10-Q

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 June 30, 2005

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 is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    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 July 31, 2005, there were 41,856,959 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 and six months ended June 30, 2005 and 2004	3
		Consolidated Balance Sheet as of June 30, 2005, December 31, 2004 and June 30, 2004	4
		Consolidated Statement of Cash Flow for the six months ended June 30, 2005 and 2004	5
		Notes to Consolidated Financial Statements	6
	Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
	Item 3 - Quantitative and Qualitative Disclosures About Market Risk		23
	Item 4 - Controls and Procedures		24
PART II - Other Information
	Item 1 - Legal Proceedings		25
	Item 4 - Submission of Matters to a Vote of Security Holders		27
	Item 6 - Exhibits		27
Signature			28

2

Part I - Financial Information

Item 1 - Financial Statements

CHIQUITA BRANDS INTERNATIONAL, INC.

CONSOLIDATED STATEMENT OF INCOME (Unaudited)

(In thousands, except per share amounts)

	Quarter Ended June 30,						Six Months Ended June 30,
	2005			2004			2005			2004
Net sales	$	1,019,444		$	848,386		$	1,951,273		$	1,641,554
Operating expenses
Cost of sales		854,259			719,387			1,605,645			1,399,525
Selling, general and administrative		82,154			78,184			159,757			151,003
Depreciation		11,363			10,672			22,312			21,507
Loss on sale of Colombian division		—			9,289			—			9,289
Equity in earnings of investees		(2,956	)		(5,665	)		(4,763	)		(8,084	)
		944,820			811,867			1,782,951			1,573,240
Operating income		74,624			36,519			168,322			68,314
Interest income		3,364			577			5,259			1,363
Interest expense		(7,882	)		(9,858	)		(15,434	)		(20,027	)
Other income (expense), net		(1,993	)		—			(1,993	)		—
Income before income taxes		68,113			27,238			156,154			49,650
Income taxes		(4,500	)		3,000			(6,000	)		500
Net income	$	63,613		$	30,238		$	150,154		$	50,150
Earnings per common share:
Basic	$	1.52		$	0.74		$	3.64		$	1.23
Diluted		1.36			0.73			3.29			1.18
Dividends per common share	$	0.10		$	—		$	0.20		$	—

See Notes to Consolidated Financial Statements.

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CHIQUITA BRANDS INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEET (Unaudited)

(In thousands, except share amounts)

	June 30, 2005		December 31, 2004		June 30, 2004
ASSETS
Current assets
Cash and equivalents	$	164,680	$	142,791	$	198,066
Trade receivables (less allowances of $11,492, $12,241, and $8,520)		496,596		340,552		353,593
Other receivables, net		85,005		89,312		85,746
Inventories		209,468		187,073		164,220
Prepaid expenses		25,040		19,164		18,243
Other current assets		36,325		14,859		30,319
Total current assets		1,017,114		793,751		850,187
Property, plant and equipment, net		615,863		419,601		403,147
Investments and other assets, net		160,265		131,715		129,202
Trademarks		449,085		387,585		387,585
Goodwill		578,905		46,109		42,199
Other intangible assets, net		170,777		1,277		1,651
Total assets	$	2,992,009	$	1,780,038	$	1,813,971
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Notes and loans payable	$	10,115	$	11,220	$	8,658
Long-term debt of subsidiaries due within one year		22,439		22,981		26,659
Accounts payable		430,950		321,296		329,308
Accrued liabilities		165,554		107,037		112,291
Total current liabilities		629,058		462,534		476,916
Long-term debt of parent company		475,000		250,000		250,000
Long-term debt of subsidiaries		599,605		65,266		86,754
Accrued pension and other employee benefits		74,393		78,190		73,440
Other liabilities		191,579		85,224		84,784
Total liabilities		1,969,635		941,214		971,894
Shareholders’ equity
Common stock, $.01 par value (41,789,413, 40,476,381 and 40,828,654 shares outstanding, respectively)		418		405		408
Capital surplus		669,721		645,365		648,797
Retained earnings		304,193		162,375		162,551
Accumulated other comprehensive income		48,042		30,679		30,321
Total shareholders’ equity		1,022,374		838,824		842,077
Total liabilities and shareholders’ equity	$	2,992,009	$	1,780,038	$	1,813,971

See Notes to Consolidated Financial Statements.

4

CHIQUITA BRANDS INTERNATIONAL, INC.

CONSOLIDATED STATEMENT OF CASH FLOW (Unaudited)

(In thousands)

	Six Months Ended June 30,
	2005			2004
Cash provided (used) by:
Operations
Net income	$	150,154		$	50,150
Depreciation		22,312			21,507
Loss on sale of Colombian division		—			3,589
Equity in earnings of investees		(4,763	)		(8,084	)
Changes in current assets and liabilities and other		(18,437	)		(5,085	)
Cash flow from operations		149,266			62,077
Investing
Capital expenditures		(9,764	)		(17,364	)
Proceeds from sale of:
Colombian division		—			28,500
Seneca preferred stock		14,467			—
Other property, plant and equipment		1,952			4,551
Acquisition of businesses		(883,480	)		(2,255	)
Other		744			1,803
Cash flow from investing		(876,081	)		15,235
Financing
Issuances of long-term debt		781,606			13,688
Repayments of long-term debt		(41,710	)		(36,924	)
Costs for CBL revolving credit facility and other fees		(3,984	)		(537	)
Increase (decrease) in notes and loans payable		214			(537	)
Proceeds from exercise of stock options/warrants		20,783			10,768
Dividends on common stock		(8,205	)		—
Cash flow from financing		748,704			(13,542	)
Increase in cash and equivalents		21,889			63,770
Balance at beginning of period		142,791			134,296
Balance at end of period	$	164,680		$	198,066

See Notes to Consolidated Financial Statements.

5

CHIQUITA BRANDS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Interim results for Chiquita Brands International, Inc. (“CBII”) and subsidiaries (collectively, with CBII, the “Company”) are subject to significant seasonal variations and are not necessarily indicative of the results of operations for a full fiscal year. The Company’s results during the third and fourth quarters are generally weaker than in the first half of the year due to increased availability of competing fruits and resulting lower banana prices.

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 2004 Annual Report on Form 10-K for additional information relating to the Company’s financial statements.

Note 1 - Earnings Per Share

Basic and diluted earnings per common share (“EPS”) are calculated as follows (in thousands, except per share amounts):

	Quarter Ended June 30,				Six Months Ended June 30,
	2005		2004		2005		2004
Net income	$	63,613	$	30,238	$	150,154	$	50,150
Weighted average common shares outstanding (used to calculate basic EPS)		41,722		40,771		41,307		40,634
Warrants, stock options and other stock awards		5,146		509		4,395		1,780
Shares used to calculate diluted EPS		46,868		41,280		45,702		42,414
Basic earnings per common share	$	1.52	$	0.74	$	3.64	$	1.23
Diluted earnings per common share		1.36		0.73		3.29		1.18

The assumed conversions to common stock of the Company’s outstanding warrants, 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.

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Note 2 - Acquisitions and Divestitures

Acquisition of Fresh Express

On June 28, 2005, the Company completed its previously announced acquisition of the Fresh Express packaged salad and fresh-cut fruit division of Performance Food Group (“PFG”). Fresh Express is the retail market leader of value-added packaged salads in the United States. The acquisition will increase Chiquita’s consolidated annual revenues by about $1 billion. The Company believes that this acquisition will permit it to diversify its business, accelerate revenue growth in higher margin value-added products, and lead to a more balanced mix of sales between Europe and North America, which will make the Company less susceptible to risks unique to Europe, such as pending changes to the European Union banana import regime and foreign exchange risk.

The Company paid $855 million in consideration and incurred transaction expenses of $8 million, $2 million of which was paid by June 30, 2005. In addition, at closing, the Company transferred $26 million to PFG corresponding to the estimated amount of cash at Fresh Express and outstanding checks (issued by PFG in payment of Fresh Express obligations) in excess of deposits. There will also be a post-closing working capital adjustment, as well as an adjustment for differences in actual and estimated closing cash and checks in excess of deposits. Additionally, the Company incurred approximately $24 million of fees related to the financing of the acquisition, which are not included in the purchase price allocation below and will be amortized over the life of the respective loans.

The purchase price allocation for this transaction is still preliminary. As of June 30, 2005, the Company recorded the following values for the identifiable tangible and intangible assets and liabilities of Fresh Express (in millions):

Fair value of fixed assets acquired	$	220
Intangible assets subject to amortization		170
Intangible assets not subject to amortization		62
Other assets		122
Deferred tax effect of acquisition		(112	)
Fair value of liabilities acquired		(97	)
Goodwill		534
	$	899

The fair value of fixed assets and intangible assets acquired is based on preliminary work of independent appraisers. The other assets and liabilities, which primarily represent trade receivables, trade payables and accrued liabilities, are based on historical values and are assumed to be stated at fair market values.

The following table presents detail of Fresh Express’s intangible assets as of the date of acquisition:

	Fair value		Amortization period	Valuation method
Intangible assets subject to amortization:
Customer relationships	$	110 million	16 to 20 years	Excess earnings
Patented technology	$	60 million	5 to 17 years	Relief-from-royalty
Intangible assets not subject to amortization:
Trademarks	$	62 million	—	Relief-from-royalty

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The excess earnings method estimates the present value of future cash flows attributable to the company’s customer base and requires estimates of the expected future revenues and remaining useful lives of the customer relationships.

The relief-from-royalty valuation method estimates the royalty expense that could be avoided in the operating business as a result of owning the respective asset or technology. The royalty savings are measured, tax-affected and, thereafter, converted to present value with a discount rate that considers the risk associated with owning the intangible assets.

Significant assumptions inherent in the excess earnings and relief-from-royalty methodologies include estimates of cash flows, discount rates, royalty rates and income tax rates. Actual results may differ from the assumptions used. The assumptions about future cash flows were based on certain projections and long-term plans. Discount rate assumptions represent the inherent risk in intangible assets compared with the Company’s weighted average cost of capital using guideline companies in similar lines of business. Royalty rate assumptions are based on the rates at which similar intangibles are being licensed in the marketplace. Income tax rate assumptions are based on the effective tax rates of guideline companies in similar lines of business.

The Company has recorded approximately $112 million of deferred tax liabilities, with a corresponding increase in goodwill, related to the consolidated temporary taxable differences existing immediately after the transaction.

Contemporaneous with the completion of the acquisition, the Company started preparing a formal integration plan. Management’s plans are preliminary but may include exiting or consolidating certain activities of Fresh Express and may include costs such as lease and contract termination, severance and certain other exit costs. Upon completion of a formal plan of exit authorized by appropriate executives, the Company anticipates that expenses to fully execute the plan will total $25 to $35 million and will be recorded as additional purchase price of the acquisition in accordance with Emerging Issues Task Force Bulletin 95-3, “Recognition of Liabilities in Connection with a Purchase Business Combination.”

Fresh Express is party to a tax incentive program with Clayton County, Georgia (“Clayton County”) in exchange for the title to all of the real and personal property at one of its Fresh-cut facilities . At the Company’s election it may re-obtain title to the real and personal property by paying Clayton County a nominal fee ($10 dollars).

The Company’s Consolidated Statement of Income for the quarter and six months ended June 30, 2005 includes the operations of Fresh Express, and interest expense on the acquisition financing, from the June 28 acquisition date to the end of the second quarter.

Set forth below is summary consolidated pro forma information for the Company, giving effect to the acquisition of Fresh Express as though it had been completed on the first day of each period presented. The summary consolidated pro forma information below is based on the preliminary purchase price allocation, and does not reflect any adjustments related to integration synergies or certain expenses previously allocated to Fresh Express by PFG.

	Quarter Ended June 30,				Six Months Ended June 30,
(in millions, except per share amounts)	2005		2004		2005		2004
Net sales	$	1,289.1	$	1,114.9	$	2,468.3	$	2,152.8
Net income		62.0		32.3		146.5		49.7
Earnings per share - basic	$	1.49	$	0.79	$	3.55	$	1.22
Earnings per share - diluted		1.32		0.78		3.21		1.17

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Other acquisitions and divestitures

In April 2005, the Company sold approximately 968,000 shares of Seneca Foods Corporation preferred stock, which had been received as part of the May 2003 sale of the Company’s Chiquita Processed Foods division to Seneca. The Company received proceeds of more than $14 million from the sale of the preferred stock and recorded a $1 million gain on the transaction in the 2005 second quarter in “Other income (expense), net.”

In January 2005, the Company acquired Darex S.A., a leading distributor of bananas in Poland, for approximately $5 million in cash, assumption of approximately $5 million of debt and forgiveness of certain receivables. Darex has approximately $30 million in annual revenues.

In June 2004, the Company sold its banana-producing and port operations in Colombia to Invesmar Ltd. (“Invesmar”), the holding company of C.I. Banacol S.A., a Colombian-based producer and exporter of bananas and other fresh products.

In exchange for the Colombian operations, the Company received, subject to certain post-closing adjustments, $28.5 million in cash; $15 million face amount of notes and deferred payments; and the assumption by the buyer of approximately $7 million of pension liabilities.

In connection with the Colombian sale, Chiquita entered into eight-year agreements to purchase bananas and pineapples from affiliates of the buyer. Under the banana purchase agreement, Chiquita will purchase approximately 11 million boxes of Colombian bananas per year at above-market prices. This resulted in a liability of $33 million at the sale date, which represented the estimated net present value of the above-market premium to be paid for the purchase of bananas over the term of the contract. Substantially all of this liability is included in “Other liabilities” in the Consolidated Balance Sheet. Under the pineapple purchase agreement, Chiquita will purchase approximately 2.5 million boxes of Costa Rican golden pineapples per year at below-market prices. This resulted in a receivable of $25 million at the sale date, which represented the estimated net present value of the discount to be received for the purchase of pineapples over the term of the contract. Substantially all of this receivable is included in “Investments and other assets, net” in the Consolidated Balance Sheet.

Also in connection with the Colombian sale, Chiquita agreed that, in the event that it becomes unable to perform its obligations under the banana purchase agreement due to a conflict with U.S. law, Chiquita will indemnify Invesmar primarily for the lost premium on the banana purchases.

The net book value of the assets and liabilities transferred in the Colombian transaction was $36 million, primarily comprised of $25 million of property, plant and equipment; $19 million of growing crop inventory; $5 million of materials and supplies inventory; $6 million of deferred tax liabilities; and $7 million of pension liabilities. The Company recognized a before-tax loss of $9 million and an after-tax loss of $4 million on the transaction, which takes into account the net $8 million loss from the two long-term fruit purchase agreements.

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Note 3 - Contingencies

In April 2003, the Company’s management and audit committee, in consultation with the board of directors, voluntarily disclosed to the U.S. Department of Justice (“Justice Department”) that the Company’s banana-producing subsidiary in Colombia, which was sold in June 2004, had been forced to make “protection” payments to certain groups in that country which had been designated under United States law as foreign terrorist organizations. The Company’s sole reason for submitting to these payment demands had been to protect its employees from the risks to their safety if the payments had not been made. The voluntary disclosure to the Justice Department was made because the Company’s management became aware that these groups had been designated as foreign terrorist organizations under a U.S. statute that makes it a crime to support such an organization. The Company requested the Justice Department’s guidance. Following the voluntary disclosure, the Justice Department undertook an investigation. The Company has cooperated with that investigation. In March 2004, the Justice Department advised that, as part of the investigation, it will be evaluating the role and conduct of the Company and some of its officers in the matter. The Company intends to continue its cooperation with the investigation, but it cannot predict the outcome of the investigation or its possible adverse effect on the Company, which could include the imposition of fines.

In October 2004 and May 2005, the Company’s Italian subsidiary received notices from Customs authorities in Italy stating that this subsidiary is potentially liable for an aggregate of approximately €26.9 million (approximately $32 million) of additional duties and taxes on the import of certain bananas into the European Union from 1998 to 2000, plus interest currently estimated at approximately €12.7 million (approximately $15 million). The Customs authorities claim that these amounts are due because the bananas were imported with licenses that were subsequently determined to have been forged. The Company is contesting these claims through appropriate proceedings, principally on the basis of its good faith belief at the time the import licenses were obtained and used that they were valid. See Part II - Item 1 - “Legal Proceedings” for further description.

As the Company announced in June 2005, Chiquita’s management became aware that certain of its employees had shared pricing and volume information with competitors in Europe over many years in violation of European competition laws and Company policies, and may have engaged in several instances of other conduct which did not comply with European competition laws or applicable Company policies. The Company promptly stopped the conduct and notified the European Commission (“EC”) and other regulatory authorities of these matters; the Company is cooperating with the related investigation subsequently commenced by the EC. Based on the Company’s voluntary notification and cooperation with the investigation, the EC has notified Chiquita that it will be granted immunity from any fines related to the conduct, subject to customary conditions, including the Company’s continuing cooperation with the investigation. Accordingly, Chiquita does not expect to be subject to any fines by the EC. However, if at the conclusion of its investigation, which could take one or more years, the EC were to determine, among other things, that Chiquita did not continue to cooperate, then the Company could be subject to fines, which, if imposed, could be substantial. The Company does not believe that the reporting of these matters or the cessation of the conduct should have any material adverse effect on the regulatory or competitive environment in which it operates, although there can be no assurance in this regard.

The Consolidated Balance Sheet does not reflect a liability for these contingencies for any of the periods presented.

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Note 4 - Inventories (in thousands)

	June 30, 2005		December 31, 2004		June 30, 2004
Bananas	$	35,482	$	35,757	$	34,448
Fresh Select (see Note 6)		13,112		14,226		16,415
Fresh Cut (see Note 6)		10,327		—		—
Processed food products		6,486		8,870		5,921
Growing crops		86,156		80,882		70,766
Materials, supplies and other		57,905		47,338		36,670
	$	209,468	$	187,073	$	164,220

Note 5 - Debt

On June 28, 2005, the Company and Chiquita Brands L.L.C. (“CBL”), the main operating subsidiary of the Company, entered into an amended and restated credit agreement (the “Credit Agreement”) with a syndicate of bank lenders for a $650 million senior secured credit facility (the “CBL Facility”) that replaces the credit agreement entered into by CBL in January 2005. Total fees of approximately $18 million were paid to obtain the CBL Facility. The CBL Facility consists of:

• A five-year $150 million revolving credit facility (the “Revolving Credit Facility”) which may be increased to $200 million under certain conditions. At June 30, 2005 no borrowings were outstanding; however, $21 million of credit availability was used to issue letters of credit. The Revolving Credit Facility bears interest at LIBOR plus a margin of 1.25% to 2.75% and CBL is required to pay a fee on the daily unused portion of the Revolving Credit Facility of 0.25% to 0.50% per annum, depending in each case on the Company’s consolidated leverage ratio; and

• Two seven-year term loans, one for $125 million (the “Term Loan B”) and one for $375 million (the “Term Loan C”) (collectively, the “Term Loans”), the proceeds of which were used to finance a portion of the acquisition of Fresh Express. At June 30, 2005 the full amounts of the Term Loans were outstanding. The Term Loans cannot be re-borrowed and each requires quarterly payments beginning in September 2005 amounting to 1% per year of the initial principal amount for the first six years with the remaining balance to be paid quarterly in the seventh year. The Term Loans bear interest at LIBOR plus a margin of 2.00% to 2.50%, depending on the Company’s consolidated leverage ratio. Initially, the interest rate on the Term Loans is LIBOR plus 2.50%.

Substantially all U.S. assets of CBL and its subsidiaries are pledged to secure the CBL Facility. The Revolving Credit Facility and Term Loan B are principally secured by the U.S. assets of CBL and its subsidiaries other than Fresh Express and its subsidiaries. The Term Loan C is principally secured by the assets of Fresh Express and its subsidiaries. The CBL Facility is also secured by liens on CBL’s trademarks as well as pledges of equity and guarantees by various subsidiaries worldwide. The CBL Facility is guaranteed by CBII and secured by a pledge of CBL’s equity.

CBL may distribute cash to CBII for routine CBII operating expenses, interest payments on CBII’s 7 ¹/2% and 8 ⁷/8% Senior Notes, and payment of other limited CBII liabilities. Certain liquidity tests must be met prior to distributions to CBII for other purposes, such as dividend payments to Chiquita shareholders and repurchases of CBII’s common stock or warrants. At June 30, 2005, distributions to CBII for these other purposes were limited to $85 million. The Credit Facility includes covenants that require the Company and CBL to maintain certain financial ratios related to leverage and fixed charge coverage and that place limitations on the ability of CBL and its subsidiaries to incur debt, create liens, dispose of assets, carry out mergers and acquisitions, and make investments and capital expenditures.

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On June 28, 2005, the Company completed the offering of $225 million of 8 ⁷/8% Senior Notes due 2015 (the “Notes”) for net proceeds of $219 million. The proceeds were used to finance a portion of the acquisition of Fresh Express. The Company may redeem the Notes at its option at any time on or after June 1, 2010, in whole or from time to time in part, at 104.438% of face value declining to face value in 2013. Before June 1, 2010, the Company may redeem some or all of the Notes at a specified treasury make-whole rate. Upon a change of control of the Company followed by a downgrade in the rating of the Notes, the Company will be required to make an offer to purchase the Notes at 101% of their principal amount, plus accrued interest. The indenture contains covenants that will, among other things and subject to a number of qualifications and exceptions, limit the ability of the Company and its subsidiaries to incur additional indebtedness and issue preferred stock, sell assets, make investments or other restricted payments, pay dividends or make distributions in respect of the Company’s capital stock, create certain liens, merge or consolidate, issue or sell stock of subsidiaries, pay dividends and make other payments affecting certain subsidiaries, engage in sale-leaseback transactions, enter into transactions with certain stockholders or affiliates, and guarantee Company debt.

In April 2005, Great White Fleet Ltd. (“GWF”), the Company’s shipping subsidiary, entered into a seven-year secured revolving credit facility for $80 million (the “GWF Facility”). The full proceeds from this facility were drawn, of which approximately $30 million was used to exercise buyout options under then-existing capital leases for four vessels, and approximately $50 million was used to finance a portion of the acquisition of Fresh Express. The loan requires GWF to maintain certain financial covenants related to tangible net worth and total debt ratios.

The GWF Facility requires 13 consecutive semi-annual principal payments in the amount of $4.4 million each, beginning in October 2005, plus a $22.8 million balloon payment at the end of the seven-year term. These semi-annual principal payments represent a corresponding reduction in the availability of funds under the GWF Facility. Amounts available under the GWF Facility may be borrowed, repaid and re-borrowed prior to the final maturity date, subject to the semi-annual payments and corresponding reductions in availability. GWF may elect to draw parts of or the entire amount of credit available in either U.S. dollars or euro, at interest rates of LIBOR plus 1.25% for dollar loans and EURIBOR plus 1.25% for euro loans. In June 2005, GWF elected to draw the entire facility in euro to hedge against the potential balance sheet translation impact of the Company’s euro net asset exposure. The total amount drawn was approximately €66 million.

Note 6 - Segment Information

Prior to the acquisition of Fresh Express, the Company reported two business segments, Bananas and Other Fresh Produce. The Banana segment included the sourcing (production and purchase), transportation, marketing and distribution of bananas. The Other Fresh Produce segment included the sourcing, marketing and distribution of fresh fruits and vegetables other than bananas. The Other Fresh Produce segment also included Chiquita’s fresh-cut fruit business. Remaining operations, which were reported in “Other,” primarily consisted of processed fruit ingredient products, which are produced in Latin America and sold in other parts of the world, and other consumer packaged goods.

As a result of the Fresh Express acquisition, the Company determined that it now has the following three reportable segments: Bananas, Fresh Select and Fresh Cut. The Company’s Banana segment remains unchanged. The Fresh Select segment includes the sourcing, marketing and distribution of whole fresh fruits and vegetables other than bananas. The Company’s Fresh Cut segment includes all of the operations of Fresh Express (packaged salads and fresh-cut fruit) and the fresh-cut fruit business of

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Chiquita. Remaining operations, reported in “Other,” continue to substantially consist of processed fruit ingredient products. The Company evaluates the performance of its business segments based on operating income. Intercompany transactions between segments are eliminated.

Financial information for each segment follows (in thousands):

	Quarter Ended June 30,						Six Months Ended June 30,
	2005			2004			2005			2004
Net sales
Bananas	$	571,287		$	458,660		$	1,091,622		$	876,544
Fresh Select		408,454			368,825			805,074			729,200
Fresh Cut		20,995			3,378			23,324			4,756
Other		18,708			17,523			31,253			31,054
	$	1,019,444		$	848,386		$	1,951,273		$	1,641,554
Operating income (loss)
Bananas	$	72,875		$	37,222		$	159,799		$	64,926
Fresh Select		4,364			2,424			14,280			9,401
Fresh Cut		(2,908	)		(4,014	)		(5,561	)		(7,595	)
Other		293			887			(196	)		1,582
	$	74,624		$	36,519		$	168,322		$	68,314

	June 30, 2005		December 31, 2004		June 30, 2004
Total assets
Bananas	$	1,385,524	$	1,324,579	$	1,349,768
Fresh Select		431,939		419,790		426,230
Fresh Cut		1,145,336		9,501		9,087
Other		29,210		26,168		28,886
	$	2,992,009	$	1,780,038	$	1,813,971

Note 7 - Comprehensive Income (in thousands)

	Quarter Ended June 30,						Six Months Ended June 30,
	2005			2004			2005			2004
Net income	$	63,613		$	30,238		$	150,154		$	50,150
Other comprehensive income
Unrealized foreign currency translation gains (losses)		(14,056	)		1,203			(21,716	)		(4,036	)
Change in minimum pension liability		—			1,077			—			1,077
Change in fair value of cost investments		(1,756	)		(1,453	)		(972	)		(3,180	)
Changes in fair value of derivatives		20,369			(1,995	)		34,406			3,755
Losses reclassified from OCI into net income		1,248			7,358			5,645			19,028
Comprehensive income	$	69,418		$	36,428		$	167,517		$	66,794

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Note 8 - Hedging

The Company purchases euro put option contracts to reduce the negative earnings impact that any significant decline in the value of the euro would have on the conversion of euro-based net cash flow into U.S. dollars, without limiting the benefit it would receive from a stronger euro. The Company also enters into hedge contracts for fuel oil for its shipping operations, which permit it to lock in fuel purchase prices for up to two years and thereby minimize the volatility that changes in fuel prices could have on its operating results.

