will be no payout under
the performance share awards. Achievement of the Company’s
three-year financial plan can be difficult to reach and is
subject to the volatile nature of Dole’s businesses, which
can be impacted by numerous factors, such as exposure to such
commodity input costs as fuel, shipping and packaging, as well
as product supplies which can be impacted by weather, political
risk, currency fluctuations and other factors.
Sustained
Profit Growth Plan for Incentive Period Ended 2010
The Growth Plan contemplated annual awards, each with three-year
incentive periods. Each Named Executive Officer’s payment
in connection with each award is determined as of the end of the
incentive period for that award, and is paid in a lump sum no
later than 90 days following the end of the incentive
period. The performance measures and targets were recommended by
management and set by the Compensation Committee. The
Compensation Committee authorized all of the Named Executive
Officers to participate in the Growth Plan.
The Named Executive Officers have identical performance goals
and earn 100% of their targeted long-term incentive payments if
financial performance goals are achieved. Under the Growth Plan,
potential payments range from 0% to 300% of a Named Executive
Officer’s target. There is no discretionary pay component
available under the Growth Plan. Achievement of target awards
under this plan requires Company performance, on a consolidated
basis, to meet three-year performance goals. Such goals are
driven by the Company’s three-year financial and operating
plan.
The Growth Plan for the 2008 — 2010 Incentive Period
(the “2008 Incentive Period”) was calculated based on
achievement of two factors: (a) the ending leverage ratio
(net debt at the end of the 2008 Incentive Period, divided by
EBITDA for the last year of the 2008 Incentive Period), and
(b) the average annual EBITDA for the 2008 Incentive
Period, in each case adjusted for unusual or non-operational
items. The ending leverage ratio goal was 4.39 and the average
annual EBITDA goal was $400 million. The Company’s
ending leverage ratio and average EBITDA over the 2008 Incentive
Period, adjusted under the Growth Plan, were 4.427 and
$406.5 million, respectively, which resulted in a combined
achievement relative to targeted performance under the Growth
Plan for the 2008 Incentive Period of 99.9% of target.
Payment under the Growth Plan for the 2008 Incentive Period was
formula driven and was paid in 2011 as follows: the Chairman
received $1,423,575; the President & Chief Executive
Officer received $1,798,200; the Executive Vice President,
General Counsel and Corporate Secretary received $749,250; and
the Executive Vice President and Chief Financial Officer
received $516,983.
Until December 31, 2001, Dole maintained a traditional
defined benefit pension plan. Subsequent to that time no new
participants were added to the plan and benefits under the plan
for existing participants were frozen. The Company did institute
a five-year transition benefit plan for long-term employees,
which concluded at the end of 2006. Mr. Tesoriero was not
an employee of the Company prior to the freeze, and so had not
accrued any benefit under the benefit pension plan prior to the
freeze. Mr. Carter is entitled to receive an annual
retirement benefit of approximately $5,747. Mr. DeLorenzo
received $314,217 in pension benefit payments in 2010.
Mr. DeLorenzo retired on December 29, 2001 and began
receiving retirement benefit payments in 2002. He was rehired in
June 2007 and continues to receive retirement benefit payments.
In addition, since Mr. DeLorenzo had been a pension plan
participant prior to July 1975, a portion of his retirement
benefit payment is based on variable units, which fluctuate in
value based on stock market changes. Therefore, the amount of
his retirement benefit payment may change from
year-to-year
to reflect annual changes in the value of the variable units.
Mr. Murdock is over the age of
701/2
and, as required by the Internal Revenue Code, received $146,341
in pension benefit payments in 2010. If any individual’s
benefit under the pension plan exceeds the maximum annual
benefit or the maximum compensation limit, Dole will pay the
excess from an unfunded supplemental retirement plan. Additional
details regarding the supplemental retirement plan are provided
in “Pension Benefits” below.
Savings
Plans
Dole matches contributions to the 401(k) plan up to 6% of
eligible compensation. Effective July 5, 2009 through
July 3, 2010, Dole reduced its match to the 401(k) plan to
$0.50 of each dollar contributed up to 6% of eligible
compensation. On July 4, 2010, Dole reverted back to
matching 100% of each dollar contributed up to 6% of eligible
compensation. In addition, effective July 4, 2010, the
Company began to annually contribute a percentage
(1% — 2%) of eligible pay to the 401(k) plan, based on
the number of years of service with Dole.
The Named Executive Officers, as well as other U.S. based
senior executives, are eligible to participate in the Excess
Savings Plan where eligible employees can contribute up to 100%
of eligible earnings (base pay and annual incentive). Additional
details regarding the Excess Savings Plan can be found in
“Nonqualified Deferred Compensation” below.
Perquisite
and Other Agreements
Perquisites for the Named Executive Officers (except for
Mr. Murdock) are the reimbursement of up to $5,000 per year
for financial planning and a Company-paid annual executive
physical not to exceed $6,000. During 2010, the Company elected
(1) to continue to provide Messrs. Carter and
Tesoriero with Company cars, insurance costs and maintenance
through the end of the year; and (2) to make a taxable gift
of the respective cars to them by fiscal year 2010 end, which
were valued at $12,750 for Mr. Carter and $7,875 for
Mr. Tesoriero, together with a cash payment of $10,150 for
Mr. Carter and $7,267 for Mr. Tesoriero, representing
reimbursement for certain transfer expenses and taxes. These
perquisites have been reviewed as competitive and consistent
with perquisites offered in the marketplace for similarly
situated executives. The values of these perquisites are
reflected in “Summary Compensation Table” below.
The Dole airplane (co-leased with a company owned by
Mr. Murdock) was used by Mr. Murdock in 2010 solely
for business purposes. The costs to Dole of these expenses are
discussed in “Certain Relationships and Related Party
Transactions” below.
The Named Executive Officers participate in the Company’s
other benefit plans on the same terms as other employees. These
plans include medical and dental insurance, life insurance,
long-term disability and charitable gift matching (limited to
$500 per employee per year).
Employment
Agreements
As of end of the 2010 fiscal year, Dole was not party to any
employment agreements with the Named Executive Officers.
The Named Executive Officers participate in the same severance
program, on the same terms, as all other eligible employees. The
program provides for severance pay upon certain involuntary
terminations based upon years of service.
Double-trigger change of control agreements are in place for the
Named Executive Officers. As discussed in “Change of
Control” below, the Company believes these change of
control agreements are important in order to keep these
executives focused on Dole’s business should a change of
control occur or be contemplated.
The Company’s change of control benefits for the Named
Executive Officers include a
gross-up
payment in connection with Internal Revenue Code
Section 280G (referred to as the Section 280G
gross-up).
The Section 280G tax on “excess parachute
payments” is assessed, in part, based on
Form W-2
income over the five year period (or lesser period if the
executive officer has not been employed with the employer for a
full five years) preceding a termination in connection with a
change of control. Thus, the amount of tax imposed varies
depending on factors such as whether the executive officer
elected to defer compensation or to exercise equity awards under
the 2009 Stock Plan and how long the executive officer has been
employed with the Company. The Section 280G
gross-up
payments are intended to make certain that the payments and
benefits actually received by the Named Executive Officers, net
of Section 280G excise tax, are consistent with the
Company’s compensation decisions and do not vary
arbitrarily due to the operation of the tax rules. For these
reasons, the Company believes that the provision of the
Section 280G
gross-up
payments for the Named Executive Officers is appropriate. In
2010, the Compensation Committee, at management’s
recommendation, adopted a new form of change of control
agreement that does not contain an excise tax
gross-up and
that will apply to all future executive officers, although the
current Named Executive Officers will continue to have excise
tax gross-up
protection under their existing change of control agreements.
In addition, consistent with the purposes behind certain of the
grants of restricted stock made to the Named Executive Officers
in connection with the Company’s IPO, those awards provide
for accelerated vesting upon a termination of the applicable
Named Executive Officer’s employment by the Company without
Cause or by the employee for Good Reason at any time (whether or
not in connection with a change of control and each as defined
in “Change of Control” below).
