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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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 11:00 a.m. local time on Thursday,
May 6, 2010.
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, including the election of
two directors. I urge you to read the accompanying Proxy
Statement thoroughly. As described in greater detail in the
Proxy Statement the Board of Directors of Dole recommends a vote
“FOR” each of the two directors and the ratification
of the appointment of Deloitte & Touche LLP as the
Company’s independent registered public accounting firm for
the fiscal year ending January 1, 2011. 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 complete, sign, date and return the enclosed proxy or
voting instruction card(s) promptly in the enclosed envelope 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 January 1, 2011;
and
3. To act upon such other business that may properly come
before the Annual Meeting.
Record Date
The stockholders of record at the close of business on Thursday,
March 25, 2010, will be entitled to 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 with the Proxy
Statement. 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 2010 Annual Meeting of Stockholders of Dole Food Company,
Inc. (the “Company”). This Proxy Statement, the
accompanying proxy card or voting instruction card, and the
Company’s 2009 Annual Report to Stockholders were first
mailed to stockholders on or before April 2, 2010. 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.
C:
ABOUT THE
ANNUAL MEETING
Who is
soliciting my vote?
The Board of Directors of the Company is soliciting your vote in
connection with the 2010 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 January 1,2011; and
3. 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. Forthe election of Andrew J. Conrad and
Justin M. Murdock as directors; and
2. Forthe ratification of the appointment of
Deloitte & Touche LLP as the Company’s
independent registered public accounting firm for the fiscal
year ending January 1, 2011.
Who is
entitled to vote at the Annual Meeting?
The Board of Directors set March 25, 2010 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 88,233,289 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
proposal?
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.
David H. Murdock, the Company’s Chairman, holds through his
various affiliates approximately 58.6% of the Company’s
common stock. Mr. Murdock has indicated that he will vote
his shares in favor of each of the proposals described in this
Proxy Statement. 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 Proxy Statement. 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 with this Proxy Statement. 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 at a stockholder meeting held
on or after January 1, 2010 is no longer considered a
routine matter. Therefore, brokers do not have discretion to
vote on the uncontested election of directors.
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 6, 2010.
THE
PROPOSALS
Proposal No. 1 — The Election of
Directors
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. Class I and Class II
each 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 2010, 2011, and 2012, respectively.
The Board of Directors has nominated Andrew J. Conrad and Justin
M. Murdock for election as Class I directors for three-year
terms expiring at the 2013 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 Andrew J. Conrad and Justin M. Murdock 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
January 1, 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 January 1, 2011.
Abstentions have the same effect as a vote against the proposal.
The Board of Directors unanimously recommends that you vote
FORthe ratification of the selection of
Deloitte & Touche LLP as the Company’s
independent registered public accounting firm for the fiscal
year ending January 1, 2011.
C:
DIRECTORS
AND EXECUTIVE OFFICERS
Nominees
and Continuing Directors
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
C:
C:
Director
Name and Experience
Class
Since
Andrew J. Conrad, Director. Mr. Conrad, 46, 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 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 six years. His historical
knowledge of the Company has helped in Dole’s transition
from private to public ownership.
Justin M. Murdock, Vice President, New Products and
Corporate Development and Director. Mr. Murdock, 37, became
Dole’s Vice President, New Products and Corporate
Development in November 2004. Mr. Murdock has been Vice
President of Investments of Castle & Cooke, Inc.,
which is wholly owned by David H. Murdock, since 2001, and
previously, from 1999, Vice President of Mergers and
Acquisitions of Pacific Holding Company, a sole proprietorship
of David H. Murdock. Mr. Murdock serves on the Audit
Committee of Dole’s Board of Directors. Mr. 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. Murdock’s 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. As the
youngest member of the Board, Mr. Murdock’s input also
gives the Board a greater insight into the Company’s
younger consumers. Mr. Murdock also helps maintain a
cohesive connection between the Board and management when
dealing with the Company’s future plans for growth and
expansion.
Continuing
Directors
Director
Name and Experience
Class
Since
Elaine L. Chao, Director. Ms. Chao, 57, 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 allow 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 75,600 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. Finally, Ms. Chao’s background as a
director of other public companies is invaluable in the
Company’s transition from private to public ownership.
Sherry Lansing, Director. Ms. Lansing, 65, 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. 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 which are crucial to the
Company’s goals and mission. Ms. Lansing’s
commitment to volunteer work represents the Company’s
commitment to the communities in which it operates.
Ms. Lansing also has experience as a public company
director.
David A. DeLorenzo, President and Chief Executive Officer
and Director. Mr. DeLorenzo, 63, 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, 86, 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
developer of the Sherwood Country Club in Ventura County,
California, and numerous other real estate developments.
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, the Company’s Vice President, New
Products and Corporate Development and 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 25 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, 57, 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 for 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, Life Skills for American
Families, and was a Director with 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 believes 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.
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, 66, 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,
Inc., Mr. Carter held positions at Concurrent Computer
Corporation, Nabisco Group Holdings (then 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, 56, 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.
C:
THE BOARD
OF DIRECTORS
C:
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,
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.
C:
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 primarily on leading the day to day operations of 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 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.
C:
Meetings
of the Board of Directors
The Board of Directors held three meetings during the fiscal
year ended January 2, 2010 (fiscal year 2009). Each
director attended at least 75% of all board and applicable
committee meetings in fiscal year 2009 held while such director
was a member of the Board of Directors or the applicable
committee.
C:
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 auditor; reviews the results and scope of the
audit, audit-related and other services provided by the
independent auditor; 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 auditor 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 “Committee
Charters” or upon written request to the Company, as set
forth below under “Additional Information —
Annual Report, Financial and Other Information.” The Audit
Committee held seven meetings during fiscal year 2009.
The Audit Committee currently consists of Messrs. Conrad,
Justin M. Murdock and Weinberg and Ms. Lansing, of whom the
Board of Directors has affirmatively determined that
Messrs. Conrad and Weinberg and Ms. Lansing are
independent under the listing standards of the NYSE, applicable
SEC rules and the Company’s Independence Standards.
