0001104659-02-004842.txt : 20021009 0001104659-02-004842.hdr.sgml : 20021009 20021009155016 ACCESSION NUMBER: 0001104659-02-004842 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20020831 FILED AS OF DATE: 20021009 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERNATIONAL MULTIFOODS CORP CENTRAL INDEX KEY: 0000051410 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-GROCERIES & RELATED PRODUCTS [5140] IRS NUMBER: 410871880 STATE OF INCORPORATION: DE FISCAL YEAR END: 0303 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06699 FILM NUMBER: 02785156 BUSINESS ADDRESS: STREET 1: 110 CHESHIREL LANE STREET 2: SUITE 300 CITY: MINNETONKA STATE: MN ZIP: 55305-1060 BUSINESS PHONE: 9525943300 MAIL ADDRESS: STREET 1: 110 CHESHIREL LANE STREET 2: SUITE 300 CITY: MINNETONKA STATE: MN ZIP: 55305 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL MILLING CO INC DATE OF NAME CHANGE: 19700217 10-Q 1 j5178_10q.htm 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
	OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 31, 2002

o	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

1-6699

INTERNATIONAL MULTIFOODS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		41-0871880
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


110 Cheshire Lane, Suite 300, Minnetonka, Minnesota		55305
(Address of principal executive offices)		(Zip Code)

(952) 594-3300

(Registrant’s telephone number, including area code)

(not applicable)

(Former name, former address and former fiscal year, if changed since last report)

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

The number of shares outstanding of the registrant’s Common Stock, par value $.10 per share, as of October 4, 2002 was 19,128,979.

PART I. FINANCIAL INFORMATION

INTERNATIONAL MULTIFOODS CORPORATION AND SUBSIDIARIES

Consolidated Condensed Statements of Operations

(unaudited)

(in thousands, except per share amounts)

	THREE MONTHS ENDED						SIX MONTHS ENDED
	Aug. 31,			Sept. 1,			Aug. 31,			Sept. 1,
	2002			2001			2002			2001
Net sales	$	210,055		$	120,967		$	420,482		$	233,384
Cost of goods sold	(168,593		)	(102,858		)	(336,990		)	(198,946		)
Gross profit	41,462			18,109			83,492			34,438
Selling, general and administrative	(28,154		)	(13,429		)	(58,375		)	(27,197		)
Unusual items	—			(344		)	—			(344		)
Operating earnings	13,308			4,336			25,117			6,897
Interest, net	(6,288		)	(1,280		)	(12,764		)	(2,515		)
Other income (expense), net	—			(218		)	—			(369		)
Earnings from continuing operations before income taxes	7,020			2,838			12,353			4,013
Income taxes	(2,667		)	(1,039		)	(4,694		)	(1,435		)
Earnings from continuing operations	4,353			1,799			7,659			2,578
Discontinued operations:
Operating earnings (loss), after tax	(6,468		)	995			(4,870		)	2,302
Cumulative effect of change in accounting principle, net of tax of $23,781	—			—			(41,342		)	—
Net loss on disposition, net of tax of $14,362	(25,922		)	—			(25,922		)	—
Earnings (loss) from discontinued operations	(32,390		)	995			(72,134		)	2,302
Net earnings (loss)	$	(28,037	)	$	2,794		$	(64,475	)	$	4,880

Basic earnings (loss) per share:
Continuing operations	$	0.23		$	0.10		$	0.40		$	0.14
Discontinued operations	(1.70		)	0.05			(3.78		)	0.12
Total	$	(1.47	)	$	0.15		$	(3.38	)	$	0.26

Diluted earnings (loss) per share:
Continuing operations	$	0.22		$	0.09		$	0.39		$	0.14
Discontinued operations	(1.66		)	0.06			(3.70		)	0.12
Total	$	(1.44	)	$	0.15		$	(3.31	)	$	0.26

Average shares of common stock outstanding:
Basic	19,095			18,816			19,062			18,789
Diluted	19,491			19,061			19,473			19,017

See accompanying notes to consolidated condensed financial statements.