See the discussion in “Severance” and “Payments
upon Termination or Change of Control” below for further
information on the Company’s severance and change of
control arrangements.
Stock
Ownership Guidelines
Dole has adopted stock ownership guidelines for our Named
Executive Officers to encourage them to build their ownership
position in the Company’s common stock. Each Named
Executive Officer will be required to acquire and hold Company
common stock in an aggregate amount having values equivalent to
the multiples of base salaries indicated below, with such goal
to be achieved by the end of fiscal year 2015, taking into
account the value of their respective shares of common stock
owned and restricted stock awards both vested and unvested, and
excluding shares held as custodian under the UGMA for children
or grandchildren. These guidelines are presented as stock value
as a multiple of base salary as follows:
Stock Value as a Multiple of
Position
Base Salary
President & Chief Executive Officer
5 times
Other Named Executive Officers
3 times
As of December 31, 2010, the President and Chief Executive
Officer satisfied his ownership guideline. The Executive Vice
President, General Counsel and Corporate Secretary, and the
Executive Vice President and Chief Financial Officer have
achieved approximately 51% and 62%, respectively, of ownership
guidelines.
Policy
Regarding Restatements
The Company does not have a formal policy requiring a fixed
course of action with respect to compensation adjustments
following later restatements of financial results. Under those
circumstances, the Board of Directors or
Compensation Committee would evaluate whether compensation
adjustments were appropriate based upon the facts and
circumstances surrounding the restatement. The Sarbanes-Oxley
Act of 2002 includes a clawback provision that allows the SEC to
seek disgorgement of incentive compensation received by a
company’s chief executive officer and chief financial
officer within 12 months after the issuance of financial
information that is restated because of a material noncompliance
with reporting requirements as a result of misconduct.
The Dodd-Frank Act directs the SEC to issue rules to require
national securities exchanges and national securities
associations to list only those companies that implement a
policy requiring the mandatory recoupment of incentive
compensation paid to current and former executive officers for
the three-year period preceding a restatement of the
Company’s financial statements that would not have been
paid under the restated financial statements. The SEC is
expected to adopt final rules implementing this portion of the
Dodd-Frank Act in late 2011 or early 2012. On or before the
effective date of those rules, Dole will adopt a clawback policy
that complies with the final rules as adopted by the SEC and the
NYSE.
Tax
Deductibility
The Company generally intends to have plans that will maximize
tax deductibility for the Company. The Company has considered
the potential future effects of Section 162(m) of the
Internal Revenue Code on the compensation paid to the Named
Executive Officers. Section 162(m) places a limit of
$1 million on the amount of compensation that a publicly
held corporation may deduct in any one year with respect to its
chief executive officer and each of the next three most highly
compensated executive officers (other than its chief financial
officer). Under Section 162(m), transition rules generally
exempt compensation paid under plans in existence before the
IPO. However, base salaries to the extent they exceed
$1 million will not be deductible under
Section 162(m). In addition, the Company may authorize
other compensation payments that do not comply with the
exemptions in Section 162(m) when the Company believes that
such payments are appropriate to attract and retain executive
talent.
Corporate
Compensation and Benefits Committee Report
The Compensation Committee has reviewed and discussed the
foregoing Compensation Discussion & Analysis with
management. Based on its review and discussion with management,
the Compensation Committee has recommended to the Board of
Directors that the Compensation Discussion & Analysis
be included in this Proxy Statement.
The table below summarizes total compensation paid, earned or
awarded to each of the Named Executive Officers for the fiscal
years ended January 1, 2011, January 2, 2010 and
January 3, 2009.
Change in
Pension Value
and
Nonqualified
Non Equity
Deferred
Stock
Option
Incentive Plan
Compensation
All Other
Name and Principal
Fiscal
Salary
Bonus
Awards
Awards
Compensation
Earnings
Compensation
Total
Position
Year
($)(1)
($)(2)
($)(3)
($)(3)
($)(4)
($)(5)
($)(6)
($)
David H. Murdock
2010
955,000
621,224
0
0
1,423,575
120,157
19,809
3,139,765
Chairman of the Board
2009
951,538
0
0
0
892,050
261,327
3,462
2,108,377
2008
968,269
1,269,226
0
0
541,500
(114,009
)
33,057
2,698,043
David A. DeLorenzo
2010
1,200,000
780,595
413,950
1,104,150
1,798,200
156,923
104,925
5,558,743
President and Chief
2009
1,200,000
0
3,958,338
1,984,500
835,200
402,150
94,182
8,474,370
Executive Officer
2008
1,223,077
1,374,199
0
0
0
(272,894
)
76,965
2,401,347
C. Michael Carter
2010
605,000
304,107
162,337
433,000
749,250
7,763
58,404
2,319,861
Executive Vice President,
2009
601,538
0
625,000
661,502
348,000
6,342
25,195
2,267,577
General Counsel and Corporate Secretary
2008
611,538
619,431
0
0
254,125
25,693
53,929
1,564,716
Joseph S. Tesoriero
2010
500,000
251,328
162,337
433,000
516,983
16,336
45,916
1,925,900
Executive Vice President
2009
500,000
0
625,000
661,502
240,120
5,336
54,408
2,086,366
and Chief Financial Officer
2008
482,692
505,464
0
0
185,725
4,955
38,995
1,217,831
(1)
Dole operates on a 52/53 week fiscal year (the fiscal year
ends on the Saturday closest to December 31) and, as a
result, fiscal year 2008 was a 53-week year (with accordingly
higher salary) while fiscal years 2009 and 2010 were 52-week
years. Mr. Tesoriero received an increase to base salary in
2009, accounting for his higher salary in 2009 and 2010.
Messrs. Murdock and Carter’s annual car allowance
benefit of $5,000 was folded into annual base salary in the
fourth quarter of 2009, accounting for their higher salaries in
2009 and 2010.
(2)
Bonus amounts shown for each fiscal year reflect cash payments
made in the subsequent fiscal year with respect to performance
for such fiscal year under the One-Year Plan.
(3)
The amounts reported represent the aggregate grant date fair
value for restricted stock and options granted during the fiscal
year, as calculated in accordance with FASB Accounting Standards
Codification Topic 718. See Note 22 of the Notes to
Consolidated Financial Statements included in the Company’s
Annual Report on
Form 10-K
for fiscal year 2010, filed on March 14, 2011, for
assumptions used in the calculation of the amounts shown and
additional information regarding the Company’s share-based
compensation. As for the performance shares granted to the Named
Executive Officers in fiscal year 2010, under applicable
accounting guidelines, these awards were considered granted (for
accounting purposes) on February 24, 2011, the date of the
Compensation Committee meeting when the net debt reduction
target was established. As a result, under SEC compensation
disclosure rules, the performance share awards are not reflected
in this Summary Compensation Table, but will instead be included
in this table in the proxy statement for the annual meeting for
fiscal year 2011. See “Compensation Discussion &
Analysis — Long Term Incentives — Equity
Incentive Awards” above.
(4)
Amounts shown for 2010 reflect awards earned for the 2008
Incentive Period, which were paid in March 2011, under the
Growth Plan. See “Compensation Discussion &
Analysis — Long Term Incentives — Sustained
Profit Growth Plan for Incentive Period Ended 2010” above.
(5)
The amounts shown reflect the actuarial decrease or increase in
the present value of Mr. Murdock’s,
Mr. DeLorenzo’s and Mr. Carter’s benefits
under all pension plans established by the Company using
interest rate and mortality rate assumptions consistent with
those used in the Company’s financial statements and
include amounts which the Named Executive Officer may not
currently be entitled to receive. In general, the present value
of the benefits under the pension plans increase until
attainment of age 65 and thereafter decrease due to the
mortality assumptions. Also reflected in the amounts shown are
the annual earnings on each Named Executive Officer’s
deferred compensation balance. The 2010 change in actuarial
value for each of the Named
Executive Officers is as follows: for Mr. Murdock $94,234;
for Mr. DeLorenzo $119,464; and, for Mr. Carter $696.
