-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UKZMxJvBDIt2WiSRSHD0JKlxPYL4FqD7v8WsKxGf3YWzVfHBzoxrd3RiubGVLJJ6 aWqgwrVa2lWKbRI46hJ1FA== 0000004507-99-000004.txt : 19990518 0000004507-99-000004.hdr.sgml : 19990518 ACCESSION NUMBER: 0000004507-99-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990517 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ORANGE CO INC /FL/ CENTRAL INDEX KEY: 0000004507 STANDARD INDUSTRIAL CLASSIFICATION: CANNED, FROZEN & PRESERVED FRUIT, VEG & FOOD SPECIALTIES [2030] IRS NUMBER: 590918547 STATE OF INCORPORATION: FL FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-06442 FILM NUMBER: 99627317 BUSINESS ADDRESS: STREET 1: 2020 HWGY 17 S STREET 2: P O BOX 2158 CITY: BARTOW STATE: FL ZIP: 33830 BUSINESS PHONE: 8135330551 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN AGRONOMICS CORP DATE OF NAME CHANGE: 19870506 FORMER COMPANY: FORMER CONFORMED NAME: SOUTH FLORIDA CITRUS INDUSTRIES INC DATE OF NAME CHANGE: 19690318 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 FORM 10-Q (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the Quarter Ended March 31, 1999 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from to Commission File No. 1-6442 ORANGE-CO, INC. (Exact name of registrant as specified in its charter) FLORIDA (State or other jurisdiction of incorporation or organization) 59-0918547 (IRS Employer Identification Number) 2020 U.S. Highway 17 South, P. O. Box 2158, Bartow, Florida 33830 (Address of principal executive offices) (941) 533-0551 (Registrant's telephone no.) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes XX No Number of shares outstanding of common stock, $.50 par value, as of May 14, 1999: 10,309,975 shares -1- ORANGE-CO, INC. AND SUBSIDIARIES FORM 10-Q TABLE OF CONTENTS PAGE NO. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Consolidated Balance Sheets 3 March 31, 1999 (unaudited) and September 30, 1998 (audited) Consolidated Statements of Operations (unaudited) 4 Six and Three Months ended March 31, 1999 and 1998 Consolidated Statements of Cash Flows (unaudited) 5 Six Months ended March 31, 1999 and 1998 Notes to Consolidated Financial Statements (unaudited) 6-9 ITEM 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 10-16 PART II. OTHER INFORMATION ITEM 4. Submission of Matters to a Vote of Security Holders 17 ITEM 6. Exhibits and Reports on Form 8-K 17 SIGNATURES 18 -2-
PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ORANGE-CO, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands) March 31, September 30, 1999 1998 ASSETS (unaudited) (audited) Current assets: Cash and cash equivalents $ 508 $ 841 Receivables 12,209 8,621 Advances on fruit purchases 185 879 Inventories 75,939 50,482 Deferred income tax 2,663 2,476 Prepaid and other 331 57 --------- --------- Total current assets 91,835 63,356 --------- --------- Property and equipment, net 126,100 126,992 --------- --------- Other assets: Excess of cost over net assets of acquired Companies 10,459 10,647 Notes receivable 1,081 1,196 Other 7,048 6,171 --------- --------- Total other assets 18,588 18,014 --------- --------- Total assets $236,523 $208,362 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Note payable $ 8,000 $ - Current installments on long-term debt 3,711 3,753 Accounts payable 6,781 5,697 Accrued liabilities 7,733 11,690 --------- --------- Total current liabilities 26,225 21,140 Deferred income taxes 23,362 23,129 Other liabilities 1,665 1,502 Long-term debt 76,168 54,901 --------- --------- Total liabilities 127,420 100,672 --------- --------- Stockholders' equity: Preferred stock, $.10 par value, 10,000,000 shares authorized; none issued - - Common stock, $.50 par value, 30,000,000 shares authorized; 10,349,399 issued 5,175 5,175 Capital in excess of par value 71,417 71,417 Retained earnings 32,885 31,472 --------- --------- 109,477 108,064 Less: Treasury stock, at cost: 39,424 shares at March 31, 1999 and September 30, 1998 (374) (374) --------- --------- Total stockholders' equity 109,103 107,690 --------- --------- Total liabilities and stockholders' equity $236,523 $208,362 ========= =========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. -3-
ORANGE-CO, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX AND THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (unaudited) (in thousands except for per share data) Six Months Three Months 1999 1998 1999 1998 Sales $65,345 $57,516 $32,350 $31,807 Cost of sales 57,746 59,041 29,764 32,296 -------- -------- -------- -------- Gross profit(loss) 7,599 (1,525) 2,586 (489) Other costs and expenses, net: Selling, general and administrative (3,312) (2,691) (1,737) (1,368) Gain(loss) on disposition of property and equipment - 122 - (14) Other (85) (264) (56) (223) Interest (1,884) (1,590) (1,039) (859) ------- -------- ------- -------- Income(loss)before income taxes 2,318 (5,948) (246) (2,953) Income tax expense(benefit) 905 (2,089) (84) (1,054) ------- -------- ------- -------- Net income(loss) $1,413 $(3,859) $ (162) $(1,899) ======= ======== ======= ======== Net income(loss) per common share, basic and diluted $ .14 $ (.37) $ (.02) $ (.18) ======= ======== ======= ======= Average number of common shares outstanding, basic and diluted 10,310 10,310 10,310 10,310 ======= ======= ======= =======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. -4-
ORANGE-CO, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED MARCH 31, 1999 AND 1998 (unaudited) (in thousands) 1999 1998 CASH FLOWS FROM OPERATING ACTIVITIES: Net income(loss) $ 1,413 $ (3,859) --------- --------- Adjustments to reconcile net income to net cash provided by (used for) operating activities: Depreciation and amortization 3,724 3,482 Increase(decrease) in deferred income taxes 46 (2,089) (Gain) on disposition of property and equipment and other - (122) Change in assets & liabilities: (Increase) in receivables (3,588) (5,681) Decrease in advances on fruit purchases 694 214 (Increase) in inventory (25,457) (10,792) (Increase)decrease in prepaid and other (274) 353 Increase(decrease) in accounts payable and accrued liabilities (2,873) 6,339 Other, net 136 192 --------- --------- Total adjustments (27,592) (8,104) --------- --------- Net cash (used for) operating activities (26,179) (11,963) --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of property & equipment 94 753 Decrease in note & mortgage receivables 115 23 Additions to property & equipment (2,580) (4,359) (Increase)decrease in other assets (1,008) 65 --------- --------- Net cash (used for) investing activities (3,379) (3,518) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of treasury stock - 3 Proceeds from short-term debt 8,000 5,000 Proceeds from long-term debt 21,225 11,724 --------- --------- Net cash provided by financing activities 29,225 16,727 --------- --------- NET (DECREASE)INCREASE IN CASH AND CASH EQUIVALENTS (333) 1,246 --------- --------- CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 841 1,009 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 508 $ 2,255 ========= =========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. -5- ORANGE-CO, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. MANAGEMENT'S OPINION The Consolidated Financial Statements include the accounts of Orange-co, Inc. and Subsidiaries (the "Company"), after elimination of material intercompany accounts and transactions. In the opinion of the management of the Company, the accompanying financial statements reflect adjustments, consisting only of normal recurring adjustments unless otherwise disclosed, which are necessary to present fairly the financial position, results of operations and cash flows for the periods presented: . Unaudited Consolidated Balance Sheet at March 31, 1999 . Audited Consolidated Balance Sheet at September 30, 1998 . Unaudited Consolidated Statements of Operations for the six and three month periods ended March 31, 1999 and 1998 . Unaudited Consolidated Statements of Cash Flows for the six month periods ended March 31, 1999 and 1998 2. NOTES PAYABLE AND LONG-TERM DEBT As of March 31, 1999, the Company had access to a $50 million working capital credit facility payable in April 2001. Accordingly, the balance at March 31, 1999 was classified as long-term debt. This facility is collateralized by substantially all of the Company's current assets. The outstanding balance at March 31, 1999 was approximately $47,103,000 with approximately $497,000 additionally available to be borrowed under a borrowing base calculation of this facility. The interest rate on the facility is variable based upon the financial institution's cost of funds plus a margin. Additionally, as of March 31, 1999 the Company had a $10 million short-term capital revolving credit facility. As of March 31, 1999 the outstanding balance on this facility was $8 million. The interest rate on this facility is variable based upon the financial institution's cost of funds plus a margin. At March 31, 1999, the Company's outstanding long-term debt (including the $47,103,000 balance on the working capital line of credit facility) was approximately $79,879,000, of which $3,711,000 matures in the next twelve months and the remainder matures at various times over the subsequent ten years. Interest paid, net of amounts capitalized, was approximately $1,902,000 and $1,623,000 for the six months ended March 31, 1999 and 1998, respectively. Interest capitalized was approximately $225,000 and $249,000 for the six months ended March 31, 1999 and 1998, respectively. The Company is exposed to interest changes primarily as a result of its variable rate credit facility and its long-term, fixed- rate debt used to finance the Company's activities. The Company's interest rate risk management objective is to limit any unfavorable impact of interest rate changes on earnings and cash flows and to lower its overall borrowing costs. To achieve its objectives, the Company borrows at both fixed and variable rates on its long-term debt and is currently a party to an interest rate swap agreement on a portion of its variable rate Credit Facility, which provides for a fixed rate of 5.07% per annum on a notional amount of $10 million. The interest rate differential is reflected as an adjustment to interest expense over the life of the swaps. -6- The following table represents information for all interest rate swaps at March 31, 1999. The notional amount does not necessarily represent amounts exchanged by the parties and, therefore, is not a direct measure of the exposure of the Company. The fair value approximates the cost to settle the outstanding contract. Notional Amount Fair Value Carrying Value Unrecognized Gain $10,000,000 $95,800 $-0- $95,800 Certain mortgage agreements contain loan covenants. At March 31, 1999, the Company was out of compliance with one loan covenant related to its debt to equity ratio. The Company received a waiver on this covenant for a period that in management's judgment will allow the Company to achieve compliance and, therefore, avoid early repayment of this loan. (See Management's Discussion and Analysis - Liquidity and Capital Resources.) 3. INVENTORIES
The major components of inventory are summarized as follows (in thousands): March 31, September 30, 1999 1998 Finished goods $63,193 $35,390 Fruit-on-tree inventory 9,856 11,099 Other 2,890 3,993 ------- ------- Total $75,939 $50,482 ======= =======
As of March 31, 1999, the Company held futures contracts as hedge positions for frozen concentrated orange juice ("FCOJ"). The net futures positions totaled approximately $11,223,000 with unrealized losses of approximately $1,422,000. Exposure to off-balance sheet risk related to these positions results from market fluctuations of FCOJ futures prices relative to the Company's open positions. As of March 31, 1999 cash deposits with brokers totaled $1,956,000 and vary with market price fluctuations. 4. OTHER Substantially all sales are to entities that market citrus and citrus-related products. During the six and three month periods ended March 31, 1999, the Company had two customers who individually accounted for approximately 18.4% and 17.8%, and 18.9% and 18.5% of total sales for the respective periods. During the six and three month periods ended March 31, 1998, the Company had two customers who individually accounted for approximately 19.5% and 13.3% and 17.0% and 13.7% of total sales for the respective periods. -7- 5. INCOME TAXES The provision for income taxes is calculated using the asset and liability method prescribed by Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes" ("FAS No. 109"). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FAS No. 109, the effect on deferred tax assets and liabilities of a change in tax rates or a deferred tax asset valuation reserve is recognized in income in the period that includes the enactment or revaluation date.