Currency hedging costs charged to the Consolidated Statement of Income were $4 million and $8 million for the quarter and six months ended June 30, 2005, compared to $7 million and $18 million for the quarter and six months ended June 30, 2004. These costs reduced the favorable impact of the exchange rate on U.S. dollar realizations of euro-denominated sales. At June 30, 2005, unrealized losses of $2 million on the Company’s currency option contracts were included in “Accumulated other comprehensive income,” of which $1 million is expected to be reclassified to net income during the next 12 months. Unrealized gains of $19 million on the fuel oil forward contracts were also included in “Accumulated other comprehensive income,” of which $13 million is expected to be reclassified to net income during the next 12 months.

At June 30, 2005, the Company had euro-denominated put options which allow for conversion of approximately €175 million of sales in 2005 at an average rate of $1.22 per euro, and approximately €330 million of sales in 2006 at an average rate of $1.19 per euro. The Company also had 3.5% Rotterdam barge fuel oil forward contracts at June 30, 2005 that require conversion of approximately 95,000 metric tons in 2005 and 115,000 metric tons in 2006 at prices ranging from $150 to $175 per metric ton, and 35,000 metric tons in 2007 at prices ranging from $175 to $225 per metric ton. The Company also had a combination of Singapore and New York Harbor fuel oil forward contracts that require conversion of approximately 20,000 metric tons in 2005 and 25,000 metric tons in 2006 at prices ranging from $180 to $215 per metric ton. At June 30, 2005, the fair value of the foreign currency option and fuel oil forward contracts was $43 million, $29 million of which was included in “Other current assets” and $14 million in “Investments and other assets, net.” For the quarter and six months ended June 30, 2005, the increase in the fair value of the fuel oil forward contracts relating to hedge ineffectiveness, and included in net income, was $1 million and $4 million, respectively.

Note 9 - Stock-Based Compensation

Effective January 1, 2003, on a prospective basis, the Company began using the fair value method under Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation,” to recognize stock option expense in its results of operations for stock options granted after December 31, 2002. Prior to January 1, 2003, the Company accounted for stock options using the intrinsic value method prescribed by Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees.”

In December 2004, the FASB issued SFAS No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123R”), which is a revision of SFAS No. 123, “Accounting for Stock-Based Compensation.” The approach to accounting for share-based payments in SFAS 123R is similar to the approach described in the original statement; however, SFAS 123R requires all share-based payments to be recognized in the financial statements based on their fair values.

In April 2005, the Securities and Exchange Commission announced that registrants with a fiscal year ending December 31, such as the Company, will not be required to adopt SFAS 123R until January 1, 2006. The Company has been recognizing expense in its results of operations for stock options granted

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after December 31, 2002. For grants prior to that date (the “2002 Grants”), the expense has been included in pro forma disclosures rather than the Consolidated Statement of Income. The 2002 Grants will be fully vested as of January 1, 2006 and, as a result, SFAS 123R will not have an impact on pre-tax income as it relates to the 2002 Grants. The Company is still assessing the remaining impact of this standard on its financial statements.

The table below illustrates the effect of stock compensation expense on the periods presented as if the Company had always applied the fair value method:

	Quarter Ended June 30,						Six Months Ended June 30,
(in thousands, except per share amounts)	2005			2004			2005			2004
Income before stock compensation expense	$	65,847		$	32,367		$	154,597		$	57,732
Stock compensation expense included in net income1		(2,234	)		(2,129	)		(4,443	)		(7,582	)
Net income		63,613			30,238			150,154			50,150
Pro forma stock compensation expense2		(1,513	)		(1,725	)		(3,026	)		(3,450	)
Pro forma net income	$	62,100		$	28,513		$	147,128		$	46,700
Basic earnings per common share:
Income before stock compensation expense	$	1.57		$	0.79		$	3.75		$	1.42
Stock compensation expense included in net income		(0.05	)		(0.05	)		(0.11	)		(0.19	)
Net income		1.52			0.74			3.64			1.23
Pro forma stock compensation expense2		(0.04	)		(0.04	)		(0.07	)		(0.08	)
Pro forma net income	$	1.48		$	0.70		$	3.57		$	1.15
Diluted earnings per common share:
Income before stock compensation expense	$	1.41		$	0.78		$	3.39		$	1.36
Stock compensation expense included in net income		(0.05	)		(0.05	)		(0.10	)		(0.18	)
Net income		1.36			0.73			3.29			1.18
Pro forma stock compensation expense2		(0.03	)		(0.04	)		(0.07	)		(0.08	)
Pro forma net income	$	1.33		$	0.69		$	3.22		$	1.10

¹ Represents expense from stock options of $0.4 million and $0.7 million for the quarter and six months ended June 30, 2005 and $0.9 million and $3.9 million for the quarter and six months ended June 30, 2004. Also represents expense from restricted stock awards of $1.8 million and $3.7 million for the quarter and six months ended June 30, 2005 and $1.2 million and $3.7 million for the quarter and six months ended June 30, 2004. Expense for the six months ended June 30, 2004 includes a charge of $3.6 million for awards granted to the Company’s former chairman and chief executive officer that vested upon his retirement as chairman on May 25, 2004.

² Represents the additional amount of stock compensation expense that would have been included in net income had the Company applied the fair value method under SFAS No. 123 for awards issued prior to 2003, when the Company first began expensing options.

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No options were granted during the first and second quarters of 2005 and the second quarter of 2004. Options for 335,000 shares were granted during the first quarter of 2004. The estimated weighted average fair value per option share granted was $12.47 during the first quarter of 2004 using a Black-Scholes option pricing model based on market prices and the following assumptions at the dates of option grant: weighted average risk-free interest rate of 3.0%, dividend yield of 0%, volatility factor for the Company’s common stock price of 60%, and a weighted average expected life of five years for options not forfeited. Approximately 1,235,000 options were exercised during the first six months of 2005, resulting in a cash inflow of $21 million. During the first six months of 2004, approximately 640,000 options were exercised, resulting in a cash inflow of $11 million.

Restricted stock awards for approximately 3,000 shares and 101,000 shares were granted to employees and directors during the quarter and six months ended June 30, 2005. For the quarter and six months ended June 30, 2004, restricted stock awards for approximately 124,000 and 579,000 shares were granted. These awards generally vest over 1-4 years, and the fair value of the awards at the grant date is expensed over the vesting periods.

Note 10 - Pension and Severance Benefits

Net pension expense from the Company’s defined benefit and severance plans, primarily comprised of the Company’s severance plans covering Central American employees, consists of the following (in thousands):

	Quarter Ended June 30,						Six Months Ended June 30,
	2005			2004			2005			2004
Defined benefit and severance plans:
Service cost	$	982		$	1,532		$	2,237		$	2,448
Interest on projected benefit obligation		1,300			1,327			2,917			3,145
Expected return on plan assets		(474	)		(605	)		(1,011	)		(1,192	)
Recognized actuarial loss		221			161			627			254
Amortization of prior service cost		274			161			441			274
		2,303			2,576			5,211			4,929
Settlement gain		(1,667	)		—			(1,667	)		—
	$	636		$	2,576		$	3,544		$	4,929

Note 11 - Income Taxes

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.

Income tax expense for the quarter and six months ended June 30, 2005 increased over the same periods in 2004 due to higher earnings in certain tax jurisdictions and the 2004 tax benefit from the sale of Colombian operations described below. The increase in income tax expense was mitigated by a net reduction in reserves of $2 million for the quarter and $3 million for the six months ended June 30, 2005 due to the resolution of outstanding tax audit items and contingencies in various jurisdictions.

In the second quarter of 2004, income tax expense reflects a benefit of $5.7 million from the release to income, upon the sale of the Colombian banana production division, of a deferred tax liability related to growing crops in Colombia.

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Item 2

CHIQUITA BRANDS INTERNATIONAL, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

The Company’s improvement in operating income in the second quarter of 2005 compared to the 2004 second quarter resulted primarily from improved local banana pricing in the Company’s core European markets, which consist of the 25 member countries of the European Union, Norway, Iceland and Switzerland. For the six months ended June 30, 2005, the improvement in operating income resulted from improved local banana pricing in both Europe and North America and favorable European currency exchange rates. The improvement in North American pricing occurred during the first quarter and was principally due to temporary contract price increases implemented after flooding in Costa Rica and Panama early in the year. These improvements have been partially offset by an increase in costs, due in part to rising fuel, paper and ship charter costs and to the costs resulting from the floods.

On June 28, 2005, the Company completed its previously announced acquisition of the Fresh Express unit of Performance Food Group (“PFG”) for a purchase price of $855 million, before certain closing adjustments. Fresh Express is the retail market leader of value-added packaged salads in the United States. The acquisition will increase Chiquita’s consolidated annual revenues by about $1 billion. The Company believes that the acquisition will permit it to diversify its business, accelerate revenue growth in higher margin value-added products, and lead to a more balanced mix of sales between Europe and North America, which will make the Company less susceptible to risks unique to Europe, such as pending changes to the European Union banana import regime and foreign exchange risk.

The Company’s Consolidated Balance Sheet at June 30, 2005 reflects the initial purchase price allocation, while the Consolidated Statement of Income for the quarter and six months ended June 30, 2005 includes the operations of Fresh Express, and interest expense on the acquisition financing, from the June 28 acquisition date to the end of the second quarter.

Prior to the Fresh Express acquisition, the Company reported two business segments, Bananas and Other Fresh Produce. The Banana segment included the sourcing (production and purchase), transportation, marketing and distribution of bananas. The Other Fresh Produce segment included the sourcing, marketing and distribution of fresh fruits and vegetables other than bananas. The Other Fresh Produce segment also included Chiquita’s fresh-cut fruit business. Remaining operations, which were reported in “Other,” consisted primarily of processed fruit ingredient products and other consumer packaged goods. As a result of the Fresh Express acquisition, the Company determined that it now has the following three reportable segments: Bananas, Fresh Select and Fresh Cut. The Banana segment remains unchanged. The Fresh Select segment includes the sourcing, marketing and distribution of whole fresh fruits and vegetables other than bananas. The Company’s Fresh Cut segment includes all of the operations of Fresh Express (packaged salads and fresh-cut fruit) and the fresh-cut fruit business of Chiquita.

Operations

Net sales

Net sales for the second quarter of 2005 were $1.0 billion, an increase of $171 million from last year’s second quarter. The increase resulted from higher banana pricing and favorable currency exchange rates in Europe, higher volume in both Europe and North America and increased sales of Fresh Select products at Atlanta AG, the Company’s German fresh produce distributor.

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Net sales for the six months ended June 30, 2005 were $1.9 billion, compared to $1.6 billion in 2004. The increase resulted from higher banana pricing and volume in both Europe and North America, favorable currency exchange rates and increased sales of Fresh Select products at Atlanta AG.

Substantially all of the 2005 revenue in the Fresh Cut segment was due to the acquisition of Fresh Express.

Operating income - Second Quarter

Operating income for the second quarter of 2005 was $75 million, compared to $37 million in the second quarter of 2004.

Banana Segment. In the Company’s Banana segment, operating income was $73 million, compared to $37 million last year.

Banana segment operating results were favorably affected by:

• $46 million net benefit from European pricing and currency, comprised of $47 million from improved local European pricing, $13 million of increased revenue from favorable European exchange rates and $3 million of decreased hedging costs, offset by balance sheet translation losses of $15 million, and $2 million in increased European costs due to the stronger euro;

• $9 million before-tax loss on the sale of the Colombian banana production division in the second quarter of 2004; and

• $3 million in lower legal and other professional fees relating to the U.S. Department of Justice investigation of the Company’s former Colombian subsidiary.

These items were offset in part by:

• $9 million of higher fuel, paper and ship charter costs;

• $6 million of higher license-related banana import costs in Europe;

• $3 million of increased costs related to the January flooding in Costa Rica and Panama, including alternative fruit sourcing, logistics and farm rehabilitation costs. The Company believes that substantially all incremental costs relating to the floods were incurred by the end of the second quarter; and

• $3 million of legal and other costs associated with a competition law matter reported to the European Commission.

The 2005 percentage changes in the Company’s banana pricing compared to 2004 follows:

	Q2		YTD
North America	-1	%	4	%
European Core Markets 1
U.S. Dollar basis 2	27	%	23	%
Local Currency	21	%	18	%
Trading Markets 3
U.S. Dollar basis 2	-3	%	11	%
Asia
U.S. Dollar basis 2	-11	%	-6	%
Local Currency	-11	%	-7	%

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The Company’s banana sales volumes of 40-pound boxes were as follows:

(In millions, except percentages)	Q2 2005	Q2 2004	% Change		YTD 2005	YTD 2004	% Change
European Core Markets 1	14.4	14.5	-1	%	29.8	28.7	4	%
Trading Markets 3	1.9	1.2	58	%	2.3	2.3	0	%
North America	16.0	14.8	8	%	30.6	28.4	8	%
Total	32.3	30.5	6	%	62.7	59.4	6	%

¹ The 25 member countries of the European Union, Norway, Iceland and Switzerland.