Mr. Tesoriero joined Dole after the defined benefit plans
were frozen and therefore does not have a benefit. The amounts
shown for 2010 also include interest earnings in excess of 120%
of the January 2010 applicable federal rate on non-qualified
deferred compensation as follows: for Mr. Murdock $16,653;
for Mr. DeLorenzo $22,147; for Mr. Carter $4,111; and,
for Mr. Tesoriero $9,553.
(6)
The 2010 amounts shown include the following:
(1) Dole’s matching contributions to both the 401(k)
and Excess Savings Plans of Dole Food Company, Inc. (see
“Compensation Discussion & Analysis
— Savings Plans” above and “Nonqualified
Deferred Compensation” below) on behalf of Mr. Murdock
$19,809, Mr. DeLorenzo $75,508, Mr. Carter $30,504 and
Mr. Tesoriero $22,221; (2) for Mr. DeLorenzo,
$21,213 above market interest earned on deferred compensation as
an outside director prior to June 2007 when he was rehired as an
employee; (3) the value attributable to personal use of the
company-provided automobiles to Mr. Carter and
Mr. Tesoriero during 2010 and the taxable gift of the
respective automobiles by year end to them, valued at $12,750
for Mr. Carter and $7,875 for Mr. Tesoriero, together
with a cash payment of $10,150 for Mr. Carter and $7,267
for Mr. Tesoriero, representing reimbursement for certain
transfer expenses and taxes; and the value attributable to
personal use of the company-provided automobile for
Mr. Tesoriero $2,162; (4) the cost of financial
planning services reimbursed (amounts are included in the
executive’s
W-2 and
taxes are borne by the executive) by the Company for
Mr. DeLorenzo $3,954, Mr. Carter $5,000 and
Mr. Tesoriero $2,841; and (5) the cost of an annual
executive physical for Mr. DeLorenzo $4,250 and for
Mr. Tesoriero $3,550.
2010
Grants of Plan-Based Awards Table
The following table sets forth all grants of plan-based awards
made to the Named Executive Officers during the fiscal year 2010.
The options vest in three equal installments commencing on
November 29, 2011.
(3)
As for the performance shares granted to the Named Executive
Officers in fiscal year 2010, under applicable accounting
guidelines, these awards were considered granted (for accounting
purposes) on February 24, 2011, the date of the
Compensation Committee meeting when the net debt reduction
target was established. As a result, under SEC compensation
disclosure rules, the performance share awards are not reflected
in this 2010 Grants of Plan-Based Awards Table, but will instead
be included in this table in the proxy statement for the annual
meeting for fiscal year 2011. See “Compensation
Discussion & Analysis — Long Term
Incentives — Equity Incentive Awards” above.
(4)
The grant date fair value was calculated in accordance with FASB
ASC Topic 718. See Note 22 of the Notes to Consolidated
Financial Statements included in the Company’s Annual
Report on
Form 10-K
for fiscal year 2010, filed on March 14, 2011, for
assumptions used in the calculation of the amounts shown and
additional information regarding the Company’s share-based
compensation.
2010
Outstanding Equity Awards at Fiscal Year-End Table
The following table sets forth equity awards of the Named
Executive Officers outstanding as of January 1, 2011.
Option Awards(1)
Stock Awards(2)
Number of
Number of
Number of
Securities
Securities
Shares or
Market Value
Underlying
Underlying
Units of
of Shares or
Unexercised
Unexercised
Option
Option
Stock That
Units of Stock
Options (#
Options (#
Exercise
Expiration
Have Not
That Have Not
Name
Exercisable)
Unexercisable)
Price ($)
Date
Vested (#)
Vested ($)(3)(4)
David H. Murdock
—
David A. DeLorenzo
116,667
233,333
12.50
10/22/2019
—
50,000
675,500
177,778
2,401,781
255,000
9.74
11/29/2020
961,350
42,500
574,175
42,500
574,175
C. Michael Carter
38,889
77,778
12.50
10/22/2019
—
16,667
225,171
22,222
300,219
100,000
9.74
11/29/2020
—
16,667
225,171
16,667
225,171
Joseph S. Tesoriero
38,889
77,778
12.50
10/22/2019
—
16,667
225,771
22,222
300,219
100,000
9.74
11/29/2020
—
16,667
225,171
16,667
225,171
(1)
All option awards vest ratably over a three-year period,
commencing on the first anniversary of the date of grant, and
have a term of ten years.
(2)
In 2009, the following number of shares of restricted stock were
granted as annual grants pursuant to the Company’s
equity-based long-term incentive program: Mr. DeLorenzo
(50,000), Mr. Carter (16,667) and Mr. Tesoriero
(16,667). These shares vest in full on October 28, 2012.
The following number of shares of restricted stock were granted
as a one-time IPO bonus: Mr. DeLorenzo (266,667),
Mr. Carter (33,333) and Mr. Tesoriero (33,333). These
shares vest in three equal annual installments commencing on
October 28, 2010. The restricted stock was granted under
the 2009 Stock Plan.
(3)
In 2010, the following number of shares of restricted stock were
granted as annual grants pursuant to the Company’s equity
based long-term incentive program: Mr. DeLorenzo (42,500),
Mr. Carter (16,667) and Mr. Tesoriero (16,667). These
shares will vest in full on November 29, 2013. The
following number of performance shares were granted:
Mr. DeLorenzo (42,500), Mr. Carter (16,667) and
Mr. Tesoriero (16,667). The performance shares vest based
upon the achievement of a net debt reduction target at the end
of the three fiscal year performance period ending with the
Company’s 2013 fiscal year. Final award amounts will be
determined at the end of the three-year period and will range
from 0% — 200% of the Named Executive Officers’
targeted awards and will be based on actual results compared
against the net debt reduction target set at the beginning of
the three-year period.
(4)
The market value was computed using the closing price ($13.51)
of the Company’s common stock on the last trading day of
the fiscal year, December 31, 2010.
The following table sets forth information with respect to
common stock acquired upon the exercise of stock options and the
vesting of stock awards of the Named Executives Officers during
fiscal year 2010.
Option Awards
Stock Awards
Number of
Number of
Shares Acquired on
Value Realized on
Shares Acquired on
Value Realized on
Name
Exercise (#)
Exercise ($)
Vesting (#)
Vesting ($)
David H. Murdock
0
0
0
David A. DeLorenzo
0
88,889
818,668
C. Michael Carter
0
11,111
102,332
Joseph S. Tesoriero
0
9,074
102,332
Pension
Benefits
The Company sponsors both a qualified and nonqualified defined
benefit plan. The accrued benefit under the qualified plan is
1.1% of final average compensation multiplied by years of
service, plus 0.33% of final average compensation multiplied by
years of service in excess of 15 years. The nonqualified
plan is a restoration plan, providing benefits that cannot be
provided under the qualified plan on account of Internal Revenue
Code limits on compensation and benefits.
Participation in both defined benefit plans was frozen on
December 31, 2001. Benefits were also frozen for most
employees at that time, although some long-service employees
received additional benefit accruals over the next five years.
No benefits accrued under either defined benefit plan after
December 31, 2006. All participants were fully vested as of
that date.
Participants may receive their full benefit upon normal
retirement at age 65 or a reduced benefit upon early
retirement on or after age 55.
The amounts in the table below reflect the present value of the
Named Executive Officer’s benefits under all defined
benefit pension plans sponsored by the Company and are
determined using the interest rate and mortality rate
assumptions used for U.S. pension plans discussed in
Note 13 in the notes to the consolidated financial
statements included in the Company’s Annual Report on
Form 10-K
for fiscal 2010.