Mr. Weinberg is Chairman of the Committee. Prior to
October 23, 2009, the date on which the Company’s
common stock began trading on the NYSE, the Committee consisted
of Scott A. Griswold, Justin M. Murdock and Edward C. Roohan.
The Board of Directors has 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 above under
“Directors and Executive Officers — Nominees and
Continuing Directors.” All of the members of the Audit
Committee will be independent directors no later than
October 22, 2010, as required by SEC and NYSE rules.
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
“Committee Charters” or upon written request to the
Company, as set forth below under “Additional
Information — Annual Report, Financial and Other
Information.” The Corporate Compensation and Benefits
Committee held one meeting during fiscal year 2009.
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. Prior to
October 23, 2009, the Corporate Compensation and Benefits
Committee consisted of Messrs. Conrad, DeLorenzo and David
H. Murdock and Ms. Roberta E. Wieman.
Role of Compensation Consultants. As discussed
below under “Compensation Discussion and
Analysis — Corporate Compensation and Benefits
Committee,” during fiscal year 2009 the Company retained
Hewitt Associates LLC to review the Company’s executive
compensation programs. In addition to providing guidance with
respect to the Company’s broad based plans and grants made
thereunder in connection with the initial public offering of the
Company’s common stock completed during October 2009 (the
“IPO”), Hewitt provided the Committee with the
relevant market data for each Named Executive Officer’s
position, as well as for other key executives within the
Company. The Company paid Hewitt Associates LLC an aggregate of
$268,704 for its services not related to the Company’s
broad based plans in fiscal year 2009. In 2010, the Company
retained Exequity, LLP, an independent compensation consulting
firm that reports directly to the Committee.
Compensation Committee Interlocks and Insider
Participation. As more specifically described
above, the following individuals served on the Corporate
Compensation and Benefits Committee during fiscal year 2009:
Messrs. Conrad, DeLorenzo and David H. Murdock and Mses.
Wieman, Chao and Lansing. During fiscal year 2009,
Mr. Murdock served as the Company’s Chairman,
Mr. DeLorenzo served as the Company’s President and
Chief Executive Officer and Ms. Wieman served as the
Company’s Executive Vice President, Chief of Staff.
Mr. Murdock is the father of Justin M. Murdock, the
Company’s Vice President, New Products and Corporate
Development and also a director. As noted, since the listing of
the Company’s common stock on the NYSE on October 23,2009, all of the members of the Corporate Compensation and
Benefits Committee have been determined by the Board of
Directors to be independent under the listing standards of the
NYSE and the Company’s Director Independence Standards.
Information with respect to the related party transactions
involving the members of the Corporate Compensation and Benefits
Committee is set forth below under “Certain Relationships
and Related Transactions — Related Party
Transactions.”
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 greater detail below under “Director
Nomination Process.” 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 “Committee Charters” or upon
written request to the Company, as set forth below under
“Additional Information — Annual Report,
Financial and Other
Information.” The Committee held one meeting during fiscal
year 2009. The Company did not have a Nominating and Corporate
Governance Committee prior to the listing of its common stock on
the NYSE on October 23, 2009.
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 greater
detail below under “Additional Information —
Stockholder Proposals and Nominations for Director.”
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
“Committee Charters” or upon written request to the
Company, as set forth below under “Additional
Information — Annual Report, Financial and Other
Information.” The Executive Committee did not meet in
fiscal year 2009. The Company did not have an Executive
Committee prior to the listing of its common stock on the NYSE
on October 23, 2009.
The Executive Committee currently consists of Messrs. David
H. Murdock and DeLorenzo. Mr. Murdock is Chairman of the
Committee.
C:
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 2009.
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
$
59,815
$
62,500
$
4,732
(3)
$
127,047
Edward C. Roohan
$
52,000
—
—
$
52,000
Elaine L. Chao
$
17,315
$
62,500
—
$
79,815
Sherry Lansing
$
14,413
$
62,500
—
$
76,913
Dennis M. Weinberg
$
18,266
$
62,500
—
$
80,766
(1)
David H. Murdock, the Company’s Chairman of the Board,
David A. DeLorenzo, President and Chief Executive Officer, C.
Michael Carter, Executive Vice President, General Counsel and
Corporate Secretary, Scott A. Griswold, Executive Vice
President, Corporate Development, Justin M. Murdock, Vice
President, New Products and Corporate Development and Roberta E.
Wieman, Executive Vice President, Chief of Staff, are not
included in this table because they are employees of the Company
and did not receive any compensation for
their service as directors. Compensation for each of
Messrs. David H. Murdock, DeLorenzo, and Carter is included
in the “Summary Compensation Table” below.
Effective as of the listing of the Company’s common stock
on the NYSE on October 23, 2009, the following directors
resigned: Messrs. Carter, Griswold and Roohan and
Ms. Wieman. Effective as of the listing of the
Company’s common stock on the NYSE, the following directors
were appointed: Elaine L. Chao, Sherry Lansing and Dennis M.
Weinberg.
(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 2009, filed on March 25, 2010, for assumptions
used in the calculation of the amounts shown and additional
information regarding the Company’s share-based
compensation. On October 28, 2009, each non-employee
director received 5,000 shares of restricted stock, with a
grant date fair value of $62,500, which vests in full on
October 28, 2010. Each non-employee director had
5,000 shares of restricted stock outstanding as of
January 2, 2010.
(3)
In 2009, interest earnings in excess of 120% of the January 2009
Applicable Federal Rate were $4,732.
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.
Prior to the IPO, members of the Board of Directors who were not
employees of the Company were entitled to receive an annual cash
retainer of $50,000 and a Board meeting fee of $2,000 for each
Board meeting attended. The fee for telephonic participation was
$1,000. Directors received $4,000 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 received $10,000 annually. Committee meeting fees
were $1,000 per meeting attended, either in person or
telephonically. Directors who were employees of the Company
received no compensation for their service as directors.
Effective upon the IPO, the annual cash retainer was increased
to $60,000 and directors now receive $10,000 annually for
service as a committee chairman except that the Audit Committee
chairman now receives $15,000 annually. The meeting fees
remained unchanged. Also, each non-employee director was granted
5,000 shares of restricted stock, effective upon the IPO,
and going forward, it is the Company’s current intention
that each non-employee director will receive an annual
restricted stock grant valued at $75,000. Directors who are
employees of the Company do not receive any compensation for
their services as directors.