² Prices on a U.S. dollar basis do not include the impact of hedging.

³ Other European and Mediterranean countries not listed above.

In addition, the Company is a 50% owner of a joint venture serving Asia, which had banana sales volume of 4.9 million and 4.2 million boxes during the second quarters of 2005 and 2004, respectively. For the six months ended June 30, 2005 and 2004, this joint venture had volume of 8.9 million and 8.0 million boxes, respectively.

Foreign currency hedging costs charged to the Consolidated Statement of Income were $4 million in the 2005 second quarter, compared to $7 million in the second quarter of 2004. These costs relate primarily to hedging the Company’s net cash flow exposure to fluctuations in the U.S. dollar value of its euro-denominated sales. At June 30, 2005, unrealized losses of $2 million on the Company’s currency option contracts were included in “Accumulated other comprehensive income,” of which $1 million is expected to be reclassified to net income during the next 12 months. The Company purchases put options, which require an upfront premium payment, to hedge its currency risk. These put options can reduce the negative earnings impact on the Company of a significant future decline in the value of the euro, without limiting the benefit the Company would receive from a stronger euro. Unrealized gains of $19 million on the Company’s fuel oil forward contracts at June 30, 2005 were also included in “Accumulated other comprehensive income,” of which $13 million is expected to be reclassified to net income during the next 12 months.

Fresh Select Segment. For the Fresh Select segment, operating income in the 2005 second quarter was $4 million, compared to $2 million in the 2004 second quarter. The improvement resulted primarily from a restructured melon program in North America and continued operational improvement at Atlanta AG, partly offset by lower results in Chile, primarily due to the impact of poor weather.

Fresh Cut Segment. In the Company’s Fresh Cut segment, operating results were a loss of $3 million in the 2005 second quarter compared to an operating loss of $4 million in 2004. Second quarter 2005 includes the results of the Company’s newly acquired Fresh Express unit from the June 28 acquisition date until the end of the quarter.

Operating income - Year-to-Date

Operating income for the six months ended June 30, 2005 was $168 million, compared to $68 million for the six months ended June 30, 2004.

Banana Segment. In the Company’s banana segment, operating income was $160 million year-to-date, compared to $65 million last year.

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Banana segment operating results were favorably affected by:

• $91 million of European pricing and currency benefit, comprised of $79 million from improved local European pricing, $25 million of increased revenue from favorable European exchange rates and $10 million of decreased hedging costs, offset by balance sheet translation losses of $19 million, and $4 million in increased European costs due to the stronger euro;

• $11 million of savings primarily related to purchased fruit, tropical production and logistics;

• $10 million from improved pricing in North America, due principally to temporary contract price increases implemented after flooding in January 2005 that affected the Company’s Costa Rica and Bocas, Panama divisions;

• $9 million before-tax loss on the sale of the Colombian banana production division in the second quarter of 2004;

• $6 million from an increase in volume in Europe and North America;

• $5 million in lower legal and other professional fees relating to the U.S. Department of Justice investigation of the Company’s former Colombian subsidiary; and

• $4 million charge recorded in the prior year first quarter related to stock options and restricted stock granted to the Company’s former chairman and CEO that vested upon his retirement in May 2004.

These items were offset in part by:

• $15 million of cost increases from higher fuel, paper and ship charter costs;

• $11 million of increased costs related to the January flooding in Costa Rica and Panama, including alternative fruit sourcing, logistics and farm rehabilitation costs, and write-downs of damaged farms. Substantially all of the incremental costs relating to the floods were incurred by the end of the second quarter;

• $10 million of higher license-related banana import costs in Europe;

• $3 million of increased expenses related to innovation spending for future growth; and

• $3 million of legal and other costs associated with a competition law matter reported to the European Commission.

Information on the Company’s banana pricing and volume is included in the Operating Income - Second Quarter section above.

Foreign currency hedging costs charged to the Consolidated Statement of Income were $8 million for the six months ended June 30, 2005, compared to $18 million for the same period in 2004. The higher 2004 costs related primarily to losses on forward and zero-cost collar contracts that have since expired.

Fresh Select Segment. For the Fresh Select segment, operating income for the six months ended June 30, 2005 was $14 million, compared to operating income of $9 million a year ago. The improvement resulted primarily from a restructured melon program in North America and continued operational improvement at Atlanta AG.

Fresh Cut Segment. In the Company’s Fresh Cut segment, operating results were a loss of $6 million for the six months ended June 30, 2005, compared to a loss of $8 million last year. The six months ended June 30, 2005 includes the results of the Company’s newly acquired Fresh Express unit from the June 28 acquisition date to the end of the second quarter.

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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. The Company’s results during the third and fourth quarters are generally weaker than in the first half of the year due to increased availability of competing fruits and resulting lower banana prices.

Interest, Other Income (Expense) and Taxes

Interest income in the 2005 second quarter was $3 million, compared to $1 million in the year-ago quarter. The increase is due to interest earned on higher cash balances and on the receivable that resulted from the pineapple purchase agreement that the Company entered into in connection with the sale of its Colombian division.

Interest expense in the 2005 second quarter was $8 million, compared to $10 million in the year-ago quarter. Interest expense declined $3 million due to the refinancing of the Company’s Senior Notes in late 2004 and the reduction in debt during 2004, partially offset by $1 million of interest expense on the liability that resulted from the banana purchase agreement that the Company entered into in connection with the sale of its Colombian division.

Other income (expense) for the quarter ended June 30, 2005 includes $3 million of financing fees, primarily related to the write-off of unamortized debt issue costs for the prior credit facility, partially offset by a $1 million gain on the sale of Seneca preferred stock.

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.

Income tax expense for the quarter and six months ended June 30, 2005 increased over the same periods in 2004 due to higher earnings in certain tax jurisdictions and the 2004 tax benefit from the sale of Colombian operations described below. The increase in income tax expense was mitigated by a net reduction in reserves of $2 million for the quarter and $3 million for the six months ended June 30, 2005 due to the resolution of outstanding tax audit items and contingencies in various jurisdictions.

In the second quarter of 2004, income tax expense reflects a benefit of $5.7 million from the release to income, upon the sale of the Colombian banana production division, of a deferred tax liability related to growing crops in Colombia.

Acquisitions and Divestitures

See Note 2 to the Consolidated Financial Statements for information on the Company’s acquisitions and divestitures occurring during 2005 and 2004.

Financial Condition – Liquidity and Capital Resources

The Company’s cash balance was $165 million at June 30, 2005, compared to $143 million at December 31, 2004 and $198 million at June 30, 2004.

Operating cash flow was $149 million for the six months ended June 30, 2005, which was used to fund a portion of the Fresh Express acquisition. The increase from $62 million of operating cash flow for the same period in 2004 was primarily due to significantly improved operating results.

Capital expenditures were $10 million year-to-date 2005 and $17 million during the comparable period of 2004.

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In the fourth quarter of 2004, Chiquita announced the initiation of a quarterly cash dividend of $0.10 per share on the Company’s outstanding shares of common stock. A dividend was paid on July 15, 2005 to shareholders of record as of the close of business on July 1, 2005. While Chiquita intends to pay regular quarterly dividends for the foreseeable future, all future dividends will be reviewed quarterly and require approval by the board of directors.

In conjunction with the Fresh Express acquisition, the Company entered into an amended and restated senior secured credit facility, which replaced an existing $150 million revolving credit facility and added $500 million in new term loans, and completed the offering of $225 million of 8 ⁷/8% Senior Notes due 2015. In addition, in April 2005, Great White Fleet Ltd., the Company’s shipping subsidiary, entered into a seven-year secured revolving credit facility for $80 million. For a full description of these transactions, see Note 5 to the Consolidated Financial Statements.

On a pro forma basis, including the Fresh Express acquisition and related financing, interest expense would have been $21 million and $42 million for the quarter and six months ended June 30, 2005. The Company has approximately $600 million of variable-rate debt after the acquisition, and as a result, a 1% change in interest rates would have resulted in a change to pro forma interest expense of $1.5 million and $3 million for the quarter and six months ended June 30, 2005.

As a result of the Fresh Express acquisition, the Company’s contractual cash commitments for raw product increased by approximately $120 million for 2005 and 2006. In addition, approximately $25 million in lease payments remain under one of the Fresh Express facility leases.

The Company believes that its cash level, cash flow generated by operating subsidiaries and borrowing capacity will provide sufficient cash reserves and liquidity to fund the Company’s working capital needs, capital expenditures and debt service requirements.

European Union Banana Import Regime

In 2001, the European Commission (“EC”) agreed to amend the quota and licensing regime for the importation of bananas into the EU. Under the 2001 agreement, the current EU banana tariff rate quota system is scheduled to be followed by a tariff-only system no later than 2006. Under the current quota system, import licenses are required to import bananas into the EU within the quota. Each year, a fixed quantity of licenses is allocated to each eligible operator, including the Company. The Company uses licenses allocated to it to import a large majority of the bananas it sells in the EU. It imports the remainder of the bananas it sells with licenses owned by its customers or purchased from other operators. In 2004, the Company sold approximately 61 million boxes (1.1 million metric tons) of bananas in Europe, a large majority of which were sold in the EU and are subject to the current tariff of €75 per metric ton. The current tariff applies to bananas imported from Latin America, which is the source of substantially all of the bananas the Company imports into the EU, but does not apply to bananas imported from certain African, Caribbean and Pacific (“ACP”) sources. Under a tariff-only system, (i) the quota and all license requirements, as well as the Company’s receipt of allocated licenses, would be eliminated, (ii) the payment of a tariff would continue to be required for the importation of any Latin American bananas into the EU, and (iii) ACP bananas imported into the EU would continue to be exempt from the payment of any tariff.

In order to remain consistent with World Trade Organization (“WTO”) principles, any new EU banana tariff is required under a 2001 WTO decision to “result in at least maintaining total market access” for Latin American suppliers. That decision establishes consultation and arbitration procedures to determine whether the proposed tariff would result in at least maintaining Latin American market access and requires that those procedures be completed before any new EU tariff-only system takes effect. In

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February 2005, the EC notified the WTO that it would propose a tariff on Latin American bananas of €230 per metric ton. This would represent a substantial increase over the €75 per metric ton tariff now applicable to Latin American bananas entering within the EU’s current tariff rate quota system. The Latin American supplying countries announced their opposition to any tariff above €75 on the basis that it would be inconsistent with the WTO standard, and in March 2005, nine Latin American governments requested arbitration. On August 1, the WTO arbitrators ruled that the EU’s €230 per metric ton proposal would not “result in at least maintaining total market access” for Latin American suppliers. Under applicable procedures, the parties are to negotiate on a “mutually acceptable solution.” If such negotiations are unsuccessful and the EU announces a new proposed tariff that the Latin American supplying countries oppose, a second arbitration will be held before the same WTO panel that ruled on August 1.

There can be no assurance that (a) a tariff-only system will be installed by 2006, (b) the tariff level finally established for Latin American bananas will be no more than the current €75 per metric ton, or (c) if a higher tariff level is imposed, it will not have a materially adverse effect on marketers of Latin American bananas, including the Company. In addition, if the tariff-only system is installed, then regardless of the amount of the final tariff, there can be no assurance that over time there will not be a materially adverse effect on EU marketers of bananas (whether from Latin America or ACP sources), including the Company, due to any decline in prices that could result from an increase in the total volume of bananas imported into the EU after the elimination of the current quota restrictions.

*    *    *    *    *

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 impact of changes in the European Union banana import regime as a result of the anticipated conversion to a tariff-only regime in 2006; the Company’s ability to successfully integrate the operations of Fresh Express; unusual weather conditions; the customary risks experienced by global companies, such as the impact of product and commodity prices, currency exchange rate fluctuations, government regulations, labor relations, taxes, political instability and terrorism; and the outcome of pending governmental investigations and claims involving the Company.

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.

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 2004 Annual Report on Form 10-K. As of June 30, 2005, there were no material changes to the information presented, with the following exceptions. At December 31, 2004, the potential reduction in the fair value of the Company’s foreign currency hedging instruments from a hypothetical 10% increase in euro currency rates would have been approximately $5 million. At June 30, 2005, a hypothetical 10% increase in euro currency rates would result in a fair value reduction of approximately $14 million. However, the Company expects that any loss on these contracts would tend to be more than offset by an increase in the dollar realization of the underlying sales denominated in foreign currencies.

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At June 30, 2005, the Company had $475 million of Senior Notes outstanding, including the new $225 million of 8 ⁷/8% Senior Notes resulting from the acquisition of Fresh Express. The adverse change in fair value of the Company’s fixed-rate debt from a hypothetical 10% decrease in interest rates would have been approximately $15 million at June 30, 2005, compared to $9 million at December 31, 2004.

Item 4 - Controls and Procedures

Evaluation of disclosure controls and procedures

Chiquita maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its periodic filings with the SEC is (a) accumulated and communicated to the Company’s management in a timely manner and (b) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. As of June 30, 2005, an evaluation was carried out by Chiquita’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures as defined in Exchange Act Rules 13a-15(e). Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective as of that date.