Number of
Payments
Years of
Present Value of
During Last
Credited
Accumulated
Fiscal Year
Name(1)
Plan Name
Service
Benefit ($)
($)
David H. Murdock(2)
Plan 29
8.5
1,445,550
93,973
SERP
8.5
805,557
52,368
David A. DeLorenzo(3)
Plan 29
31.5
1,017,727
73,601
SERP
31.5
3,221,706
240,616
C. Michael Carter
Plan 29
1.25
31,814
—
SERP
1.25
30,913
—
(1)
Mr. Tesoriero joined Dole after the defined benefit plans
were frozen and is not shown in the table as he does not have an
accrued benefit under the qualified or nonqualified defined
benefits plan.
(2)
As required by the Internal Revenue Code, Mr. Murdock, who
is over the age of
701/2,
is receiving his current annual retirement benefit as a joint
and survivor annuity.
(3)
Mr. DeLorenzo retired from Dole on December 29, 2001
and began receiving retirement benefit payments in 2002.
Mr. DeLorenzo was rehired on June 4, 2007 and
continues to receive retirement benefit payments. In addition,
since Mr. DeLorenzo had been a pension plan participant
prior to July 1975, a portion of his retirement benefit payments
is based on variable units, which fluctuate in value based upon
stock market changes. Therefore, the amount of his retirement
benefit payment may change from
year-to-year
to reflect annual changes in the value of the variable units.
Named Executive Officers and certain other executives are
eligible to participate in the Excess Savings Plan (the
“ESP”). This plan is a nonqualified savings plan that
provides participants with the opportunity to contribute amounts
on a deferred tax basis which are in excess of the limits that
apply to the 401(k) Plan. The ESP is coordinated with the
Salaried 401(k) Plan so that, on a combined plan basis,
participants may defer up to 100% of eligible earnings
(generally, base salary and annual incentives) and will receive
a Company match of the first 6% of eligible earnings. Effective
July 5, 2009 through July 3, 2010, Dole reduced its
match to the 401(k) plan to $0.50 of each dollar contributed up
to 6% of eligible compensation. On July 4, 2010, Dole
reverted back to matching 100% of each dollar contributed up to
6% of eligible compensation. The Company contributions to the
nonqualified plan are matching or service related amounts that
cannot be included in the 401(k) plan because of pay or
contribution limits contained in the plan or in Federal law.
Amounts contributed to the ESP receive a fixed rate of interest.
For 2010, the interest rate was 8.25%. The interest rate in 2011
has been set at 6.23%. Such rate is based on the yield of
Dole’s unsecured bonds as of the first week of December
2010. In addition, effective July 4, 2010, the Company
commenced annual contributions of a percentage (1% —
2%) of eligible pay to the 401(k) plan, based on the number of
years of service with Dole.
Aggregate
Executive
Company
Aggregate
Balance at
Contributions
Contributions
Earnings
Aggregate
Last Fiscal
in Last FY
in Last FY
in Last FY
Withdrawals/
Year End
Name
($)(1)
($)(1)
($)
Distributions
($)
David H. Murdock
0
0
25,923
0
340,135
David A. DeLorenzo
62,127
46,982
37,459
0
532,238
C. Michael Carter
24,246
17,773
7,067
0
114,580
Joseph S. Tesoriero
15,000
8,465
16,336
0
211,531
(1)
Executive contributions and Company match are also reflected in
the “Summary Compensation Table” above.
By irrevocable election, an executive may elect to receive
benefits under the ESP in either a lump sum payment or annual
installments for a period of up to fifteen years. Lump-sum
benefits under the ESP will be paid at the earlier of the
beginning of the year following the executive’s retirement
or termination of employment or a year as specified by the
executive. Effective January 1, 2009, new participants in
the ESP, with respect to all deferrals, and current
participants, with respect to certain deferrals that are to
begin paying out on after January 1, 2009, may only elect a
lump sum payment to be paid in the year following the
participant’s retirement or termination of employment.
However, upon a showing of financial hardship and receipt of
approval from the Corporate Compensation and Benefits Committee,
an executive may be allowed to access deferred funds earlier
than previously elected by the executive. A nonemergency
withdrawal may be elected prior to termination of employment but
only from benefits accrued prior to January 1, 2005. Such
nonemergency withdrawal is subject to a penalty of 10%.
There are no investment options available under the ESP.
Payments
upon Termination or Change of Control
The tables below reflect the amount of compensation that would
become payable to each of the Named Executive Officers under
existing plans and arrangements if the Named Executive
Officer’s employment had terminated on January 1,2011, given the Named Executive Officer’s compensation and
service levels as of such date. These benefits are in addition
to benefits available prior to the occurrence of any termination
of employment, including benefits generally available to
salaried employees, such as distributions under the
Company’s 401(k) plan and frozen pension plans, and
previously accrued and vested benefits under the Company’s
nonqualified deferred compensation plan, as described in the
tables above. In addition, in connection with any actual
termination of employment, the Company may determine to enter
into an agreement or to establish an arrangement providing
additional benefits or amounts, or altering the terms of
benefits described below, as the Corporate Compensation and
Benefits Committee determines appropriate. The actual amounts
that would be paid upon a Named Executive Officer’s
termination of employment can be determined only at the time of
such executive’s separation from the Company. Due to the
number of factors that affect the nature and amount of any
benefits provided upon the events
discussed below, any actual amounts paid or distributed may be
higher or lower than reported below. Factors that could affect
these amounts include the timing during the year of any such
event and the executive’s age. Following the tables is a
general summary of the severance and change of control benefits
that may be available to the Named Executive Officers under
various scenarios.
David H.
Murdock
Involuntary
Termination in
Termination
Connection
Executive Payments
Voluntary
Normal
Without
For Cause
with Change
Death and
Upon Separation ($)
Termination
Retirement
Cause
Termination
of Control
Disability
One-Year Management Incentive Plan(1)
0
1,050,500
0
0
1,050,500
1,050,000
Sustained Profit Growth Plan(2)
1,425,000
1,425,000
1,425,000
0
1,425,000
1,425,000
Health and Welfare Benefits, Fringe Benefits and other
perquisites
0
0
2,501
0
30,000
0
Equity Acceleration
0
0
0
0
0
Cash Severance
0
0
1,046,820
0
6,016,500
0
Excise Tax and
Gross-Up
0
0
0
0
2,880,439
0
David A.
DeLorenzo
Involuntary
Termination in
Termination
Connection
Executive Payments
Voluntary
Normal
Without
For Cause
with Change
Death and
Upon Separation ($)
Termination
Retirement
Cause
Termination
of Control
Disability
One-Year Management Incentive Plan(1)
0
1,320,000
0
0
1,320,000
1,320,000
Sustained Profit Growth Plan(2)
1,800,000
1,800,000
1,800,000
0
1,800,000
1,800,000
Health and Welfare Benefits, Fringe Benefits and other
perquisites
0
0
1,843
0
30,000
0
Equity Acceleration(3)
0
0
2,401,781
0
5,422,647
(4)
0
Cash Severance
0
0
211,528
0
7,560,000
0
Excise Tax and
Gross-Up
0
0
0
0
5,145,998
0
C. Michael
Carter
Involuntary
Termination in
Termination
Connection
Executive Payments
Voluntary
Normal
Without
For Cause
with Change
Death and
Upon Separation ($)
Termination
Retirement
Cause
Termination
of Control
Disability
One-Year Management Incentive Plan(1)
0
514,250
0
0
514,250
514,250
Sustained Profit Growth Plan(2)
750,000
750,000
750,000
0
750,000
750,000
Health and Welfare Benefits, Fringe Benefits and other
perquisites
Health and Welfare Benefits, Fringe Benefits and other
perquisites
0
0
5,409
0
30,000
0
Equity Acceleration(3)
0
300,219
0
1,431,289
(4)
0
Cash Severance
0
0
197,113
0
2,775,000
0
Excise Tax and
Gross-Up
0
0
0
0
1,765,093
0
(1)
For purposes of illustration, target amounts are shown. Payments
made in the event of retirement, death or disability would be
based on actual results for the plan year 2010. In fact,
payments under the One-Year Management Incentive Plan were made
in March 2011.