INTERNATIONAL MULTIFOODS CORPORATION AND SUBSIDIARIES

Consolidated Condensed Balance Sheets

(in thousands)

	(Unaudited) Aug. 31, 2002			Condensed from audited financial statements March 2, 2002
Assets
Current assets:
Cash and cash equivalents	$	22,710		$	26,459
Trade accounts receivable, net	46,713			45,319
Inventories	130,666			104,756
Current assets of discontinued operations	247,591			258,108
Other current assets	35,262			34,582
Total current assets	482,942			469,224
Property, plant and equipment, net	162,699			147,991
Goodwill, net	43,757			43,412
Other intangible assets, net	138,081			138,247
Noncurrent assets of discontinued operations	44,690			151,164
Other assets	181,652			174,632
Total assets	$	1,053,821		$	1,124,670

Liabilities and Shareholders’ Equity
Current liabilities:
Notes payable	$	4,245		$	—
Current portion of long-term debt	19,360			24,508
Accounts payable	64,415			51,254
Current liabilities of discontinued
operations	132,805			143,111
Other current liabilities	65,557			51,186
Total current liabilities	286,382			270,059
Long-term debt	505,313			514,541
Employee benefits and other liabilities	50,271			68,000
Total liabilities	841,966			852,600

Shareholders’ equity:
Common stock	2,184			2,184
Accumulated other comprehensive loss	(13,670		)	(14,840		)
Other shareholders’ equity	223,341			284,726
Total shareholders’ equity	211,855			272,070

Commitments and contingencies

Total liabilities and shareholders’ equity	$	1,053,821		$	1,124,670

See accompanying notes to consolidated condensed financial statements.

INTERNATIONAL MULTIFOODS CORPORATION AND SUBSIDIARIES

Consolidated Condensed Statements of Cash Flows

(unaudited)

(in thousands)

	SIX MONTHS ENDED
	Aug. 31, 2002			Sept. 1, 2001
Cash flows from operations:
Earnings from continuing operations	$	7,659		$	2,578
Adjustments to reconcile earnings from continuing operations to cash provided by (used for) continuing operations:
Depreciation and amortization	7,555			5,880
Deferred income tax expense	3,515			1,133
Increase in prepaid pension assets	(5,495		)	(6,878		)
Provision for losses on receivables	769			243
Changes in working capital:
Accounts receivable	(847		)	(3,972		)
Inventories	(24,770		)	(15,988		)
Other current assets	(2,002		)	(10,360		)
Accounts payable	10,784			6,665
Other current liabilities	15,788			(3,574		)
Other, net	5,341			4,486
Cash provided by (used for) continuing operations	18,297			(19,787		)
Cash provided by (used for) discontinued operations	3,262			(30,191		)
Cash provided by (used for) operations	21,559			(49,978		)
Cash flows from investing activities:
Capital expenditures	(13,211		)	(9,366		)
Proceeds from property disposals	93			63
Payment received on note receivable	—			1,422
Discontinued operations	(1,577		)	(4,081		)
Cash used for investing activities	(14,695		)	(11,962		)
Cash flows from financing activities:
Net increase in notes payable	4,216			62,859
Reductions in long-term debt	(15,813		)	(1,000		)
Proceeds from issuance of common stock	1,048			1,000
Other, net	(233		)	(3		)
Cash provided by (used for) financing activities	(10,782		)	62,856
Effect of exchange rate changes on cash and cash equivalents	169			(6		)
Net increase (decrease) in cash and cash equivalents	(3,749		)	910
Cash and cash equivalents at beginning of period	26,459			10,232
Cash and cash equivalents at end of period	$	22,710		$	11,142

See accompanying notes to consolidated condensed financial statements.

INTERNATIONAL MULTIFOODS CORPORATION AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements

(unaudited)

(1) In our opinion, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of only normal recurring adjustments, except as noted elsewhere in the notes to the consolidated condensed financial statements) necessary to present fairly our financial position as of August 31, 2002, and the results of our operations and cash flows for the interim periods presented. These statements are condensed and, therefore, do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The statements should be read in conjunction with the consolidated financial statements and footnotes included in our Annual Report on Form 10-K for the year ended March 2, 2002. The results of operations for the three and six months ended August 31, 2002, are not necessarily indicative of the results to be expected for the full year.

(2) New accounting pronouncements

Statement of Financial Accounting Standards No. 142 (SFAS 142), “Goodwill and Other Intangible Assets”

We adopted SFAS 142, “Goodwill and Other Intangible Assets,” on March 3, 2002. Under SFAS 142, goodwill and other intangible assets that have indefinite lives will no longer be amortized, but rather will be tested for impairment at least annually in accordance with the provisions of the standard. See Note 6 for further information on the adoption of SFAS 142.

SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”

We adopted SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” on March 3, 2002. SFAS 144, which supersedes SFAS 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,” provides guidance on the accounting for and reporting of the impairment of long-lived assets. Although SFAS 144 retains many of the fundamental recognition and measurement provisions of SFAS 121, it also establishes certain criteria that would have to be met in order to classify an asset as held-for-sale. With the exception of a certain key provision on classification, SFAS 144 also supersedes Accounting Principles Board (APB) No. 30, “Reporting the Results of Operations-Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions.” The adoption of SFAS 144 did not impact our consolidated financial statements.

SFAS 146, “Accounting for Costs Associated with Exit or Disposal Activities “

In June 2002, the FASB issued SFAS 146, “Accounting for Costs Associated with Exit or Disposal Activities.” The standard requires that a liability for a cost associated with an exit or disposal activity be recognized and measured initially at fair value when the liability is incurred. The provisions of the standard are effective for exit or disposal activities initiated after December 31, 2002. We anticipate that the adoption of SFAS No. 146 will not have a significant effect on our results of operations.

Emerging Issues Task Force (EITF) No. 01-9, “Accounting for Consideration Given by a Vendor to a Customer or a Reseller of the Vendor’s Products”

We adopted Emerging Issues Task Force (EITF) No. 01-9, “Accounting for Consideration Given by a Vendor to a Customer or a Reseller of the Vendor’s Products” on March 3, 2002. The purpose of the EITF is to codify and reconcile the consensus reached on accounting for consideration paid from a vendor to a retailer, including slotting fees, cooperative advertising arrangements and buy-downs. The EITF also addresses accounting for coupons. The guidance generally requires that these incentives be classified as a reduction of sales. In addition, EITF 01-9 requires reclassification of prior-period financial statements to comply with its guidance. As a result, we reclassified $2.3 million and $4.1 million, respectively, of promotional expenses to reduction of net sales for the three months and six months ended September 1, 2001. The reclassification had no impact on our reported earnings.

(3) Discontinued operations

On July 29, 2002, we entered into an agreement to sell our foodservice distribution business to Wellspring Distribution Corp. In accordance with SFAS 144, we have reported the results of operations of the business in discontinued operations.

On September 9, 2002, we completed the sale of our foodservice distribution business for $166 million in cash. We recorded a net after-tax loss on the disposition of $25.9 million. We used the proceeds from the sale along with available cash balances to repay $179 million of term notes.

We continue to guarantee certain real estate, information system and tractor/trailer lease obligations of the foodservice distribution business. See Note 11 for further information.

The following are the operating results of the discontinued operations:

	Three Months Ended					Six Months Ended
	Aug. 31,			Sept. 1,		Aug. 31,			Sept. 1,
(in thousands)	2002			2001		2002			2001
Net sales	$	542,440		$	561,691	$	1,111,678		$	1,113,541
Earnings (loss) before tax	(8,977		)	1,668		(6,401		)	3,857
Earnings (loss) after tax	(6,468		)	995		(4,870		)	2,302

We allocated interest expense to discontinued operations based on net assets that were specifically identifiable to the operation. The operating results of the business in fiscal 2003 included a $6.3 million pre-tax loss from the curtailment and settlement of pension obligations, which resulted from the sale of the business. In addition, we recorded a $3.7 million pre-tax charge in fiscal 2003 primarily for severance costs.

We also recorded an after-tax loss of $41.3 million for the cumulative effect of change in accounting principle due to goodwill impairment. The charge was recognized in the first quarter of fiscal 2003. See Note 6 for further information.

The current and noncurrent assets and liabilities of the foodservice distribution business as of August 31, 2002, and March 2, 2002, are as follows:

	Aug. 31, 2002		March 2, 2002
(in thousands)	Aug. 31, 2002		March 2, 2002
Cash and cash equivalents	$	14	$	15
Trade accounts receivables, net	109,081		104,595
Inventories	119,122		134,445
Other current assets	19,374		19,053
Current assets of discontinued operations	$	247,591	$	258,108

Property, plant and equipment, net	$	44,541	$	82,292
Goodwill, net	—		65,123
Other assets	149		3,749
Noncurrent assets of discontinued operations	$	44,690	$	151,164

Accounts payable	$	117,400	$	131,019
Other current liabilities	15,405		12,092
Current liabilities of discontinued operations	$	132,805	$	143,111

(4) Acquisition

On November 13, 2001, we acquired the Pillsbury dessert and specialty products business, the Pillsbury non-custom foodservice baking mix and frosting products business, and certain regional flour and side-dish brands of General Mills (the Acquisition). The cash purchase price for the Acquisition paid at closing was $304.5 million. The transaction was accounted for under the purchase method in accordance with SFAS 141, “Business Combinations.”