Changes in internal control over financial reporting

Chiquita also maintains a system of internal accounting controls, which includes internal control over financial reporting, that is designed to provide reasonable assurance that the Company’s financial records can be relied on for preparation of its financial statements and that its assets are safeguarded against loss from unauthorized use or disposition. During the quarter ended June 30, 2005, there was no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting except for the acquisition of Fresh Express on June 28, 2005. As a result of this acquisition, the Company has included Fresh Express within its system of internal control over financial reporting.

As previously disclosed, Chiquita implemented a transaction processing system in certain Latin American and European subsidiaries effective January 1, 2005. This transaction processing system includes the accounting software used to process and accumulate financial data principally supporting sales, cost of sales, cash, accounts receivable, inventory, accounts payable, and general ledger transactions and processes.

As reported in Chiquita’s quarterly report on Form 10-Q for the quarter ended March 31, 2005, certain controls within the system were not functioning as intended during that quarter. As a result, management took additional actions to ensure the financial statements and related financial information presented in Form 10-Q for the quarter ended March 31, 2005 presented fairly, in all material respects, the Company’s financial condition and results of operations in accordance with generally accepted accounting principles. In addition, management took steps during the quarter ended June 30, 2005 to improve the operation of the noted controls. These actions included forming improvement teams focused on the key transactional, operational and system issues, conducting weekly status meetings during which key metrics were analyzed, completing additional user training in certain locations, and continually monitoring issue status and resolution.

Measurable improvements have been experienced in the system and its functionality since these actions were implemented, including an improvement in the operation of the noted controls. Nonetheless, to provide further assurance, management took additional actions similar to those taken for the quarter ended March 31, 2005 to ensure the financial statements and related financial information presented in Form 10-Q for the quarter ended June 30, 2005 present fairly, in all material respects, the Company’s financial condition and results of operations in accordance with generally accepted accounting principles.

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Management will continue to monitor internal control over financial reporting and will modify or implement, if necessary, any additional controls and procedures that may be required to ensure the continued integrity of the Company’s financial statements.

Part II - Other Information

Item 1 - Legal Proceedings

As the Company announced in early June 2005, Chiquita’s management became aware that certain of its employees had shared pricing and volume information with competitors in Europe over many years in violation of European competition laws and Company policies, and may have engaged in several instances of other conduct which did not comply with European competition laws or applicable Company policies. The Company promptly stopped the conduct and notified the European Commission (“EC”) and other regulatory authorities of these matters; and the Company is cooperating with the related investigation subsequently commenced by the EC. Based on the Company’s voluntary notification and cooperation with the investigation, the EC has notified Chiquita that it will be granted immunity from any fines related to the conduct, subject to customary conditions, including the Company’s continuing cooperation with the investigation. Accordingly, Chiquita does not expect to be subject to any fines by the EC. However, if at the conclusion of its investigation, which could take one or more years, the EC were to determine, among other things, that Chiquita did not continue to cooperate, then the Company could be subject to fines, which, if imposed, could be substantial. The Company does not believe that the reporting of these matters or the cessation of the conduct should have any material adverse effect on the regulatory or competitive environment in which it operates, although there can be no assurance in this regard.

The Company also announced that its management became aware that certain of its employees in one Latin American country shared information with competitors regarding the volume of fruit shipped from that country to North America. While the Company does not believe that such conduct had any anti-competitive effects, it discontinued the conduct and notified the appropriate regulatory authorities in the United States and Canada. After reviewing the information provided by the Company, these authorities informed the Company of their respective decisions not to proceed with an investigation.

In July and early August 2005, five class action lawsuits were filed in the U.S. District Court for the Southern District of Florida against the Company and three of its competitors on behalf of entities that purchased bananas in the United States directly from the defendants from May 2003 (in one case from July 2001) until the present. The complaints allege that the defendants engaged in a conspiracy to artificially raise or maintain prices and control and restrict output of bananas in the United States. The plaintiffs seek treble damages for violation of Section 1 of the Sherman Antitrust Act. The complaints provide no specific information regarding the allegations. The Company believes that the lawsuits are without merit.

*****

As the Company also reported in early June, there are two proceedings pending involving potential liability of the Company’s Italian subsidiary Chiquita Italia S.p.A. (“Chiquita Italia”) for additional customs duties on the import of bananas by Socoba S.r.l. (“Socoba”) into Italy during the years 1998 to 2000 for sale to Chiquita Italia. These duties are alleged to be due because these imports were made with licenses that were purportedly issued by the Spanish Ministry of Foreign Trade but were subsequently determined to have been forged. The authorities contend that Chiquita Italia should be jointly liable with

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Socoba because (a) Socoba was controlled by the former general manager of Chiquita Italia and allegedly managed for the benefit of Chiquita Italia and (b) the import transactions benefited Chiquita Italia, which arranged for Socoba to purchase the bananas from another Chiquita subsidiary and, after customs clearance, sell them to Chiquita Italia. In the first of these two proceedings (as described under “Legal Proceedings” in the Company’s Annual Report on Form 10-K for 2004), Chiquita Italia received a notice of assessment in 2004 from customs authorities in Trento, Italy stating that Chiquita Italia, Socoba, the former managing director of Chiquita Italia, and the managing director of Socoba are jointly and severally liable for approximately €3.3 million of duties and taxes, plus interest, related to imports cleared in Trento. In the second proceeding, in May 2005 Chiquita Italia received notice of an investigation underway by customs authorities in Genoa, Italy into the possible joint liability of Chiquita Italia and Socoba for approximately €26.9 million (approximately $32 million) of duties and taxes, plus interest (an estimated €12.7 million (approximately $15 million) of interest having accrued to date). In this case, Chiquita Italia has not yet received a notice of assessment. The scope of the Genoa proceeding includes all banana imports into Italy by Socoba for sale to Chiquita Italia that used the purported Spanish licenses, including imports cleared by customs authorities in Trento. Therefore, any amounts ultimately paid by Chiquita Italia in the Trento proceeding should reduce any ultimate liability of Chiquita Italia in the Genoa proceeding. Chiquita Italia has appealed the Trento assessment to the Tax Commission in Trento and will appeal any Genoa assessment, through appropriate procedures, on the bases that (a) Chiquita Italia had a good faith belief at the time the import licenses were obtained and used, that they were valid and (b) no Chiquita entity has ever had an ownership interest in Socoba, and Chiquita Italia should therefore not be held responsible for the acts of Socoba. In addition, Chiquita Italia has intervened in a judicial action filed by Socoba in Genoa in March 2005 for a declaratory judgment that the Spanish licenses in question should be regarded as genuine.

A third, unrelated “false license” case involves licenses used in 1998 to import bananas for Chiquita Italia that were obtained by an independent Italian license broker from the Italian Ministry of Foreign Trade on the basis of allegedly false license applications. In that case, in 1999 and 2002 the customs authorities in Trento assessed Chiquita Italia an aggregate of approximately €1.2 million of additional customs duties and taxes, plus interest (an estimated €0.6 million of interest having accrued to date). In 2004, an appellate court in Trento upheld the assessments, which Chiquita Italia is appealing to the Court of Cassation (the highest court in Italy) on the basis that it had no reason to know that the broker’s applications were false. In June 2004, at the conclusion of a related criminal investigation into the involvement of the current managing director of Chiquita Italia in this “false license” situation, an investigative judge found that the managing director did not engage in illegal conduct with respect to the use of those licenses. The public prosecutor in Trento appealed this decision. In May 2005, an appellate court in Trento affirmed the finding that the managing director did not know the licenses were fraudulently obtained, but convicted him of engaging in a license usage transaction whose structure was “fraudulent” and sentenced him to one year in prison, which it conditionally suspended. The structure in question, which the Company believes was common in the industry, involved the sale of bananas by a Chiquita subsidiary to a license holder, who, after using the license to clear customs, sold the bananas to Chiquita Italia. The managing director will appeal this decision to the Court of Cassation on the basis that governmental authorities in Italy and elsewhere in the EU have confirmed the legality of the transaction structure in question.

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Item 4 - Submission of Matters to a Vote of Security Holders

In connection with the Company’s Annual Meeting of Shareholders held on May 26, 2005, proxies were solicited pursuant to Regulation 14A under the Securities Exchange Act of 1934. The following votes (representing approximately 90% of the shares eligible to vote) were cast at that meeting:

Election of Eight Directors

	Votes
Name	For	Against	Withheld
Fernando Aguirre	36,928,077	—	713,017
Morten Arntzen	37,443,808	—	197,286
Jeffrey D. Benjamin	35,650,747	—	1,990,347
Robert W. Fisher	36,524,086	—	1,117,008
Roderick M. Hills	37,436,186	—	204,908
Durk I. Jager	36,282,537	—	1,358,557
Jaime Serra	37,023,285	—	617,809
Steven P. Stanbrook	36,499,933	—	1,141,161

Appointment of Ernst & Young LLP as the Company’s Independent Auditors

	Votes
	For	Against	Withheld
Ratify Ernst & Young LLP	37,541,567	71,562	27,965

Item 6 - Exhibits

Exhibit 4.1- Acceptance of Appointment as Successor Warrant Agent by Wachovia Bank, N.A. and Amendment No. 1, dated June 24, 2005 between Chiquita Brands International, Inc. and Wachovia Bank, N.A., to Warrant Agreement dated as of March 19, 2002

Exhibit 10.1 - Form of Change in Control Severance Agreement entered into with executive officers of the Company reporting directly to the Chief Executive Officer

Exhibit 10.2 - Form of Restricted Share Agreement for use with employees, including executive officers, for grants under the Long Term Incentive Program and otherwise under the Company’s Stock Option and Incentive Plan [used after May 24, 2005]

Exhibit 31.1 - Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

Exhibit 31.2 - Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

Exhibit 32 - Section 1350 Certifications

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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/ Brian W. Kocher
	Brian W. Kocher
	Vice President and Controller
	(Chief Accounting Officer)

August 5, 2005

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EX-4.1

Exhibit 4.1

ACCEPTANCE OF APPOINTMENT

AS SUCCESSOR WARRANT AGENT

THIS ACCEPTANCE OF APPOINTMENT AS SUCCESSOR WARRANT AGENT (this “Acceptance of Appointment”), is made as of June 24, 2005 by and between Chiquita Brands International, Inc., a New Jersey corporation (the “Company”), Wachovia Bank, N.A., a national banking association (“Wachovia”).

WHEREAS, the Company is party to that certain Chiquita Brands International, Inc. Common Stock Warrant Agreement (the “Agreement”) dated as of March 19, 2002 by and between the Company and American Security Transfer Company Limited Partnership (“American Security”);

WHEREAS, American Security has notified the Company of its intention to resign as Warrant Agent (as such term is defined therein) under the Agreement; and

WHEREAS, the Company desires Wachovia to become vested with all the authority, rights, powers, duties and obligations of the Warrant Agent, and Wachovia is willing to accept such appointment.

NOW THEREFORE, in consideration of the premises and of the mutual agreement herein contained, the parties agree as follows:

1. Acceptance of Appointment. Pursuant to Section 6.3 of the Agreement, the Company hereby appoints Wachovia as Warrant Agent and Wachovia agrees to accept the appointment as Warrant Agent and to become vested with all the authority, rights, powers, trusts, immunities, duties and obligations of Warrant Agent with like effect as if originally named Warrant Agent under the Agreement. Wachovia acknowledges receipt of a copy of the Agreement.

2. Transition and Timing. The Company agrees to deliver this Acceptance of Appointment to American Security and to take all reasonable actions to enable the transfer of all documentation from American Security to Wachovia to the extent necessary for Wachovia’s performance as Warrant Agent. The parties expect that Wachovia will replace American Security as Warrant Agent in all respects as of June 24, 2005.

3. Further Assurances. The Company and Wachovia agree to cooperate reasonably with each other and with their respective representatives in connection with any steps required to be taken as part of their respective obligations under this Acceptance of Appointment and the Agreement, and agree to (a) furnish upon request to each other such further information; (b) execute and deliver to each other such other documents; and (c) do such other acts and things, all as the other party may reasonably request for the purpose of carrying out the duties and obligations under the Agreement.

4. Addresses. The notice address for Wachovia under Section 8.4 of the Agreement is Wachovia Bank, N.A., 1525 W. WT Harris Blvd.; 3C3, Charlotte, North Carolina 28262.

5. Counterparts. This Acceptance of Appointment may be executed in any number of counterparts, each of which as so executed shall be deemed to be an original, but such counterparts shall together constitute one and the same instrument.

IN WITNESS WHEREOF, the Company and Wachovia have caused this Acceptance of Appointment to be signed by their respective duly authorized officers, and the same to be attested by their respective Secretaries or one of their respective Assistant Secretaries, all as of the day and year first written above.

CHIQUITA BRANDS INTERNATIONAL, INC.
By:	/s/ Robert W. Olson
Name:	Robert W. Olson
Title:	Senior Vice President, General Counsel and Secretary

Attest:

/s/ Barbara M. Howland

Barbara M. Howland

Title: Assistant Secretary

WACHOVIA BANK, N.A.
By:	/s/ Joan K. Kaprinski
Name:	Joan K. Kaprinski
Title:	Vice President

Attest:

/s/ Harry Drummond

Title: AVP

Amendment to Chiquita Brands International, Inc.