(2)
For purposes of illustration, target amounts under the Growth
Plan are shown; however, it should be noted that the 2008
Incentive Period ended at the end of fiscal year 2010, the
Growth Plan has terminated and actual amounts were paid out in
March 2011, and the Growth Plan has been replaced by the 2011
LTIP (see “Compensation Discussion &
Analysis — Long Term Incentives — Sustained
Profit Growth Plan for Incentive Period Ended 2010” above).
Under the Growth Plan, for purposes of the amounts reflected in
this table: (i) payments made in the event of retirement,
death, disability or involuntary termination without cause would
have been based on actual results for the applicable incentive
periods and the number of months of participation in any
applicable incentive period; (ii) amounts shown for
retirement, death, disability and involuntary termination
without cause would have been payable following the termination
and calculation of the applicable incentive period;
(iii) amounts shown for voluntary termination would have
been paid only if the termination of employment occurred during
the 90-day
window between the end of fiscal year 2010 and the date of
payment under the Growth Plan; and (iv) awards would have
been prorated based on the applicable employment termination
date for the Named Executive Officer.
(3)
The value of the restricted stock is based on the
December 31, 2010 closing price of $13.51. The value of
stock options is based on the difference between $13.51 and the
exercise price of the options..
(4)
Includes vesting of performance shares that were outstanding but
had not yet vested as of January 1, 2011. The grant of the
performance shares is not reflected in the “Summary
Compensation Table” or “2010 Grants of Plan-Based
Awards Table” above. See “Compensation
Discussion & Analysis — Long Term
Incentives — Equity Incentive Awards” above.
Severance
The Severance Pay Plan for Employees of Dole Food Company, Inc.
and Participating Divisions and Subsidiaries (the
“Severance Plan”) is in place for all eligible
employees and provides for payment if an employee’s,
including a Named Executive Officer’s, employment is
involuntarily terminated as a result a workforce reduction,
elimination of operations or job elimination. There are no other
severance plans or severance agreements covering the Named
Executive Officers. In the unlikely circumstance that a Named
Executive Officer’s employment is involuntarily terminated
under the qualifications of the Severance Plan, the Severance
Plan provides for benefits in an amount equal to the weekly base
compensation determined according to the following schedule:
In no event will the severance benefits under the Severance Plan
exceed either of the following: (i) an amount equal to a
total of 104 weeks of weekly base compensation; or
(ii) an amount equal to twice the Named Executive
Officer’s compensation during the twelve-month period
immediately preceding his termination of service.
Health and other insurance benefits are continued for up to six
months corresponding to the termination benefits.
Change of
Control
Change of Control Agreements. In line with the
practice of numerous companies of the Company’s size, the
Company recognizes that the possibility of a change of control
of the Company may result in the departure or distraction of
management to the detriment of the Company. In March 2001, the
Company put in place a program to offer change of control
agreements to certain officers and employees of the Company,
including each of the Named Executive Officers. At the time the
program was put in place, the Company was advised by its
executive compensation consultants that the benefits provided
under the change of control agreements were within the range of
customary practices of other public companies. In addition, the
Company’s current executive compensation consultant,
Exequity, LLP, has advised that the benefits provided under such
agreements are within the range of customary practices of other
public companies. The benefits under the change of control
agreements are paid in a lump sum and are based on a multiple of
three for each of the Named Executive Officers.
In order to receive a payment under the change of control
agreement, two triggers must occur. The first trigger is a
change of control, as defined below. The second trigger is that
the employment of the Named Executive Officer must be terminated
by the Company without Cause or the Named Executive Officer
leaves with Good Reason, each as defined below, during the
period beginning on the change of control date and ending on the
second anniversary of the date on which the change of control
becomes effective; provided that, in certain cases, the Named
Executive Officer may be entitled to payment if employment is
terminated after the later of (i) the date of the first
public disclosure that an agreement with respect to a change of
control has been entered into or (ii) the date that is 270
calendar days prior to the date on which such change of control
becomes effective or is consummated.
The payments to the Named Executive Officers would be in the
form of a lump sum cash payment, determined as follows:
•
Three times the Named Executive Officer’s base salary;
•
Three times the Named Executive Officer’s target bonus;
•
$30,000, in lieu of any other health and welfare benefits,
fringe benefits and perquisites (including medical, life,
disability, accident and other insurance or other health and
welfare plan, programs, policies or practices or understandings)
and other taxable perquisites and fringe benefits that the Named
Executive Officer or his family may have been entitled to
receive;
•
The pro-rata portion (other than if termination occurred on the
last day of the fiscal year, in which case it would be the full
amount) of the greater of the following amounts under the
applicable cash-based long-term incentive plan (the Growth Plan
for fiscal year 2010, which has terminated and by which actual
amounts were paid out in March 2011, and the 2011 LTIP, which
replaced the Growth Plan for fiscal year 2011, as discussed in
“Compensation Discussion & Analysis —
Long Term Incentives — Sustained Profit Growth Plan
for Incentive Period Ended 2010” above): (i) the Named
Executive Officer’s target amounts under the applicable
plan and (ii) the Named Executive Officer’s actual
benefits under the applicable plan;
•
Accrued obligations (any unpaid base salary to date of
termination, any accrued vacation pay or paid time off), and
deferred compensation — including interest and
earnings pursuant to outstanding elections;
•
Pro-rata portion (other than if termination occurred on the last
day of the fiscal year, in which case it would be the full
amount) of the Named Executive Officer’s target annual
bonus for the fiscal year in which the termination occurs;
•
Reimbursement for outstanding reimbursable expenses; and
A gross-up
payment to hold the Named Executive Officer harmless against the
impact, if any, of federal excise taxes imposed on the executive
as a result of the payments contingent on a change of control.
2009 Stock Incentive Plan. Pursuant to the
2009 Stock Plan, unless otherwise provided in the applicable
award agreement or otherwise agreed to, (a) with respect to
an award that is assumed in a change of control (as defined in
the 2009 Stock Plan), if the awardee’s employment is
terminated without Cause or the awardee leaves for Good Reason
within 24 months of the change of control or (b) if
the award is not assumed in a change of control, in each case,
the award will vest and be fully exercisable or be paid or
settled in full, as applicable.
Definitions. For purposes of the change of
control agreements and the 2009 Stock Plan:
The occurrence of any of the following events would constitute a
change of control at Dole. These events have been reviewed by
both internal and external experts and were deemed to best
capture those situations in which control of the Company would
be altered. Below is a general summary of the events that
constitute a change of control.
1) An acquisition of 20% or more of the combined voting
power of the Company’s stock. Excluded from the 20%
acquisition rule is Mr. Murdock, or following his death,
any trust or trustees designated by Mr. Murdock.
2) A change in the majority constitution of the Board of
Directors, unless the changes are approved by two-thirds of the
incumbent Board of Directors.
3) A merger, reorganization, consolidation,
recapitalization, exchange offer or other extraordinary
transaction unless (i) the beneficial owners of the
outstanding voting securities of the Company immediately prior
to such transaction own at least 50% of the outstanding voting
securities of the surviving or resulting entity and (ii) a
majority of the members of the board of directors of the
surviving or resulting entity were members of the Board of
Directors of the Company at the time of the execution of the
agreement providing for such transaction.
4) A sale, transfer or distribution of all or substantially
all of the Company’s assets.