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. In 2009, each
non-employee director who deferred his or her annual retainer or
fees through this program has an interest rate of 7.2%, the same
as the interest rate used for management’s Excess Savings
Plan. In 2010, the interest rate for this plan will be 8.25%,
which is based on the yield of Dole’s unsecured bonds as of
the first week of December 2009. None of the non-employee
directors have elected to defer the annual retainer or fees in
2010. 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.
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.
C:
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,”“Code of
Conduct” and “Toll Free International Numbers.”
C:
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 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 set
forth below under “Additional Information —
Annual Report, Financial and Other Information.”
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 “Code of
Conduct” or upon written request to the Company, as set
forth below under “Additional Information —
Annual Report, Financial and Other Information.”
C:
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 2, 2010, 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 accountant’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 2, 2010, for filing with
the SEC.
Respectfully submitted,
Dennis M. Weinberg, Chairman
Andrew J. Conrad
Sherry Lansing
Justin M. Murdock
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
or the Board of Directors (amounts in thousands).
2009
2008
Audit fees (includes fees incurred during 2009 for services
provided related to the IPO)
$
7,186
$
4,058
Audit-related fees
453
436
Tax fees
244
167
All other fees
—
—
Total
$
7,883
$
4,661
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.
Starting in 2009, audit fees include fees associated with the
audit of the Company’s internal control over financial
reporting. Additionally, audit fees during 2009 include
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.
All Other Fees — No amounts were
billed for other services during 2009 or 2008.
C:
EXECUTIVE
COMPENSATION
Compensation
Discussion & Analysis
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 the “Summary Compensation
Table” below. The Company’s Named Executive Officers
for 2009 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 Corporate Compensation and Benefits Committee (the
“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
above under “The Board of Directors — Committees
of the Board — Corporate Compensation and Benefits
Committee — Role of Compensation Consultants,”the Company retained the services of Hewitt Associates LLC, an
executive compensation consulting firm, in fiscal year 2009 to
review periodically the competitiveness of the Company’s
executive compensation programs relative to comparable
companies. Hewitt provided the Committee with the relevant
market data for each Named Executive Officer’s position, as
well as for other key executives within Dole. Hewitt also
responded to requests generated by the Committee through
management. Hewitt also provided administrative employee benefit
services and actuarial valuations to the Company. Beginning in
2010, the Company retained Exequity, LLP. Exequity is an
independent compensation consulting firm that reports directly
to the Committee and will not provide any nonexecutive
compensation services to the Company.
Role of
Named Executive Officers in Compensation Decisions
Mr. Murdock and the 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 provide input on their own compensation.
Recommendations with respect to each component of pay are
presented to the Committee for approval. The Committee can
exercise its discretion with respect to recommendations made for
any Named Executive Officer.
Benchmarking
The Committee compares each component of its pay program against
a group of food and consumer products companies. The Committee
also compares pay components to other general industry
companies. For comparison purposes, Dole’s revenue is
slightly below the median of the group and data is
size-regressed to adjust the compensation data for differences
in revenue. Annual revenues range from approximately
$1 billion to $17 billion. The companies in the group
are as follows and represent the relevant companies found in
Hewitt’s database for 2009:
Campbell Soup Company
Del Monte Foods Company
The Hershey Company
Ralcorp Holdings Inc.
Chiquita Brands International, Inc.
Dr. Pepper Snapple Group
Hormel Foods Corporation
Sara Lee Corporation
ConAgra Foods, Inc.
Fresh Del Monte Produce Company
Kellogg Company
Smithfield Foods Inc.
Corn Products International Inc.
General Mills, Inc.
McCormick & Company, Inc.
J.M. Smucker Co.
Dean Foods Co.
H. J. Heinz Company
PepsiAmericas Inc.
Dole competes with many larger public companies for executive
talent. Historically, the Committee has determined that, because
Dole was a privately-held enterprise, Dole would rely on base
salary and annual incentives that are targeted at or above the
median of other similarly sized companies and that long-term
incentive compensation would trail the median. Since the IPO,
the Committee has determined that the peer group identified
above continues to be an appropriate group with which to
benchmark pay for Dole executives. The Committee will also use
data from general industry surveys to benchmark pay for
executives. The Committee has 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 at Dole has three components: base salary,
annual cash incentives and long-term equity incentive programs.
Dole targeted 2009 total direct pay as follows: for the
Chairman, approximately $2 million; for the President and
Chief Executive Officer, approximately $4.9 million; for
the Executive Vice President, General Counsel and Corporate
Secretary, approximately $1.9 million; and, for the
Executive Vice President and Chief Financial Officer,
approximately $1.7 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 (70% — 80%)
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) fall 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
equity-based long-term incentive programs for the Named
Executive Officers (exclusive of the Chairman) is as follows:
20% — 30% to base salary; 20% — 30% to
annual incentives; and 40% - 50% to equity-based long-term
incentives. In allocating total compensation among these
components of pay, the 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 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 20% — 30% of
total direct compensation. The 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 2009. Based on market data and
factors noted above, the Committee decided on the pay levels
noted in the “Summary Compensation Table.”
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 75% to 110%. The target bonuses for
fiscal year 2009 for the Named Executive Officers were as
follows: 110% of base salary for Mr. Murdock and
Mr. DeLorenzo, 85% of base salary for Mr. Carter, and
75% of base salary for 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 Committee. Historically,
payments could range from 0% to 300% of target. Maximums over
200% were used at Dole because of the lack of equity upside. For
fiscal year 2010, the target bonuses for the Named Executive
Officers are as follows: 110% of base salary for
Mr. Murdock and Mr. DeLorenzo, and 85% of base salary
for Mr. Carter and Mr. Tesoriero; and maximum
opportunity in the annual incentive program will be 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 2009:
The annual financial performance goals (discussed in more detail
below) are recommended by management and set by the Committee.
The financial performance goals are structured to present a
challenging, yet achievable profitability scenario for the
Company. The 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 20% to 30% of total
direct compensation.
The Named Executive Officers have identical financial
performance goals for their annual incentives and may earn 100%
of their targeted incentives if the established target for the
financial performance goals are met. The 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.