Common Stock Warrant Agreement

This Amendment to the Chiquita Brands International, Inc. Common Stock Warrant Agreement (“Amendment”) is made as of June 24, 2005 by and between Chiquita Brands International, Inc., a New Jersey corporation (the “Company”), Wachovia Bank, N.A., a national banking association (“Wachovia”). Any capitalized terms not defined herein shall have the meaning set forth in the Chiquita Brands International, Inc. Common Stock Warrant Agreement (the “Agreement”) dated as of March 19, 2002 by and between the Company and American Security Transfer Company Limited Partnership.

WHEREAS, contemporaneously with the execution of this Amendment, Wachovia is executing the Acceptance of Appointment as Successor Warrant Agent under the Agreement; and

WHEREAS, the Company and Wachovia desire to amend the Agreement to change the process for payment of the Warrant Price to the Company.

NOW, THEREFORE, in consideration of the promises and mutual covenants contained in this Amendment, the parties hereby agree as follows:

1. Section 2.3(a) of the Agreement shall be amended in its entirety to state the following:

(a) During the period specified in Section 2.2, any whole number of Warrants may be exercised by delivering to the Warrant Agent the Warrant Certificate with the form of election to purchase Warrant Shares set forth on the reverse side of the Warrant Certificate properly completed and duly executed and by either (i) paying in full, by certified check or by bank wire transfer, in each case in immediately available funds, the Warrant Price for each Warrant exercised (the “Aggregate Warrant Price”), to the Warrant Agent at its corporate office or (ii) delivering written notice to the Warrant Agent that the holder of the Warrant is exercising the Warrant (or a portion thereof) by authorizing the Company to withhold from issuance a number of Warrant Shares issuable upon such exercise of the Warrant which when multiplied by the Market Price of the Common Stock is equal to the Aggregate Warrant Price (and such withheld shares shall no longer be issuable under the Warrant (a “Cashless Exercise”). The formula for determining the number of Warrant Shares to be issued in a Cashless Exercise is set forth on Exhibit B attached hereto. The date on which the Warrant Certificate and payment in full of the Warrant Price or the notice described in clause (ii) above is received by the Warrant Agent shall be deemed to be the date on which the Warrant is exercised. The Warrant Agent shall deposit all funds received by it in payment of the Warrant Price into an Evergreen Institutional Treasury Money Market Fund account for the benefit of the Company (or such other no-fee interest bearing account agreed to by the Company and the Warrant Agent) and on a weekly basis, the Warrant Agent shall wire such funds to the Company using the following wire instructions (or subsequent instructions provided in writing by the Company to the Warrant Agent):

Bank Name: [intentionally deleted]

Account Name: [intentionally deleted]

On a weekly basis, the Warrant Agent shall deliver reports to the Company at its address pursuant to Section 8.4, providing the Warrant exercise transaction detail for the prior week’s and the year-to-date activity.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Company and Wachovia have caused this Amendment to be signed by their respective duly authorized officers, and the same to be attested by their respective Secretaries or one of their respective Assistant Secretaries, all as of the day and year first written above.

CHIQUITA BRANDS INTERNATIONAL, INC.
By:	/s/ Robert W. Olson
Name:	Robert W. Olson
Title:	Senior Vice President, General Counsel and Secretary

Attest:

/s/ Barbara M. Howland

Barbara M. Howland

Title: Assistant Secretary

WACHOVIA BANK, N.A.
By:	/s/ Joan K. Kaprinski
Name:	Joan K. Kaprinski
Title:	Vice President

Attest:

/s/ Harry Drummond

Title: AVP

EX-10.1

Exhibit 10.1

SEVERANCE AGREEMENT

THIS AGREEMENT, dated July     , 2005 is made by and between Chiquita Brands International, Inc., a New Jersey corporation (the “Company”), and                      (the “Executive”).

WHEREAS, the Company considers it essential to the best interests of its stockholders to foster the continued employment of key management personnel; and

WHEREAS, the Board recognizes that, as is the case with many publicly held corporations, the possibility of a Change in Control exists and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its stockholders; and

WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company’s management, including the Executive, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a Change in Control;

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Executive hereby agree as follows:

1. Defined Terms. The definitions of capitalized terms used in this Agreement are provided in the last Section hereof.

2. Term of Agreement. The Term of this Agreement shall commence on the date hereof and shall continue in effect through the third anniversary of the date hereof; provided, however, that if a Change in Control shall have occurred during the Term, the Term shall not expire before the second anniversary of such Change in Control.

3. Company’s Covenants Summarized.

3.1 In order to induce the Executive to remain in the employ of the Company and in consideration of the Executive’s covenants set forth in Section 4 hereof, the Company agrees, under the conditions described herein, to pay the Executive the Severance Payments and the other payments and benefits described herein. Except as provided in Section 9.1 hereof, no Severance Payments shall be payable under this Agreement unless there shall have been a termination of the Executive’s employment with the Company during the Term and following a Change in Control described in Section 6.1 hereof.

3.2 This Agreement shall not be construed as creating an express or implied contract of employment and, except as otherwise agreed in writing between the Executive and the Company, the Executive shall not have any right to be retained in the employ of the Company.

3.3 If the Executive materially breaches any of the terms of this Agreement, the Company shall immediately be entitled, in its sole discretion, to terminate its obligations to the Executive under this Agreement.

3.4 If Executive is now, or at any time during the term of this Agreement becomes, employed by a subsidiary of the Company (including an indirect subsidiary of the Company), (a) all references herein to his employment, or termination of employment, by or with the Company shall, except where the context otherwise indicates, be deemed to be references to his employment, or termination of employment, by or with such subsidiary and (b) the Company shall have the right to cause such subsidiary to pay amounts and provide other benefits due to the Executive under this Agreement on the Company’s behalf, provided that nothing in this clause (b) shall relieve the Company of its obligation to cause all such amounts to be paid and such benefits to be provided to the Executive when due. The transfer of the Executive to the employ of the Company or any subsidiary of the Company shall not constitute a termination of his employment for purposes of this Agreement.

4. The Executive’s Covenants.

4.1 The Executive shall execute a release of claims against the Company substantially in the form set forth as Exhibit A hereto, at such time and in such manner as may reasonably be requested by the Company, in connection with the Executive’s termination of employment under the terms of this Agreement and as a condition to any payment or other provision of benefits by the Company hereunder.

4.2 Following termination of his employment with the Company, the Executive shall not use or disclose confidential information with respect to the Company or any of its subsidiaries to any person not authorized by the Company to receive such information, and the Executive shall assist the Company, in such manner as may reasonably be requested by the Company, in any litigation in which the Company or any of its subsidiaries is or may become involved. The Executive’s obligations under this Section 4.3 shall not be limited by the Term of this Agreement and shall continue in full force following the expiration of this Agreement.

4.3 For a period extending until twenty-four (24) months after a termination of the Executive’s employment during the Term and following a Change in Control, the Executive shall not directly or indirectly (a) solicit or attempt to solicit any employee to leave the employ of the Company; (b) engage or hold an interest in any company listed in Exhibit B hereto or any subsidiary or affiliate of such business (the “Competing Businesses”), or directly or indirectly have any interest in, own, manage, operate, control, be connected with as a stockholder (other than as a stockholder of less than five percent (5%)), joint venturer, officer, director, partner, employee or consultant, or otherwise engage or invest or participate in, any business conducted by a Competing Business; or (c) indirectly interfere with or disrupt any relationship, contractual or otherwise, between the Company and its customers, suppliers, distributors or other similar parties or contact any customer for the purpose of influencing the directing or transferring of any business or patronage away from the Company.

5. Compensation Other Than Severance Payments.

5.1 If the Executive’s employment shall be terminated for any reason during the Term and following a Change in Control, the Company shall pay the Executive’s full salary to the Executive through the Date of Termination at the rate in effect immediately prior to the Date of Termination or, if higher, the rate in effect immediately prior to the Change in Control, together with all compensation and benefits (including without limitation, pay for accrued but unused vacation) payable to the Executive through the Date of Termination under the terms of the Company’s compensation and benefit plans, programs or arrangements as in effect immediately prior to the Date of Termination.

5.2 If the Executive’s employment shall be terminated for any reason during the Term and following a Change in Control, the Company shall provide to the Executive the Executive’s normal post-termination compensation and benefits (including but not limited to outplacement services and, if the Executive’s place of employment was outside the United States, all benefits under the Company’s repatriation policy to which the Executive would be entitled if there were approval by all Company departments whose approval is required under such policy) as such payments and benefits become due. Such post-termination compensation and benefits shall be determined under, and paid in accordance with, the Company’s retirement, insurance and other compensation or benefit plans, programs, policies and arrangements as in effect immediately prior to the Date of Termination.

6. Severance Payments.

6.1 Subject to Section 6.2 hereof, if (1) a Change in Control occurs during the Term, and (2) the Executive’s employment is terminated (other than (A) by the Company for Cause, (B) by reason of death or Disability, or

(C) by the Executive without Good Reason) and the Date of Termination in connection therewith occurs within two (2) years after such Change in Control then the Company shall pay the Executive the amounts, and provide the Executive the benefits, hereinafter described in this Section 6.1 (“Severance Payments”), together with any payments that may be due under Section 6.2 hereof, in addition to any payments and benefits to which the Executive is entitled under Section 5 hereof.

(A) In lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable by the Company or any of its subsidiaries to the Executive, the Company shall pay to the Executive a lump sum severance payment, in cash, equal to two (2.0) times the sum of (i) the Executive’s base salary as in effect immediately prior to the Date of Termination or, if higher, in effect immediately prior to the Change in Control (the “Base Salary”), plus (ii) the target annual bonus established for the Executive under the bonus plan maintained by the Company in respect of the fiscal year in which occurs the Date of Termination (or, if higher, in respect of the fiscal year in which occurs the Change in Control). If, notwithstanding the foregoing provision that the lump sum severance is to be in lieu of any severance benefit otherwise payable, the Company or any of its subsidiaries is required by applicable law to pay such a benefit, the Company’s obligation to pay such lump sum severance hereunder shall be offset and reduced by the amount of the benefit required to be paid by applicable law. The amounts payable under this Section 6.1(A) shall be reduced dollar-for-dollar for any salary and other compensation payments made pursuant to Section 7.4 hereof.

(B) For the 24-month period immediately following the Date of Termination, the Company shall arrange to provide the Executive and his dependents with life, disability, accident and health insurance benefits substantially similar to those provided to the Executive and his dependents immediately prior to the Date of Termination (or, if more favorable to the Executive, those provided to the Executive and his dependents immediately prior to the Change in Control), at no greater cost to the Executive on an after-tax basis than the cost to the Executive immediately prior to such date or occurrence. Benefits otherwise receivable by the Executive pursuant to this Section 6.1(B) shall cease if benefits of the same type are received by or made available to the Executive by a subsequent employer during the applicable period set forth above (and any such benefits received by or made available to the Executive shall be reported to the Company by the Executive). If the Severance Payments shall be decreased pursuant to Section 6.2(B) hereof, and the Section 6.1(B) benefits which remain payable after the application of Section 6.2 hereof are thereafter discontinued pursuant to the immediately preceding sentence, the Company shall, no later than five (5) business days following such discontinuation, pay to the Executive the least of (a) the amount of the decrease made in the Severance Payments pursuant to Section 6.2 hereof, (b) the value of the discontinued Section 6.1(B) benefits, or (c) the maximum amount which can be paid to the Executive

without being, or causing any other payment to be, nondeductible by reason of Section 280G of the Code. The time period during which benefits are payable under this Section 6.1(B) shall be reduced by the amount of time benefits are paid to Executive pursuant to Section 7.4 hereof.

(C) Notwithstanding any provision of any incentive, stock, retirement, savings or other plan to the contrary, as of the Date of Termination, (i) the Executive shall be fully vested in (1) all then outstanding options to acquire stock of the Company (or if such options have been assumed by, or replaced with options for shares of, a parent, surviving or acquiring company, such assumed or replacement options), and all then outstanding restricted shares of stock of the Company (or the stock of any parent, surviving or acquiring company into which such restricted shares have been converted or for which they have been exchanged) held by the Executive, (2) all accrued basic match and incremental match employer contributions under the Company’s Capital Appreciation Plan, and (3) to the extent permissible under the Code and the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), all amounts credited to his account under the Company’s 401(k) Savings and Investment Plan which are attributable to employer contributions; and (ii) all stock options referred to in clause (i) above shall remain exercisable until the earlier of (x) the 1st anniversary of the Date of Termination or (y) the otherwise applicable expiration date of such option; provided, however, that if the Date of Termination is more than one year after the date of a Change of Control, then the foregoing provisions of this (ii) shall apply only to the extent such application would not cause the stock option to be subject to Section 409A of the Code, and if any stock options would be subject to Section 409A of the Code, such options shall remain exercisable in accordance with the terms of the applicable award agreement and stock option plan rather than the terms of this Agreement. To the extent that the full vesting of the Executive under clause (i)(3) of the preceding sentence would violate either ERISA or the Code, the Company shall pay to the Executive a lump sum amount, in cash, equal to the amount which cannot become fully vested.