5) Any other significant corporate transaction determined
by the Corporate Compensation and Benefits Committee or the
Board of Directors to be a change of control for purposes of
change of control agreements
and/or the
2009 Stock Plan, as applicable.
For purposes of the change of control agreements:
“Cause”is defined as the Company’s
termination of the executive’s employment related to the
occurrence of any one or more of the following:
(1) conviction of, or pleading guilty or nolo contendere
to, a felony; (2) commission of an act of gross misconduct
in connection with the performance of duties;
(3) demonstration of habitual negligence in the performance
of duties; (4) commission of an act of fraud,
misappropriation of funds or embezzlement in connection with
employment by Dole; (5) death; or (6) Disability.
“Good Reason”is defined as the
executive’s resignation of employment with Dole related to
the occurrence of one or more of the following: (1) subject
to certain exceptions, whether direct or indirect, a significant
diminution of authority, duties, responsibilities or status
inconsistent with and below those held, exercised and assigned
in the ordinary course during the
90-day
period immediately preceding the change of control date;
(2) the assignment of duties that are inconsistent (in any
significant respect) with, or that impair (in any significant
respect) ability to perform, the duties customarily assigned to
an executive holding the position held immediately prior to the
change of control date in a corporation of the size and nature
of Dole or the applicable subsidiary or business unit of Dole;
(3) relocation of primary office more than 35 miles
from current office on the change of control date; (4) any
material breach by Dole of the change of control agreement or
any other agreement with the executive; (5) any reduction
in base salary below base salary in effect on the change of
control date (or if base salary was reduced within 180 days
before the change of control date, the base salary in effect
immediately prior to such reduction); (6) the failure of
Dole or any successor to continue in effect any equity-based or
non-equity based incentive compensation plan (whether annual or
long-term) in
effect immediately prior to the change of control, or a non de
minimis reduction, in the aggregate, in participation in any
such plans (based upon (a) in the case of equity based
plans, the average grant date fair value of awards under such
plans over the three years preceding the change of control (or
such lesser period of employment following the IPO) or
(b) in the case of non-equity based plans, the target award
under such plans for the performance period in which the change
of control occurs), unless afforded the opportunity to
participate in an alternative incentive compensation plan of
reasonably equivalent value; provided that a reduction in the
aggregate value of participation in any such plans of not more
than 5% in connection with
across-the-board
reductions or modifications affecting all executives with change
of control agreements containing substantially identical terms
will not constitute Good Reason; (7) any reduction in the
aggregate value of benefits provided, as in effect on the change
of control; provided that a reduction in the aggregate value of
benefits of not more than 5% in connection with
across-the-board
reductions or modifications affecting all executives with change
of control agreements containing substantially identical terms
will not constitute Good Reason; and (8) the failure of a
successor to Dole (in any transaction that constitutes a change
of control), to assume in writing Dole’s obligations to the
executive under the change of control agreement or any other
agreement with the executive, if the same is not assumed by such
successor by operation of law.
Other
Equity Acceleration
In addition to potential vesting acceleration in connection with
a change of control, certain awards of restricted stock granted
under the 2009 Stock Plan to each of the Named Executive
Officers (other than Mr. Murdock) in connection with our
IPO provide for accelerated vesting of all then unvested shares
upon a termination of the awardee’s employment by the
Company without Cause or by the awardee for Good Reason (each as
defined above) at any time, whether or not in connection with a
change of control.
The following table summarizes, as of January 1, 2011,
compensation plans under which our equity securities are
authorized for issuance, aggregated as to: (i) all
compensation plans previously approved by stockholders; and
(ii) all compensation plans not previously approved by
stockholders.
Number of
Securities
Remaining
Number of
Available
Securities to
Weighted-
for Future
be Issued
Average
Issuance
Upon
Exercise
Under Equity
Exercise of
Price of
Compensation
Outstanding
Outstanding
Plans
Options,
Options,
(excluding
Warrants
Warrants
securities
and
and
reflected in
Rights(2)
Rights(3)
column(a))
Plan Category
(a)
(b)
(c)
Equity compensation plans approved by security holders(1)
2,803,238
$
11.27
2,011,077
Equity compensation plans not approved by security holders
—
—
—
Total
2,803,238
$
11.27
2,011,077
(1)
The 2009 Stock Plan has 6,000,000 shares available for
issuance of awards granted thereunder. The 2009 Stock Plan is
the only equity compensation plan approved by security holders.
(2)
This amount includes 285,487 shares subject to outstanding
restricted stock unit and performance share awards. This amount
excludes 1,038,241 shares subject to unvested restricted
stock awards outstanding under the 2009 Stock Plan. Awards of
147,444 shares of restricted stock have vested and are no
longer available for issuance under the 2009 Stock Plan.
(3)
The weighted-average exercise price in column (b) does not
take into account the 285,487 shares referred to in note
(1), as there is no exercise price associated therewith.
The following table, based in part upon information supplied by
officers and directors, sets forth certain information regarding
the beneficial ownership of the Company’s common stock as
of the Record Date by (1) each director and nominee for
director; (2) each Named Executive Officer; (3) all
directors and executive officers (Section 16 Officers) of
the Company as a group; and (4) each person known to the
Company to beneficially own more than 5% of the Company’s
common stock. Unless otherwise indicated, each of these
stockholders has sole voting and investment power with respect
to the shares beneficially owned, subject to community property
laws where applicable. Unless noted otherwise, the mailing
address for each of the beneficial owners listed below is
c/o Dole
Food Company, Inc., One Dole Drive, Westlake Village, CA91362.
Amount of
Beneficial
Percent of
Beneficial Owner
Ownership(1)
Class(2)
Directors
Elaine L. Chao
7,701
*
Andrew J. Conrad
22,701
*
Sherry Lansing
9,701
*
Justin M. Murdock
17,667
(3)
*
Dennis M. Weinberg
26,923
*
Named Executive Officers
David H. Murdock (also a Director)
51,710,000
(4)
58.4
%
David A. DeLorenzo (also a Director)
625,934
(5)
*
C. Michael Carter
107,556
(6)
*
Joseph S. Tesoriero
109,769
(7)
*
All executive officers (Section 16 Officers) and directors
as a group (10 persons)
52,677,921
59.3
%
Greater than 5% Beneficial Owners
Aletheia Research and Management, Inc.
6,697,348
(8)
7.6
%
BAMCO INC.
5,588,218
(9)
6.3
%
(1)
Beneficial ownership is determined in accordance with SEC rules
and includes shares owned outright, shares of restricted stock
(whether vested or unvested), options to purchase common stock
that were exercisable as of the Record Date or that will become
exercisable within 60 days of the Record Date, and other
forms of indirect ownership. Beneficial ownership does not
include stock options that are not exercisable and will not
become exercisable within 60 days of the Record Date or
performance shares. Except as otherwise indicated below, to our
knowledge, all persons have sole voting and investment power
with respect to the common stock, except to the extent authority
is shared by spouses under applicable law.
(2)
Calculated based on 88,587,310 shares of common stock
outstanding as of the Record Date. Unless indicated otherwise,
percentage of ownership is less than 1.0%.
(3)
Includes 17,667 options to purchase common stock that are
exercisable. No additional options will vest within 60 days
of the Record Date.
(4)
Mr. Murdock beneficially owns these shares either directly
through the David H. Murdock Living Trust dated May 28,
1986, as amended (the “Trust”), for which
Mr. Murdock is the trustee, or indirectly through
Castle & Cooke Holdings, Inc., which is wholly-owned
indirectly by Mr. Murdock. 24,000,000 of these shares have
been pledged as collateral pursuant to that certain Collateral
Agreement, dated as of October 22, 2009, among
Mr. Murdock in his individual capacity and as trustee for
the Trust, and U.S. Bank, National Association, for the benefit
of the 2009 Dole Food Automatic Common Exchange Security Trust
which is filed as Exhibit 99.7 to the Schedule 13D
filed with the SEC on November 10, 2009. Mr. Murdock
pledged 4,000,000 shares to DB Private Clients Corp. as
collateral to secure his obligations under a term loan facility
he uses to support various personal business activities.
Includes 116,667 options to purchase common stock that are
exercisable. No additional options will vest within 60 days
of the Record Date.
(6)
Includes 38,889 options to purchase common stock that are
exercisable. No additional options will vest within 60 days
of the Record Date.
(7)
Includes 38,889 options to purchase common stock that are
exercisable. No additional options will vest within 60 days
of the Record Date. Also includes an aggregate of
2,250 shares which are held in custodial accounts for
Mr. Tesoriero’s children for which he serves as UGMA
custodian.
(8)
The information regarding the beneficial ownership of Aletheia
Research and Management, Inc. is based on the Schedule 13G
filed with the SEC on February 14, 2011. The address for
Aletheia Research and Management, Inc. is 100 Wilshire Blvd.,
Suite 1960, Santa Monica, CA90401.
(9)
The information regarding the beneficial ownership of BAMCO INC.
is based on the Schedule 13G filed with the SEC jointly by
BAMCO INC., Baron Capital Group, Inc., Baron Capital Management,
Inc., and Ronald Baron on February 14, 2011. BAMCO INC. has
shared power to vote or direct the vote with respect to
4,322,000 of these shares and shared power to dispose or to
direct the disposition with respect to 4,977,000. The address
for BAMCO INC. is 767 Fifth Avenue, 49th Floor, New York,
NY10153.
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Related
Party Transactions
David H. Murdock, the Company’s Chairman of the Board,
owns, inter alia, Castle & Cooke, Inc.
(“Castle”), a transportation equipment leasing
company, a warehouse company, and a hotel. During fiscal year
2010, the Company paid Mr. Murdock’s companies an
aggregate of approximately $9.0 million, primarily for the
rental of truck chassis, generator sets and warehousing
services. In addition, the Company paid Mr. Murdock’s
companies an aggregate of approximately $0.1 million in
fiscal year 2010 for landscape maintenance services. Castle
purchased approximately $0.6 million of products from the
Company during fiscal year 2010. The Company also paid
$0.6 million in fiscal years 2010 in rental payments under
a sublease with North Carolina State University, the lessee of
the property under a lease with Castle.
The Company and Castle are responsible for 68% and 32%,
respectively, of all obligations under an aircraft lease
arrangement. Each party is responsible for the direct costs
associated with its use of this aircraft; and indirect costs are
shared by them based upon each party’s actual percentage of
usage for the year. During fiscal year 2010, the Company’s
share of the direct and indirect costs for this aircraft was
$2.3 million.
The Company and Castle previously operated their risk management
departments on a joint basis. Insurance procurement and premium
costs were based on the relative risks borne by each company as
determined by the insurance underwriters. The Company and Castle
ceased sharing insurance procurement and premium costs on
October 31, 2009. During fiscal year 2010, administrative
costs of the risk management department were shared on a
50-50 basis,
and the Company’s share of these costs was approximately
$8,000. This joint sharing arrangement was discontinued on
February 1, 2010.
The Company had outstanding net accounts receivable of
approximately $145,000 due from Castle at January 1, 2011.
Mr. Murdock is a director and executive officer of the
Company and also serves as a director and executive officer of
privately held entities that he owns or controls. Scott A.
Griswold and Roberta E. Wieman, each a former director and
current officer of Dole, and Justin M. Murdock, a director and
former officer of Dole, also serve as directors and officers of
privately held entities controlled by Mr. Murdock.
During December 2006, Dole entered into a five-year lease with
Laboratory Corporation of America, pursuant to which the latter
is leasing approximately 1,483 rentable square feet in
Dole’s World Headquarters building in Westlake Village,
California, at a rental rate of $115,674 per year, subject to
annual inflation adjustments. The lease provides that the tenant
may renew the lease for two additional five-year terms. Andrew
J. Conrad, a director of Dole, is the tenant’s Executive
Vice President and Chief Scientific Officer.
Mr. Murdock is party to a registration rights agreement
with the Company. Pursuant to this agreement, Mr. Murdock
may demand that the Company register shares of common stock held
by Mr. Murdock or require that the Company include shares
of common stock owned by Mr. Murdock in a registration
statement to the extent the Company proposes to register any
Company securities under the Securities Act of 1933, as amended,
for sale to the public, in each case under certain circumstances
and subject to customary restrictions and limitations set forth
in the agreement.
Related
Party Transactions Policies and Procedures
In addition to the procedures with respect to related party
transactions described in “Transactions with
Affiliates” below, the Company has adopted a written
related person transaction policy, which covers transactions
between the Company and its directors, executive officers, 5% or
greater stockholders and parties related to the foregoing, such
as immediate family members and entities they control. The
policy requires that, subject to permitted guidelines adopted by
the Audit Committee and other than with respect to certain
specified transactions that the Board of Directors has deemed to
be pre-approved or ratified, as applicable, any such transaction
be considered and approved by the Audit Committee prior to entry
into such transaction. In determining whether to approve or
ratify a specific transaction, the Audit Committee will take
into account, among other factors it deems appropriate, whether
the transaction is on terms no less favorable to the Company
than terms generally available to or from an unaffiliated
third-party under the same or similar circumstances and the
extent of the related person’s interest in the transaction.
Pursuant to the policy, the Audit Committee has established
guidelines for the Company’s management to follow in its
ongoing dealings with the related person. The Audit Committee,
on at least an annual basis, will review and assess ongoing
relationships with the related person to see that they are in
compliance with the Company’s guidelines and that the
transaction remains appropriate.
None of the transactions described in “Related Party
Transactions” above that are long-standing relationships
that existed prior to the IPO were approved pursuant this policy
as the policy was implemented subsequent to the transactions.
However, each transaction was approved by the Board of Directors
or the Audit Committee. All transactions described in
“Related Party Transactions” above that were entered
into subsequent to the IPO and all future transactions of this
nature will be approved pursuant to the Company’s written
policy now in effect, as required by the specific terms of the
policy.
Transactions
with Affiliates
The Company’s secured credit facilities and its senior
notes and debenture indentures impose substantive and procedural
requirements with respect to the entry by the Company and its
subsidiaries into transactions with affiliates. The credit
facilities generally require that, except as expressly permitted
in the credit facilities, all such transactions with affiliates
be entered into in the ordinary course of business and on terms
and conditions substantially as favorable to the Company as
would reasonably be expected to be obtainable at the time in a
comparable arms-length transaction with an unaffiliated third
party. The indentures generally require that, except as
expressly permitted in the indentures, all transactions with
affiliates must satisfy the requirements set forth above
pursuant to Dole’s credit facilities and, in addition, any
transaction or series of related transactions with an affiliate
involving aggregate payments with a fair market value in excess
of $7.5 million must be approved by a Board of Directors
resolution stating that the Board of Directors has determined
that the transaction complies with the preceding requirements.
Further, if such aggregate payments have a fair market value of
more than $20 million, the Board of Directors must, prior
to the consummation of the transaction, have obtained a
favorable opinion as to the fairness of the transaction to the
Company from a financial point of view from an independent
financial advisor, and such opinion must be filed with the
indenture trustee. In addition, the Company’s legal
department and finance department review all transactions with
related parties to ensure that they comply with the preceding
requirements.
All of the transactions described in “Related Party
Transactions” above were approved as and when required
pursuant to the requirements of the secured credit facilities
and senior notes and debenture indentures outlined above.
Section 16(a) of the Exchange Act requires the
Company’s directors and the Company’s executive
officers (i.e., the Named Executive Officers) and Chief
Accounting Officer (together the “Section 16
Officers), and persons who own more than 10% of a registered
class of the Company’s equity securities, to file with the
SEC and the NYSE initial reports of ownership and reports of
changes in ownership of the Company’s common stock and
other equity securities. To the Company’s knowledge, based
solely on a review of the copies of such filings furnished to
the Company and written representations from its Directors and
Section 16 Officers, all Section 16(a) filing
requirements applicable to the Company’s directors,
Section 16 Officers and greater than 10 percent
beneficial owners were complied with on a timely basis during
the fiscal year ended January 1, 2011.