Metrics
for Fiscal 2009
The Company selected a consolidated earnings before interest,
taxes, depreciation and amortization (“EBITDA”) goal
of $440 million as a threshold test for funding of the
incentive pool. This threshold was established because of its
significance as a key metric for the Company to meet its 2009
objectives. If this threshold had been surpassed, then Company
performance against a level of cash flow return on investment
(“CFROI”) targeted at 18.44%, would have been
evaluated as the basis for funding the incentive pool. CFROI was
chosen because the Committee determined that it provides a
comprehensive view of annual consolidated performance and
focuses management on cash generation and debt reduction. In
determining the funding of the bonus pool, the Committee
compares actual consolidated results with the target performance
level for CFROI. For incentive purposes, CFROI is the
Company’s annual budgeted EBITDA divided by budgeted
investment. The annual budget is the budget used for operating
and planning purposes and is not a special budget used for
compensation purposes. The Company’s 2009 EBITDA, adjusted
for purposes of determining CFROI, was $427.6 million which
did not meet the threshold necessary for funding the incentive
pool. As a result, no incentives were paid for fiscal 2009.
These adjustments to CFROI were not the same as the adjustments
reflected in Adjusted EBITDA reported in the Company’s
Annual Report on
Form 10-K
for the fiscal year ended January 2, 2010.
Metrics
for Fiscal 2010
In 2010, a combination of CFROI and the year-end
net-debt-to-EBITDA (“Debt Ratio”) have been adopted as
financial performance metrics for annual incentive payments.
CFROI will be weighted at 80% in funding the incentive pool
because the Committee determined that it provides the best view
of annual consolidated performance. The Debt Ratio is determined
by dividing the net debt at the end of the year by EBITDA. The
Debt Ratio will be weighted at 20% in funding the incentive pool
as it is also an important objective of the Company. Greater
weighting is given to CFROI for purposes of the annual plan
because 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 which
provided for annual awards each with three-year Incentive
Periods. Outstanding awards under the Sustained Profit Growth
Plan (the “Growth Plan”) will continue in accordance
with their existing terms and will pay out, in cash, as and when
earned. Payments under the Growth Plan are payable, even if the
Named Executive Officer is no longer employed by the Company, if
termination of employment results from normal retirement, death
or disability (as defined in the Growth Plan).
The 2009 Stock Incentive Plan (the “2009 Stock Plan”)
was adopted on October 8, 2009 in connection with the IPO.
During fiscal 2009, the Company granted equity awards to each
Named Executive Officer (other than Mr. Murdock given his
existing ownership stake) in connection with the IPO. The equity
awards were granted to the Named Executive Officers and certain
other employees in lieu of having the Sustained Profit Growth
Plan for the
2009-2011
Incentive Period. The equity awards were a combination of
restricted stock and option awards. Each Named Executive Officer
also received an additional restricted stock grant as a one-time
IPO bonus (the “IPO
Restricted Stock”), outside of the Company’s annual
long-term compensation program. The Company currently intends to
continue to award equity-based long-term incentive awards on an
annual basis in lieu of cash-based long-term incentives formerly
issued under the Sustained Profit Growth Plan.
The table below reflects the grants made to the Named Executive
Officers during fiscal 2009. In an effort to balance the
objectives of shareholder value creation with retention and
share conservation, the Committee decided to issue a mix of
stock options and restricted stock shown in the proportions
described below. The grants of the IPO Restricted Stock were
made in recognition of the efforts of the Named Executive
Officers in the lead up to and the consummation of the IPO on
October 28, 2009.
Name
Stock Options
Restricted Stock
IPO Restricted Stock
David H. Murdock
0
0
0
David A. DeLorenzo
350,000
50,000
266,667
C. Michael Carter
116,667
16,667
33,333
Joseph S. Tesoriero
116,667
16,667
33,333
The grants reflected in the table above were the only grants
made during fiscal 2009.
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 Committee. The Committee authorized
all of the Named Executive Officers to participate in the Growth
Plan.
The Named Executive Officers have identical performance goals
and will earn 100% of their targeted long-term incentive
payments if financial performance goals are achieved. 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.
We disclose targets with respect to incentive periods that have
concluded, but not with respect to incentive periods that have
not yet concluded. Disclosure of numerical performance targets
under our long-term incentive plans would pose a risk of
competitive harm in that our competitors, suppliers and key
customers might be able to estimate planned pricing, and other
competitively sensitive information. This is particularly true
in our industry, where there are a relatively small number of
global competitors, some of which are not subject to public
disclosure regulations. Our suppliers could use information
concerning our expected financial performance, including
expected pricing to our customers, to gain an unfair advantage
in their negotiations with us for the supply of fruit and other
input commodities. In addition, our customers could unfairly use
information in negotiations with us.
Metrics
for Incentive Period Ended 2009
The Growth Plan for the 2007 — 2009 Incentive Period
(the “2007 Incentive Period”) was calculated based on
achievement of consolidated revenue in fiscal year 2009 and
average CFROI over the three-year period. The consolidated
revenue goal was $8.3 billion and the average CFROI goal
for the same period was 17.5%. The Company’s 2009
consolidated revenue and average CFROI over the three-year
period, adjusted under the Growth Plan, were $7.2 billion
and 15.6%, respectively, which resulted in a combined
achievement relative to targeted performance under the Growth
Plan for the 2007 Incentive Period of 46.4% of target.
Payment under the Growth Plan for the 2007 Incentive Period is
formula driven and were paid in 2010 as follows: the Chairman
received $892,050; the President & Chief Executive
Officer received $835,200; the Executive Vice President, General
Counsel and Corporate Secretary received $348,000; and the
Executive Vice President and Chief Financial Officer received
$240,120.
The Growth Plan for the 2008 — 2010 Incentive Period
is based on two factors: (a) the ending leverage ratio (net
debt at the end of the three year period, divided by EBITDA for
the last year of the three year period), and (b) the
average annual EBITDA for the three year period, in each case
adjusted for unusual or non-operational items.