Income tax expense(benefit) attributable to income for the six and three month periods ended March 31, 1999 and 1998 consists of the following (in thousands): Six Months Three Months Ended March 31, Ended March 31, 1999 1998 1999 1998 Current: Federal income tax $ 723 $ - $ 170 $ - State income tax 136 - 21 - ------ -------- ------- -------- Total $ 859 $ - $ 191 $ - ------ -------- ------- -------- Deferred: Federal income tax(benefit) $ 42 $(1,887) $ (248) $ (953) State income tax(benefit) 4 (202) (27) (101) ------ -------- -------- -------- Total $ 46 $(2,089) $ (275) $(1,054) ------ -------- -------- -------- Total provision for income tax(benefit) $ 905 $(2,089) $ (84) $(1,054) ====== ======== ======== ========
-8-
Following is a reconciliation of the expected income tax expense(benefit) computed at the U.S. Federal statutory rate of 34% and the actual income tax(benefit) provisions for the six and three month periods ended March 31, 1999 and 1998 (in thousands): Six Months Three Months Ended March 31, Ended March 31, 1999 1998 1999 1998 Expected income tax(benefit) $ 788 $(2,022) $ (84) $(1,004) Increase(decrease) resulting from: Permanent items and other 52 45 6 (15) State income taxes, net of Federal tax benefit 65 (112) (6) (35) ----- -------- ------ ------- Total provision for income tax(benefit) $ 905 $(2,089) $ (84) $(1,054) ===== ======== ======= ========
6. APPLICATION OF ACCOUNTING STANDARDS In June 1998 FASB issued SFAS No. 133 (SFAS 133), "Accounting for Derivative Instruments and Hedging Activities". SFAS 133 requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. Under the comprehensive income reporting method adopted under SFAS 130 "Reporting Comprehensive Income", gains or losses resulting from changes in the values of those derivatives would be accounted for depending on the use of the derivative and whether it qualifies for hedge accounting. The key criterion for hedge accounting is that the hedging relationship must be highly effective in achieving offsetting changes in fair value or cash flows. SFAS 133 is effective for interim and annual periods beginning after June 15, 1999. The Company is currently evaluating, and has not yet determined, the effect that the adoption of SFAS 133 will have on its financial statements. The Financial Accounting Standards Board recently issued SFAS 131, "Disclosures about Segments of an Enterprise and Related Information", which is effective for the Company's fiscal year beginning October 1, 1998. Under SFAS 131 the basis for determining an enterprise's operating segments is the manner in which management operates the businesses. The Company plans to adopt these disclosures as of the end of the current fiscal year as provided for in the application requirement of SFAS 131. -9- ORANGE-CO, INC. AND SUBSIDIARIES PART I - ITEM 2 Management's Discussion and Analysis of Financial Condition and Results of Operations Fiscal 1999 versus Fiscal 1998 The following is management's discussion and analysis of significant factors which have affected the Company's operations during the periods included. It compares the Company's operations for the six and three month periods ended March 31, 1999 to operations for the six and three month periods ended March 31, 1998. The following table reflects changes in sales, cost of sales and gross profit by division and other changes in the Statements of Operations through net income between the respective periods.
Six Months (YTD) and Three Months (QTR) Ended March 31, 1999 Versus Six Months (YTD) and Three Months (QTR) Ended March 31, 1998 Increases/(Decreases) (in thousands) Sales Cost of Sales Net Change to Income YTD QTR YTD QTR YTD QTR Beverage Division $8,324 $ 694 $ (833) $(2,501) $ 9,157 $ 3,195 Grove Management Division (495) (151) (462) (31) (33) (120) ------- ------- -------- -------- -------- -------- Total $7,829 $ 543 $(1,295) $(2,532) 9,124 3,075 ======= ======= ======== ======== Other costs and expenses net: Selling, general and administrative . . . . . . . . . . . (621) (369) Gain on disposition of property and equipment . . . . . . (122) 14 Other . . . . . . . . . . . . . . . . . . . . . . . . . . 179 167 Interest . . . . . . . . . . . . . . . . . . . . . . . . . (294) (180) -------- -------- Income before income taxes . . . . . . . . . . . . . . . . 8,266 2,707 Income tax expense . . . . . . . . . . . . . . . . . . . . (2,994) (970) -------- -------- Net income . . . . . . . . . . . . . . . . . . . . . . . . $ 5,272 $ 1,737 ======== ========
SALES Sales for the six and three month periods ended March 31, 1999 increased approximately $7,829,000 and $543,000 respectively compared to the same periods in the prior year. The Beverage Division accounted for the principal increases for the six and three month periods, with increased sales of approximately $8,324,000 and $694,000 respectively. Grove Management Division sales decreased by approximately $495,000 and $151,000 for the current six and three month periods compared to the same periods in the prior year. -10- BEVERAGE DIVISION The increase in Beverage Division sales of approximately $8,324,000 and $694,000 during the current six and three month periods, respectively, compared to the same periods in the prior year resulted from numerous increases and decreases in sales volume, prices, or combinations thereof. Of this increase, revenues from the sale of the Company's bulk citrus juice products increased approximately $4,324,000 during the current six month period as a result of offsetting increases and decreases. Of the increase during the current six month period, approximately $11,153,000 was due to higher prices compared to the same period of the prior year. Partially offsetting this increase during the current six month period, revenues from the volume of bulk citrus juice products sold decreased approximately $6,829,000. This decrease in sales volume was due primarily to unusually higher shipments of bulk citrus products during the first six months of the prior year. During the current three month period sales revenue from the sale of bulk citrus juice products decreased by approximately $1,100,000 compared to the same period of the prior year. Of the decrease during the current three month period, approximately $5,040,000 was due to a decrease in the volume of bulk citrus juice products sold compared to the same period of the prior year. Offsetting this decrease was an increase of approximately $3,940,000 due to higher prices compared to the same period of the prior year. As the Company entered the 1998-99 season, the United States Department of Agriculture ("USDA") announced in October 1998 an estimated Florida orange crop approximately 190,000,000 boxes of round oranges. This estimate, if true, represents a significant decrease from the 1997-98 actual crop of 244,000,000 boxes of round oranges and the 1996-97 actual crop of 226,200,000 boxes. The anticipation of a significant decrease in the crop has had the effect of increasing prices throughout the first two quarters of fiscal 1999. Sales of the Company's packaged citrus juice products increased approximately $4,359,000 and $2,113,000 during the current six and three month respective periods compared to the same periods in the prior year. These increases were due primarily to increased volume of packaged citrus juice products sold during the current six and three month periods of approximately $4,581,000 and $1,780,000 respectively. Offsetting the increase during the six month period was a decrease in prices which resulted in decreased revenues of approximately $222,000. During the current three month period, increased prices resulted in an increase of revenue of approximately $333,000 compared to the same period of the prior year. The Company's non-orange packaged juices and drink base product sales decreased approximately $91,000 and $51,000 during the current six and three month periods compared to the same periods in the prior year. Decreased prices of these products accounted for decreased revenues of approximately $240,000 and $26,000 during the current six and three month periods respectively. Offsetting the decrease during the current six month period was an increase in volume of approximately $149,000. During the current three month period the volume of products sold decreased by approximately $25,000 compared to the same period in the prior year. Revenues from the sale of the Company's citrus by-products, including feed, pulp cells, and citrus oils, decreased approximately $256,000 and $186,000 during the current six and three month periods respectively compared to the same periods in the prior year. Revenues from by-products decreased approximately $404,000 and $484,000 during the current six and three month periods respectively as a result of lower volumes of by-products produced and sold compared to the same periods in the prior year. Partially offsetting these decreases were increases in the prices of by- products sold of approximately $148,000 and $298,000 during the current six and three month periods respectively. The combination of decreased volumes and increased prices for by-products during the current periods is primarily a result of the previously mentioned smaller crops for the current season. -11- Storage, handling, processing citrus for customers under contract, and other revenues decreased approximately $12,000 and $82,000 during the current six and three month periods compared to the same periods in the prior year. These decreases were due primarily to decreases in the volumes of these services performed during the current six and three month periods compared to the same periods in the prior year. GROVE MANAGEMENT DIVISION Grove Management Division sales decreased approximately $495,000 and $151,000 for the current six and three month periods respectively compared to the same periods in the prior year. The principal decreases in revenues of approximately $671,000 and $248,000 during the current six and three month periods resulted principally from a reduction in harvesting and grove caretaking services performed. However, partially offsetting these decreases were increases during the current six and three month periods in revenues of approximately $176,000 and $97,000 primarily as a result of increases in the prices of fruit sold to third party packers and processors. GROSS PROFIT Gross profit for the current six and three month periods ended March 31, 1999 increased approximately $9,124,000 and approximately $3,075,000 compared to the same periods in the prior year. The principal increases of approximately $9,157,000 and $3,195,000 during the current six and three month periods occurred in the Beverage Division. Gross profit for the Grove Management Division decreased during the current six month and three month periods by approximately $33,000 and approximately $120,000 respectively. BEVERAGE DIVISION Gross profit of the Beverage Division increased approximately $9,157,000 and $3,195,000 during the current six and three month respective periods compared to the same periods in the prior year as a result of numerous offsetting increases and decreases in volumes, prices, costs of production and combinations thereof. The effects of these changes are quantified as follows. The principal components were increases during the current six and three month respective periods of approximately $9,264,000 and $2,495,000 from the sale of bulk citrus juice products. Of the increases during the current six month and three month respective periods, approximately $11,153,000 and $3,940,000 resulted from the previously mentioned increased prices for bulk citrus juice products. Partially offsetting these increases were decreases in gross profit of approximately $1,889,000 and $1,445,000 during the current six and three month periods, principally due to higher cost of raw fruit and concentrate used in the production of bulk citrus juice products sold compared to the same periods in the prior year. The Company utilizes the FCOJ futures market to hedge fruit inventory, anticipated requirements and sales commitments of FCOJ. The effects of this hedging activity, if any, are reflected in sales or in the cost of inventories and flow through the Consolidated Statements of Operations as the associated products are sold. As of March 31, 1999 the Company held contracts for FCOJ futures with unrealized losses of approximately $1,422,000 which would have been realized if said positions had been prematurely liquidated on that date. These unrealized losses are based upon the closing market prices of equivalent futures obligations and do not necessarily represent prices at which the Company expects to sell or purchase the FCOJ. -12- The table below provides information about the Company's FCOJ futures contracts, that are sensitive to changes in commodity prices, specifically FCOJ prices. The table