Assuming the Acquisition had occurred on March 3, 2001, the unaudited pro

forma results of operations are as follows:

	Three Months Ended Sept. 1, 2001		Six Months Ended Sept. 1, 2001
(in thousands, except per share amounts)	Three Months Ended Sept. 1, 2001		Six Months Ended Sept. 1, 2001
Net sales	$	218,040	$	421,797
Earnings from continuing operations	8,843		16,768
Basic earnings per share from
continuing operations	0.47		0.89
Diluted earnings per share from
continuing operations	0.46		0.88

The pro forma results of operations are based on our historical financial statements and those of the acquired businesses. We believe that costs under our ownership, including marketing and product development, will exceed those included in the historical financial statements of the acquired businesses. Accordingly, the pro forma results do not purport to represent what our results of operations would have been had the Acquisition occurred on March 3, 2001.

(5) Comprehensive income (loss) — The components of total comprehensive income (loss) were as follows:

	Three Months Ended						Six Months Ended
	Aug. 31, 2002			Sept. 1, 2001			Aug. 31, 2002			Sept. 1, 2001
(in thousands)	Aug. 31, 2002			Sept. 1, 2001			Aug. 31, 2002			Sept. 1, 2001
Net earnings (loss)	$	(28,037	)	$	2,794		$	(64,475	)	$	4,880
Foreign currency
translation adjustment	(1,534		)	(662		)	2,421			83
Net unrealized gain (loss)
on cash flow hedges	(1,153		)	154			(1,437		)	186
Reclassification adjustment for
amounts in earnings (loss)	161			(144		)	186			(429		)
Comprehensive income (loss)	$	(30,563	)	$	2,142		$	(63,305	)	$	4,720

(6) Goodwill and other intangible assets — As discussed in Note 2, we adopted SFAS 142, “Goodwill and Other Intangible Assets” on March 3, 2002. Under SFAS 142, goodwill and other intangible assets that have indefinite lives will no longer be amortized, but rather will be tested for impairment at least annually in accordance with the provisions of the standard.

The test for goodwill impairment is a two-step process. The first step is a comparison of the fair value of the reporting unit (as defined) with its carrying amount, including goodwill. If this step reflects impairment, then the loss would be measured as the excess of recorded goodwill over its implied fair value. Implied fair value is the excess of fair value of the reporting unit over the fair value of all identified assets and liabilities.

In the first quarter of fiscal 2003, we completed the initial testing of our existing goodwill and other intangible assets that have indefinite lives. Based on valuations provided by an independent third-party using primarily discounted cash flows, we determined that all the goodwill associated with our Multifoods Distribution Group (MDG) business was impaired. As a result, we recorded a $65.1 million ($41.3 million after tax) goodwill impairment charge in the first quarter of fiscal 2003. We classified the impairment charge as a cumulative effect of change in accounting principle in the consolidated statement of operations. On July 29, 2002, we entered into an agreement to sell MDG. In accordance with SFAS 144, we have reported the results of operations of MDG in discontinued operations, including the impairment charge. No other impairment charges resulted from the required impairment evaluations on the rest of the reporting units, which were determined using discounted cash flow analyses. The assumptions used in these analyses were consistent with our internal plans.

The changes in the carrying amount of goodwill by segment for the six months ended August 31, 2002, are as follows:

(in thousands)	U.S. Consumer Products		U.S. Foodservice Products		Canadian Foods		Total
Balance as of March 3, 2002	$	24,715	$	12,643	$	6,054	$	43,412
Addition	178		—		—		178
Foreign currency translation	—		—		167		167
Balance as of August 31, 2002	$	24,893	$	12,643	$	6,221	$	43,757

Other intangible assets as of August 31, 2002, and March 2, 2002, are as follows:

	Aug. 31, 2002						March 2, 2002
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Amortized intangible
assets
Trademarks	$	9,090	$	1,714	$	7,376	$	9,090	$	1,394	$	7,696
Non-compete
agreements	1,198		1,171		27		1,162		1,162		—
Customer lists	5,800		4,137		1,663		5,800		3,997		1,803
Other	772		732		40		772		710		62
Total	$	16,860	$	7,754	$	9,106	$	16,824	$	7,263	$	9,561