The 2008 — 2010 performance measures were changed from
the previous incentive periods, which used consolidated revenue
and average CFROI. Management recommended this change to the
Committee in order to recognize the need to better align
executive pay with the Company’s overall strategy of
increasing operating performance and paying down debt. The
targets were set aggressively and require successful achievement
of asset sales and management focus on effective and profitable
use of capital.
Degree
of Difficulty
Generally, the Committee sets the minimum, target and maximum
levels such that the relative difficulty of achieving the target
level is consistent from year to year. Maximum awards reflect
very ambitious goals which can only be attained when business
results are exceptional, thus justifying the higher award
payments. Similarly, if performance targets fall short of
specified levels, there will be no payout under the Growth Plan.
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 commodity input costs like fuel,
shipping and packaging, as well as product supplies which can be
impacted by weather, political risk, currency fluctuations and
other factors.
Perhaps the most useful indicator of the degree of difficulty in
achieving the performance targets is Dole’s track record:
Dole has not hit its ambitious performance targets in any of the
last four incentive period cycles. The payout has been between
approximately 26% and 46% of the participant’s target award
opportunity with an average payout over the past three incentive
periods of 39% of target.
Retirement
Plan
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 and
that 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 $314,755 in pension benefit payments in 2009.
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 2009. 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
under “Pension Benefits.”
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 will revert back to
matching 100% of each dollar contributed up to 6% of eligible
compensation. In addition, effective July 4, 2010, the
Company will 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 below under “Nonqualified Deferred
Compensation.”
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. Messrs. Carter and Tesoriero
are provided with company cars, insurance costs and maintenance.
These perquisites have been reviewed as competitive and
consistent with perquisites offered in the marketplace for
similarly situated executives.
The Dole airplane (co-leased with a company owned by
Mr. Murdock) was used by Mr. Murdock in 2009 solely
for business purposes. The costs to Dole of these expenses are
discussed under “Certain Relationships and Related Party
Transactions.”
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 2009 fiscal year, Dole was not party to any
employment agreements with the Named Executive Officers.
Severance
and Change of Control Arrangements
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 below under “Change
of Control,”the Company believes these change of control
agreements are important in order to keep these executives
focused on Dole’ business should a change of control occur.
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 addition, consistent with the purposes behind the grants of
the IPO Restricted Stock, the IPO Restricted Stock 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 below under “Change of Control”).
See the discussion below under “Severance” and
“Payments upon Termination or Change of Control” for
further information on the Company’s severance and change
of control arrangements.
Stock
Ownership Guidelines
There are no equity ownership requirements or guidelines that
any of the directors or any of the Named Executive Officers or
other employees must meet or maintain.
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 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.
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
$1 million will not be deductible under
Section 162(m). In addition, the Company may authorize
other compensation payments that do not comply with the
exemptions in Section 162(m) when the Company believes that
such payments are appropriate to attract and retain executive
talent.
Corporate
Compensation and Benefits Committee Report
The Corporate Compensation and Benefits Committee has reviewed
and discussed the foregoing Compensation Discussion and Analysis
with management. Based on its review and discussion with
management, the Committee has recommended to the Board of
Directors that the Compensation Discussion and Analysis be
included in this Proxy Statement.
The table below summarizes total compensation paid, earned or
awarded to each of the Named Executive Officers for the fiscal
years ended January 2, 2010, January 3, 2009 and
December 29, 2007.
Change in
Pension Value
and
Nonqualified
Non Equity
Deferred
Stock
Option
Incentive Plan
Compensation
All Other
Name and Principal
Fiscal
Salary
Bonus
Awards
Awards
Compensation
Earnings
Compensation
Total
Position
Year
($)(1)
($)(2)
($)(3)
($)(3)
($)(4)
($)(5)
($)(6)
($)
David H. Murdock
2009
951,538
0
0
0
892,050
261,327
3,462
2,108,377
Chairman of the Board
2008
968,269
1,269,226
0
0
541,500
(114,009
)
33,057
2,698,043
2007
950,000
489,250
0
0
247,950
(99,206
)
29,415
1,617,409
David A. DeLorenzo
2009
1,200,000
0
3,958,338
1,984,500
835,200
402,150
94,182
8,474,370
President and Chief
2008
1,223,077
1,374,199
0
0
0
(272,894
)
76,965
2,401,347
Executive Officer
2007
687,692
618,000
0
0
0
(123,065
)
41,352
1,223,979
C. Michael Carter
2009
601,538
0
625,000
661,502
348,000
6,342
25,195
2,267,577
Executive Vice President,
2008
611,538
619,431
0
0
254,125
25,693
53,929
1,564,716
General Counsel and Corporate Secretary
2007
600,000
300,000
0
0
118,690
22,829
80,805
1,122,324
Joseph S. Tesoriero
2009
500,000
0
625,000
661,502
240,120
5,336
54,408
2,086,366
Executive Vice President
2008
482,692
505,464
0
0
185,725
4,955
38,995
1,217,831
and Chief Financial Officer
2007
444,231
350,000
0
0
36,703
2,714
62,293
895,941
(1)
Base salary adjustments are made based on performance, internal
equity and market data. None of the Named Executive Officers
received a pay increase in 2009. Messrs. Murdock and
Carter’s annual car allowance benefit of $5,000 was folded
into annual base salary in the fourth quarter of 2009.
Messrs. Murdock and Carter’s salaries were higher in
2008 solely due to fiscal 2008 being a 53-week fiscal year in
contrast to fiscal 2009 and 2007 which were both 52-week fiscal
years. Mr. Tesoriero received a salary adjustment in July
2008 based on both his level of pay relative to the benchmarking
data and his level of performance. Mr. DeLorenzo rejoined
the Company’s management team on June 4, 2007.
Mr. Tesoriero was Vice President and Chief Financial
Officer throughout 2009. He was elected Executive Vice President
and Chief Financial Officer in February 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 2009, filed on March 25, 2010, for assumptions
used in the calculation of the amounts shown and additional
information regarding the Company’s share-based
compensation.
(4)
Amounts shown for 2009 reflect awards earned for the
2007 — 2009 incentive period (paid in 2010) under
the Sustained Profit Growth Plan.
(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
includes 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 2009 change in actuarial
value for each of the Named Executive Officers is as follows:
for Mr. Murdock $247,492; for Mr. DeLorenzo $390,259;
and, for Mr. Carter $4,197. Mr. Tesoriero joined Dole
after the defined benefit plans were frozen and therefore does
not have a benefit. The amounts shown for 2009 also include
above market earnings on non-qualified deferred compensation as
follows: for Mr. Murdock $13,835; for Mr. DeLorenzo
$11,891; for Mr. Carter $2,145; and, for Mr. Tesoriero
$5,336.
The 2009 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” and “Nonqualified Deferred
Compensation”) on behalf of Mr. Murdock $0,
Mr. Carter $20,911, Mr. DeLorenzo $76,737, and
Mr. Tesoriero $40,731; (2) for Mr. DeLorenzo,
$17,445 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 for Mr. Carter $822, and
Mr. Tesoriero $4,427; (4) an annual car allowance to
Mr. Murdock $3,462, and Mr. Carter $3,462, which
annual car allowance of $5,000 was folded into their respective
annual base salaries in the fourth quarter of 2009; (5) 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. Murdock $0, Mr. Carter $0, Mr. DeLorenzo $0
and Mr. Tesoriero $5,000; and (6) the cost of an
annual executive physical for Mr. Murdock $0,
Mr. Carter $0, Mr. DeLorenzo $0 and Mr. Tesoriero
$4,250.
C:
Grants of
Plan-Based Awards Table
The following table sets forth all grants of plan-based awards
made to the Named Executive Officers during the fiscal year 2009.
All Other Stock
All Other Option
Grant Date Fair
Awards, Number
Awards: Number of
Value of Stock
of Shares of
Securities
Exercise or Base
and Option
Grant
Stock or Units
Underlying Options
Price of Option
Awards
Name
Date
(1)
(2)
Awards ($/sh)
(3)
David H. Murdock
—
—
—
—
—
—
—
—
David A. DeLorenzo
10/28/2009
316,667
—
$
3,958,338
10/22/2009
350,000
12.50
$
1,984,500
C. Michael Carter
10/28/2009
50,000
—
—
$
625,000
10/22/2009
—
116,667
12.50
$
661,502
Joseph S. Tesoriero
10/28/2009
50,000
—
—
$
625,000
10/22/2009
—
116,667
12.50
$
661,502
(1)
The following number of shares of restricted stock were granted
as annual grants pursuant to the Company’s long-term
compensation 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
bonus in connection with the IPO: 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.
(2)
The options vest in three equal installments commencing on
October 22, 2010. The options were granted under the 2009
Stock Plan.
(3)
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 2009, filed on March 25, 2010, for assumptions
used in the calculation of the amounts shown and additional
information regarding the Company’s share-based
compensation.
2009
Outstanding Equity Awards at Fiscal Year-End Table
The following table sets forth equity awards of the Named
Executive Officers outstanding as of January 2, 2010.
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)
David H. Murdock
—
David A. DeLorenzo
—
350,000
12.50
10/22/2019
—
50,000
620,500
266,667
3,309,337
C. Michael Carter
—
116,667
12.50
10/22/2019
—
16,667
206,837
33,333
413,663
Joseph S. Tesoriero
—
116,667
12.50
10/22/2019
—
16,667
206,837
33,333
413,663
(1)
The options vest in three equal installments commencing on
October 22, 2010.
(2)
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)
The market value was computed using the closing price ($12.41)
of the Company’s common stock on the last trading day of
the fiscal year, December 31, 2009.
C:
Pension
Benefits
The Company sponsors both a qualified and nonqualified defined
benefit plan. The accrued benefit under the qualified plan is
1.1% of final average compensation multiplied by years of
service, plus .33% of final average compensation multiplied by
years of service in excess of 15 years. The nonqualified
plan is a restoration plan, providing benefits that cannot be
provided under the qualified plan on account of Internal Revenue
Code limits on compensation and benefits.
Participation in both defined benefit plans was frozen on
December 31, 2001. Benefits were also frozen for most
employees at that time, although some long-service employees
received additional benefit accruals over the next five years.
No benefits accrued under either defined benefit plan after
December 31, 2006. All participants were fully vested as of
that date.
Participants may receive their full benefit upon normal
retirement at age 65 or a reduced benefit upon early
retirement on or after age 55.
The amounts in the table below reflect the present value of the
Named Executive Officer’s benefits under all defined
benefit pension plans sponsored by the Company and are
determined using the interest rate and mortality rate
assumptions used for U.S. pension plans discussed in
Note 12 in the notes to the consolidated financial
statements included in the Company’s Annual Report on
Form 10-K
for fiscal 2009.
Number of
Payments
Years of
Present Value of
During Last
Credited
Accumulated
Fiscal Year
Name(1)
Plan Name
Service
Benefit ($)
($)
David H. Murdock(2)
Plan 29
8.5
1,385,038
93,973
SERP
8.5
771,835
52,368
David A. DeLorenzo(3)
Plan 29
31.5
986,321
74,139
SERP
31.5
3,133,648
240,616
C. Michael Carter
Plan 29
1.25
31,461
0
SERP
1.25
30,570
0
(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.
C:
Nonqualified
Deferred Compensation
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 $0.50 of each dollar contributed up
to 6% of eligible compensation. On July 4, 2010, Dole will
revert back to matching 100% of each dollar contributed up to 6%
of eligible compensation. The Company contributions to the
nonqualified plan are matching or service related amounts that
cannot be included in the 401(k) plan because of pay or
contribution limits contained in the plan or in Federal law.
Amounts contributed to the ESP receive a fixed rate of interest.
For 2009, the interest rate was 7.2%. The interest rate in 2010
has been set at 8.25%. Such rate is based on the yield of
Dole’s unsecured bonds as of the first week of December
2009. In addition, effective July 4, 2010, the Company will
annually contribute a percentage (1% — 2%) of eligible
pay to the 401(k) plan, based on the number of years of service
with Dole.
Aggregate
Executive
Registrant
Aggregate
Balance at
Contributions
Contributions
Earnings
Aggregate
Last Fiscal
in Last FY
in Last FY
in Last FY
Withdrawals/
Year End
Name
($)(1)
($)(1)
($)
Distributions
($)
David H. Murdock
0
0
21,103
0
314,212
David A. DeLorenzo
87,010
69,387
20,236
0
385,669
C. Michael Carter
6,042
13,561
3,975
0
65,495
Joseph S. Tesoriero
35,000
31,951
8,542
0
171,731
(1)
Executive contributions and company match are also reflected in
the “Summary Compensation Table.”
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.
C:
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 December 31,2009, 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.
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:
Years of Service
Severance Pay Benefit
1 to 4
2 weeks for each year of service plus 2 weeks
5 to 14
2 weeks for each year of service plus 4 weeks
15 or more
2 weeks for each year of service plus 6 weeks
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. 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, car allowance or other
health and welfare plan, programs, policies or practices or
understandings but excluding the Named Executive Officer’s
rights relative to the option of acquiring full ownership of the
company car) 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 of the greater of (i) the Named
Executive Officer’s target amounts under the Sustained
Profit Growth Plan and (ii) the Named Executive
Officer’s actual benefits under the Sustained Profit Growth
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 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 in
control agreements and the 2009 Stock Plan:
There are four events that could constitute a change of control
at Dole. The occurrence of any of these events would be deemed a
change of control. These events were carefully 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 percent 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.
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 in 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.
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)
892,050
2,375,000
2,375,000
0
2,375,000
2,375,000
Health and Welfare Benefits, Fringe Benefits and other
perquisites
0
0
2,250
0
30,000
0
Equity Acceleration
0
0
0
0
0
Cash Severance
0
0
1,010,089
0
6,016,500
0
Excise Tax and
Gross-Up
0
0
0
0
3,685,367
0
David A.
DeLorenzo
Involuntary
Termination in
Termination
Connection
Executive Payments
Voluntary
Normal
Without
For Cause
with Change
Death and
Upon Separation ($)
Termination
Retirement
Cause
Termination
of Control
Disability
One-Year Management Incentive Plan(1)
0
1,320,000
0
0
1,320,000
1,320,000
Sustained Profit Growth Plan(2)
835,200
3,000,000
3,000,000
0
3,000,000
3,000,000
Health and Welfare Benefits, Fringe Benefits and other
perquisites
0
0
1,334
0
30,000
0
Equity Acceleration(3)
0
0
3,309,337
0
3,929,837
0
Cash Severance(4)
0
0
165,374
0
7,560,000
0
Excise Tax and
Gross-Up
0
0
0
0
6,431,708
0
C. Michael
Carter
Involuntary
Termination in
Termination
Connection
Executive Payments
Voluntary
Normal
Without
For Cause
with Change
Death and
Upon Separation ($)
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)
348,000
1,250,000
1,250,000
0
1,250,000
1,250,000
Health and Welfare Benefits, Fringe Benefits and other
perquisites
Health and Welfare Benefits, Fringe Benefits and other
perquisites
0
0
4,482
0
30,000
0
Equity Acceleration(3)
0
413,663
0
620,500
0
Cash Severance
0
0
177,883
0
2,625,000
0
Excise Tax and
Gross-Up
0
0
0
0
1,882,738
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, 2009.
(2)
Prior to the IPO, awards for the Sustained Profit Growth Plan
were made annually and numbers shown above include amounts for
incentive periods that overlap. For purposes of illustration,
targets amounts are shown. Payments made in the event of
retirement, death, disability or involuntary termination without
cause would be based on actual results for the applicable
incentive periods and the number of months of participation in
any applicable incentive period. Amounts shown for retirement,
death, disability and involuntary termination without cause are
payable following the termination and calculation of the
applicable incentive period. Amounts would be paid upon
voluntary termination only if the termination of employment
occurred during the
90-day
window between the end of 2010 and the date of payment under the
Sustained Profit Growth Plan. Awards, if any, are prorated based
on the applicable employment termination date for the Named
Executive Officer. In connection with the IPO, the Sustained
Profit Growth Plan for plan years beginning in 2009 was replaced
with the 2009 Stock Plan.
(3)
The value of the restricted stock is based on the
December 31, 2009 closing price of $12.41. The value of
stock options is zero due to a strike price of $12.50, which is
above the closing price on December 31, 2009.
The following table summarizes, as of December 31, 2009,
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(1)(2)
Rights(2)
column(a))
Plan Category
(a)
(b)
(c)
Equity compensation plans approved by security holders
1,430,212
$
12.50
3,761,499
Equity compensation plans not approved by security holders
—
—
—
Total
1,430,212
$
12.50
3,761,499
(1)
This amount excludes outstanding restricted stock awards. In
addition to the above, there are 808,289 shares subject to
unvested restricted stock awards outstanding under the
stockholder-approved plan.
(2)
This amount includes 35,211 shares subject to outstanding
restricted stock unit awards. The weighted-average exercise
price in column (b) does not take these awards into account.
The following table, based in part upon information supplied by
officers and directors, sets forth certain information regarding
the 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 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
5,000
*
Andrew J. Conrad
15,000
*
Sherry Lansing
6,000
*
Justin M. Murdock
13,000
*
Dennis M. Weinberg
9,222
*
Named Executive Officers
David H. Murdock (also a Director)
51,710,000
(3)
58.6
%
David A. DeLorenzo (also a Director)
419,767
*
C. Michael Carter
51,000
*
Joseph S. Tesoriero
54,250
*
All executive officers and directors as a group
52,283,239
59.3
%
Greater than 5% Beneficial Owners
FMR LLC
8,404,579
(4)
9.5
%
BAMCO INC.
5,406,524
(5)
6.1
%
(1)
The shares beneficially owned by our directors and Named
Executive Officers are subject to resale restrictions set forth
in lock up agreements entered into in connection with the IPO
(all expiring April 19, 2010, subject to a potential
automatic short extension) and described in greater detail under
the heading “Underwriting” in our Final Prospectus
filed with the SEC on October 26, 2009.
(2)
Calculated based on 88,233,289 shares of common stock
outstanding as of the Record Date. Unless indicated otherwise,
percentage of ownership is less than 1.0%.
(3)
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.
(4)
The information regarding the beneficial ownership of FMR LLC is
based on the Schedule 13G filed with the SEC jointly by FMR
LLC and Edward C. Johnson 3d on February 16, 2010. FMR LLC
has the sole power to vote or direct the vote with respect to
308,237 of these shares. The address for FMR LLC is 82
Devonshire Street, Boston, MA02109.