presents the total dollar contract amount by expected maturity dates. Contract amounts are used to calculate the contractual payments of FCOJ to be exchanged under the futures contracts. Contractual cash flows from these derivative financial instruments, if executed at maturity, would be as follows at March 31, 1999: Contractual Cash Flows Inflows/(Outflows) Maturity Date FCOJ Futures (Net long) $(11,223,000) May - November 1999 The contractual cash flows from the derivatives are based upon the execution of the underlying futures contracts and do not necessarily represent actual cash flows when the futures contracts mature or otherwise terminate. Gross profit on sales of packaged citrus juice products decreased approximately $903,000 and $23,000 during the current six and three month respective periods compared to the same periods in the prior year. Lower prices during the current six month period accounted for decreases in gross profit of approximately $222,000 while higher prices during the current three month period resulted in an increase in gross profit of $333,000 compared to the same period in the prior year. Additionally, gross profit decreased approximately $681,000 and $356,000 during the current six and three month periods principally as a result of higher cost of production of packaged citrus juices sold. Gross profit from the sale of the Company's non-orange packaged juices and drink base products increased approximately $815,000 and $547,000 during the current six and three month periods compared to the same periods in the prior year. Of these increases lower production costs, primarily ingredients, resulted in increases in gross profit of approximately $1,286,000 and $623,000 during the current periods. Decreases in the volume of sales of these products resulted in decreases in gross profit of approximately $231,000 and $51,000. Additionally, decreases during the current six and three month periods of $240,000 and $25,000 resulted from decreased prices. Gross profit from citrus by-products, including feed, pulp cells, and citrus oils, increased approximately $355,000 and $284,000 during the current six and three month respective periods compared to the same periods in the prior year. Of these increases approximately $148,000 and $298,000 resulted from the previously mentioned higher prices for by-products sold compared to the same periods in the prior year. Partially offsetting the increase in the current three month period was a decrease in gross profit of approximately $14,000 due principally to higher production costs. Additionally, during the current six month period gross profit increased approximately $207,000 due primarily to lower production costs as compared to the same period in the prior year. Gross profit from storage, handling, and other activities decreased by approximately $24,000 and $108,000 during the current six and three month periods respectively principally due to fluctuations in the volume of these services provided compared to the same periods in the prior year. During the current six month period gross profit decreased by approximately $350,000 principally as a result of the partial settlement of an insurance claim related to the recovery of operating expenses in the first quarter of the prior year which were incurred as a result of an involuntary conversion of certain inventory. In July 1997, a storm containing strong winds damaged a product storage warehouse and some inventory. There was no comparable payment in the current period. -13- GROVE MANAGEMENT DIVISION Grove Management Division gross profit decreased approximately $33,000 and $120,000 during the current six and three month periods respectively compared to the same periods in the prior year. The primary decreases of approximately $212,000 and $138,000 in gross profit during the current six and three month periods resulted from the combination of a reduction in the volume of caretaking and harvesting services along with higher costs to provide these services. However, partially offsetting these decreases were increases in gross profit of approximately $179,000 and $18,000 during the current six and three month periods resulting from an increase in the price of fruit sold to third party packers and processors. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses increased approximately $621,000 and $369,000 for the current six and three month respective periods compared to the same periods in the prior year. Of the increase in the current six month period, approximately $272,000 was due to an increase in salary and benefit costs, and $349,000 resulted from an increase in other costs. In the current three month period an increase of approximately $143,000 was due to an increase in salary and benefit costs and an increase of approximately $226,000 resulted from an increase in other costs. GAIN/(LOSS) ON DISPOSITION OF PROPERTY AND EQUIPMENT The decreased gain on the disposition of property and equipment of approximately $122,000 for the six month period ending March 31, 1999 compared to the same period in the prior year was principally due to the gain from insurance proceeds on damage to the product storage warehouse in the prior year for which there was no comparable event in the same period of fiscal year 1999. The decreased loss on the disposition of property and equipment of approximately $14,000 for the three month period ending March 31, 1999 compared to the same period of the prior year resulted from differences in losses on the sales of commercial properties not utilized in citrus production or processing. OTHER EXPENSE Other expense decreased approximately $179,000 and $167,000 for the current six and three month periods respectively as compared to the same periods in the prior year. The principal component for both periods was an increase in the provision for uncollectible notes receivable in the prior year for which there was no comparable activity in fiscal year 1999. INTEREST EXPENSE Interest expense increased approximately $294,000 and approximately $180,000 during the current six and three month periods respectively compared to the same periods in the prior year. The primary increases of approximately $332,000 and $257,000 were due to an increase in the average outstanding debt. Offsetting these increases were decreases of approximately $82,000 and $154,000 for the current six and three month periods that resulted from a decrease in interest rates. Additionally, increases of approximately $25,000 and $28,000 during the current six and three month periods were due to decreases in capitalized interest. Also during the current six and three month periods, increases of $19,000 and $49,000 were due to changes in interest income and other interest charges. -14- LIQUIDITY AND CAPITAL RESOURCES The Company's Bartow processing plant normally operates from early November through late May or June. While the plant is in operation, the inventory of processed juice increases to a level which will cover anticipated sales until the following November when the plant begins operation again. The Company's working capital credit facility is generally utilized to finance these inventories. Borrowings under this credit facility normally peak in late May or June. The Company began processing activities for the 1998-99 season in November. The Company's ability to generate cash adequate to meet its needs, including the financing of its inventories and trade receivables, has been supported primarily by cash flow from operations and periodic borrowings under its primary $50 million credit facility. This facility is principally secured by substantially all of the Company's current assets. The outstanding balance at March 31, 1999 was approximately $47,103,000 and approximately $497,000 of additional borrowings were available under a borrowing base calculation of this facility. The interest rate is variable based upon the financial institution's cost of funds plus a margin. The terms of the agreement call for repayment of the principal amount in April 2001; accordingly, it is classified as long-term debt. The Company anticipates that the working capital facility will be adequately serviced with cash proceeds from operations. Additionally, as of March 31, 1999 the Company had a $10 million short-term capital revolving credit facility. As of March 31, 1999 the outstanding balance on this facility was $8 million. The interest rate on this facility is variable based upon the financial institution's cost of funds plus a margin. Current assets increased approximately $28,479,000 as of March 31, 1999 compared to September 30, 1998. The principal component of this was an increase in inventories of approximately $25,457,000 in the first six months of the current year due to the seasonal accumulation of inventories. The Company's accounts receivable balance increased approximately $3,588,000 during the six months ending March 31, 1999. Offsetting these increases was a decrease in cash and cash equivalents of approximately $333,000. Additionally, advances on fruit purchases decreased approximately $694,000 as the Company began processing the purchased fruit and collecting these advances. Current liabilities increased approximately $5,085,000 during the first six months of fiscal 1999 compared to September 30, 1998. This increase was due principally to an increase in a note payable of approximately $8,000,000. Also, accounts payable increased approximately $1,084,000. Offsetting these increases were decreases of $42,000 and $3,957,000 in the current portion of long-term debt and accrued liabilities, respectively. At March 31, 1999 the Company's outstanding long-term debt was approximately $76,168,000 which includes the working capital facility of approximately $47,103,000. In addition, current installments of long-term debt were approximately $3,711,000 with the remaining amounts due on various dates over the subsequent ten years. The Company anticipates that amounts due over the next twelve months will be paid out of working capital or will be refinanced through extending current mortgages. At March 31, 1999 the Company was out of compliance with a loan covenant related to the debt to equity ratio as a result of high seasonal working capital requirements. The lender has waived these requirements for a period that, in management's judgment, will allow the Company to achieve compliance and, therefore, avoid early repayment of this loan. Management believes its relationships with its lenders are good. During the first six months of the current fiscal year, capital expenditures of approximately $125,000 were made for the installation of new irrigation systems on 2,265 acres of Company- owned groves. Also, the cost of caring for newly planted citrus trees in the amount of approximately $1,111,000 were capitalized and expenditures of approximately $494,000 were made for grove operations equipment. Additionally, expenditures of approximately $515,000 were made -15- during the same period primarily for the purpose of improving the efficiency of the Bartow processing facility. Also during the current six month period, expenditures of approximately $335,000 were made to support the Company's juice and coffee dispenser programs. The Company anticipates that these improvements will be financed principally by working capital or by securing additional funds under existing mortgages. OTHER SIGNIFICANT EVENTS In October 1998 the United States Department of Agriculture ("USDA") announced a Florida crop estimate of approximately 190,000,000 boxes of round oranges for the 1998-99 season, which, if true, would be a significant decrease from the 1997-98 Florida crop of 244,000,000 boxes. This estimate was most recently revised in May 1999 to approximately 188,000,000 boxes. The inability of computers, software and other equipment utilizing microprocessors to recognize and properly process date fields containing a two-digit year is commonly referred to as the Year 2000 Compliance issue. As the year 2000 approaches, such systems may be unable to accurately process certain date-based information. During the past four fiscal years, the Company has been making capital expenditures to improve and update its computer systems to enhance the efficiency of its production, processing, marketing, sales and management systems. It has concurrently addressed the "Year 2000" issue. Management believes that the new systems will be completed in fiscal 1999 and that the Company's systems will then also be in compliance with "Year 2000" issues. While the Company is communicating with certain key suppliers and customers to determine their Year 2000 readiness, there can be no assurance that the failure of such third parties to adequately address their respective Year 2000 issues will not have a material adverse effect on the Company's business, financial condition and results of operations. The total cost to the Company of these Year 2000 Compliance activities has not been estimated since they have been addressed concurrently with the computer updating effort which has been in process for four years. It is, therefore, not considered to be material to the Company's financial position or results of operations in any given year. These costs and the date on which the Company plans to complete the Year 2000 modification and testing processes are based on management's best estimates, which were derived utilizing numerous assumptions of future events, including the continued availability of certain resources, third-party modification plans and other factors. However, there can be no guarantee that these estimates will be achieved, and actual results could differ from those plans. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK The Company engages in the use of FCOJ futures and interest rate swaps for other than trading purposes. For information about the market risk associated with FCOJ futures see "Management's Discussion and Analysis - Gross Profit" and "Notes to the Consolidated Financial Statements - Note 3". For information about market risk on the Company's interest rate swap see Notes to the Consolidated Financial Statements - Note 2". -16- PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of Stockholders on February 18, 1999, the stockholders of the Company elected directors. The results of these votes were as follows: DIRECTOR NOMINEES FOR AUTHORITY WITHHELD Richard A. Coonrod 8,725,089 55,650 Paul E. Coury, MD 8,725,367 55,372 Ben Hill Griffin, III 8,726,466 54,273 George W. Harris, Jr. 8,727,588 53,151 Dr. W. Bernard Lester 8,727,598 53,141 Bobby F. McKown 8,727,598 53,141 Gene Mooney 8,727,598 53,141 C. B. Myers, Jr. 8,725,381 55,358 Thomas H. Taylor 8,727,588 53,151
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K A. Exhibit EXHIBIT Page No. No. 10.32 Eighth Amendment to Loan Agreement By 19 and Among Orange-co, Inc., Orange-co of Florida, Inc. and SunTrust Bank, Central Florida, National Association, dated March 8, 1999. 10.33 Ninth Amendment to Loan Agreement By and 25 Among Orange-co, Inc., Orange-co of Florida, Inc. and SunTrust Bank, Central Florida, National Association, dated April 30, 1999. 27 Financial Data Schedule (Electronic Filing Only) 99.4 Orange-co, Inc. 1998 Incentive Equity Plan dated February 18, 1999. 32 B. Reports on Form 8-K: None -17- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ORANGE-CO, INC. (Registrant) Date: May 17, 1999 By: /s/Gene Mooney ------------------------ Gene Mooney President and Chief Operating Officer Date: May 17, 1999 By: /s/Dale A. Bruwelheide --------------------------- Dale A. Bruwelheide Vice President and Chief Financial Officer, and Principal Accounting Officer -18- EX-10 2 EXHIBIT 10-32 EIGHTH AMENDMENT TO LOAN AGREEMENT THIS EIGHTH AMENDMENT TO LOAN AGREEMENT dated as of March 8, 1999, by and between: ORANGE-CO, INC., a Florida corporation and ORANGE-CO OF FLORIDA, INC., a Florida corporation, 2020 Highway 17 South, Bartow, Florida 33830 (hereinafter collectively referred to as the "Borrowers"); and SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL ASSOCIATION, a national banking association, 200 South Orange Avenue, Post Office Box 3833, Orlando, Florida 32897 (hereinafter referred to as the "Bank"). W I T N E S S E T H: WHEREAS, pursuant to the Loan Agreement, dated June 16, 1993, as amended, by and among the Bank and the Borrowers, the Bank agreed to extend to the Borrowers a working capital line of credit loan in the maximum principal amount of $45,000,000.00 (the "Working Capital Loan") and a revolving line of credit loan in the maximum principal amount of $10,000,000.00 (the "Revolving Loan"); and WHEREAS, the Borrowers have requested the Bank to increase the commitment amount under the Working Capital Loan from $45,000,000.00 to $50,000,000.00; and WHEREAS, the Bank has agreed to the foregoing subject to the terms and conditions hereof and the other Loan Documents. NOW, THEREFORE, for and in consideration of the above premises, and the mutual covenants and agreements contained herein, the Borrowers and the Bank do hereby agree as follows: 1. Amendments to Loan Agreement. The Loan Agreement is hereby amended as follows: (a) The definition of "Working Capital Loan" is hereby deleted and, in lieu thereof, there is substituted the following: "Working Capital Loan" shall mean the loan or loans up to but not exceeding the principal amount of $50,000,000.00 made to the Borrowers -19- by the Bank pursuant to and in accordance with the terms of this Agreement." (b) Section 2.01 of the Loan Agreement is hereby deleted and, in lieu thereof, there is substituted the following: "SECTION 2.01. The Loans. The Bank agrees from time to time during the applicable Revolving Period to lend to the Borrowers, upon the request of either Borrower, or pursuant to the Cash Management Agreement, on the terms and conditions set forth herein, up to the maximum principal amount of $10,000,000.00 with respect to the Revolving Loan and up to the lesser of (i) $50,000,000.00 or (ii) the amount of the Borrowing Base with respect to the Working Capital Loan. During the Revolving Period, the Borrowers shall be entitled to receive the entire proceeds of the Loans in one or more Advances pursuant to Section 2.02 hereof, except as otherwise specifically set forth in this Agreement. Advances under the Revolving Loan and the Working Capital Loan shall be evidenced by the Revolving Note and the Working Capital Note, respectively, payable as provided in Section 2.08 hereof. After the expiration of the Revolving Period, the Borrowers shall not be entitled to receive any Subsequent Advance. The Working Capital Loan and Revolving Loan may revolve during the Revolving Period; accordingly, during the Revolving Period, the Borrowers may borrow up to the maximum principal amount of said Working Capital Loan and Revolving Loan, repay all or any portion of such principal amount of said Loans, and reborrow up to such maximum principal amount, subject to the terms and conditions set forth herein. If at any time the principal amount outstanding under the Working Capital Loan exceeds the amount of the Borrowing Base, the Borrowers shall immediately reduce the excess principal balance of the Working Capital Loan. (c) Section 4.01(a) of the Loan Agreement is hereby deleted and, in lieu thereof, there is substituted the following: "(a) Accounting; Financial Statement; Etc. The Borrowers will deliver or cause to be delivered to the Bank copies of each of the following: (i) as soon as practicable and in any event within forty-five (45) days after the end of each quarter in each fiscal year, internally generated financial statements of the Borrowers and their Subsidiaries for the period from the beginning of the current fiscal year to the end of such quarter, in reasonable detail and certified by an authorized financial officer of the Borrowers, subject to changes resulting from year-end adjustments; (ii) as soon as practicable and in any event within ninety (90) days after the end of each fiscal year, an audited consolidated profit and loss statement, reconciliation of surplus statement, and source and application of funds statement of the Borrowers -20- and their Subsidiaries for such year, and an audited consolidated balance sheet of the Borrowers and their Subsidiaries as at the end of such year, setting forth in each case in comparative form corresponding consolidated figures from the preceding annual audit and certified to the Borrowers by independent certified public accountants of recognized standing selected by the Borrowers whose certificate shall be in scope and substance satisfactory to the Bank; (iii) promptly upon transmission thereof, copies of all such financial statements, proxy statements, notices, and reports as it shall send to all stockholders and of all registration statements (without exhibits) and all reports which either Borrower is or may be required to file with the Securities and Exchange Commission or any governmental body or agency succeeding to the functions of such Commission; (iv) promptly upon receipt thereof, a copy of each other report submitted to the Borrower by independent accountants in connection with any annual, interim, or special audit made by them of the books of the Borrowers; (v) Simultaneously with the delivery of each set of annual and quarterly financial statements prior to April 1, 1999, a statement of the Borrower's chief executive officer, chief financial/accounting officer or chief technology officer to the effect that nothing has come to his/her attention to cause him/her to believe that the Y2K Plan milestones have not been met in a manner such that the Borrower's and its Subsidiaries' hardware and software systems will not be Year 2000 Compliant and Ready on or before March 31, 1999. (vi) on a monthly basis, a Borrowing Base Certificate; and (vii) with reasonable promptness, information regarding the hedging activities of the Borrowers and their Subsidiaries including a summary of all futures long and short positions and such other data and information as from time to time may be required by the Bank.` Together with each delivery of financial statement required by clause (ii) above, the Borrowers shall deliver to the Bank a certificate of said accountants stating that, in making the audit necessary to have the certificate of such financial statements, they have obtained no knowledge of an Event of Default or Default, or, if any such Event of Default or Default exists, specifying the nature and period of existence thereof. Such accountants, however, shall not be liable to anyone by reason of their failure to obtain knowledge of any such Event of Default or Default which would not be disclosed in the course of an audit conducted in accordance with GAAP. The Borrowers also covenant that forthwith upon any officer of the -21- Borrowers obtaining knowledge of any Event of Default or Default under this Agreement or any other obligation of the Borrowers, it shall deliver to the Bank an Officer's Certificate specifying the nature thereof, the period of existence thereof, and what action the Borrowers proposes to take with respect thereto." (d) Article Four of the Loan Agreement is hereby amended by adding Section 4.01(t) as follows: "(t) Year 2000 Compliance. Each Borrower has developed a comprehensive working plan (the "Y2K Plan") to insure that each Borrower's and each Subsidiary's software and hardware systems which impact or affect in any material way the business operations of either Borrower and their Subsidiaries will be Year 2000 Compliant and Ready (defined below) by no later than March 31, 1999. Upon the request of the Bank, each Borrower will promptly deliver to the Bank a copy of such Y2K Plan and a copy of any third party assessment of the Y2K Plan (if available). Each Borrower and their Subsidiaries have met all previous Y2K Plan milestones and will hereafter meet all future Y2K Plan milestones so that all hardware and software systems will be Year 2000 Compliant and Ready in accordance with the Y2K Plan, except where the failure to meet such milestones has not had, or would not have, a material adverse effect on the business, operations, assets or condition (financial or otherwise) of either Borrower or their Subsidiaries on a consolidated basis. As used herein, "Year 2000 Compliant and Ready" means that each Borrower's and their Subsidiary's hardware and software systems with respect to the operation of their business and their general business plan will: (i) handle date information involving any and all dates before, during and/or after January 1, 2000, including accepting input, providing output and performing date calculations in whole or in part; (ii) operate accurately without interruption on and in respect of any and all dates before, during and/or after January 1, 2000 and without any change in performance, (iii) respond to and process two digit year input without creating any ambiguity as to the century, and (iv) store and provide date input information without creating any ambiguity as to the century." 2. Capitalized Terms. All capitalized terms contained herein shall have the meanings assigned to them in the applicable Loan Documents (as defined in the Loan Agreement) unless the context herein otherwise dictates or unless different meanings are specifically assigned to such terms herein. 3. Representations and Warranties. Each of the Borrowers represents and warrants as follows: (a) The execution, delivery and performance of this Eighth Amendment to Loan Agreement and the other loan documents provided to the Bank in connection therewith has been duly authorized by all requisite action of the Borrowers; and -22- (b) The Loan Documents are valid, legal binding obligations of the Borrowers enforceable in accordance with their terms. There are no defenses, counterclaims, rights of setoff or recoupment thereunder. 4. Miscellaneous. The Borrowers hereby confirm the terms conditions, representations and warranties of the Loan Agreement. The Loan Agreement, as amended hereby, shall remain in full force and effect and this Eighth Amendment to Loan Agreement shall not be deemed to be a novation. 5. Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart. IN WITNESS WHEREOF, the parties have executed the Eighth Amendment to Loan Agreement as of the day and year first above written. BORROWERS: ORANGE-CO, INC., a Florida corporation By: /s/ Dale A. Bruwelheide ----------------------------------- Dale A. Bruwelheide, Vice President (CORPORATE SEAL) ORANGE-CO OF FLORIDA, INC., a Florida corporation By: /s/ Dale A. Bruwelheide ----------------------------------- Dale A. Bruwelheide, Vice President (CORPORATE SEAL) -23- BANK: SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL ASSOCIATION By: /s/ William A. Mang ------------------------------------- William A. Mang, First Vice President -24- EX-10 3 EXHIBIT 10-33 NINTH AMENDMENT TO LOAN AGREEMENT THIS NINTH AMENDMENT TO LOAN AGREEMENT dated as of April 30, 1999, by and between: ORANGE-CO, INC., a Florida corporation and ORANGE-CO OF FLORIDA, INC., a Florida corporation, 2020 Highway 17 South, Bartow, Florida 33830 (hereinafter collectively referred to as the "Borrowers"); and SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL ASSOCIATION, a national banking association, 200 South Orange Avenue, Post Office Box 3833, Orlando, Florida 32897 (hereinafter referred to as the "Bank"). W I T N E S S E T H: WHEREAS, pursuant to the Loan Agreement, dated June 16, 1993, as amended, by and among the Bank and the Borrowers, the Bank agreed to extend to the Borrowers a working capital line of credit loan in the maximum principal amount of $50,000,000.00 (the "Working Capital Loan") and a revolving line of credit loan in the maximum principal amount of $10,000,000.00 (the "Revolving Loan"); and WHEREAS, the Borrowers have requested the Bank to renew the commitments under the Working Capital Loan and Revolving Loan and to otherwise modify certain terms and conditions related thereto; and WHEREAS, the Bank has agreed to the foregoing subject to the terms and conditions hereof and the other Loan Documents. NOW, THEREFORE, for and in consideration of the above premises, and the mutual covenants and agreements contained herein, the Borrowers and the Bank do hereby agree as follows: 1. Amendments to Loan Agreement. The Loan Agreement is hereby amended as follows: 2. (a) Article One of the Loan Agreement is hereby amended by replacing the definition of "Debt Service" with the following: (b) "'Debt Service' shall mean the sum of interest payments and regularly scheduled principal payments made by the -25- Borrowers during the most recent twelve (12) month period." (a) A definition of "Revolving Loan Maturity Date" is hereby added to the Loan Agreement to read as follows: (b) "'Revolving Loan Maturity Date' shall mean the earlier occurrence of (i) an Event of Default hereunder or (ii) April 30, 2000." (a) Article One of the Loan Agreement is hereby amended by replacing the definition of "Revolving Period" with the following: (b) "'Revolving Period' shall mean the periods during which Advances are available to the Borrowers under the Revolving Loan and Working Capital Loan, respectively, which shall commence on the satisfaction of each of the conditions precedent set forth in Article Five hereof and end on the Revolving Loan Maturity Date and Working Capital Loan Maturity Date, respectively." (a) A definition of "Working Capital Loan Maturity Date" is hereby added to the Loan Agreement to read as follows: (b) "'Working Capital Loan Maturity Date" shall mean the earlier occurrence of (i) an Event of Default hereunder or (ii) April 30, 2001." (a) Article Four of the Loan Agreement is hereby amended by replacing Section 4.01(a) of the Loan Agreement as follows: (b) "(a) Accounting; Financial Statement; Etc. The Borrowers will deliver or cause to be delivered to the Bank copies of each of the following: (i) as soon as practicable and in any event within forty-five (45) days after the end of each quarter in each fiscal year, internally generated financial statements of the Borrowers and their Subsidiaries for the period from the beginning of the current fiscal year to the end of such quarter, in reasonable detail and certified by an authorized financial officer of the Borrowers, subject to changes resulting from year-end adjustments; (ii) as soon as practicable and in any event within -26- ninety (90) days after the end of each fiscal year, an audited consolidated profit and loss statement, reconciliation of surplus statement, and source and application of funds statement of the Borrowers and their Subsidiaries for such year, and an audited consolidated balance sheet of the Borrowers and their Subsidiaries as at the end of such year, setting forth in each case in comparative form corresponding consolidated figures from the preceding annual audit and certified to the Borrowers by independent certified public accountants of recognized standing selected by the Borrowers whose certificate shall be in scope and substance satisfactory to the Bank; (iii) promptly upon transmission thereof, copies of all such financial statements, proxy statements, notices, and reports as it shall send to all stockholders and of all registration statements (without exhibits) and all reports which either Borrower is or may be required to file with the Securities and Exchange Commission or any governmental body or agency succeeding to the functions of such Commission; (iv) promptly upon receipt thereof, a copy of each other report submitted to the Borrower by independent accountants in connection with any annual, interim, or special audit made by them of the books of the Borrowers; (v) Simultaneously with the delivery of each set of annual and quarterly financial statements, a statement of the Borrower's chief executive officer, chief financial/accounting officer or chief technology officer to the effect that nothing has come to his/her attention to cause him/her to believe that the Y2K Plan milestones have not been met in a manner such that the Borrower's and its Subsidiaries' hardware and software systems are not Year 2000 Compliant and Ready; (vi) on a monthly basis, a Borrowing Base Certificate; and (vii) with reasonable promptness, information regarding the hedging activities of the Borrowers and their Subsidiaries including a summary of all futures -27- long and short positions and such other data and information as from time to time may be required by the Bank.` Together with each delivery of financial statement required by clause (ii) above, the Borrowers shall deliver to the Bank a certificate of said accountants stating that, in making the audit necessary to have the certificate of such financial statements, they have obtained no knowledge of an Event of Default or Default, or, if any such Event of Default or Default exists, specifying the nature and period of existence thereof. Such accountants, however, shall not be liable to anyone by reason of their failure to obtain knowledge of any such Event of Default or Default which would not be disclosed in the course of an audit conducted in accordance with GAAP. The Borrowers also covenant that forthwith upon any officer of the Borrowers obtaining knowledge of any Event of Default or Default under this Agreement or any other obligation of the Borrowers, it shall deliver to the Bank and Officer's Certificate specifying the nature thereof, the period of existence thereof, and what action the Borrowers purposes to take with respect thereto." (a) Article Four of the Loan Agreement is hereby amended by replacing Section 4.01(q) as follows: (q) Current Ratio. As at the end of each fiscal quarter, the Borrowers' Current Ratio shall equal to or exceed 1.0:1.0. (a) Article Four of the Loan Agreement is hereby amended by replacing Section 4.01(r) as follows: (b) (r) Debt Service Coverage Ratio. As at the end of each fiscal quarter, calculated on a rolling four quarter basis the ratio of the Borrowers' Cash Flow Before Debt Service to its Debt Service shall be 1.25:1.0. (a) Article Four of the Loan Agreement is hereby amended by replacing Section 4.01(s) as follows: (b) (s) Minimum Debt to Net Worth. As at the end of each fiscal quarter, the ratio of the Borrowers' Liabilities to -28- Net Worth shall be less than 1.2:1.0. (a) Article Four of the Loan Agreement is hereby amended by replacing Section 4.01(t) as follows: (b) (t) Minimum Net Worth. As at the end of each fiscal quarter, the Borrowers' Net Worth shall be greater than $90,000,000.00. (a) Article Four of the Loan Agreement is hereby amended by adding Section 4.01(w) as follows: (b) (w) Year 2000 Compliance. Each Borrower has developed a comprehensive working plan (the "Y2K Plan") to insure that each Borrower's and each Subsidiary's software and hardware systems which impact or affect in any material way the business operations of either Borrower or their Subsidiaries are Year 2000 Compliant and Ready (defined below). Upon the request of the Bank, each Borrower will promptly deliver to the Bank a copy of such Y2K Plan and a copy of any third party assessment of the Y2K Plan (if available). Each Borrower and their Subsidiaries have met all previous Y2K Plan milestones and will hereafter meet all future Y2K Plan milestones so that all hardware and software systems will be Year 2000 Compliant and Ready in accordance with the Y2K Plan, except where the failure to meet such milestones has not had, or would not have, a material adverse effect on the business, operations, assets or condition (financial or otherwise) of either Borrower or their Subsidiaries on a consolidated basis. As used herein, "Year 2000 Compliant and Ready" means that each Borrower's and their Subsidiary's hardware and software systems with respect to the operation of their business and their general business plan will: (i) handle date information involving any and all dates before, during and/or after January 1, 2000, including accepting input, providing output and performing date calculations in whole or in part; (ii) operate accurately without interruption on and in respect of any and all dates before, during and/or after January 1, 2000 and without any change in performance, (iii) respond to and process two digit year input without creating any ambiguity as to the century, and (iv) -29- store and provide date input information without creating any ambiguity as to the century." 2. Capitalized Terms. All capitalized terms contained herein shall have the meanings assigned to them in the applicable Loan Documents (as defined in the Loan Agreement) unless the context herein otherwise dictates or unless different meanings are specifically assigned to such terms herein. 3. Representations and Warranties. Each of the Borrowers represents and warrants as follows: (a) The execution, delivery and performance of this Ninth Amendment to Loan Agreement and the other loan documents provided to the Bank in connection therewith has been duly authorized by all requisite action of the Borrowers; and (b) The Loan Documents are valid, legal binding obligations of the Borrowers enforceable in accordance with their terms. There are no defenses, counterclaims, rights of setoff or recoupment thereunder. 4. Miscellaneous. The Borrowers hereby confirm the terms conditions, representations and warranties of the Loan Agreement. The Loan Agreement, as amended hereby, shall remain in full force and effect and this Ninth Amendment to Loan Agreement shall not be deemed to be a novation. 5. Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart. IN WITNESS WHEREOF, the parties have executed the Ninth Amendment to Loan Agreement as of the day and year first above written. BORROWERS: ORANGE-CO, INC., a Florida corporation By:/s/ Dale A. Bruwelheide ----------------------------------- Dale A. Bruwelheide, Vice President (CORPORATE SEAL) ORANGE-CO OF FLORIDA, INC., a Florida corporation -30- By:/s/ Dale A. Bruwelheide ----------------------------------- Dale A. Bruwelheide, Vice President (CORPORATE SEAL) BANK: SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL ASSOCIATION By: /s/ William A. Mang ------------------------------------- William A. Mang, First Vice President -31- EX-99 4 EXHIBIT 99.4 Effective Date: December 3, 1998 ORANGE-CO, INC., INC. 1998 INCENTIVE EQUITY PLAN ---------------- TABLE OF CONTENTS Page ARTICLE I DEFINITIONS (a) "Affiliate" 1 (b) "Agreement" 1 (c) "Board" 1 (d) "Code" 1 (e) "Company" 1 (f) "Director" 1 (g) "Employee" 1 (h) "Employer" 1 (i) "Fair Market Value" 1 (j) "ISO" 2 (k) "1934 Act" 2 (l) "Officer" 2 (m) "Option" 2 (n) "Optionee" 2 (o) "Option Price" 2 (p) "Parent" 3 (q) "Participant" 3 (r) "Plan" 3 (s) "Purchasable" 3 (t) "Reload Option" 3 (u) "Restriction Period" 3 (v) "Restricted Stock" 3 (w) "SAR" 3 (x) "Stock" 3 (y) "Stock Appreciation Right" 3 (z) "Stock Option Agreement" 4 (aa) "Subsidiary" 4 -32- ARTICLE II THE PLAN 4 Section 2.l Name 4 Section 2.2 Purpose 4 Section 2.3 Effective Date 4 Section 2.4 Termination Date 4 ARTICLE III ELIGIBILITY 5 ARTICLE IV ADMINISTRATION 5 Section 4.1 Duties and Powers of the Board 5 Section 4.2 Interpretation; Rules 5 Section 4.3 No Liability 5 Section 4.4 Company Assistance 5 ARTICLE V SHARES OF STOCK SUBJECT TO PLAN 6 Section 5.1 Limitations 6 Section 5.2 Antidilution 6 ARTICLE VI OPTIONS 7 Section 6.1 Types of Options Granted 7 Section 6.2 Option Grant and Agreement 7 Section 6.3 Optionee Limitations 7 Section 6.4 $100,000 Limitation 8 Section 6.5 Option Price 8 Section 6.6 Exercise Period 8 Section 6.7 Option Exercise 9 Section 6.8 Nontransferability of Option 9 Section 6.9 Termination of Employment 10 Section 6.10 Employment Rights 10 Section 6.11 Certain Successor Options 10 ARTICLE VII STOCK APPRECIATION RIGHTS 10 Section 7.1 Grant and Exercise 10 Section 7.2 Terms and Conditions 11 -33- ARTICLE VIII AWARDS OF RESTRICTED STOCK 12 Section 8.1 Administration 12 Section 8.2 Restrictions and Conditions 12 ARTICLE IX CONDITIONS TO ISSUING STOCK, SAR OR RESTRICTED STOCK AWARD 14 ARTICLE X TERMINATION, AMENDMENT AND MODIFICATION OF PLAN 14 ARTICLE XI MISCELLANEOUS 15 Section 11.1 Replacement Grants 15 Section 11.2 Forfeiture for Competition 15 Section 11.3 Plan Binding on Successors 15 Section 11.4 Gender 15 Section 11.5 Headings No Part of Plan 15 -34- ORANGE-CO, INC. 1998 INCENTIVE EQUITY PLAN ARTICLE I DEFINITIONS As used herein, the following terms have the meanings hereinafter set forth unless the context clearly indicates to the contrary: (a) "Affiliate" shall mean any entity other than the Company and its Subsidiaries which the Board designates as an "Affiliate" for purposes of this Plan. (b) "Agreement" shall mean an agreement between the company and a Participant pursuant to which the terms and conditions of any Options, SARs or Restricted Stock granted to such Participant are specified. (c) "Board" shall mean the Board of Directors of the Company. (d) "Code" shall mean the United States Internal Revenue Code of 1986, as amended, including effective date and transition rules (whether or not codified). Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of future law. (e) "Company" shall mean Orange-co, Inc., a Florida corporation, and any successor to it. (f) "Director" shall mean a member of the Board. (g) "Employee" shall mean any employee of the Company or any Subsidiary of the Company, and any Director who also serves as an Officer and whose duties as such involve a significant time commitment beyond that associated with preparation for and attendance at meetings of the Board and committees thereof. (h) "Employer" shall mean the corporation that employs an Optionee. (i) "Fair Market Value" of the shares of Stock on any date shall mean: (i) the closing sales price, regular way, or in the absence thereof, the mean of the last reported bid and asked quotations, on such date on the exchange having the greatest volume of trading in the shares during the thirty-day period preceding such date (or if such exchange was not open for trading on such date, the next preceding date on which it was open); or -35- (ii) if there is no price as specified in (i), the final reported sales price, or if not reported, in the following manner, the mean of the closing high bid and low asked prices, in the over-the-counter market for the shares as reported by The Nasdaq National Market or, if such organization is not in existence, by an organization providing similar services, on such date (or if such date is not a date for which such system or organization generally provides reports, then on the next preceding date for which it does so); or (iii) if there also is no price as specified in (ii), the price determined by the Board by reference to bid-and-asked quotations for the shares provided by members of an association of brokers and dealers registered pursuant to subsection 15(b) of the 1934 Act, which members make a market in the shares, for such recent dates as the Board shall determine to be appropriate for fairly determining current market value; or (iv) if there also is no price as specified in (iii), the amount determined in good faith by the Board based on such relevant facts, which may include opinions of independent experts, as may be available to the Board. (j) "ISO" shall mean an Option that complies with and is subject to the terms, limitations and conditions of Code section 422 and any regulations promulgated with respect thereto. (k) "1934 Act" shall mean the Securities Exchange Act of 1934, as the same may be amended from time to time. (l) "Officer" shall mean a person who constitutes an officer of the Company for the purposes of Section 16 of the 1934 Act, as determined by reference to such Section 16 and to the rules, regulations, judicial decisions, and interpretative or "no- action" positions with respect thereto of the Securities and Exchange Commission, as the same may be in effect or set forth from time to time. (m) "Option" shall mean a contractual right to purchase Stock granted pursuant to the provisions of Article VI hereof. (n) "Optionee" shall mean a person to whom an Option has been granted hereunder. (o) "Option Price" shall mean the price at which an Optionee may purchase a share of Stock pursuant to an Option. -36- (p) "Parent" shall mean any corporation (other than the corporation with respect to which the determination is being made) in an unbroken chain of corporations ending with the corporation with respect to which the determination is being made if, at the time of the grant (or modification) of the Option, each of the corporations other than the corporation with respect to which the determination is being made owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. (q) "Participant" shall mean a person to whom an Option, SAR or Stock Appreciation Right has been granted hereunder. (r) "Plan" shall mean the Orange-co, Inc., 1998 Incentive Equity Plan as set forth herein and as amended from time to time. (s) "Purchasable," when used to describe Stock, shall refer to Stock that may be purchased by an Optionee under the terms of this Plan on or after a certain date specified in the applicable Stock Option Agreement. (t) "Reload Option" shall mean an Option that is granted, without further action of the Board, (i) to an Optionee who surrenders or authorizes the withholding of shares of Stock in payment of amounts specified in paragraphs 6.7(c) or 6.7(d) hereof, (ii) for the same number of shares as is so paid, (iii) as of the date of such payment and at an Option Price equal to the Fair Market Value of the Stock on such date, and (iv) otherwise on the same terms and conditions as the Option whose exercise has occasioned such payment, subject to such contingencies, conditions or other terms as the Board shall specify at the time such exercised Option is granted. (u) "Restriction Period" shall mean the period of time during which shares of Stock awarded to a Participant pursuant to Article VIII remain subject to the restrictions referred to in Section 8.2. (v) "Restricted Stock" shall mean an award of shares of stock that is subject to restrictions under Article VIII. (w) "SAR" shall mean stock appreciation right. (x) "Stock" shall mean the $0.50 par value common stock of the Company or, in the event that the outstanding shares of such stock are hereafter changed into or exchanged for shares of a different class of stock or securities of the Company or some other corporation, such other stock or securities. (y) "Stock Appreciation Right" shall mean the rights granted under Article VIII to surrender to the Company all or a portion of a Stock Option in exchange for a payment in cash or Stock. -37- (z) "Stock Option Agreement" shall mean an agreement between the Company and an Optionee setting forth the terms of an Option. (aa) "Subsidiary" shall mean any corporation (other than the corporation with respect to which the determination is being made) in an unbroken chain of corporations beginning with the corporation with respect to which the determination is being made if, at the time of the grant (or modification) of the Option, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. ARTICLE II THE PLAN 2.l Name. This plan shall be known as the "Orange-co, Inc., 1998 Incentive Equity Plan." 2.2 Purpose. The purpose of the Plan is to advance the interests of the Company, its stockholders, and any Subsidiary of the Company, by offering certain Participants an opportunity to acquire or increase their proprietary interests in the Company by granting such persons Options, Stock Appreciation Rights and/or Restricted Stock. These grants will promote the growth and profitability of the Company, and any Subsidiary of the Company, because Participants will be provided with an additional incentive to achieve the Company's objectives through participation in its success and growth. 2.3 Effective Date. The Plan shall become effective on February 18, 1999 (the "Effective Date"). No Option, SAR or Restricted Stock granted under the Plan shall become exercisable or vested, however, until the Plan is approved by the affirmative vote of the holders of a majority of the shares of common stock represented at a stockholders meeting at which a quorum is present and grants under the Plan prior to such approval shall be conditioned on and subject to such approval. Subject to this limitation, Options, SARs and Restricted Stock may be granted under the Plan at any time after the Effective Date and before termination of the Plan. 2.4 Termination Date. No further Options, SARs and/or Restricted Stock shall be granted hereunder on or after February 18, 2009, but all Options, SARs and/or Restricted Stock granted prior to that time shall remain in effect in accordance with their terms; provided, however, that the Plan shall terminate, and all Options, SARs and Restricted Stock theretofore granted shall become void and may not be exercised, on February 18, 1999 if the stockholders of the Company shall not by that date have approved the Plan's adoption. -38- ARTICLE III ELIGIBILITY The persons eligible to participate in this Plan shall consist only of those individuals, Board members and Employees whose participation the Board determines is in the best interests of the Company. ARTICLE IV ADMINISTRATION 4.1 Duties and Powers of the Board in Administering the Plan. The Plan shall be administered by the Board. In administering the Plan, the Board's actions and determinations shall be binding on all interested parties. The Board shall have the power to grant Options, SARs and/or Restricted Stock in accordance with the provisions of the Plan. Subject to the provisions of the Plan, the Board shall have the discretion and authority to determine those individuals to whom Options, SARs and/or Restricted Stock will be granted and in the case of Options whether such Options shall be accompanied by the right to receive Reload Options, the number of shares of Stock subject to each Option, SAR or Restricted Stock, such other matters as are specified herein, and any other terms and conditions of the Agreement applicable thereto. To the extent not inconsistent with the provisions of the Plan, the Board shall have the authority to amend or modify an outstanding Agreement relative to an Option, SAR or Restricted Stock, or to waive any provision thereof, provided that the Participant consents to such action. 4.2 Interpretation; Rules. Subject to the express provisions of the Plan, the Board also shall have complete authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to it, to determine the details and provisions of each Agreement, and to make all other determinations necessary or advisable in the administration of the Plan, including, without limitation, the amending or altering of any Options, SARs or Restricted Stock granted hereunder as may be required to comply with or to conform to any federal, state or local laws or regulations. 4.3 No Liability. No member of the Board shall be liable to any person for any act or determination made in good faith with respect to the Plan or any Option, SAR or Restricted Stock granted hereunder. 