Unamortized intangible
assets
Trademarks	$	128,889	$	—	$	128,889	$	128,600	$	—	$	128,600
Other	86		—		86		86		—		86
Total	$	128,975	$	—	$	128,975	$	128,686	$	—	$	128,686

Amortization expense related to amortizable intangibles assets for the six months ended August 31, 2002, and September 1, 2001, was $488,000 and $241,000, respectively. The estimated amortization expense for fiscal 2003 to fiscal 2007 is as follows:

(in thousands)	Amounts
2003	$	979
2004	955
2005	924
2006	921
2007	921

The following provides a reconciliation of reported earnings to pro forma amounts adjusted for the elimination of amortization of goodwill:

(in thousands)	Three Months Ended					Six Months Ended_
	Aug. 31, 2002			Sept. 1, 2001		Aug. 31, 2002			Sept. 1, 2001

Reported earnings from
continuing operations	$	4,353		$	1,799	$	7,659		$	2,578
Amortization of goodwill	—			88		—			175
Adjusted earnings from
continuing operations	4,353			1,887		7,659			2,753

Reported earnings (loss) from
discontinued operations	(32,390		)	995		(72,134		)	2,302
Amortization of goodwill	—			364		—			728
Adjusted earnings (loss) from
discontinued operations	(32,390		)	1,359		(72,134		)	3,030

Adjusted net earnings (loss)	$	(28,037	)	$	3,246	$	(64,475	)	$	5,783

Basic earnings (loss) per share	Three Months Ended					Six Months Ended
	Aug. 31, 2002			Sept. 1, 2001		Aug. 31, 2002			Sept. 1, 2001

Reported basic earnings per share
from continuing operations	$	0.23		$	0.10	$	0.40		$	0.14
Amortization of goodwill	—			—		—			0.01
Adjusted basic earnings per share
from continuing operations	0.23			0.10		0.40			0.15

Reported basic earnings (loss) per
share from discontinued operations	(1.70		)	0.05		(3.78		)	0.12
Amortization of goodwill	—			0.02		—			0.04
Adjusted basic earnings (loss) per
share from discontinued operations	(1.70		)	0.07		(3.78		)	0.16

Adjusted basic earnings (loss)
per share	$	(1.47	)	$	0.17	$	(3.38	)	$	0.31

Diluted earnings (loss) per share	Three Months Ended					Six Months Ended
	Aug. 31, 2002			Sept. 1, 2001		Aug. 31, 2002			Sept. 1, 2001

Reported diluted earnings per share
from continuing operations	$	0.22		$	0.09	$	0.39		$	0.14
Amortization of goodwill	—			—		—			0.01
Adjusted diluted earnings per share
from continuing operations	0.22			0.09		0.39			0.15

Reported diluted earnings (loss) per
share from discontinued operations	(1.66		)	0.06		(3.70		)	0.12
Amortization of goodwill	—			0.02		—			0.04
Adjusted diluted earnings (loss) per
share from discontinued operations	(1.66		)	0.08		(3.70		)	0.16

Adjusted diluted earnings (loss)
per share	$	(1.44	)	$	0.17	$	(3.31	)	$	0.31

(7) Interest, net

	Three Months Ended						Six Months Ended
(in thousands)	Aug. 31, 2002			Sept. 1, 2001			Aug. 31, 2002			Sept. 1, 2001
Interest expense	$	8,980		$	4,131		$	18,079		$	8,290
Capitalized interest	(125		)	(100		)	(190		)	(254		)
Non-operating interest income	(71		)	(453		)	(120		)	(881		)
	8,784			3,578			17,769			7,155
Interest expense allocated to discontinued operations	(2,496		)	(2,298		)	(5,005		)	(4,640		)
Interest, net	$	6,288		$	1,280		$	12,764		$	2,515

Cash payments for interest, net of amounts capitalized, were $9.4 million and $8.1 million for the six months ended August 31, 2002, and September 1, 2001, respectively.

We allocated interest expense to discontinued operations based on net assets that can be specifically identifiable to the operation.

(8) Income taxes — Cash payments for income taxes were $4.5 million and $5.5 million for the six months ended August 31, 2002, and September 1, 2001, respectively.