Stockholder
Proposals and Nominations for Director
Deadlines to Have Matters Considered at a
Meeting. Under the Company’s Bylaws, for
nominations or other business to be properly brought before an
annual meeting by a stockholder, the stockholder must have given
timely written notice of the nomination or such other business
to the Company’s Corporate Secretary and such business must
be a proper subject for stockholder action. To be timely, a
stockholder’s notice must be delivered to the Corporate
Secretary not later than the close of business on the ninetieth
(90th) day nor earlier than the close of business on the one
hundred twentieth (120th) day prior to the first anniversary of
the preceding year’s annual meeting. However, if the date
of the annual meeting is more than thirty (30) days before
or more than seventy (70) days after the anniversary of the
prior year’s meeting, notice must be delivered not earlier
than the close of business on the one hundred twentieth (120th)
day prior to such annual meeting and not later than the close of
business on the later of the ninetieth (90th) day prior to such
annual meeting or the tenth (10th) day following the date on
which the Company makes public announcement of the date of the
meeting. For purposes of the 2012 Annual Meeting of
Stockholders, assuming it is not moved more than thirty
(30) days before or more than seventy (70) days after
May 19, 2012, to be timely, a stockholder’s notice
must be delivered to the Corporate Secretary not later than the
close of business on February 6, 2012, nor earlier than the
close of business on January 6, 2012. Any such notice must
include the applicable information required pursuant to
Section 2.10 of the Company’s Bylaws. Nominations or
proposals not meeting these requirements will not be entertained
at the annual meeting.
Deadlines for Inclusion of Matters in the Company’s
Proxy Materials. Stockholders interested in
submitting a proposal for inclusion in the Company’s proxy
statement and form of proxy for the 2012 Annual Meeting of
Stockholders may do so by following the procedures prescribed in
SEC
Rule 14a-8
promulgated under the Exchange Act. Under
Rule 14a-8,
to be eligible for inclusion in the Company’s proxy
statement and form of proxy for the 2012 Annual Meeting of
Stockholders, among other things, a proposal must qualify as a
proper subject matter under SEC
Rule 14a-8
and be received no later than December 10, 2011. Should the
Company move the date of the 2012 Annual Meeting of Stockholders
more than 30 days from the one-year anniversary of the
Annual Meeting, the Company will revise and publicly disclose
this deadline accordingly.
Householding
of Proxy Materials
The SEC has adopted rules that permit companies and
intermediaries such as brokers to satisfy delivery requirements
for proxy materials with respect to two or more stockholders
sharing the same address by delivering a single set of proxy
materials addressed to those stockholders. This process, which
is commonly referred to as “householding,” potentially
provides extra convenience for stockholders and cost savings for
companies. The Company and some brokers household proxy
materials unless contrary instructions have been received from
the affected stockholders. Once a stockholder has received
notice from the stockholder’s broker or the Company that
they or the Company will be householding materials to the
stockholder’s address, householding will continue until the
stockholder is notified otherwise or until the stockholder
revokes the stockholder’s consent. If, at any time, the
stockholder no longer wishes to participate in householding and
would prefer to receive separate proxy materials, or if the
stockholder is receiving multiple copies of the proxy materials
and wishes to receive only one, the stockholder should notify
the stockholder’s broker if the stockholder’s shares
are held in a brokerage account or the Company if
the stockholder holds common stock directly. Requests in writing
should be addressed to: Dole Food Company, Inc., One Dole Drive,
Westlake Village, California, 91362, Attention: Investor
Relations.
Annual
Report, Financial and Other Information
The Company’s annual audited financial statements and
review of operations for fiscal 2010 can be found in the
Company’s Annual Report on
Form 10-K
for the fiscal year ended January 1, 2011. The 2010
Form 10-K
constitutes the Annual Report to Shareholders for 2010, which is
being made available to stockholders along with this Proxy
Statement. The Company will furnish without charge a copy of the
2010
Form 10-K
(including the financial statements, schedules and a list of
exhibits), as well as a copy of any of the documents referenced
in this Proxy Statement as being available upon written request,
to any person requesting in writing and stating that he or she
was the beneficial owner of the Company’s common stock on
the Record Date. The 2010
Form 10-K
(which also constitutes the Company’s Annual Report to
Shareholders for 2010) may be obtained without charge over
the Internet at the Company’s website at www.dole.comor at the SEC’s website at www.sec.gov. The
Company will also furnish copies of any exhibits to the 2010
Form 10-K
to eligible persons requesting exhibits at a cost of $0.50 per
page, paid in advance. The Company will indicate the number of
pages to be charged for upon written inquiry. Requests should be
addressed to: Dole Food Company, Inc., One Dole Drive, Westlake
Village, California, 91362, Attention: Investor Relations.
OTHER
MATTERS
The Board of Directors does not know of any other matter that
will be brought before the Annual Meeting. However, if any other
matter that may properly be acted upon properly comes before the
Annual Meeting or any adjournment or postponement thereof, the
proxies solicited hereby will be voted on such matter in
accordance with the discretion of the proxy holders named
therein.
Shareowner ServicesSM
P.O. Box 64945
St. Paul, MN55164-0945TO VOTE BY MAIL AS THE BOARD OF DIRECTORS RECOMMENDS ON ALL ITEMS BELOW,
SIMPLY SIGN, DATE, AND RETURN THIS PROXY CARD.The Board of Directors Recommends a Vote FOR Items 1, 2 and 3, and 3 years for Item 4.
1. Election of Directors: 01 Elaine L. Chao ¦ Vote FOR ¦ Vote WITHHELD
02 Sherry Lansing all nominees from all nominees
(except as marked)
(Instructions: To withhold authority to vote for
any indicated nominee, write the number(s) of the
nominee(s) in the box provided to the right.)
2. Ratification of the Appointment of Deloitte & Touche LLC as Dole’s Independent Registered
Public Accounting Firm for the Fiscal Year Ending December 31, 2011
3. Advisory Resolution on Executive Compensation
4. Advisory Resolution on the Frequency of the Future Advisory ¦ 3 Years
Votes on Executive Compensation
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, ITEMS 1, 2 AND 3, AND 3
YEARSFOR ITEM 4.
Address Change? Mark box, sign, and indicate changes below: ¦
¦ For ¦ Against ¦ Abstain
¦ For ¦ Against ¦ Abstain
¦ 2 Years ¦ 1 Year ¦ Abstain
IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR
Date ___________________________
Signature(s) in Box
Please sign exactly as your name(s) appears on Proxy. If held in joint tenancy, all persons should
sign. Trustees, adminis-trators, etc., should include title and authority. Corporations should
provide full name of corporation and title of authorized officer signing the Proxy.
DOLE FOOD COMPANY, INC.
ANNUAL MEETING OF STOCKHOLDERS
Thursday, May 19, 2011
1:00 P.M., Pacific Daylight Time
Dole Food Company, Inc. World Headquarters
One Dole Drive
Westlake Village, California91362
Dole Food Company, Inc.
One Dole Drive
Westlake Village, California91362
proxy
This proxy is solicited by the Board of Directors for use at the Annual Meeting on May 19,2011.
The shares of stock you hold in your account will be voted as you specify on the reverse side.
If no choice is specified, the proxy will be voted “FOR” Items 1, 2 and 3, and 3 YEARS for
Item 4.
By signing the proxy, you revoke all prior proxies and appoint David H. Murdock, David A. DeLorenzo
and C. Michael Carter, and each of them with full power of substitution, to vote your shares on the
matters shown on the reverse side and any other matters which may come before the Annual Meeting
and all adjournments.
See reverse for voting instructions.
Dates Referenced Herein and Documents Incorporated by Reference