(D) The Company shall pay to the Executive a lump sum amount, in cash, equal to the Executive’s target annual bonus under the bonus plan maintained by the Company in respect of the fiscal year in which occurs the Date of Termination (or, if higher, in respect of the fiscal year in which occurs the Change of Control) multiplied by a fraction, the numerator of which is the number of days in such fiscal year through and including the Date of Termination, and the denominator of which is 365.

6.2 (A) Except as otherwise provided in Section 6.2(B), if the Severance Payments together with any payment or benefit received or to be received by the Executive in connection with a Change in Control or the termination of the Executive’s employment (whether pursuant to the terms of this Agreement or otherwise) (all such payments and benefits, excluding the Gross-Up

Payment, being hereinafter called “Total Payments”) will be subject (in whole or part) to the Excise Tax, then the Company shall pay to the Executive an additional amount (the “Gross-Up Payment”) such that the net amount retained by the Executive, after deduction of any Excise Tax on the Total Payments and any federal, state and local income and employment taxes and Excise Tax upon the Gross-Up Payment, shall be equal to the Total Payments. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and localities of the Executive’s residence and employment, as applicable, on the Date of Termination, net of the maximum reduction in federal income tax which could be obtained from deduction of such state and local taxes.

(B) If the Total Payments would (but for this Section 6.2(B)) be subject (in whole or part) to the Excise Tax, but the aggregate value of the portion of the Total Payments which are considered “parachute payments” within the meaning of Section 280G(b)(2) of the Code is less than 330 percent of the Executive’s Base Amount, then subsection (A) of this Section 6.2 shall not apply, no Gross-Up Payment shall be made to Executive and the cash Severance Payments shall be reduced (if necessary, to zero), and all other Severance Payments shall thereafter be reduced (if necessary, to zero), to the extent necessary to cause the Total Payments not to be subject to the Excise Tax.

(C) For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) all of the Total Payments shall be treated as “parachute payments” within the meaning of Section 280G(b)(2) of the Code, unless in the opinion of tax counsel (“Tax Counsel”) reasonably acceptable to the Executive and selected by the Company, such other payments or benefits (in whole or in part) do not constitute parachute payments, including by reason of Section 280G(b)(4)(A) of the Code, (ii) all “excess parachute payments” within the meaning of Section 280G(b)(l) of the Code shall be treated as subject to the Excise Tax unless, in the opinion of the Tax Counsel, such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the Base Amount allocable to such reasonable compensation, or are otherwise not subject to the Excise Tax, and (iii) the value of any noncash benefits or any deferred payment or benefit shall be determined by the Tax Counsel in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. Prior to the payment date set forth in Section 6.3 hereof, the Company shall provide the Executive with its calculation of the amounts referred to in this Section 6.2(C) and such supporting materials as are reasonably necessary for the Executive to evaluate the Company’s calculations. If the Executive disputes the Company’s calculations (in whole or in part), the reasonable opinion of the Tax Counsel with respect to the matter in dispute shall prevail.

(D) (I) In the event that (1) amounts are paid to the Executive pursuant to Section 6.2(A), (2) there is a Final Determination that the Excise Tax is less than the amount taken into account hereunder in calculating the Gross-Up Payment, and (3) after giving effect to such Final Determination, the Severance Payments are to be reduced pursuant to Section 6.2(B), the Executive shall repay to the Company, within five (5) business days following the date of the Final Determination, the Gross-Up Payment and the amount of the reduction in the Severance Payments, plus interest on the amount of such repayments at 120 percent of the rate provided in Section 1274(b)(2)(B) of the Code.

(II) In the event that (1) amounts are paid to the Executive pursuant to Section 6.2(A), (2) there is a Final Determination that the Excise Tax is less than the amount taken into account hereunder in calculating the Gross-Up Payment, and (3) after giving effect to such Final Determination, the Severance Payments are not to be reduced pursuant to Section 6.2(B), the Executive shall repay to the Company, within five (5) business days following the date of the Final Determination, the portion of the Gross-Up Payment attributable to such reduction (plus that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income and employment taxes imposed on the Gross-Up Payment being repaid by the Executive), to the extent that such repayment results in a reduction in the Excise Tax and a dollar-for-dollar reduction in the Executive’s taxable income and wages for purposes of federal, state and local income and employment taxes, plus interest on the amount of such repayment at 120 percent of the rate provided in Section 1274(b)(2)(B) of the Code.

(III) Except as otherwise provided in clause (IV) below, in the event there is a Final Determination that the Excise Tax exceeds the amount taken into account hereunder in determining the Gross-Up Payment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall pay to the Executive, within five (5) business days following the date of the Final Determination, the sum of (1) a Gross-Up Payment in respect of such excess and in respect of any portion of the Excise Tax with respect to which the Company had not previously made a Gross-Up Payment, including a Gross-Up Payment in respect of any Excise Tax attributable to amounts payable under clauses (2) and (3) of this paragraph (III) (plus any interest, penalties or additions payable by the Executive with respect to such excess and such portion), (2) if Severance Payments were reduced pursuant to Section 6.2(B) but after giving effect to such Final Determination, the Severance Payments should

not have been reduced pursuant to Section 6.2(B), the amount by which the Severance Payments were reduced pursuant to Section 6.2(B), and (3) interest on such amounts at 120 percent of the rate provided in Section 1274(b)(2) of the Code.

(IV) In the event that (1) Severance Payments were reduced pursuant to Section 6.2(B) and (2) the aggregate value of Total Payments which are considered “parachute payments” within the meaning of Section 280G(b)(2) of the Code is subsequently redetermined in a Final Determination, but such redetermined value still does not exceed 330 percent of the Executive’s Base Amount, then, within five (5) business days following such Final Determination, (x) the Company shall pay to the Executive the amount (if any) by which the reduced Severance Payments (after taking the Final Determination into account) exceeds the amount of the reduced Severance Payments actually paid to the Executive, plus interest on the amount of such repayment at 120 percent of the rate provided in Section 1274(b) of the Code, or (y) the Executive shall pay to the Company the amount (if any) by which the reduced Severance Payments actually paid to the Executive exceeds the amount of the reduced Severance Payments (after taking the Final Determination into account), plus interest on the amount of such repayment at 120 percent of the rate provided in Section 1274(b) of the Code.

6.3 The payments provided in subsection (A), (B) and (D) (and to the extent applicable, subsection (C)) of Section 6.1 hereof and in Section 6.2 hereof shall be made not later than the fifteenth (15th) day following the Date of Termination (or such later day as may be required by Section 409A of the Code), provided, however, that if the amounts of such payments, and the potential limitation on such payments set forth in Section 6.2 hereof, cannot be finally determined on or before such day, the Company shall pay to the Executive on such day an estimate, as determined in good faith by the Company or, in the case of payments under Section 6.2 hereof, in accordance with said Section 6.2, of the minimum amount of such payments to which the Executive is clearly entitled and shall pay the remainder of such payments (together with interest on the unpaid remainder (or on all such payments to the extent the Company fails to make such payments when due) at 120 percent of the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the sixtieth (60^th) day after the Date of Termination (or such later day as may be required by Section 409A of the Code). At the time that payments are made under this Agreement, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company has received from the Tax Counsel or other advisors or consultants (and any such opinions or advice which are in writing shall be attached to the statement).

6.4 The Company also shall pay to the Executive all reasonable legal fees and expenses incurred by the Executive in disputing in good faith any issue hereunder relating to the termination of the Executive’s employment, in seeking in good faith to obtain or enforce any benefit or right provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of Section 4999 of the Code to any payment or benefit provided hereunder. Such payments shall be made within five (5) business days after delivery of the Executive’s written requests for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require.

7. Termination Procedures and Compensation During Dispute.

7.1 Notice of Termination. Any purported termination of the Executive’s employment hereunder (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Section 10 hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated. Further, a Notice of Termination for Cause is required to include a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board which was called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive was guilty of conduct set forth in clause (i) or (ii) of the definition of Cause herein, and specifying the particulars thereof in detail.

7.2 Date of Termination. “Date of Termination,” with respect to any purported termination of the Executive’s employment hereunder, including a termination described in the second sentence of Section 6.1 hereof, shall mean the date specified in the Notice of Termination (which, except in the case of a termination for Cause, shall not be less than fifteen (15) days nor more than thirty (30) days, respectively, from the date such Notice of Termination is given).

7.3 Dispute Concerning Termination. If, prior to the Date of Termination (as determined without regard to this Section 7.3), the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be extended until the earlier of (i) the date on which the Term ends or (ii) the date on which the dispute is finally resolved, either by mutual written agreement of the parties or by a final

judgment, order or decree of an arbitrator (which is not appealable or with respect to which the time for appeal therefrom has expired and no appeal has been perfected); provided, however, that the Date of Termination shall be extended by a notice of dispute given by the Executive only if such notice is given in good faith and the Executive pursues the resolution of such dispute with reasonable diligence.

7.4 Compensation During Dispute. If a purported termination occurs following a Change in Control and during the Term and the Date of Termination is extended in accordance with Section 7.3 hereof, the Company shall continue to pay the Executive the full compensation in effect when the notice giving rise to the dispute was given (including, but not limited to, salary) and continue the Executive as a participant in all compensation, benefit and insurance plans in which the Executive was participating when the notice giving rise to the dispute was given, until the Date of Termination, as determined in accordance with Section 7.3 hereof. Payments of compensation otherwise receivable pursuant to this Section 7.4 shall be reduced to the extent cash compensation is received by the Executive from a subsequent employer for services rendered during the period described in this Section 7.4 (and any such compensation received by a subsequent employer shall be reported by the Executive to the Company), and benefits otherwise receivable pursuant to this Section 7.4 shall be also be reduced in the manner provided in the penultimate sentence of Section 6.1(B) hereof. Pursuant to Sections 6.1(A) and (B), amounts paid under this Section 7.4 during the pendency of a dispute shall be offset against and reduce other amounts due under such Sections.

8. No Mitigation. The Company agrees that, if the Executive’s employment with the Company terminates during the Term, the Executive is not required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the Company pursuant to Section 6 hereof or Section 7.4 hereof. Further, the amount of any payment or benefit provided for in this Agreement (other than as expressly provided in Section 6.1(A), 6.1(B) or 7.4 hereof) shall not be reduced by any compensation earned by the Executive as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive to the Company, or otherwise.

9. Successors; Binding Agreement.

9.1 In addition to any obligations imposed by law upon any successor to the Company, the Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such assumption and agreement within 30

days after a written demand therefor is delivered to the Board by the Executive shall be a breach of this Agreement and shall entitle the Executive to compensation from the Company in the same amount and on the same terms as the Executive would be entitled to hereunder if the Executive were to terminate the Executive’s employment for Good Reason after a Change in Control, except that, for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination.

9.2 This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amount would still be payable to the Executive hereunder (other than amounts which, by their terms, terminate upon the death of the Executive) if the Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives or administrators of the Executive’s estate.

10. Notices. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given if (a) mailed by registered mail, return receipt requested, postage prepaid, (b) transmitted by hand delivery, (c) sent by next-day or overnight delivery through Federal Express, UPS or another similar nationally recognized delivery service, (d) sent by facsimile or telecopy (provided a copy is contemporaneously mailed by first class mail), addressed in each case if to the Executive, to the address inserted below the Executive’s signature on the final page hereof and, if to the Company, to the address set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon actual receipt:

To the Company:

Chiquita Brands International, Inc.

250 East Fifth Street

Cincinnati, Ohio 45202

Attention: Corporate Secretary

All such notices shall be deemed to have been received (w) if by certified or registered mail, on the seventh business day after the mailing thereof, (x) if by personal delivery, on the business day after such delivery, (y) if by next-day or overnight delivery, on the business day after such delivery and (z) if by facsimile or telecopy, on the business day following the sending of such facsimile or telecopy.

11. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or of any lack of compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. This Agreement supersedes any other agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof which have been made by either party; provided, however, that this Agreement shall supersede any agreement setting forth the terms and conditions of the Executive’s employment with the Company only in the event that the Executive’s employment with the Company is terminated on or following a Change in Control, by the Company other than for Cause or by the Executive for Good Reason. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Ohio. All references to sections of the Exchange Act or the Code shall be deemed also to refer to any successor provisions to such sections. Any payments provided for hereunder shall be paid net of any applicable withholding required under federal, state or local law and any additional withholding to which the Executive has agreed. The obligations of the Company and the Executive under this Agreement which by their nature may require either partial or total performance after the expiration of the Term (including, without limitation, those under Sections 6 and 7 hereof) shall survive such expiration. All pronouns shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the person or persons referred to may require.

12. Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

13. 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 instrument.

14. Settlement of Disputes; Arbitration.

14.1 All claims by the Executive for benefits under this Agreement shall be directed to and determined by the Employee Benefits Committee of the Company and shall be in writing. Any denial by the Employee Benefits Committee of a claim for benefits under this Agreement shall be delivered to the Executive in writing and shall set forth the specific reasons for the denial and the specific provisions of this Agreement relied upon. The Employee Benefits Committee shall afford a reasonable opportunity to the Executive for a review of the decision denying a claim and shall further allow the Executive to appeal to the

Compensation Committee of the Board a decision of the Employee Benefits Committee within sixty (60) days after notification by the Employee Benefits Committee that the Executive’s claim has been denied.

14.2 Except as provided in Section 14.3, any further dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Cincinnati, Ohio, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. Notwithstanding any provision of this Agreement to the contrary, the Executive shall be entitled to seek specific performance of the Executive’s right to be paid until the Date of Termination during the pendency of any dispute or controversy arising under or in connection with this Agreement.

14.3 Notwithstanding anything herein to the contrary, the Executive agrees that it would be difficult to measure any damages caused to the Company that might result from any breach by the Executive of the provisions of Sections 4.2 or 4.3 hereof, and that in any event money damages would be an inadequate remedy for any such breach. Accordingly, the Executive agrees that in the case of breach, or proposed breach, of such provisions, the Company shall be entitled, in addition to all other remedies that it may have, to seek an injunction or other appropriate equitable relief to restrain any such breach without showing or proving any actual damage to the Company.

15. Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated below:

(A) “Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.

(B) “Base Amount” shall have the meaning set forth in Section 280G(b)(3) of the Code.

(C) “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act.

(D) “Board” shall mean the Board of Directors of the Company.

(E) “Cause” for termination by the Company of the Executive’s employment shall mean (i) the willful and continued failure by the Executive to substantially perform the Executive’s duties with the Company (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination for Good Reason by the Executive pursuant to Section 7.1

hereof) that has not been cured within 30 days after a written demand for substantial performance is delivered to the Executive by the Board, which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive’s duties, (ii) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the Company or its subsidiaries, monetarily or otherwise, or (iii) the refusal of the Executive to cooperate with any legal proceeding or investigation, if requested to do so by the Company. For purposes of clauses (i) and (ii) of this definition, no act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s act, or failure to act, was in the best interest of the Company.

(F) A “Change in Control” shall have the meaning set forth in the Company’s Amended and Restated 2002 Stock Option Plan, as in effect on the date hereof.

(G) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

(H) “Company” shall mean Chiquita Brands International, Inc., and, except in determining under Section 15(G) hereof whether or not any Change in Control of the Company has occurred, shall include any successor to its business and/or assets which assumes and agrees to perform this Agreement by operation of law, or otherwise.

(I) “Date of Termination” shall have the meaning set forth in Section 7.2 hereof.

(J) “Disability” shall be deemed the reason for the termination by the Company of the Executive’s employment, if, as a result of the Executive’s incapacity due to physical or mental illness, the Executive shall have been absent from the full-time performance of the Executive’s duties with the Company for a period of six (6) consecutive months, the Company shall have given the Executive a Notice of Termination for Disability, and, within thirty (30) days after such Notice of Termination is given, the Executive shall not have returned to the full-time performance of the Executive’s duties.

(K) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

(L) “Excise Tax” shall mean the excise tax imposed under Section 4999 of the Code.

(M) “Executive” shall mean the individual named in the first paragraph of this Agreement.

(N) “Final Determination” means an audit adjustment by the Internal Revenue Service that is either (i) agreed to by both the Executive (or his estate) and the Company (such agreement by the Company to be not unreasonably withheld) or (ii) sustained by a court of competent jurisdiction in a decision with which the Executive and the Company concur (such concurrence by the Company to be not unreasonably withheld) or with respect to which the period within which an appeal may be filed has lapsed without a notice of appeal being filed or there is no further right of appeal.

(O) “Good Reason” for termination by the Executive of the Executive’s employment shall mean the occurrence (without the Executive’s express written consent) after any Change in Control described in Section 6.1 hereof, of any one of the following acts by the Company, or failures by the Company to act, provided such act (or failure to act) is not cured within 30 days after receipt of written notice from Executive:

(I) the assignment to the Executive of any duties inconsistent with the Executive’s status as an executive officer of the Company (provided that Good Reason shall not be deemed to have occurred merely by reason of the Company becoming a subsidiary of another company) or a substantial adverse alteration in the nature or status of the Executive’s responsibilities from those in effect immediately prior to such Change in Control;

(II) a reduction by the Company in the Executive’s annual base salary or target annual bonus opportunity as in effect immediately prior to such Change in Control or as the same may thereafter be increased from time to time, or a failure to provide the Executive with participation in any stock option or other equity-based plan in which other employees of the Company (and any parent, surviving or acquiring company) participate on a basis that does not unreasonably discriminate against the Executive as compared to such other employees who have similar levels of responsibility and compensation;

(III) the relocation of the Executive’s principal place of employment to a location more than 50 miles from the Executive’s principal place of employment immediately prior to such Change in Control, except for required travel on the Company’s business to an extent substantially consistent with the Executive’s business travel obligations immediately prior to such Change in Control; or

(IV) any material breach by the Company of its obligations under this Agreement;

provided, however, that, the Notice of Termination in connection with the foregoing acts or failure to act must be communicated by the Executive to the Company within six months of the Executive becoming aware of such act or failure to act.

The Executive’s right to terminate the Executive’s employment for Good Reason shall not be affected by the Executive’s incapacity due to physical or mental illness. Except as provided above, the Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder.

(P) “Gross-Up Payment” shall have the meaning set forth in Section 6.2 hereof.

(Q) “Notice of Termination” shall have the meaning set forth in Section 7.1 hereof.

(R) “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

(S) “Severance Payments” shall have the meaning set forth in Section 6.1 hereof.

(T) “Tax Counsel” shall have the meaning set forth in Section 6.2 hereof.

(U) “Term” shall mean the period of time described in Section 2 hereof (including any extension described therein).

(V) “Total Payments” shall mean those payments so described in Section 6.2 hereof.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

CHIQUITA BRANDS INTERNATIONAL, INC.
By:
Name:	Fernando Aguirre
Title:	Chairman of the Board, President and Chief Executive Officer

EXECUTIVE: 

Title:

Address:

EX-10.2

Exhibit 10.2

CHIQUITA BRANDS INTERNATIONAL, INC.

2002 STOCK OPTION AND INCENTIVE PLAN

RESTRICTED STOCK AWARD AND AGREEMENT

Congratulations! You have been awarded a restricted stock award under [the Long-Term Incentive Program (the “LTIP”) of] the Amended and Restated Chiquita 2002 Stock Option and Incentive Plan (the “Plan”).

GRANT: Chiquita Brands International, Inc., a New Jersey corporation (the “Company”), hereby awards to you (the “Grantee” named below) restricted shares of the Company’s Common Stock, par value $.01 per share (“Shares”), subject to the forfeiture provisions and other terms of this Agreement. The Shares will be issued at no cost to you on the Vesting Date[s] set forth below, provided that you are employed by the Company or any of its subsidiaries on the [applicable] Vesting Date. Please read this Agreement carefully and return one copy as requested below. Unless otherwise provided in this Agreement, capitalized terms have the meanings specified in the Plan.

Grantee: No. of Shares: Grant Date: Vesting Dates:

VESTING: [All of the Shares will vest (become deliverable) on [date]] or [The Shares will vest (become deliverable) between the Grant Date and [last vesting date] with [% or number of shares] vesting on [dates]] or, if earlier, upon a Change of Control of the Company (the “Vesting Date”); subject, however, to the forfeiture provisions set forth below. Notwithstanding the foregoing, you may elect, by filing a written election with the Company prior to the date of a Change of Control, to waive all or a portion of your rights to vest in this award by reason of the Change of Control. If your employment terminates because of your death, Disability or Retirement, all the Shares issuable under this award will vest on your termination of employment. On [the][each] Vesting Date (or promptly thereafter), the Company will deliver to you a certificate representing the Shares which have vested on such date.

NO RIGHTS AS SHAREHOLDER PRIOR TO VESTING: Prior to [the][any] Vesting Date, you will have no rights as a shareholder of the Company with respect to the Shares to be issued on or after [the][that] Vesting Date.

FORFEITURE OF SHARES: In the event you cease to be employed by the Company, or by any of its subsidiaries for any reason (other than as a result of death, Disability or Retirement) prior to [the] [any] Vesting Date, then, [subject to the terms of the LTIP,] all unvested Shares subject to this award will be forfeited as of the date of your termination of employment and any rights with respect to such forfeited Shares will immediately cease.

CONFIDENTIALITY, NON-COMPETITION AND NON-SOLICITATION: In consideration of your receipt of this award, you agree as follows:

(a) During your employment with the Company or by any of its subsidiaries, and after the termination of your employment for any reason, voluntary or involuntary, you will hold in a fiduciary capacity for the benefit of the Company all information, knowledge or data relating to the Company or any of its subsidiaries and their respective businesses which the Company or any of its subsidiaries consider to be proprietary, trade secret or confidential that you obtain or have previously obtained during your employment by the Company or any of its subsidiaries and that is not public knowledge (other than as a result of your violation of this provision) (“Confidential Information”). You will not directly or indirectly use any Confidential Information for any purpose not associated with the activities of the Company or any of its subsidiaries, or communicate, divulge or disseminate Confidential Information to any person or entity not authorized by the Company or any of its subsidiaries to receive it at any time during or after your employment with the Company, except with the prior written consent of the Company or as otherwise required by law or legal process. At any time requested by the Company and immediately upon the termination of employment, you shall return all copies of all documents and other materials in any form that constitute, contain, refer or relate to any Confidential Information.

(b) During your employment with the Company or any of its subsidiaries and for a period of two years after the termination of your employment with the Company or any of its subsidiaries, for any reason, voluntary or involuntary, you will not, without the written consent of the Company, directly or indirectly, engage or invest or participate in any business or activity conducted by any company listed in Exhibit A, or any subsidiary or affiliate of such company (the “Competing Businesses”), whether as an employee, officer, director, partner, joint venturer, consultant, representative, shareholder (other than as a holder of less than five percent (5%) of any class of publicly traded securities) or in any other capacity.

(c) During your employment with the Company or any of its subsidiaries, and for a period of one year after the termination of your employment with the Company or any of its subsidiaries, for any reason, voluntary or involuntary, you will not, without the written consent of the Company, directly or indirectly solicit, entice, persuade or induce any person or entity which has a business relationship with the Company to direct or transfer away any business from the Company or any person to leave the employment of the Company or any of its subsidiaries (other than persons employed in a clerical, non-professional or non-management position).

(d) You understand and agree that the restrictions set forth above, including, without limitation, the duration and the business scope of such restrictions, are reasonable and necessary to protect the legal interests of the Company. You further agree that the Company will be entitled to seek injunctive relief in the event of any actual or threatened breach of such restrictions, and you hereby consent to the exercise of personal jurisdiction and venue in a federal or state court of competent jurisdiction located in Hamilton County, Ohio. You understand and agree that this Agreement shall be construed and enforced in accordance with the laws of the state of Ohio applicable to contracts executed and performed therein. If any provision of this Agreement is determined to be unenforceable by any court, then such provision will be modified or omitted only to the extent necessary to make the remaining provisions of this Agreement enforceable.

TAXES: You must pay all applicable U.S. federal, state, local and foreign taxes resulting from the grant of this award and the issuance of the Shares upon any vesting of this award. The Company has the right to withhold all applicable taxes due upon the vesting of this award (by payroll deduction or otherwise) from the proceeds of this award or from future earnings (including salary, bonus or any other payments.) In advance of [the][each] Vesting Date you may elect to pay the withholding amounts due by surrendering to the Company a number of the Shares otherwise deliverable on that Vesting Date that have a fair market value on that Vesting Date equal to the amount of the payroll withholding taxes due.

CONDITIONS: This award is governed by and subject to the terms and conditions of the Plan [and the LTIP], which contains important provisions of this award and forms a part of this Agreement. [A copy][Copies] of the Plan [and the LTIP] [is] [are] being provided to you, along with a summary of the Plan. If there is any conflict between any provision of this Agreement and the Plan, this Agreement will control, unless the provision is not permitted by the Plan, in which case the provision of the Plan will apply. Your rights and obligations under this Agreement are also governed by and are subject to applicable U.S. laws and foreign laws.

AGREEMENT: To acknowledge your agreement to the terms and conditions of this award, please sign and return one copy of this Agreement to the Corporate Secretary’s Office, Attention: Barbara Howland.

CHIQUITA BRANDS INTERNATIONAL, INC.	Complete Grantee Information below:
	Home Address (including country)
By:
By:

Date Agreed To:                   U.S. Social Security Number (if applicable)

-2-

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

I, Fernando Aguirre, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Chiquita Brands International, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 5, 2005

/s/ Fernando Aguirre
Title:	Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

I, Jeffrey M. Zalla, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Chiquita Brands International, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 5, 2005

/s/ Jeffrey M. Zalla
Title:	Chief Financial Officer

EX-32

Exhibit 32

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of Chiquita Brands International, Inc. (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 5, 2005

/s/ Fernando Aguirre
Name:	Fernando Aguirre
Title:	Chief Executive Officer

Dated: August 5, 2005

/s/ Jeffrey M. Zalla
Name:	Jeffrey M. Zalla
Title:	Chief Financial Officer