(9) Supplemental balance sheet information

(in thousands)	Aug. 31, 2002			March 2, 2002
(in thousands)	Aug. 31, 2002			March 2, 2002
Trade accounts receivable, net:
Trade	$	47,201		$	45,619
Allowance for doubtful accounts	(488		)	(300		)
Total trade accounts receivable, net	$	46,713		$	45,319

Inventories:
Raw materials, excluding grain	$	16,329		$	13,781
Grain	11,622			4,360
Finished and in-process goods	97,097			82,629
Packages and supplies	5,618			3,986
Total inventories	$	130,666		$	104,756

Property, plant and equipment, net:
Land	$	2,199		$	2,152
Buildings and improvements	50,469			49,078
Machinery and equipment	188,604			183,674
Improvements in progress	30,034			14,857
	271,306			249,761
Accumulated depreciation	(108,607		)	(101,770		)
Total property, plant and equipment, net	$	162,699		$	147,991

Accumulated other comprehensive loss:
Foreign currency translation adjustment	$	(15,826	)	$	(18,247	)
Minimum pension liability adjustment	(2,566		)	(2,566		)
Derivative hedge accounting adjustment	4,722			5,973
Total accumulated other comprehensive loss	$	(13,670	)	$	(14,840	)

(10) Segment information

We manage the company through three operating segments: U.S. Consumer Products, U.S. Foodservice Products and Canadian Foods. Our organizational structure is the basis for reporting business results to management and the segment data presented in this Note. We formed the U.S. Consumer Products business in fiscal 2002 as a result of our acquisition of certain retail brands from Pillsbury and General Mills.

(in millions)	Net Sales		Operating Costs			Unusual Items			Operating Earnings
Three Months Ended Aug. 31, 2002
U.S. Consumer Products	$	79.9	$	(69.6	)	$	—		$	10.3
U.S. Foodservice Products	58.3		(56.9		)	—			1.4
Canadian Foods	71.9		(66.6		)	—			5.3
Corporate	—		(3.7		)	—			(3.7		)
Total	$	210.1	$	(196.8	)	$	—		$	13.3

Three Months Ended Sept. 1, 2001
U.S. Consumer Products	$	—	$	—		$	—		$	—
U.S. Foodservice Products	52.9		(51.5		)	—			1.4
Canadian Foods	68.1		(62.3		)	—			5.8
Corporate	—		(2.6		)	(0.3		)	(2.9		)
Total	$	121.0	$	(116.4	)	$	(0.3	)	$	4.3

Six Months Ended Aug. 31, 2002
U.S. Consumer Products	$	165.9	$	(145.1	)	$	—		$	20.8
U.S. Foodservice Products	116.6		(113.6		)	—			3.0
Canadian Foods	138.0		(128.9		)	—			9.1
Corporate	—		(7.8		)	—			(7.8		)
Total	$	420.5	$	(395.4	)	$	—		$	25.1

Six Months Ended Sept. 1, 2001
U.S. Consumer Products	$	—	$	—		$	—		$	—
U.S. Foodservice Products	105.4		(102.4		)	—			3.0
Canadian Foods	128.0		(118.3		)	—			9.7
Corporate	—		(5.5		)	(0.3		)	(5.8		)
Total	$	233.4	$	(226.2	)	$	(0.3	)	$	6.9

(11) Contingencies — In fiscal 1998, we were notified that approximately $6 million of our inventory was stolen from a ship in the port of St. Petersburg, Russia. The ship had been chartered by a major customer of our former food-exporting business. We believe, based on the facts known to date, that the loss is covered by insurance. However, following submission of a claim for indemnity, the insurance carrier denied our claim for coverage, and we commenced a lawsuit seeking to obtain coverage under the insurance carrier’s policy. In October 2001, the U.S. District Court of the Southern District of New York granted us summary judgment on our claim and awarded us interest to the date of judgment. In November 2001, the insurance carrier appealed the judgment to the U.S. Court of Appeals for the Second Circuit. Although we will continue to vigorously assert our claim in the litigation, the interest awarded by the U.S. District Court will not be recognized as income until collection is assured.

On September 9, 2002, we completed the sale of our foodservice distribution business to Wellspring Distribution Corp. We continue to guaranty certain real estate, information system and tractor/trailer fleet lease obligations of our former business. However, at the time of the sale of the business, we renegotiated our guaranty of the business’s fleet lease obligations. The guaranty now requires the lessor to pursue collection and other remedies against our former subsidiaries before demanding payment from us. In addition, our guarantee obligation is limited to 75% of the amount outstanding after the

lessor has exhausted its remedies against our former subsidiaries. This reduces our risk under the fleet lease guaranty. In addition, while the initial guaranty was not limited by time, the fleet lease guaranty will now expire in September 2006.

The outstanding guaranties for the lease obligations of our former subsidiaries are as follows:

(in millions)	Gross amount		Net present value @ 7%
Tractor/trailer	$	28.8	$	24.0
Real estate	17.3		13.7
Information systems	0.8		0.7
Total	$	46.9	$	38.4

If Wellspring Distribution Corp. was unable to meet its obligations that we have guaranteed, any loss would be reduced by the amount generated from the liquidation of the tractor/trailer fleet and income from the sub-lease of real estate space.

The possibility of the Company having to honor our contingent liabilities under the guaranties is largely dependent upon the future operations of our former subsidiaries and the value of the underlying leased properties. Should a reserve be required in the future, it would be recorded at the time the obligation was determined to be probable.

(12) Subsequent event

In September 2002, we used the proceeds from the sale of our foodservice distribution business along with available cash balances to repay $179 million of term notes. As a result of the debt repayment, we will recognize a non-cash pre-tax loss of approximately $4.5 million in our third quarter results ended November 30, 2002.

INTERNATIONAL MULTIFOODS CORPORATION AND SUBSIDIARIES

Management’s Discussion and Analysis of Results of

Operations and Financial Condition

OVERVIEW

International Multifoods is a North American producer of branded consumer foods and foodservice products, including baking mixes, frozen bakery products, flour, ready-to-spread frostings, condiments, potato and pancake mix offerings. We manage the company through three operating segments—U.S. Consumer Products, U.S. Foodservice Products and Canadian Foods.

In July 2002, we announced we had entered into an agreement to sell our foodservice distribution business to Wellspring Distribution Corp. We completed the sale on September 9, 2002, for $166 million in cash. The foodservice distribution business is classified as discontinued operations in the consolidated financial statements and in the following management discussion and analysis.

In November 2001, we completed our acquisition of the Pillsbury desserts and specialty products business, the Pillsbury non-custom foodservice baking mix and frosting products business, and certain regional flour and side-dish brands of General Mills. The acquisition makes International Multifoods a leading marketer of U.S. consumer baking products and enhances our existing U.S. foodservice manufacturing business.

Results of Operations

Continuing Operations

Earnings from continuing operations were $4.4 million, or 22 cents per diluted share, in the second quarter ended August 31, 2002, compared with earnings of $1.8 million, or 9 cents per share, in the same period last year. The increase in earnings primarily reflects the contribution from the Pillsbury and General Mills businesses that we acquired in November 2001. The increase was partially offset by higher interest expense, which resulted from the debt we incurred to pay for the acquisition.

For the six months ended August 31, 2002, earnings from continuing operations were $7.7 million, or 39 cents per diluted share, compared with earnings of $2.6 million, or 14 cents per share, a year ago.

Segment Results

U.S. Consumer Products: This business segment was formed last year as a result of our acquisition of certain retail brands of The Pillsbury Company and General Mills. The operating results of the acquired brands have been included in our results since the date of acquisition.

Second quarter net sales were $79.9 million. On a comparable pro forma basis, as if we owned the retail brands in last year’s second quarter, unit volume declined about 5%. The decline in comparable unit volume was driven by difficult comparisons a year ago and competitive pressures in the U.S. retail baking category. For the six months ended August 31, 2002, comparable unit volume increased approximately 4% on more effective merchandising, success in emerging channels and brand-building initiatives.

U.S. Foodservice Products: Net sales increased 10% to $58.3 million, which reflects the incremental contribution from the Pillsbury foodservice brands that we acquired last year. We also had unit volume growth in our ready-to-bake and

thaw-and-serve products. Bakery mix products, however, experienced a decline in unit volume as a result of competitive pressures in a soft foodservice environment.

Operating earnings of $1.4 million were even with last year. The earnings contribution from the acquired Pillsbury brands was offset by competitive pressures and higher costs, principally for sugar and restructuring of the foodservice sales force.

Net sales for the six-month period ended August 31, 2002, increased 11% to $116.6 million, compared with $105.4 million a year ago. The increase in sales was essentially due to the same factors discussed for the second quarter. Operating earnings of $3 million were even with a year ago. In addition to the factors described in the discussion of the second quarter, operating earnings in the six-month period were impacted by a loss on an advance to a supplier that filed for bankruptcy.

Canadian Foods: Net sales increased 6% to $71.9 million. We had unit volume growth in consumer condiments, commercial mixes and export products. Consumer condiment unit volumes benefited from a new product offering last year. The increase in sales was also due to higher prices on grain-based products sold to commercial customers, which resulted from increased commodity costs.

Operating earnings declined to $5.3 million, compared with $5.8 million last year. The earnings decline was driven by higher condiments costs, which included increased marketing costs associated with the national roll-out of a new product offering. Operating earnings were also impacted by an unfavorable grain-based sales mix.

Net sales for the six-month period ended August 31, 2002, increased 8% to $138 million, compared with $128 million a year ago. Sales increased on unit volume growth in consumer condiments, commercial flour and export products. The increase was also due to higher prices in grain-based products sold to commercial customers. Operating earnings declined 6% to $9.1 million, compared with $9.7 million last year. The decline was primarily the result of higher condiments costs, which includes the impact of inefficiencies in manufacturing costs associated with a facility consolidation project that took place last year.

Corporate: Corporate expenses in the second quarter were $3.7 million, compared with $2.9 million last year. The increase was primarily the result of increased incentive costs along with higher staff costs to support the acquired businesses.

Non-operating Expense and Income

Net interest expense in the second quarter was $6.3 million, compared with $1.3 million last year. The significant increase was primarily due to the debt we incurred in November 2001 to finance the acquisition of the Pillsbury and General Mills businesses.

Discontinued Operations

Our discontinued foodservice distribution business had a pre-tax operating loss of $9 million ($6.5 million after tax) in the second quarter of fiscal 2003. Operating results included a $6.3 million pre-tax loss from the curtailment and settlement of pension obligations, which resulted from the sale of the business. In addition, we recorded a $3.7 million pre-tax charge primarily for severance costs.

We also recorded a net after-tax loss of $25.9 million in the second quarter for the disposition of the business. On September 9, 2002, we completed the sale of our foodservice distribution business for $166 million in cash.

As a result of our adoption of Statement of Accounting Standards No. 142 (SFAS 142), Goodwill and other Intangible Assets, we recorded a cumulative effect of a change in accounting principle of $41.3 million to write off the goodwill associated with Multifoods Distribution Group. See additional discussion in Note 6 to the consolidated condensed financial statements.

Financial Condition

Our major sources of liquidity are cash flows from operations and borrowings from our $100 million revolving credit facility. As of August 31, 2002, we had $89 million available under the revolving credit facility.

We believe that cash flows from operations, current cash on hand and borrowings from our existing revolving credit facility will be sufficient to meet our operating requirements and debt service obligations for the foreseeable future.

The debt-to-total-capitalization ratio increased to 71% at August 31, 2002, compared with 66% at March 2, 2002. The increase was primarily the result of a decline in shareholders’ equity, which was caused by the loss we recognized from discontinued operations.

Cash provided by continuing operations was $18.3 million for the first six months of fiscal 2003, compared with cash used of $19.8 million in the prior-year six-month period. Operating cash flows in the current period exceeded the prior year as a result of favorable working capital movements, higher earnings from continuing operations and payments received from an escrow account established as part of the acquisition.

In September 2002, we used the proceeds from the sale of our foodservice distribution business and available cash balances to repay $179 million of term notes. We repaid all our Term A notes and $53 million of our Term B notes. As a result of the repayment, we will recognize a non-cash pre-tax loss of approximately $4.5 million in our third-quarter results ended November 30, 2002. If our $179 million repayment had been made as of August 31, 2002, our debt-to-total-capitalization ratio at that date would have been 62%.

Cautionary Statement Relevant to Forward-Looking Information

This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning our operations and financial performance and condition. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. We caution that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, successful completion of the integration of the acquired businesses; reliance on General Mills, Inc., to provide material transition and co-pack services to our U.S. Consumer Products division, including the conversion of the General Mills Toledo plant for our use; the impact of competitive products and pricing; changes in consumer preferences and tastes or perceptions of health-related issues; effectiveness of advertising or market-spending programs; market or weather conditions that may affect the costs of grain, other raw materials, fuel and labor; changes in laws and regulations; fluctuations in interest rates; the inability to collect on a $6 million insurance claim related to the theft of product in St. Petersburg, