-----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, GpzZiZDptsKrNyTXv6KCsXoFlDQ4XyB7GHLHhMY6ODzK4jjMrWzWnF3yVScmK722 Dd23Id1+JTBoaNDB/1fpSw== 0001021408-02-007138.txt : 20020515 0001021408-02-007138.hdr.sgml : 20020515 20020515122711 ACCESSION NUMBER: 0001021408-02-007138 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020331 FILED AS OF DATE: 20020515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHIQUITA BRANDS INTERNATIONAL INC CENTRAL INDEX KEY: 0000101063 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100] IRS NUMBER: 041923360 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01550 FILM NUMBER: 02649749 BUSINESS ADDRESS: STREET 1: 250 E FIFTH ST CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137848880 MAIL ADDRESS: STREET 1: CHIQUITA BRANDS INTERNATIONAL, INC. STREET 2: 250 EAST FIFTH STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FORMER COMPANY: FORMER CONFORMED NAME: UNITED BRANDS CO DATE OF NAME CHANGE: 19900403 10-Q 1 d10q.txt FORM 10Q FOR THE PERIOD ENDED MARCH 31, 2002 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- FORM 10-Q (Mark One) [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2002 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to -------- -------- Commission file number 1-1550 CHIQUITA BRANDS INTERNATIONAL, INC. (Exact Name of Registrant as Specified in Its Charter) New Jersey 04-1923360 (State or Other Jurisdiction of Incorporation or Organization) (I.R.S.Employer Identification No.)
250 East Fifth Street Cincinnati, Ohio 45202 (Address of principal executive offices and zip code) Registrant's telephone number, including area code: (513) 784-8000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X]. No [ ]. Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [X]. No [ ]. Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. As of April 30, 2002, there were 39,065,950 shares of Common Stock outstanding. CHIQUITA BRANDS INTERNATIONAL, INC. ----------------------------------- TABLE OF CONTENTS -----------------
Page ---- PART I - Financial Information - ------ Item 1 - Financial Statements Consolidated Statement of Income for the quarters ended March 31, 2002 and 2001.............................................. 3 Consolidated Balance Sheet as of March 31, 2002, December 31, 2001 and March 31, 2001....................................... 4 Consolidated Statement of Cash Flow for the quarters ended March 31, 2002 and 2001.............................................. 5 Notes to Consolidated Financial Statements.................................... 6 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations............................................ 14 Item 3 - Quantitative and Qualitative Disclosures About Market Risk.............. 16 PART II - Other Information - ------- Item 2 - Changes in Securities................................................... 16 Item 3 - Defaults Upon Senior Securities......................................... 16 Item 4 - Submission of Matters to a Vote of Security Holders..................... 16 Item 5 - Other Information....................................................... 16 Item 6 - Exhibits and Reports on Form 8-K........................................ 17 Signature............................................................................. 18
Part I - Financial Information - ------------------------------ Item 1 - Financial Statements - ----------------------------- CHIQUITA BRANDS INTERNATIONAL, INC. ----------------------------------- CONSOLIDATED STATEMENT OF INCOME (Unaudited) -------------------------------------------- (In thousands, except per share amounts)
Predecessor Company* -------------------- Quarter Ended March 31, -------------------- 2002 2001 --------- -------- Net sales $ 629,505 $577,249 --------- -------- Operating expenses Cost of sales 510,384 462,275 Selling, general and administrative 55,336 55,792 Depreciation 21,401 20,794 --------- -------- 587,121 538,861 --------- -------- Operating income 42,384 38,388 Interest income 624 3,051 Interest expense (9,486) (32,694) Reorganization costs (29,597) (1,117) Fresh start adjustments (410,271) -- --------- -------- Income (loss) before income taxes, extraordinary item and cumulative effect of a change in method of accounting (406,346) 7,628 Income taxes (1,000) (3,500) --------- -------- Income (loss) before extraordinary item and cumulative effect of a change in method of accounting (407,346) 4,128 Extraordinary gain from debt extinguishment 154,046 -- Cumulative effect of a change in method of accounting (144,523) -- --------- -------- Net income (loss) $(397,823) $ 4,128 ========= ======== Basic and diluted earnings per common share: - Before extraordinary item and cumulative effect of a change in method of accounting $ (5.20) $ .01 - Extraordinary item 1.97 -- - Cumulative effect of a change in method of accounting (1.85) -- --------- -------- - Net income (loss) $ (5.08) $ .01 ========= ========
*See Notes to Consolidated Financial Statements, including Basis of Presentation describing the Predecessor Company. 3 CHIQUITA BRANDS INTERNATIONAL, INC. ----------------------------------- CONSOLIDATED BALANCE SHEET (Unaudited) -------------------------------------- (In thousands, except share amounts)
Reorganized Company* Predecessor Company* ----------- ------------------------- March 31, December 31, March 31, 2002 2001 2001 ----------- ------------ ---------- ASSETS - ------ Current assets Cash and equivalents $ 56,850 $ 70,428 $ 90,894 Trade receivables (less allowances of $10,573, $11,902, and $10,981) 258,775 193,945 226,840 Other receivables, net 77,537 80,378 98,548 Inventories 355,780 392,190 381,991 Other current assets 39,789 35,414 34,637 ---------- ---------- ---------- Total current assets 788,731 772,355 832,910 Property, plant and equipment, net 429,076 1,005,606 1,056,849 Investments and other assets, net 155,597 326,116 331,515 Intangibles, net 387,585 158,415 162,462 ---------- ---------- ---------- Total assets $1,760,989 $2,262,492 $2,383,736 ========== ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Liabilities not subject to compromise Current liabilities Notes and loans payable $ 49,332 $ 53,374 $ 80,391 Long-term debt due within one year Parent company -- -- 858,423 Subsidiaries 49,873 56,376 43,401 Accounts payable 196,855 175,161 190,252 Accrued liabilities 86,008 102,452 113,731 ---------- ---------- ---------- Total current liabilities 382,068 387,363 1,286,198 Long-term debt of parent company 250,000 -- -- Long-term debt of subsidiaries 304,358 306,017 353,174 Accrued pension and other employee benefits 104,286 68,193 62,619 Other liabilities 107,524 89,505 97,615 ---------- ---------- ---------- Total liabilities not subject to compromise 1,148,236 851,078 1,799,606 Liabilities subject to compromise -- 962,820 -- ---------- ---------- ---------- Total liabilities 1,148,236 1,813,898 1,799,606 ---------- ---------- ---------- Shareholders' equity Preferred and preference stock -- 139,729 183,083 Common stock, $.01 par value: Reorganized Company (39,065,950 shares at March 31, 2002) 391 -- -- Predecessor Company (78,273,183 shares at December 31, 2001 and 72,506,774 shares at March 31, 2001) -- 783 725 Capital surplus 612,362 881,192 837,622 Accumulated deficit -- (530,068) (407,172) Accumulated other comprehensive loss -- (43,042) (30,128) ---------- ---------- ---------- Total shareholders' equity 612,753 448,594 584,130 ---------- ---------- ---------- Total liabilities and shareholders' equity $1,760,989 $2,262,492 $2,383,736 ========== ========== ==========
*See Notes to Consolidated Financial Statements, including Basis of Presentation describing the Reorganized Company and Predecessor Company. 4 CHIQUITA BRANDS INTERNATIONAL, INC. ----------------------------------- CONSOLIDATED STATEMENT OF CASH FLOW (Unaudited) ----------------------------------------------- (In thousands)
Predecessor Company* -------------------- Quarter Ended March 31, -------------------- 2002 2001 --------- -------- Cash provided (used) by: Operations Income (loss) before extraordinary item and cumulative effect of a change in method of accounting $(407,346) $ 4,128 Fresh start adjustments 410,271 -- Reorganization costs 16,736 -- Depreciation and amortization 21,401 22,332 Parent company interest expense not paid -- 20,355 Collection of tax refund -- 9,456 Changes in current assets and liabilities and other (33,954) (33,475) --------- -------- Cash flow from operations 7,108 22,796 --------- -------- Investing Capital expenditures (4,807) (5,715) Hurricane Mitch insurance proceeds -- 3,961 Long-term investments -- (4,296) Proceeds from sales of property, plant and equipment 5,029 3,076 Other 275 (278) --------- -------- Cash flow from investing 497 (3,252) --------- -------- Financing** Issuances of long-term debt 200 69,856 Repayments of long-term debt (9,948) (66,631) CBI credit facility amendment and other fees (7,393) -- Decrease in notes and loans payable (4,042) (28,799) --------- -------- Cash flow from financing (21,183) (25,574) --------- -------- Decrease in cash and equivalents (13,578) (6,030) Balance at beginning of period 70,428 96,924 --------- -------- Balance at end of period $ 56,850 $ 90,894 ========= ========
*See Notes to Consolidated Financial Statements, including Basis of Presentation describing the Reorganized Company and Predecessor Company. ** On March 19, 2002, in accordance with the Company's Plan of Reorganization under Chapter 11 of the U.S. Bankruptcy Code, all previously existing parent company public debt ($861 million principal plus $102 million accrued interest) was exchanged for 95.5% of the new common stock of the Reorganized Company and $250 million of 10.56% Senior Notes due 2009. 5 CHIQUITA BRANDS INTERNATIONAL, INC. ----------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ------------------------------------------------------ Basis of Presentation - --------------------- Chiquita Brands International, Inc. ("CBII") and its subsidiaries (collectively, "Chiquita" or the "Company") operate as a leading international marketer, producer and distributor of quality fresh fruits and vegetables and processed foods. On March 19, 2002, CBII, a parent holding company without business operations of its own, completed its previously announced financial restructuring when its pre-arranged Plan of Reorganization under Chapter 11 of the U.S. Bankruptcy Code (the "Plan" or "Plan of Reorganization") became effective. For financial reporting purposes, the Company used an effective date of March 31, 2002. References in these financial statements to "Predecessor Company" refer to the Company prior to March 31, 2002. References to "Reorganized Company" refer to the Company on and after March 31, 2002, after giving effect to the issuance of new securities in exchange for the previously outstanding securities in accordance with the Plan, and implementation of fresh start accounting. The events which occurred during 2001 and the first quarter of 2002 relating to the Chapter 11 proceedings, the securities issued in accordance with the Plan, and the fresh start accounting adjustments are described in "Parent Company Debt Restructuring" and "Fresh Start Adjustments" below. Interim results for the Company are subject to significant seasonal variations and are not necessarily indicative of the results of operations for a full fiscal year. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary for a fair statement of the results of the interim periods shown have been made. See Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2001 for additional information relating to the Company's financial statements. Parent Company Debt Restructuring - --------------------------------- In January 2001, the Company announced that it was seeking to restructure $861 million principal amount of CBII's outstanding senior notes and subordinated debentures ("Old Notes") through the conversion of a substantial portion of the Old Notes into new common equity. As part of this initiative, CBII discontinued all interest and principal payments on the Old Notes. In February 2001, the Company commenced discussions with certain holders of the Old Notes ("Prepetition Noteholder Committees") to discuss the financial condition of the Company and the proposed restructuring. The Company engaged in extensive, arms' length negotiations with the Prepetition Noteholder Committees regarding the terms of a consensual restructuring of CBII. On November 9, 2001, these parties agreed on the terms of the restructuring. On November 28, 2001, CBII filed its Plan of Reorganization under Chapter 11 of the U.S. Bankruptcy Code. CBII's general unsecured creditors (except for holders of the Old Notes) were unaffected by the Chapter 11 bankruptcy proceedings and the Plan. CBII's operating subsidiaries, which continued to meet their obligations with their own cash flow and credit facilities during the restructuring, were also not involved in the restructuring or the Chapter 11 bankruptcy proceedings. The Plan was confirmed by the bankruptcy court on March 8, 2002 and became effective March 19, 2002, resulting in exchange of the $861 million of Old Notes and $102 million of accrued and unpaid interest thereon for $250 million of 10.56% Senior Notes due 2009 ("New Notes") and 95.5% of the common stock of the reorganized entity ("New Common Stock"). Previously outstanding preferred, preference and common stock of the Predecessor Company was exchanged for 2% of the New Common Stock as well as 7-year warrants ("Warrants") to purchase up to 25% of the New Common Stock on a fully diluted basis (prior to any dilution by grants under a new stock option plan) of the Reorganized Company. In addition, as part 6 of a management incentive program, certain executives were granted rights to receive 2.5% of the New Common Stock. In accordance with the Plan, the Reorganized Company: . issued 39,065,950 shares of New Common Stock through March 31, 2002, and committed to issue 900,000 additional shares to management of the Company; . issued the New Notes and the Warrants; . adopted a new stock option plan; . reserved (a) 13,333,333 shares of New Common Stock for issuance upon exercise of the Warrants and (b) 5,925,926 shares of New Common Stock for issuance upon exercise of employee stock options authorized for grant under the new stock option plan; and . cancelled the Old Notes, previously outstanding preferred, preference and common stock, and previously outstanding stock options. The New Notes mature on March 15, 2009. These Notes were issued by CBII and are not secured by any of the assets of CBII and its subsidiaries. The indenture for the New Notes contains restrictions on the payment of dividends that, at March 31, 2002, limited the aggregate amount of dividends that could be paid by CBII to $25 million. The indenture has additional restrictions related to asset sales, incurrence of additional indebtedness, sale-leaseback transactions, and related party transactions. The New Notes are callable on or after March 15, 2005 at a price of 105.28% of face value declining to face value in 2008. In addition, the Company may redeem some or all of the New Notes prior to March 15, 2005 at a redemption price based on a discounted present value of the 105.28% price. In accordance with the Plan, 150 million shares of New Common Stock are authorized, including approximately 40 million shares issued or to be issued in accordance with the Plan of Reorganization. The Warrants entitle the holders to purchase up to 13.3 million shares of New Common Stock at a price of $19.23 per share through March 19, 2009. The Warrants, valued at $41 million for purposes of the Plan of Reorganization, are included in Capital Surplus on the Consolidated Balance Sheet of the Reorganized Company at March 31, 2002. No interest payments on the Old Notes were made in 2002 and 2001. The Company recorded interest expense on the Old Notes until November 28, 2001, the date the Company filed its Chapter 11 petition, but not thereafter. As a result, interest expense for the first quarter of 2002 does not include $20 million which would have been payable under the terms of the Old Notes. Subsidiary interest payments for the first quarter were $10 million in 2002 and $12 million in 2001. The Company incurred $30 million of reorganization costs during the first quarter of 2002 primarily associated with the grants of New Common Stock to certain executives as part of the Chapter 11 restructuring agreement, and professional fees. Cash payments in the first quarter of 2002 associated with reorganization costs were $13 million. 7 Fresh Start Adjustments - ----------------------- The Company's emergence from Chapter 11 bankruptcy proceedings resulted in a new reporting entity and adoption of fresh start reporting in accordance with Statement of Position No. 90-7, "Financial Reporting by Entities in Reorganization Under the Bankruptcy Code." The consolidated financial statements as of and for the quarter ended March 31, 2002 reflect reorganization adjustments for the discharge of debt and adoption of fresh start reporting. Accordingly, the estimated reorganization value of the Company of $1,280 million, which served as the basis for the Plan approved by the bankruptcy court, was used to determine the equity value allocated to the assets and liabilities of the Reorganized Company in proportion to their relative fair values in conformity with Statement of Financial Accounting Standards No. 141, "Business Combinations." Two methodologies were used by the Company's financial advisors to derive the estimated reorganization value of $1,280 million: (a) the application of public market valuation multiples to the Company's historical and projected financial results, and (b) a calculation of the present value of the Company's free cash flows using 5-year projected financial results, including an assumption for a terminal value, discounted back at the Company's estimated post-restructuring weighted average cost of capital. Reorganization adjustments in the March 31, 2002 consolidated financial statements result primarily from the following: . Exchange of Old Notes and accrued interest for 95.5% of the New Common Stock and $250 million of New Notes, resulting in a $154 million extraordinary gain; . Reduction of property, plant and equipment carrying values, including reduction of the Company's tropical farm assets by $320 million and shipping vessels by $158 million; . Reduction of long-term operating investments and other asset carrying values; . Increase in the carrying value of the Chiquita trademark; . Increase in accrued pension and other employee benefits primarily associated with tropical pension/severance obligations; and . Increase in other liabilities for unfavorable lease obligations. These adjustments were based upon the work of outside appraisers, actuaries and financial consultants, as well as internal valuation estimates using discounted cash flow analyses, to determine the relative fair values of the Company's assets and liabilities. 8 The following table reflects the reorganization adjustments to the Company's Consolidated Balance Sheet discussed above:
Unaudited Balance Sheet at March 31, 2002 ------------------------------------------------------------ Reorganization Adjustments Before -------------------------- After Reorganization Debt Fresh Start Reorganization (In thousands) Adjustments Discharge Adjustments Adjustments -------------- --------- ----------- -------------- Current assets $ 788,731 $ -- $ -- $ 788,731 Property, plant and equipment, net 979,219 -- (550,143) 429,076 Investments and other assets, net 341,183 -- (185,586) 155,597 Intangibles, net 12,757 -- 374,828 387,585 ---------- --------- --------- ---------- Total assets $2,121,890 $ -- $(360,901) $1,760,989 ========== ========= ========= ========== Notes and loans payable $ 49,332 $ -- $ -- $ 49,332 Long-term debt due within one year 49,873 -- -- 49,873 Accounts payable and accrued liabilities 269,178 -- 13,685 282,863 Long-term debt of parent company -- 250,000 -- 250,000 Long-term debt of subsidiaries 304,358 -- -- 304,358 Accrued pension and other employee benefits 71,266 -- 33,020 104,286 Other liabilities 91,174 -- 16,350 107,524 Liabilities subject to compromise 962,820 (962,820) -- -- ---------- --------- --------- ---------- Total liabilities 1,798,001 (712,820) 63,055 1,148,236 Accumulated deficit (657,016) 154,046 502,970 -- Other shareholders' equity 980,905 558,774 (926,926) 612,753* ---------- --------- --------- ---------- Total liabilities and shareholders' equity $2,121,890 $ -- $(360,901) $1,760,989 ========== ========= ========= ==========
* After deducting $654 million of indebtedness from the Company's $1,280 million estimated reorganization value, the total equity value of the Company is approximately $626 million. The total shareholders' equity in the Reorganized Company balance sheet excludes $13 million related to restricted management shares subject to delayed delivery. 9 Earnings Per Share - ------------------ Basic and diluted earnings per common share ("EPS") are calculated as follows (in thousands, except per share amounts):
Predecessor Company ------------------- Quarter Ended March 31, ------------------- 2002 2001 --------- ------- Income (loss) before extraordinary item and cumulative effect of a change in method of accounting $(407,346) $ 4,128 Extraordinary gain from debt extinguishment 154,046 -- Cumulative effect of a change in method of accounting (144,523) -- --------- ------- Net income (loss) (397,823) 4,128 Dividends payable on preferred and preference stock -- (3,680) --------- ------- Net income (loss) attributed to common shares $(397,823) $ 448 ========= ======= Weighted average common shares outstanding (shares used to calculate basic EPS) 78,273 68,839 Stock options and other stock awards -- 8 --------- ------- Shares used to calculate diluted EPS 78,273 68,847 ========= ======= Basic and diluted earnings per common share: - Before extraordinary item and cumulative effect of a change in method of accounting $ (5.20) $ .01 - Extraordinary item 1.97 -- - Cumulative effect of a change in method of accounting (1.85) -- --------- ------- - Net income (loss) $ (5.08) $ .01 ========= =======
The earnings per share calculations are based on common stock shares outstanding prior to the Company's emergence from Chapter 11 proceedings on March 19, 2002. Upon emergence, these shares were cancelled and the Company has issued or committed to issue 40 million shares of New Common Stock. The assumed conversions to common stock of the Company's 7% convertible subordinated debentures (which were convertible until March 28, 2001), preferred stock and preference stock, and the assumed exercise of outstanding stock options and other stock awards, are excluded from the diluted EPS computations for periods in which these items, on an individual basis, have an anti-dilutive effect on diluted EPS. The Company's 7% convertible subordinated debentures, stock options and other stock awards, and preferred and preference stock were all cancelled in accordance with the Company's Plan of Reorganization. The Company discontinued payment of dividends on its preferred and preference stock in the fourth quarter of 2000, and accrued but unpaid dividends were cancelled as part of the Plan of Reorganization. These dividends were deducted from net income to calculate EPS for the first quarter of 2001. These dividends were not deducted from net income to calculate EPS for the first quarter of 2002 because of the Company's bankruptcy petition filing on November 28, 2001. 10 Accounting Pronouncements - ------------------------- In July 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 142 ("SFAS No. 142"), "Goodwill and Other Intangible Assets," which was adopted by the Company as of January 1, 2002. Under this standard, goodwill and other intangible assets with an indefinite life are no longer amortized but are reviewed at least annually for impairment. As of January 1, 2002, to give effect to the new standard, the Company recorded a goodwill write-down of $145 million as a cumulative effect of a change in method of accounting. The write-down results from applying the SFAS No. 142 requirement to evaluate goodwill using discounted cash flows rather than the undiscounted cash flow methodology prescribed by the previous standard. The elimination of future amortization of goodwill by SFAS No. 142 is expected to result in an annual increase to income before taxes of approximately $6 million. Net income for the quarter ended March 31, 2001 would have been $1.4 million ($.02 per share) higher if SFAS No. 142 had been adopted as of January 1, 2001. Inventories (in thousands) - ------------------------- Reorganized Company Predecessor Company ----------- ----------------------- March 31, December 31, March 31, 2002 2001 2001 ----------- ------------ -------- Fresh produce $ 49,365 $ 40,520 $ 33,509 Processed food products 162,237 208,436 189,510 Growing crops 96,135 96,203 98,167 Materials, supplies and other 48,043 47,031 60,805 -------- -------- -------- $355,780 $392,190 $381,991 ======== ======== ======== Long-term Debt - -------------- The Company's operating subsidiary, Chiquita Brands, Inc. ("CBI"), has a secured bank credit facility expiring on June 7, 2004 for up to $130 million, comprised of a $70 million term loan and a revolving credit facility of $60 million. At March 31, 2002, $70 million of the term loan was outstanding, $15 million of borrowings were outstanding under the revolving credit facility, and $4 million of the availability under the revolving credit facility had also been used to issue letters of credit. Availability under the CBI facility at March 31, 2002 was $31 million. 11 Segment Information (in thousands) - --------------------------------- Financial information for the Company's business segments is as follows: Predecessor Company ------------------------- Quarter Ended March 31, ------------------------- 2002 2001 ---------- ---------- Net sales Fresh Produce $520,595 $468,956 Processed Foods 108,910 108,293 -------- -------- $629,505 $577,249 ======== ======== Operating income Fresh Produce $ 41,132 $ 38,316 Processed Foods 1,252 72 -------- -------- $ 42,384 $ 38,388 ======== ======== Reorganized Predecessor Company Company ----------- -------------------------- March 31, December 31, March 31, 2002 2001 2001 ----------- ------------ ----------- Total assets Fresh Produce $1,467,400 $1,806,736 $1,913,517 Processed Foods 293,589 455,756 470,219 ---------- ---------- ---------- $1,760,989 $2,262,492 $2,383,736 ========== ========== ========== Hedging - ------- Statement of Financial Accounting Standards No. 133 ("SFAS No. 133"), "Accounting for Derivative Instruments and Hedging Activities," as amended, was implemented by the Company on January 1, 2001. This standard requires the recognition of all derivatives on the balance sheet at fair value, and recognition of the resulting gains or losses as adjustments to net income or other comprehensive income ("OCI"). The effect of adopting SFAS No. 133 on the Company's net income was not material. At March 31, 2002, the Company had euro-denominated option contracts which ensure conversion of approximately (euro)185 million of sales in 2002 at average rates not lower than 0.87 dollars per euro. The fair value of these option contracts at March 31, 2002 was approximately $2 million and was included in other current assets. The Company also had 3.5% Rotterdam barge fuel option contracts at March 31, 2002 that limit the average cost on approximately 50,000 metric tons of fuel oil to no more than $98 per metric ton in 2002. During the first quarter of 2002, the change in the fair value of these contracts relating to hedge ineffectiveness was not material. 12 Comprehensive Income (Loss) - --------------------------
Predecessor Company ------------------- Quarter Ended March 31, ------------------- 2002 2001 --------- ------- Net income (loss) $(397,823) $ 4,128 Other comprehensive income Unrealized foreign currency translation gains (losses) 485 (2,734) Changes in fair value of derivatives (1,200) 4,866 Losses reclassified from OCI into net income (loss) 2,958 1,231 --------- ------- Comprehensive income (loss) before cumulative effect of adopting SFAS No. 133 (395,580) 7,491 Cumulative effect of adopting SFAS No. 133 -- (6,975) --------- ------- Comprehensive income (loss) $(395,580) $ 516 ========= =======
13 Item 2 - ------ CHIQUITA BRANDS INTERNATIONAL, INC. ----------------------------------- MANAGEMENT'S DISCUSSION AND ANALYSIS OF --------------------------------------- FINANCIAL CONDITION AND RESULTS OF OPERATIONS --------------------------------------------- Operations - ---------- Net sales for the first quarter of 2002 increased $52 million to $630 million primarily due to higher banana volume in Europe and higher local prices in Central Europe compared to the prior year. Operating income for the first quarter of 2002 was $42 million compared to 2001 first quarter operating income of $38 million. Most of the improvement in first quarter results occurred in the Company's Fresh Produce business, primarily as a result of banana volume growth in core European markets, higher local banana pricing on volume growth in Central European markets, and lower import license costs because of the April 2001 resolution of the U.S. - European Union trade dispute. The Company grew volume by about 2 million boxes in Central European markets, where market pricing was strong. In core European markets, the Company grew banana volume about 10% year-on-year and benefited from approximately $6 million in lower import license costs. Additionally, in the Asia Pacific region, where the Company has a relatively smaller presence, higher local banana prices drove a $6 million earnings improvement despite weakness in the yen. These improvements were mostly offset by weaker European currencies in relation to the U.S. dollar, lower pricing in North America, and higher costs for the purchase and production of bananas in the quarter. European currency weakness had a $9 million negative effect compared to the first quarter of 2001. In North America, the Company increased banana volume by about 5% but experienced 7% lower pricing versus the same period a year ago. Processed Foods operating income was $1 million versus a breakeven result in the first quarter of 2001. Higher prices on canned vegetables were offset by increased costs per can as a result of a planned smaller harvest during the fall 2001. The Company's interest expense of $9 million in the first quarter of 2002 was $23 million lower than in 2001. $20 million of this decrease was due to the elimination of interest expense on parent company debt while CBII was in Chapter 11 proceedings during the first quarter of 2002. The Company's effective tax rate is affected by the level and mix of income among various domestic and foreign jurisdictions in which the Company operates. For the first quarter of 2002, income tax expense includes a benefit for a 2002 tax law that changed the calculation of the Company's 2001 U.S. alternative minimum tax liability. Financial Condition - ------------------- Parent Company Debt Restructuring On March 19, 2002, CBII, a parent holding company without business operations of its own, completed its previously announced financial restructuring when its pre-arranged Plan of Reorganization under Chapter 11 of the U.S. Bankruptcy Code became effective. The events which occurred during 2001 and the first quarter of 2002 relating to the Chapter 11 proceedings, the securities issued in accordance with the Plan, and the fresh start accounting adjustments are described in "Parent Company Debt Restructuring" and "Fresh Start Adjustments" in the Notes to Consolidated Financial Statements. The Plan will reduce Chiquita's future annual interest expense by approximately $60 million. In addition, due to the fresh start adjustments to property, plant and equipment, annual depreciation expense will decrease by approximately $40 million. 14 Other Liquidity and Capital Resources Information The Company believes that the reduction of interest expense provided by its financial restructuring, the cash flow generated by operating subsidiaries, and available borrowings under its working capital facilities provide sufficient cash reserves and liquidity to fund the Company's working capital needs, capital expenditures and debt service requirements, including CBII's New Notes. In March 2001, the Company's operating subsidiary, CBI, obtained a three-year secured bank credit facility for up to $120 million to replace CBII's expiring bank revolving credit agreement. This facility consisted of a term loan of $75 million and a revolving credit facility of $45 million. A portion of the proceeds of the term loan was used to repay $50 million of bank loans of certain Costa Rican farm subsidiaries. Interest on amounts outstanding under the facility was based on the bank corporate base rate plus 5%, subject to a minimum of 14% per annum. An annual facility fee of 2% of the total credit facility was also payable. In March 2002, this CBI facility was increased to $130 million, comprised of a $70 million term loan and a revolving credit facility of $60 million. Interest on borrowings on this amended facility is based on the prevailing LIBOR rates plus 3.75% or the bank corporate base rate plus 1% (at CBI's option), subject to a minimum annual rate of 6%. The annual facility fee has been eliminated, and the Company paid an amendment fee of 5% of the total credit facility. Substantially all U.S. assets of CBI (except for those of subsidiaries, such as Chiquita Processed Foods, L.L.C. ("CPF"), with their own credit facilities) are pledged to secure the CBI credit facility. The CBI credit facility is also secured by liens on CBI's trademarks and pledges of stock and guarantees by various subsidiaries worldwide. The facility contains covenants that limit the distribution of cash from CBI to CBII, the parent holding company, to amounts necessary to pay interest on the New Notes (provided CBI meets certain liquidity tests), income taxes and permitted CBII overhead. The facility also has covenants that require CBI to maintain certain financial ratios related to debt coverage and income, and that limit capital expenditures and investments. At April 30, 2002, $70 million of the term loan was outstanding, $35 million of borrowings were outstanding under the revolving credit facility and $4 million of the availability under the revolving credit facility had also been used to issue letters of credit. Availability under the CBI facility at April 30, 2002 was $11 million. At April 30, 2002, approximately $75 million of additional borrowings were available to CPF for working capital purposes under its committed line of credit. * * * * * This quarterly report contains certain statements that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of Chiquita, including the continued maintenance of the reforms agreed to by the U.S. and EU regarding the EU's banana import regime, prices for Chiquita products, availability and costs of products and raw materials, currency exchange rate fluctuations, natural disasters and unusual weather conditions, operating efficiencies, labor relations, actions of governmental bodies, the continuing availability of financing and other market and competitive conditions. The forward-looking statements speak as of the date made and are not guarantees of future performance. Actual results or developments may differ materially from the expectations expressed or implied in the forward-looking statements, and the Company undertakes no obligation to update any such statements. 15 Item 3 - Quantitative and Qualitative Disclosures About Market Risk - ------------------------------------------------------------------- Reference is made to the discussion under "Management's Discussion and Analysis of Financial Condition and Results of Operations - Market Risk Management" in the Company's 2001 Annual Report to Shareholders. As of March 31, 2002, there were no material changes to the information presented. Part II - Other Information - --------------------------- Item 2 - Changes in Securities - ------------------------------ CBII's Plan of Reorganization under Chapter 11 of the U.S. Bankruptcy Code became effective on March 19, 2002, at which time all then-outstanding debt and equity securities of CBII were cancelled in exchange for new securities. Information concerning the new securities is summarized in Part I, Item 1, above, in the Notes to Consolidated Financial Statements, under "Parent Company Debt Restructuring" and has been previously reported in the Company's Registration Statement on Form 8-A filed March 12, 2002, as amended on March 19, 2002, the Company's Current Reports on Form 8-K filed March 12, 2002 and March 19, 2002 and its Annual Report on Form 10-K filed March 20, 2002. The indenture for the New Notes contains restrictions on the payment of dividends that, at March 31, 2002, limited the aggregate amount of dividends that could be paid by CBII to $25 million. The securities issued pursuant to the Plan on March 19, 2002 consisted of $250 million aggregate principal amount of New Notes, 39 million shares of Common Stock and 13,333,333 Warrants. All of these securities along with any shares of Common Stock issuable upon exercise of the Warrants, were or will be issued pursuant to the Plan in exchange for previously issued securities, as described in the Current Reports on Form 8-K referred to in the preceding paragraph, without registration under the Securities Act of 1933 in reliance on the provisions of Section 1145 of the U.S. Bankruptcy Code. An additional 65,950 shares of Common Stock were issued on March 20, 2002 without registration under the Securities Act of 1933 on the basis that no sale was involved. Item 3 - Defaults Upon Senior Securities - ---------------------------------------- As indicated above, all of CBII's then-outstanding debt and equity securities were cancelled on March 19, 2002 when the Plan became effective. Defaults on those cancelled securities were previously reported in the Company's Quarterly Reports on Form 10-Q filed in 2001. Item 4 - Submission of Matters to a Vote of Security Holders - ------------------------------------------------------------ The information required by this item relating to the approval of the Plan has been previously reported in Part I, Item 4 of the Company's Annual Report on Form 10-K for the year ended December 31, 2001. Item 5 - Other Information - -------------------------- The Company expects to hold its 2002 annual meeting of shareholders during the third quarter of 2002 and will publicly announce the meeting date once it has been set. The Company's Certificate of Incorporation provides that shareholders may nominate directors or submit proposals at this annual meeting only if they have properly notified the Company within 15 days after public announcement of the meeting date. Reference is made to the Certificate of Incorporation (Exhibit 3(i) to the Company's 2001 Annual Report on Form 10-K) for further information regarding this advance notice requirement. 16 Item 6 - Exhibits and Reports on Form 8-K - ----------------------------------------- (a) Exhibit 3.1 - Restated By-Laws, as amended through April 9, 2002. Exhibit 10.1 - Termination and Release Agreement, dated as of March 25, 2002, by and between Chiquita Brands International, Inc. and Steven G. Warshaw. (b) The Company filed the following reports on Form 8-K during the quarter ended March 31, 2002: March 6, 2002 (filed March 12, 2002) - to report amendment of the credit facility of Chiquita Brands, Inc. with Wells Fargo Bank, National Association and Foothill Capital Corporation for aggregate indebtedness of up to $130 million, and to report confirmation of the Company's Plan of Reorganization on March 8, 2002 by the Bankruptcy Court. March 19, 2002 (filed March 19, 2002) - to report the effectiveness of the Company's Plan of Reorganization. March 20, 2002 (filed March 21, 2002) - to report the election of Cyrus F. Freidheim, Jr. as chairman of the board and chief executive officer and of Robert W. Fisher as acting chief operating officer. 17 SIGNATURE --------- 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. CHIQUITA BRANDS INTERNATIONAL, INC. By: /s/ William A. Tsacalis ----------------------------- William A. Tsacalis Vice President and Controller (Chief Accounting Officer) May 15, 2002 18 EX-3.1 3 dex31.txt RESTATED BY-LAWS Exhibit 3.1 RESTATED BY-LAWS of CHIQUITA BRANDS INTERNATIONAL, INC. A New Jersey Corporation (Adopted as of March 19, 2002; amended April 9, 2002) _________________________________ ARTICLE I Shareholders Section 1.1 Annual Meeting. The annual meeting of shareholders, for the -------------- election of directors and the transaction of such other business as may properly come before the meeting, shall be held on such date, at such hour and at such place, within or without the State of New Jersey, as may be designated each year by the board of directors and stated in the notice of meeting. Failure to hold an annual meeting at the designated time and place shall not, however, invalidate the corporate existence or affect otherwise valid corporate acts. Section 1.2 Special Meetings. Special meetings of the shareholders may only ---------------- be called in the manner provided in the Third Restated Certificate of Incorporation (as amended from time to time, the "Certificate of -------------- Incorporation"). - ------------- Section 1.3 Notice of Meeting. Written notice of each meeting of ----------------- shareholders, stating the time, place and, in the case of a special meeting, the purpose or purposes thereof, shall be given, personally or by mail, to each shareholder entitled to vote at the meeting not less than ten (10) nor more than sixty (60) days before the meeting, except as otherwise required by the New Jersey Business Corporation Act or the Certificate of Incorporation. Section 1.4 Determination of Shareholders of Record. For the purposes of --------------------------------------- determining the shareholders entitled (a) to notice of or to vote at any meeting of shareholders or any adjournment thereof, or (b) to receive payment of any dividend or other disbursement or allotment of any right, or for the purpose of any other action, the board of directors may fix, in advance, a record date which shall not be more than sixty (60) days nor less than ten (10) days before the date of such meeting nor more than sixty (60) days prior to any other action. Section 1.5 Quorum and Adjournments. At any meeting of the shareholders the ----------------------- presence in person or by proxy of the holders of a majority of the shares of the corporation entitled to vote at the meeting shall constitute a quorum for the transaction of business, except as otherwise provided by law or the Certificate of Incorporation. If a quorum is not present at any meeting of the shareholders, the chairman of the meeting may adjourn the meeting from time to time without notice, other than announcement at the meeting, until a quorum is present; provided that if after adjournment the board of directors fixes a new record - -------- ---- date for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record on the new record date entitled to vote. Less than a quorum may adjourn the meeting. -1- Section 1.6 Vote Required. When a quorum is present, a majority of the ------------- votes cast at the meeting by the holders of shares entitled to vote on the subject matter shall be the act of the shareholders, unless (a) by express provisions of an applicable law or of the Certificate of Incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question, or (b) the subject matter is the election of directors, in which case Section 2.2 of Article II hereof shall govern and control the approval of such subject matter. Section 1.7 Voting Rights. Except as otherwise provided by the New Jersey ------------- Business Corporation Act, the Certificate of Incorporation or these by-laws, every shareholder shall at every meeting of the shareholders be entitled to one vote in person or by proxy for each share of common stock held by such shareholder. Section 1.8 Proxies. Each shareholder entitled to vote at a meeting of ------- shareholders may authorize another person or persons to act for him or her by proxy, but no such proxy shall be voted or acted upon after eleven months from its date, unless the proxy expressly provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally. A proxy is revoked when the person executing the proxy is present at a meeting of shareholders and (a) files a written notice of revocation with the secretary of the meeting prior to the voting of the proxy or (b) votes the shares subject to the proxy by written ballot, except that when such proxy is coupled with an interest and the fact of the interest appears on the face of the proxy, the agent named in the proxy shall have all voting and other rights referred to in the proxy, notwithstanding the presence of the person executing the proxy. At each meeting of the shareholders, and before any voting commences, all proxies filed at or before the meeting shall be submitted to and examined by the secretary or a person designated by the secretary, and no shares may be represented or voted under a proxy that has been found to be invalid or irregular. ARTICLE II Directors and Committees of Directors Section 2.1 General Powers. The business and affairs of the corporation -------------- shall be managed by or under the direction of the board of directors. In addition to such powers as are herein and in the Certificate of Incorporation expressly conferred upon it, the board of directors shall have and may exercise all the powers of the corporation, subject to the provisions of the laws of New Jersey, the Certificate of Incorporation and these by-laws. Section 2.2 Number, Election and Term of Office. The number of directors ----------------------------------- constituting the corporation's board of directors shall be determined in the manner provided in the Certificate of Incorporation. The directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meetings and entitled to vote in the election of directors; provided that whenever the holders of any class or series of capital -------- ---- stock of the corporation are entitled to elect one or more directors pursuant to the provisions of the Certificate of Incorporation, such directors shall be elected by a plurality of the votes of such class or series present in person or represented by proxy at the meeting and entitled to vote in the -2- election of such directors. The directors shall be elected in this manner at the annual meeting of shareholders, except as otherwise provided in the Certificate of Incorporation. Section 2.3 Chairman of the Board. The chairman of the board (or such other --------------------- person designated by the board of directors) shall preside at all meetings of the shareholders, and the chairman of the board (or the president, in the case of the absence or disability of the chairman of the board) shall preside at all meetings of the board of directors and shall have such other powers and perform such other duties as may be prescribed to him or her by the board of directors or provided in these by-laws. Section 2.4 Meetings of the Board of Directors. Regular meetings of the ---------------------------------- board of directors may be held without notice at such time, date, and place as may be fixed from time to time by resolution of the board of directors. At any regular meeting of the board of directors any business that comes before such meeting may be transacted except where special notice is required by these by-laws. Special meetings of the board of directors may be called by the chairman of the board or the president and shall be called by the secretary upon the written request of a majority of the directors, and shall be held at such time and place as shall be specified in the call of the meeting. Notice of each special meeting shall be given to each member of the board of directors, personally or by mail, e-mail, facsimile or telephone, at least three (3) days before the meeting. Section 2.5 Committees of the Board of Directors. ------------------------------------ (a) Appointment and Authority. The board of directors, by resolution ------------------------- adopted by a majority of the entire board ("entire board" means the total number of directors which the corporation would have if there were no vacancies), may appoint from among its members an executive committee and one or more other committees, each of which shall have one or more members. To the extent provided in such resolution (and unless otherwise provided in the resolution designating the members of the executive committee), each such committee shall have and may exercise all the authority of the board of directors, except that no such committee shall: (1) make, alter, or repeal any by-law of the corporation; (2) elect or appoint any director, or remove any officer or director; (3) submit to the shareholders any action that requires the shareholders' approval; or (4) amend or repeal any resolution theretofore adopted by the board of directors which by its terms is amendable or repealable only by the board of directors. (b) Control of Committee by Board of Directors. The board of directors, by ------------------------------------------ resolution adopted by a majority of the entire board of directors, may: (1) fill any vacancy in any such committee; (2) appoint one or more directors to serve as additional members of any such committee; (3) appoint one or more directors to serve as alternate members of any such committee, to act in the absence or disability of members of any such committee with all the powers of such absent or disabled members; (4) abolish any such committee at its pleasure; and (5) remove any director from membership on such committee at any time, with or without cause. (c) Report to Board of Directors. Action taken at a meeting of any ---------------------------- committee shall be reported to the board of directors at its next meeting following such committee meeting, except that, when the meeting of the board of directors is held within two (2) days after the -3- committee meeting, such report shall, if not made at its first meeting, be made to the board of directors at its second meeting following such committee meeting. Section 2.6 Quorum of Board of Directors and Committees. A majority of the ------------------------------------------- entire board of directors ("entire board" means the total number of directors which the corporation would have if there were no vacancies) or a majority of any committee of the board of directors, but in either case not less than two (2) persons, shall constitute a quorum for the transaction of business. Directors having a personal or conflicting interest in any matter to be acted upon may be counted in determining the presence of a quorum. The act of the majority present at a meeting at which a quorum is present shall be the act of the board of directors or of the committee unless a greater number is required by law, the Certificate of Incorporation, or these by-laws. Section 2.7 Vacancies in Board of Directors. Vacancies in the board of ------------------------------- directors shall be filled in accordance with the Certificate of Incorporation. Section 2.8 Participation in Meetings by Means of Conference Telephone or ------------------------------------------------------------- Similar Instrument. Members of the board of directors or any committee thereof - ------------------ may participate in and act at any meeting of such board of directors or committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear and speak with each other, and participation in the meeting pursuant to this section shall constitute presence in person at the meeting. Section 2.9 Action of Board of Directors and Committee Without A Meeting. ------------------------------------------------------------ Any action required or permitted to be taken pursuant to authorization voted at a meeting of the board of directors or any committee of the board of directors may be taken without a meeting if, prior or subsequent to such action, all members of the board of directors or of such committee, as the case may be, consent thereto in writing and such written consents are filed with the minutes of the proceedings of the board of directors or committee. Section 2.10 Resignation of Directors. Any director or directors may resign ------------------------ and the resulting vacancy shall be filled in accordance with the Certificate of Incorporation. Any such resignation shall take effect at the time specified therein or, if no such time is specified, upon receipt thereof. The acceptance of any such resignation shall not be necessary to make it effective. Section 2.11 Compensation. Directors and members of committees shall be ------------ reimbursed for their expenses incurred in attending meetings of the board of directors or such committees and may be paid a fixed sum for attendance at any meeting of the board of directors or a stated salary as a director, as the board of directors may from time to time determine. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. ARTICLE III Officers Section 3.1 Officers. The officers of the corporation shall be elected by -------- the board of directors and shall consist of a chief executive officer, a president , a secretary, a treasurer and -4- such other officers and assistant officers (which may include the chairman of the board) as may be deemed necessary or desirable by the Board of Directors. Any two or more offices of the corporation may be held by the same person, but no officer shall execute, acknowledge or verify any instrument in more than one capacity if such instrument is required by law or these by-laws to be executed, acknowledged or verified by two or more officers. Section 3.2 Term and Removal of Officers of the Corporation. Unless ----------------------------------------------- otherwise provided by resolution of the board of directors, at the time of his election or appointment, the term of all officers shall be until the first meeting of the board of directors following the next annual meeting of shareholders and until their respective successors are elected and qualify, but any officer may be removed from office, either with or without cause, at any time, by the affirmative vote of a majority of the members of the board of directors then in office; provided that such removal shall be without prejudice -------- ---- to the contract rights, if any, of the person so removed. Any vacancy occurring in the offices of the corporation may be filled by the board of directors. Section 3.3 Chief Executive Officer. The chief executive officer shall have ----------------------- the powers and perform the duties incident to that position. Subject to the powers of the board of directors, the chief executive officer shall be in the general and active charge of the entire business, affairs and property of the corporation. The chief executive officer shall have such other powers and perform such other duties as may be prescribed by the board of directors or provided in these by-laws. Section 3.4 President. The president shall have the powers and perform the --------- duties incident to that position and shall have such other powers and perform such other duties as may be prescribed by the board of directors or provided in these by-laws. Section 3.5 The Secretary. The secretary shall attend all meetings of the ------------- board of directors, all meetings of the committees thereof and all meetings of the shareholders and record all the proceedings of the meetings in a book or books to be kept for that purpose or shall ensure that his or her designee attends each such meeting to act in such capacity. Under the chief executive officer's supervision, the secretary shall give, or cause to be given, all notices required to be given by these by-laws or by law; and shall have such powers and perform such duties as the board of directors, the chief executive officer or these by-laws may, from time to time, prescribe. Section 3.6 Other Officers. The other officers of the corporation shall -------------- have such powers and duties as generally pertain to their respective offices as well as such powers and duties as may be prescribed from time to time by the board of directors or the chief executive officer. Section 3.7 Absence or Disability of Officers. In the case of the absence --------------------------------- or disability of any officer of the corporation and of any person hereby authorized to act in such officer's place during such officer's absence or disability, the board of directors may by resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person selected by it. -5- ARTICLE IV Shares of Stock of the Corporation Section 4.1 Certificates. The certificates representing shares of stock of ------------ the corporation shall be in such form as shall be approved from time to time by the board of directors. The certificates shall be signed by, or in the name of the corporation by, the chairman of the board of directors, or the president and chief executive officer, or a vice president, and by the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation and may be sealed with the seal of the corporation or a facsimile thereof. If the certificate is countersigned by a transfer agent or registrar, who is not an officer or employee of the corporation, any and all other signatures may be facsimiles. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of its issue. Without limiting the generality of the foregoing, the board of directors may provide that some or all of the shares of any class or series of stock of the corporation shall be represented by uncertificated shares. Section 4.2 Registered Shareholders. Prior to the surrender to the ----------------------- corporation of the certificate or certificates for a share or shares of stock with a request to record the transfer of such share or shares, or a request to transfer uncertificated shares, the corporation may treat the registered owner as the person entitled to receive dividends, to vote, to receive notifications and otherwise to exercise all the rights and powers of an owner. The corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof. Section 4.3 Lost, Stolen or Destroyed Certificates. The board of directors -------------------------------------- may authorize the issuance of a new certificate in place of any certificate theretofore issued by the corporation, alleged to have been lost, stolen or destroyed, upon the making of an affidavit of such loss, theft or destruction by the owner thereof or his legal representative, and the board of directors may, in its discretion, require such owner or legal representative to give the corporation a bond indemnifying the corporation and the transfer agents and registrars against all loss, cost and damage which may arise from the issuance of a new certificate in place of the original certificate. ARTICLE V Miscellaneous Section 5.1 Fiscal Year. The fiscal year of the corporation shall begin on ----------- the first day of January in each year. Section 5.2 Corporate Seal. The seal of the corporation shall bear the name -------------- of the corporation and such other legend as the board of directors may from time to time determine and may be an impression upon paper or wax or a printed or facsimile reproduction thereof. Section 5.3 Waiver of Notice. Whenever any notice is required by the New ---------------- Jersey Business Corporation Act, the Certificate of Incorporation or these by-laws to be given, a waiver -6- thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent thereto. The attendance of any director at a meeting of the board of directors or any committee thereof without protesting prior to the conclusion of the meeting the lack of notice of such meeting shall constitute a waiver of notice by him. Neither the business to be transacted at, or the purposes thereof of any meeting or committee thereof of the board of directors need be specified in the waiver of notice of such meeting. Section 5.4 Notices. In computing the period of time for the giving of any ------- notice required or permitted for any purpose, the day on which the notice is given shall be excluded and the day on which the matter noticed is to occur shall be included. If notice is given by mail or telegraph, the notice shall be deemed to be given when deposited in the mail or telegraph office, addressed to the person to whom it is directed at his last address as it appears on the records of the corporation, with postage or charges prepaid thereon, provided, however, that notice must be given by telephone, e-mail, facsimile transmission, personal service or by personally advising the person orally when, as authorized in these by-laws, less than three (3) days notice is given. Notice to a shareholder shall be addressed to the address of such shareholder as it appears on the stock transfer records of the corporation. Section 5.5 Amendments. The board of directors shall have power to make, ---------- alter and repeal by-laws, but by-laws made by the board of directors may be altered or repealed and new by-laws made by the shareholders, and the shareholders may prescribe in the by-laws that any by-law made by them shall not be altered or repealed by the board of directors. A copy of any proposed by-law to be submitted for adoption by shareholders must be included with the notice of the meeting so that all shareholders entitled to vote thereon will have received a copy thereof. Section 5.6 Loans. The corporation may lend money to, or guarantee any ----- obligation of, or otherwise assist any director, officer or other employee of the corporation or of its subsidiaries, whenever, in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the board of directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing in this section shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute. Section 5.7 Section Headings. Section headings in these by-laws are for ---------------- convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein. Section 5.8 Inconsistent Provisions. In the event that any provision of ----------------------- these by-laws is or becomes inconsistent with any provision of the Certificate of Incorporation, the New Jersey Business Corporation Act or any other applicable law, the provision of these by-laws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect. -7- EX-10.1 4 dex101.txt TERMINATION AND RELEASE AGREEMENT Exhibit 10.1 TERMINATION AND RELEASE AGREEMENT --------------------------------- AGREEMENT (this "Agreement"), dated as of March 25, 2002, by and between CHIQUITA BRANDS INTERNATIONAL, INC. (the "Company"), and STEVEN G. WARSHAW (the "Executive"). WHEREAS, the Executive has been employed as Chief Executive Officer and President of the Company; and WHEREAS, by mutual agreement between the parties hereto, the Executive has resigned, effective as of the Termination Date, his positions as Chief Executive Officer and President of the Company, as a member of the board of directors of the Company and as an officer and director of any subsidiary or affiliate of the Company for which he is serving in such positions. NOW, THEREFORE, BE IT RESOLVED, that the Company and the Executive, in consideration of the covenants herein set forth, hereby agree as follows: 1. Termination of Employment ------------------------- By mutual agreement with the Company, the Executive has resigned, effective as of March 20, 2002 (the "Termination Date"), from his positions as Chief Executive Officer and President of the Company and a member of the Board of Directors of the Company, and from all other positions the Executive may currently hold as an officer or member of the board of directors of any of the Company's subsidiaries or affiliates. The Executive shall sign and deliver to the Company such other documents as may be necessary to effect or reflect such resignations. 2. Severance Payments, Benefits and Obligations -------------------------------------------- (a) The Executive will not be entitled to any compensation or benefits from the Company, or its subsidiaries or affiliates, except as provided in this Agreement. (b) In consideration of the Executive's execution of the release set forth in Section 5 of this Agreement and the Executive's agreement to comply with Section 4 of this Agreement, and in lieu of and in satisfaction of any agreement or any severance or other payments due under any severance or other benefit plans maintained by the Company or any of its subsidiaries or affiliates (collectively, the "Company Entities"), or any individual agreement previously entered into with the Executive by any of the Company Entities, including the Severance Agreement, dated February 14, 2001, by and between the Company and the Executive (the "Severance Agreement"), the Company shall pay or provide to the Executive (i) the payments and benefits due under Section 5 of the Severance Agreement and (ii) no later than the first business day following the expiration of the Revocation Period (as defined in Section 5(a) of this Agreement), the (A) severance payments and benefits set forth in Section 6.1 of the Severance Agreement (which for purposes of Section 6.1(D) of the Severance Agreement shall 1 be a pro rata annual bonus payment of $175,000), (B) a lump sum cash payment of $175,000 in full satisfaction of the Executive's retention bonus and (C) a lump sum cash payment of Executive's unpaid base salary from the Termination Date through June 30, 2002, based upon an annual rate of $700,000 (provided, that, if payment of the amounts under clauses (B) and/or (C) would result in a breach of a covenant under any credit agreements of the Company Entities , such payments will be made no later than June 30, 2002). The Company has provided Executive with a certificate for 65,950 shares of common stock of the Company in full satisfaction of Executive's "Award Shares" under Executive's Award Share Agreement with the Company, dated as of February 21, 2002, which takes into account applicable tax withholding of 34,050 shares on the payment of the Award Shares. To the extent applicable, the Executive will remain eligible to receive the payments set forth in Section 6.2 of the Severance Agreement. Except as provided in this Agreement, the Executive hereby waives his rights to any additional compensation and benefits from the Company Entities. (c) The Company and its subsidiaries will continue to honor, pursuant to their terms, the director and officer indemnification provisions maintained by such entities with respect to the Executive, with respect to actions of the Executive as an officer or director of the Company (or any of its subsidiaries) prior to the Termination Date. (d) The Company will reimburse the Executive for any unreimbursed reasonable business expenses incurred by the Executive prior to the Termination Date, pursuant to the Company's reimbursement policies; provided, that, the Executive must present all expense reports to the Company within 90 days following the Termination Date. (e) The Company shall provide Executive with outplacement services pursuant to the Severance Agreement in a form and amount commensurate with Executive's title and position. (f) This Agreement shall supersede the Severance Agreement, and the Severance Agreement shall be deemed terminated from and after the date of this Agreement, without any remaining obligation of any party under such agreement, except to the extent otherwise specifically referred to in this Agreement. This Agreement shall also supersede the Severance Agreement by and between the Executive and the Company, dated January 16, 2001, as amended, which shall be deemed terminated from and after the date of this Agreement. 3. Confidentiality of this Agreement --------------------------------- Except as required by law or regulation (including all federal securities laws and regulations) as determined by the Company in its discretion, none of the parties hereto will disclose the terms of this Agreement, provided that the Executive may disclose such terms to his financial and legal advisors and his spouse and the Company may disclose such terms to selected employees, advisors and affiliates on a "need to know" basis, each of whom shall be instructed by the Executive and the Company, as the case may be, to maintain the terms of this Agreement in strict confidence in accordance with the terms hereof. 2 4. Restrictive Covenants --------------------- (a) The Executive has returned or will immediately return to the Company all Company Information (as defined below), including client lists, files, software, records, computer access codes and instruction manuals which he has in his possession, and agrees not to keep any copies of Company Information. The Executive affirms his obligation to keep all Company Information confidential and not to use or disclose it to any third party in the future. The term "Company Information" means: (i) confidential information relating to the Company Entities, including information received from third parties under confidential conditions, and (ii) other technical, marketing, business or financial information, or information relating to personnel or former personnel of the Company Entities, the use or disclosure of which might reasonably be construed to be contrary to the interest of the Company; provided, however, that the term "Company Information" shall not include any information that is or became generally known or available to the public other than as a direct result of a breach of this paragraph by the Executive or any action by the Executive prior to the Termination Date which would have been a breach of the Executive's obligations to the Company in effect at such time. (b) The Executive agrees to remain subject to the provisions of Section 4 of the Severance Agreement, and agrees to provide reasonable cooperation to the Company for transition services through June 30, 2002. (c) From and after the Termination Date, the Executive will refrain from taking actions or making statements, written or oral, which denigrate, disparage or defame the goodwill or reputation of the Company Entities and their trustees, officers, security holders, partners, agents and former and current employees and directors or which are intended to, or may be reasonably expected to, embarrass or adversely affect the morale of the employees of any of the Company Entities. The Executive further agrees not to make any negative statements to employees of the Company Entities or to third parties relating to his employment or any aspect of the business of the Company Entities and not to make any statements to employees of the Company Entities or to third parties about the circumstances of the Executive's resignation, or about the Company Entities and their former and current trustees, officers, security holders, partners, agents, employees and directors. From and after the Termination Date, the Company will advise its executive officers and directors to refrain, from taking actions or making statements, written or oral, which denigrate, disparage or defame the reputation of the Executive. The Company further agrees to advise its executive officers and directors not to make, any negative statements to employees of the Company Entities or to third parties relating to the Executive's employment or any statements to employees of the Company Entities or to third parties about the circumstances of the Executive's resignation. 5. Waiver and Release ------------------ (a) In exchange for the payments and benefits identified in this Agreement, certain of which the Executive acknowledges are in addition to anything of value to which he is already entitled, the Executive, on behalf of himself and his beneficiaries, heirs and assigns, hereby releases, settles and forever discharges the Company Entities and their subsidiaries, affiliates, successors and assigns, together with their past and present shareholders, directors, officers, employees, agents, insurers, attorneys, and any other party associated with the Company Entities, to the fullest extent permitted by applicable law, from any and all claims, causes of 3 action, rights, demands, debts, liens, liabilities or damages of whatever nature, whether known or unknown, suspected or unsuspected, which the Executive ever had or may now have against the Company or any of the foregoing. This includes, without limitation, any claims, liens, demands, or liabilities arising out of or in any way connected with the Executive's employment with the Company and the termination of that employment pursuant to any federal, state or local laws regulating employment such as the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans With Disabilities Act of 1990, the Family and Medical Leave Act of 1993, the Civil Rights Act known as 42 USC 1981, the Employee Retirement Income Security Act of 1974 ("ERISA"), the Worker Adjustment and Retraining Notification Act, the Fair Labor Standards Act of 1938, as well as other federal, state, and local laws, except that this release shall not affect any rights of the Executive for benefits payable under any Social Security, Worker's Compensation or unemployment laws or rights arising out of any breach of this Agreement by the Company. The Executive further expressly and specifically waives any and all rights or claims under the Age Discrimination In Employment Act of 1967 and the Older Workers Benefit Protection Act (collectively the "Act"). The Executive acknowledges and agrees that this waiver of any right or claim under the Act (the "Waiver") is knowing and voluntary, and specifically agrees as follows: (a) that this Agreement and the Waiver are written in a manner which he understands; (b) that the Waiver specifically relates to rights or claims under the Act; (c) that he does not waive any rights or claims under the Act that may arise after the date of execution of the Waiver; (d) that he waives rights or claims under the Act in exchange for consideration in addition to anything of value to which he is already entitled; and (e) that he is advised in writing to consult with an attorney prior to executing the Waiver. The Executive acknowledges that he was given up to 21 days to consider executing this Agreement, including the Waiver. The Executive has 15 days following his execution of this Agreement to revoke the Waiver (the "Revocation Period"). In the event the Executive revokes the Waiver, the Company shall not be required to make the payments under Section 2(b) of this Agreement. (b) In exchange for the Executive's agreements and covenants set forth in this Agreement, the Company and its subsidiaries, on behalf of such entities and their successors and assigns, hereby release, settle and forever discharge the Executive, and his heirs, successors and assigns, to the fullest extent permitted by applicable law, from any and all claims, causes of action, rights, demands, debts, liens, liabilities or damages of whatever nature, whether known or unknown, suspected or unsuspected, which the Company and its subsidiaries ever had or may now have against the Executive other than (i) any claims related to, arising under or in connection with the Executive's fraudulent or criminal activity and (ii) any claims arising out of the Executive's breach of this Agreement. (c) The Executive represents and acknowledges that, in executing this Agreement, he has not relied upon any representation or statement made by the Company not set forth herein. 6. Public Statement ---------------- The parties agree that no subsequent comments shall be made to the media or through other public statements by any party hereto regarding the Executive's termination of 4 employment that are inconsistent with the press release issued in connection with the Executive's resignation, except as may be required by applicable law or regulation. 7. Governing Law ------------- This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio, without regard to the principles of conflicts of law thereof. Except as provided in Section 10 of this Agreement, any dispute under this Agreement shall be resolved pursuant to the dispute provisions of Section 14 of the Severance Agreement 8. Taxes ----- All payments or other benefits made or provided to the Executive under this Agreement will be reduced by, or the Executive will otherwise pay, all income, employment and Medicare taxes required to be withheld on such payments and other benefits. 9. Savings and Severability ------------------------ The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. With respect to any provision of this Agreement finally determined by a court of competent jurisdiction to be unenforceable, the Executive and the Company Entities hereby agree that such court shall have jurisdiction to reform this Agreement or any provision hereof so that it is enforceable to the maximum extent permitted by law, and the parties agree to abide by such court's determination. If any of the provisions of this Agreement are determined to be wholly or partially unenforceable in any jurisdiction, such determination shall not be a bar to or in any way diminish the rights of the Company Entities to enforce any such covenant in any other jurisdiction. 10. Remedies -------- The Executive acknowledges and agrees that because of the nature of the business in which the Company Entities are engaged and because of the nature of the Company Information to which the Executive has had access during his employment, it would be impractical and excessively difficult to determine the actual damages of the Company Entities in the event the Executive breached any of the restrictive covenants contained herein, and remedies at law (such as monetary damages) for any breach of the Executive's covenants would be inadequate. The Executive therefore agrees and consents that if the Executive commits any such breach or threatens to commit any such breach, the Company shall have the right (in addition to, and not in lieu of, any other right or remedy that may be available to it) to temporary and permanent injunctive relief from a court of competent jurisdiction, without posting any bond or other security and without the necessity of proof of actual damage. 11. Notices ------- All notices, requests, demands and other communication which are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given when received if personally delivered; when transmitted by telecopy, electronic or digital transmission method upon receipt of telephonic or electronic confirmation; that day after it is 5 sent, if sent for next day delivery to a domestic address by recognized overnight delivery service (e.g., Federal Express) and upon receipt, if sent by ---- certified or registered mail, return receipt requested. In each case notice shall be sent to: If to the Executive, addressed to: Steven G. Warshaw c/o Robert E. Coletti Keating, Muething & Klekamp PLL 1400 Provident Tower One East Fourth Street Cincinnati, Ohio 45202 If to the Company, addressed to: Chiquita Brands International, Inc. 250 East Fifth Street Cincinnati, Ohio 45202 Attention: General Counsel or to such other place and with such other copies as any party may designate as to itself or himself by written notice to the others. 12. Amendments; Waivers ------------------- This Agreement may not be amended, modified or terminated, except by a written instrument signed by the parties hereto. Any provision of this Agreement may be waived by a written instrument signed by the party to be charged with such waiver. 13. Successors ---------- This Agreement shall be binding on and inure to the benefit of the Executive, the Company, and their respective heirs, successors and assigns, including without limitation any corporation or other entity into which the Company may be merged, reorganized or liquidated, or by which may be acquired. The obligations of the Company may be assigned without limitation; but, as the obligations to be performed by the Executive hereunder are unique based upon his skills and qualifications, the Executive's obligations under this Agreement may not be assigned. 14. Entire Agreement ---------------- Except as specified herein, this Agreement contains the entire agreement between the parties concerning the subject matter hereof and supersedes all prior agreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto. 15. Counterparts ------------ This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement. 6 IN WITNESS WHEREOF, the parties have executed this Agreement, as of the date and year first written above. CHIQUITA BRANDS INTERNATIONAL, INC. By: /s/ Cyrus F. Freidheim Jr. -------------------------- Name: Cyrus F. Freidheim, Jr. Title: Chairman of the Board and Chief Executive Officer /s/ Steven G. Warshaw --------------------- STEVEN G. WARSHAW 7 -----END PRIVACY-ENHANCED MESSAGE-----