4.4 Company Assistance. The Company shall supply full and timely information to the Board on all matters relating to eligible persons, their employment, death, retirement, disability or other termination of employment, and such other pertinent facts as the Board may require. The Company shall furnish the Board with such clerical and other assistance as is necessary in the performance of its duties. -39- ARTICLE V SHARES OF STOCK SUBJECT TO PLAN 5.1 Limitations. Subject to any antidilution adjustment pursuant to the provisions of Section 5.2 hereof, the maximum number of shares of Stock that may be issued and sold hereunder shall be 750,000 shares. Shares subject to an Option or issued pursuant to a Restricted Stock grant may be either authorized and unissued shares or shares issued and later acquired by the Company; provided, however, that shares of Stock with respect to which an Option has been exercised or Restricted Stock which has become vested shall not again be available for issuance hereunder. The shares covered by (i) any unexercised portion of an Option that has terminated for any reason, or (ii) any Restricted Stock which has been forfeited, may again be granted under this Plan, and such shares shall not be considered as having been optioned or issued in computing the number of shares of Stock remaining available for grant hereunder. 5.2 Antidilution. (a) In the event that the outstanding shares of Stock are changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of merger, consolidation, reorganization, recapitalization, reclassification, combination or exchange of shares, stock split or stock dividend, or in the event that any spin-off, spin-out or other distribution of assets materially affects the price of the Company's stock: (i) The aggregate number and kind of shares of Stock for which Options, SARs and/or Restricted Stock may be granted hereunder shall be adjusted proportionately by the Board; and (ii) The rights of Participants (concerning the number of shares subject to Options and SARs and the Option Price) under outstanding Options and SARs shall be adjusted proportionately by the Board. (b) If the Company shall be a party to any reorganization in which it does not survive, involving merger, consolidation, or acquisition of the stock or substantially all the assets of the Company, the Board, in its discretion, may: (i) declare that all Options and SARs granted under the Plan shall become exercisable immediately and that all Restricted Stock shall become vested notwithstanding the provisions of the respective Agreements regarding exercisability or vesting, and that all such Options and SARs shall terminate 30 days after the Board gives written notice of the immediate right to exercise all such Options and SARs and of the decision to terminate all Options and SARs not exercised within such 30- day period; or -40- (ii) notify all Participants that all Options and SARs granted under the Plan and all Restricted Stock Agreements shall be assumed by the successor corporation or substituted with Options, SARs or Restricted Stock issued by such successor corporation. (c) If the Company is to be liquidated or dissolved in connection with a reorganization described in paragraph 5.2(b), the provisions of such paragraph shall apply. In all other instances, the adoption of a plan of dissolution or liquidation of the Company shall cause (i) every Option and SAR outstanding under the Plan to terminate to the extent not exercised prior to the adoption of the plan of dissolution or liquidation by the stockholders, provided that the Board in its discretion may declare all Options and SARs granted under the Plan to be exercisable at any time on or before the fifth business day following such adoption notwithstanding the provisions of the respective Agreements regarding exercisability and (ii) every share of Restricted Stock to vest. The Board's actions under this provision and the Participant's exercise of Options and SAR's under this provision shall be subject, however, to the limitations set forth in Articles VI and Article VII hereof. (d) The adjustments described in paragraphs (a) through (c) of this Section 5.2, and the manner of their application, shall be determined solely by the Board, and any such adjustment may provide for the elimination of fractional share interests. The adjustments required under this Article V shall apply to any successors of the Company and shall be made regardless of the number or type of successive events requiring such adjustments. ARTICLE VI OPTIONS 6.1 Types of Options Granted. Within the limitations provided herein, Options may be granted to one Participant at one or several times or to different Participants at the same time or at different times, in either case under different terms and conditions, as long as the terms and conditions of each Option are consistent with the provisions of the Plan. Without limitation of the foregoing, Options may be granted subject to conditions based on the financial performance of the Company or any other factor the Board deems relevant. 6.2 Option Grant and Agreement. Each Option granted or modified hereunder shall be evidenced (a) by either minutes of a meeting or a written consent of the Board, and (b) by a written Stock Option Agreement executed by the Company and the Participant. The terms of the Option, including the Option's duration, time or times of exercise, exercise price, whether the Option is intended to be an ISO, and whether the Option is to be accompanied by the right to receive a Reload Option, shall be stated in the Stock Option Agreement. Separate Stock Option Agreements shall be used for Options intended to be ISO's and those not so intended. 6.3 Optionee Limitations. The Board shall not grant an ISO to any person who, at the time the ISO would be granted: -41- (a) is not an Employee; or (b) owns or is considered to own stock possessing more than 10% of the total combined voting power of all classes of stock of the Employer, or any Parent or Subsidiary of the Employer; provided, however, that this limitation shall not apply if at the time an ISO is granted the Option Price is at least 110% of the Fair Market Value of the Stock subject to such Option and such Option by its terms would not be exercisable after the expiration of five years from the date on which the Option is granted. For the purpose of this paragraph (b), a person shall be considered to own (i) the stock owned, directly or indirectly, by or for his brothers and sisters (whether by the whole or half blood), spouse, ancestors and lineal descendants, (ii) the stock owned, directly or indirectly, by or for a corporation, partnership, estate, or trust in proportion to such person's stock interest, partnership interest or beneficial interest therein, and (iii) the stock which such person may purchase under any outstanding options of the Employer or of any Parent or Subsidiary of the Employer. 6.4 $100,000 Limitation. Except as provided below, the Board shall not grant an ISO to, or modify the exercise provisions of outstanding ISO's held by, any person who, at the time the ISO is granted (or modified), would thereby receive or hold any incentive stock options (as described in Code section 422) of the Employer and any Parent or Subsidiary of the Employer, such that the aggregate Fair Market Value (determined as of the respective dates of grant or modification of each option) of the stock with respect to which such incentive stock options are exercisable for the first time during any calendar year is in excess of $100,000; provided, that the foregoing restriction on modification of outstanding ISO's shall not preclude the Board from modifying an outstanding ISO if, as a result of such modification and with the consent of the Optionee, such Option no longer constitutes an ISO; and provided that, if the $100,000 limitation described in this Section 6.4 is exceeded, an Option that otherwise qualifies as an ISO shall be treated as an ISO up to the limitation and the excess shall be treated as an Option not qualifying as an ISO. The preceding sentence shall be applied by taking options intended to be ISO's into account in the order in which they were granted. 6.5 Option Price. The Option Price under each Option shall be determined by the Board. However, the Option Price shall not be less than 50% of the Fair Market Value of the Stock, or in the case of an ISO less than the Fair Market Value of the Stock, in each case on the date that the Option is granted (or, in the case of an ISO that is subsequently modified, on the date of such modification). 6.6 Exercise Period. The period for the exercise of each Option granted hereunder shall be determined by the Board, but the Stock Option Agreement with respect to each Option intended to be an ISO shall provide that such Option shall not be exercisable after the expiration of ten years from the date of grant (or modification) of the Option. In addition, no Option granted to an Participant who is also an Officer or Director shall be exercisable prior to the expiration of six months from the date such Option is granted, other than in the case of the death or disability of such Participant. -42- 6.7 Option Exercise. (a) Unless otherwise provided in the Stock Option Agreement, an Option may be exercised at any time or from time to time during the term of the Option as to any or all whole shares that have become Purchasable under the provisions of the Option, but not at any time as to less than 100 shares unless the remaining shares that have become so Purchasable are less than 100 shares. The Board shall have the authority to prescribe in any Stock Option Agreement that the Option may be exercised only in accordance with a vesting schedule during the term of the Option. (b) An Option shall be exercised by (i) delivery to the Treasurer of the Company at its principal office of written notice of exercise with respect to a specified number of shares of Stock, and (ii) payment to the Company at that office of the full amount of the Option Price for such number of shares. (c) The Option Price shall be paid in full upon the exercise of the Option; provided, however, that the Board may provide in a Stock Option Agreement that, in lieu of cash, all or any portion of the Option Price may be paid by tendering to the Company shares of Stock duly endorsed for transfer and owned by the Optionee, to be credited against the Option Price at the Fair Market Value of such shares on the date of exercise (however, no fractional shares may be so transferred, and the Company shall not be obligated to make any cash payments in consideration of any excess of the aggregate Fair Market Value of shares transferred over the aggregate option price). (d) In addition to and at the time of payment of the Option Price, the Optionee shall pay to the Company in cash the full amount of any federal, state and local income, employment or other taxes required to be withheld from the income of such Optionee as a result of such exercise; provided, however, that in the discretion of the Board any Stock Option Agreement may provide that all or any portion of such tax obligations, together with additional taxes not exceeding the actual additional taxes to be owed by the Optionee as a result of such exercise, may, upon the irrevocable election of the Optionee, be paid by tendering to the Company whole shares of Stock duly endorsed for transfer and owned by the Optionee, or by authorization to the Company to withhold shares of Stock otherwise issuable upon exercise of the Option, in either case in that number of shares having a Fair Market Value on the date of exercise equal to the amount of such taxes thereby being paid, and subject to such restrictions as to the approval and timing of any such election as the Board may from time to time determine to be necessary or appropriate to satisfy the conditions of the exemption set forth in Rule 16b-3 under the 1934 Act. (e) The holder of an Option shall not have any of the rights of a stockholder with respect to the shares of Stock subject to the Option until such shares have been issued and transferred to him upon the exercise of the Option. 6.8 Nontransferability of Option. No Option or any rights therein shall be transferable by an Optionee otherwise than by will or the laws of descent and distribution. During the lifetime -43- of an Optionee, an Option granted to that Optionee shall be exercisable only by such Optionee (or by such Optionee's guardian or other legal representative, should one be appointed). 6.9 Termination of Employment. The Board shall have the power to specify, with respect to the Options granted to any particular Optionee, the effect upon such Optionee's right to exercise an Option of the termination of such Optionee's employment under various circumstances, including but not limited to the death or disability of the Optionee which effect may include immediate or deferred termination of such Optionee's rights under an Option, or acceleration of the date at which an Option may be exercised in full. 6.10 Employment Rights. Options granted under the Plan shall not be affected by any change of employment so long as the Optionee continues to be an employee or Board Member. Nothing in the Plan or in any Stock Option Agreement shall confer on any person any right to continue in the employ of the Company or any Subsidiary of the Company, or shall interfere in any way with the right of the Company or any such Subsidiary to terminate such person's employment at any time. 6.11 Certain Successor Options. To the extent not inconsistent with the terms, limitations and conditions of Code section 422, and any regulations promulgated with respect thereto, an Option issued in respect of an option held by an Employee to acquire stock of any entity acquired, by merger or otherwise, by the Company (or any Subsidiary of the Company) may contain terms that differ from those stated in this Article VI, but solely to the extent necessary to preserve for any such employee the rights and benefits contained in such predecessor option, or to satisfy the requirements of Code section 425(a). ARTICLE VII STOCK APPRECIATION RIGHTS 7.1 Grant and Exercise. Stock Appreciation Rights may be granted in conjunction with all or part of any Stock Option granted under the Plan. In the case of a Non-Qualified Stock Option, such rights may be granted either at or after the time of the grant of such Stock Option. In the case of an Incentive Stock Option, such rights may be granted only at the time of the grant of such Stock Option. A Stock Appreciation Right or applicable portion thereof granted with respect to a given Stock Option shall terminate and no longer be exercisable upon the termination or exercise of the related Stock Option, except that, unless otherwise determined by the Board at the time of grant, a Stock Appreciation Right granted with respect to less than the full number of shares covered by a related Stock Option shall not be reduced until the number of shares covered by an exercise or termination of the related Stock Option exceeds the number of shares not covered by the Stock Appreciation Right. A Stock Appreciation Right may be exercised by a Participant, in accordance with Section -44- 7.2, by surrendering the applicable portion of the related Stock Option in accordance with procedures established by the Board for such purposes. Upon such exercise and surrender, the Participant shall be entitled to receive an amount determined in a manner prescribed in Section 7.1. Stock Options which have been so surrendered shall no longer be exercisable to the extent the related Stock Appreciation Rights have been exercised. 7.2 Terms and Conditions. Stock Appreciation Rights shall be subject to such terms and conditions, not inconsistent with the provisions of the Plan, as shall be determined from time to time by the Board, including the following: (i) Stock Appreciation Rights shall be exercisable only at such time or times and to the extent that the Stock Options to which they relate are exercisable, in accordance with the provisions of Article VI and Article VII of the Plan. (ii) Upon the exercise of a Stock Appreciation Right, a Participant shall be entitled to receive an amount in cash and/or shares of Stock in the aggregate equal in value to the excess of the Fair Market Value of one share of Stock over the option price per share specified in the related Stock Option multiplied by the number of shares in respect of which the Stock Appreciation Right shall have been exercised, with the Board having the right to determine the form of payment. (iii) Stock Appreciation Rights shall be transferable only when and to the extent that the underlying Stock Option would be transferable under Article VI of the Plan. (iv) Upon the exercise of a Stock Appreciation Right, the Stock Option or part thereof to which Stock Appreciation Right is related shall be deemed to have been exercised for the purpose of the limitation set forth in Article V of the Plan on the number of shares of Stock to be issued under the Plan, but only to the extent of the number of shares of Stock issued under the Stock Appreciation Right based on the value of the Stock Appreciation Right. (v) The Board may provide, at the time of grant, that such Stock Appreciation Right can be exercised only in the event of a Change in Control and/or a Potential Change in Control, subject to such terms and conditions as the Board may specify at grant. (vi) The Board may also provide that, in the event of a Change in Control and/or a Potential Change in Control, the amount to be paid upon the exercise of a Stock Appreciation Right shall be based on the Change in Control Price, subject to such terms and conditions as -45- the Board may specify at grant. ARTICLE VIII AWARDS OF RESTRICTED STOCK 8.1 Administration. Shares of Restricted Stock may be issued either alone or in addition to other awards granted under the Plan. The Board shall determine Participants to whom, and the time or times at which, such grants will be made, the number of shares to be awarded, the price (if any) to be paid under Section 8.2(i) by the recipient of a Restricted Stock Award, the time or times within which such awards may be subject to forfeiture, and all other conditions of the awards. The Board may condition grants of Restricted Stock upon the attainment of specified performance goals or such other factors or criteria as the Board may determine. The provisions of Restricted Stock Awards need not be the same with respect to each recipient. 8.2 Restrictions and Conditions. Restricted Stock Awards shall be subject to the following restrictions and conditions: (i) The purchase price for shares of Restricted Stock may be equal to or less than their par value and may be zero. (ii) Awards of Restricted Stock must be accepted within a period of 60 days (or such shorter periods as the Board may specify at grant) after the award date, by executing a Restricted Stock Agreement and paying whatever price (if any) is required under Section 8.2(i). The prospective recipient of a Restricted Stock Award shall not have any rights with respect to such award, unless and until such recipient has executed an agreement evidencing the award and has delivered a fully executed copy thereof to the Company, and has otherwise complied with the applicable terms and conditions of such award. (iii) Each Participant receiving a Restricted Stock Award shall be issued a stock certificate in respect of such shares of Restricted Stock. Such certificate shall be registered in the name of such Participant, and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such award, substantially in the following form: "The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) of the Orange-co, Inc. 1998 Incentive Equity Plan and an -46- Agreement entered into between the registered owner and Orange-co, Inc. Copies of such Plan and Agreement are on file in the offices of Orange-co, Inc., Bartow, Florida. The Board may require that the stock certificates evidencing such shares be held in custody by the Company until the restrictions thereon shall have lapsed, and that, as a condition of any Restricted Stock Award, the participant shall have delivered a stock power, endorsed in blank, relating to the Stock covered by such award. (iv) Subject to the provisions of this Plan and the applicable award agreement, during a period set by the Board commencing with the date of such award (the "Restriction Period"), the Participant shall not be permitted to sell, transfer, pledge, assign or otherwise encumber shares of Restricted Stock awarded under the Plan. Based on service, performance and/or such other factors or criteria as the Board may determine, the Board may, however, at or after grant provide for the lapse of such restrictions in installments and/or may accelerate or waive such restrictions in whole or in part. (v) Except as provided in this Section 8.2, unless otherwise determined by the Board the recipient shall have, with respect to the shares of Restricted Stock covered by any award, all of the rights of a stockholder of the Company, including the right to vote the shares, and the right to receive any dividends. (vi) Except as otherwise provided in this Section 8.2 and in the applicable award agreement, upon termination of a participant's employment with the Company or any Subsidiary or Affiliate for any reason during the Restriction Period for a given award, all shares still subject to restriction shall be forfeited by the participant, provided, however, the Board may provide for waiver of the restrictions in the event of termination of employment due to death, disability or retirement. (vii) In the event of hardship or other special circumstances of a participant whose employment with the Company or any Subsidiary or Affiliate is involuntarily terminated, the Board may waive in whole or in part any or all remaining restrictions with respect to any or all of the Participant's Restricted Stock, based on such factors and criteria as the Board may deem appropriate. (viii) If and when the Restriction Period expires without a prior forfeiture -47- of the Restricted Stock subject to such Restriction Period, unrestricted certificates for such shares shall be delivered to the participant. ARTICLE IX CONDITIONS TO ISSUING STOCK, SAR OR RESTRICTED STOCK AWARD The Company shall not be required to issue or deliver any Stock purchased (i) pursuant to any Restricted Stock Award or (ii) upon the full or partial exercise of any Option or SAR granted hereunder prior to fulfillment of all of the following conditions: (a) The admission of such shares to listing on all stock exchanges on which the Stock is then listed; (b) The completion of any registration or other qualification of such shares that the Company shall determine to be necessary or advisable under any federal or state law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body, or the Company's determination that an exemption is available from such registration or qualification; (c) The obtaining of any approval or other clearance from any federal or state governmental agency that the Company shall determine to be necessary or advisable; and (d) The lapse of such reasonable period of time following exercise as shall be appropriate for reasons of administrative convenience. Unless the shares of Stock covered by the Plan shall be the subject of an effective registration statement under the Securities Act of 1933, as amended, stock certificates issued and delivered to Participants shall bear such restrictive legends as the Company shall deem necessary or advisable pursuant to applicable federal and state securities laws. ARTICLE X TERMINATION, AMENDMENT AND MODIFICATION OF PLAN The Board may at any time, (i) cause the Board to cease granting Options or Restricted Stock Awards, (ii) terminate the Plan, or (iii) in any respect amend or modify the Plan; provided, however, that the Board (unless its actions are approved or ratified by the stockholders of the Company within twelve months of the date the Board amends the Plan) may not amend the Plan to: (a) Increase the number of shares of Stock subject to the Plan beyond the amount previously approved or ratified by the stockholders; or -48- (b) Change or modify the class of persons that may participate in the Plan. No termination, amendment or modification of the Plan shall affect adversely the rights of a Participant under any outstanding Option, SAR or Restricted Stock Award without the consent of the Participant or his legal representative. ARTICLE XI MISCELLANEOUS 11.1 Replacement Grants. At the sole discretion of the Board, a Participant may be given an election to surrender an Option, SAR or Restricted Stock Award in exchange for a new Option, SAR or Restricted Stock Award. 11.2 Forfeiture for Competition. If a Participant provides services to a competitor of the Company or any of its Subsidiaries, whether as an employee, officer, director, independent contractor, consultant, agent or otherwise, such services being of a nature that can reasonably be expected to involve the skills and experience used or developed by the Participant while an employee or Board member, then that Participant's rights under any Options, SARs or Restricted Stock Awards outstanding hereunder shall be forfeited and terminated, subject to a determination to the contrary by the Board. 11.3 Plan Binding on Successors. The Plan shall be binding upon the successors of the Company. 11.4 Gender. Whenever used herein, the masculine pronoun shall include the feminine gender. 11.5 Headings No Part of Plan. Headings of Articles and Sections hereof are inserted for convenience and reference, and do not constitute a part of the Plan. -49- EX-27 5
5 0000004507 ORANGE-CO, INC. 1,000 US DOLLARS 6-MOS SEP-30-1999 OCT-01-1998 MAR-31-1999 1 508 0 13,011 802 75,939 91,835 179,784 53,684 236,523 26,225 0 0 0 76,218 32,885 236,523 65,345 65,345 57,746 57,746 3,397 0 1,884 2,318 905 1,413 0 0 0 1,413 .14 .14
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