(5)
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 12, 2010. BAMCO INC. has
shared power to vote or direct the vote with respect to
4,881,524 of these shares and shared power to dispose or to
direct the disposition of all of these shares. 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 private dining club and a hotel. During fiscal year
2009, the Company paid Mr. Murdock’s companies an
aggregate of approximately $9.8 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 2009 for landscape maintenance services. Castle
purchased approximately $0.5 million of products from the
Company during fiscal year 2009. The Company also paid
$0.7 million in fiscal years 2009 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 2009, the Company’s
share of the direct and indirect costs for this aircraft was
$2.2 million.
The Company and Castle have operated their risk management
departments on a joint basis. Insurance procurement and premium
costs are 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 2009, administrative
costs of the risk management department were shared on a
50-50 basis,
and the Company’s share of these costs was
$0.1 million. This joint sharing arrangement was
discontinued on February 1, 2010.
The Company has retained risk for commercial property losses
sustained by the Company and Castle totaling $3 million in
the aggregate and $3 million per occurrence, above which
the Company has coverage provided through third-party insurance
carriers. The arrangement provided for premiums to be paid to
the Company by Castle in exchange for the Company’s
retained risk. The Company received approximately
$0.3 million from Castle during fiscal year 2009. The
Company ceased providing this coverage to Castle as of
October 31, 2009.
The Company had outstanding net accounts receivable of $18,000;
and a note receivable of $9.8 million due from Castle at
January 2, 2010, of which 40% will ultimately be disbursed
to Castle as our minority partner.
During June 2006, the Company and Castle executed a lease
agreement pursuant to which the Company’s fresh vegetables
operations occupy an office building in Monterey, California,
which was owned by Castle. In August 2009, the lease was amended
whereby the lease term was extended from May 2021 to May 2024.
Dole received $0.3 million from Castle as consideration for
the lease expiration. In September 2009, Castle sold the office
building to a third party. Rent expense paid to Castle for
fiscal year 2009 totaled $0.9 million.
Mr. Murdock is a director and executive officer of Dole 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 officer
of Dole, also serve as directors and officers of privately held
entities controlled by Mr. Murdock. Edward C. Roohan, a
former director of Dole, was, until August 2009, a director and
executive officer of Castle. Any compensation paid by such other
entities is within the discretion of their respective boards of
directors.
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.
In connection with and prior to the consummation of the IPO, as
more fully disclosed in the Final Prospectus of the Company
filed with the SEC pursuant to Rule 424(b)(4) on
October 26, 2009 (the “Final Prospectus”), the
Company effected the following internal restructuring
transactions on October 28, 2009:
•
DHM Holding Company, Inc., the Company’s parent company
prior to the IPO (“DHM”), contributed to Dole 50% of
the outstanding limited liability company membership interests
it then held in Westlake Wellbeing Properties, LLC, a hotel
operating company (“WWP”).
•
DHM was merged with and into the Company with the Company as the
corporation surviving the merger (the “Merger”).
•
The Company transferred the outstanding limited liability
company membership interests of WWP it then held and
$30 million of debt associated with WWP (all of which was
acquired pursuant to the transfer described in the first two
bullets above), to affiliates of Mr. Murdock through which
he owns his Company common stock.
•
The Company transferred to affiliates of Mr. Murdock
through which he owns his Company common stock the ownership
interest in one 1,361 acre parcel of idle farm land in
Honduras with a fair market value of approximately
$10 million and a book value of $188,838 at the time of
transfer.
Also, following the IPO, as described in the Final Prospectus,
the Company used approximately $85 million of the IPO
proceeds to extinguish the remaining balance outstanding of debt
associated with WWP.
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 below under “Transactions with
Affiliates,” in connection with the IPO, the Company
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, 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. If a transaction will be ongoing,
the Audit Committee may establish guidelines for the
Company’s management to follow in its ongoing dealings with
the related person. Thereafter, 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 above under “Related
Party Transactions” 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 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 above under “Related
Party Transactions” 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 percent 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 2, 2010.
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 2011 annual meeting, assuming it is
not moved more than thirty (30) days before or more than
seventy (70) days after May 6, 2011, to be timely, a
stockholder’s notice must be delivered to the Corporate
Secretary not later than the close of business on
February 7, 2011, nor earlier than the close of business on
January 6, 2011. 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 2011 Annual Meeting of
Stockholders may do so by following the procedures prescribed in
SEC
Rule 14a-8
promulgated under the Securities Exchange Act of 1934, as
amended. Under
Rule 14a-8,
to be eligible for inclusion in the Company’s proxy
statement and form of proxy for the 2011 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 3, 2010.
Should the Company move the date of the 2011 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 statements with respect to two or more stockholders
sharing the same address by delivering a single proxy statement
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 a separate proxy statement, or if the
stockholder is receiving multiple copies of the proxy statement
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 2009 can be found in the
Company’s Annual Report on
Form 10-K
for the fiscal year ended January 2, 2010. A copy of the
2009
Form 10-K
is included in the Annual Report to Shareholders for 2009, which
is being mailed concurrently with this Proxy Statement to each
stockholder. The Company will furnish without charge a copy of
the 2009
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 Company’s Annual Report on
Form 10-K
may be obtained without charge over the Internet at the
Company’s website at www.dole.comor at the
Securities and Exchange Commission’s website at
www.sec.gov. The Company’s Annual Report to
Shareholders may be obtained without charge over the Internet at
the Company’s website at www.dole.com. The
Company will also furnish copies of any exhibits to the 2009
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.
C:
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.
Dole 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.Please detach hereThe Board of Directors Recommends a Vote FOR Items 1 and 2.
1. Election of directors: 01 Andrew J. Conrad o Vote FOR o Vote WITHHELD
02 Justin M. Murdock 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 January 1, 2011 o For
o Against o Abstain
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE
VOTED FOR EACH PROPOSAL.
Address Change? Mark box, sign and indicate changes below: ? o 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, administrators, 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 6, 2010
11:00 A.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 6,2010.
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 and 2.
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
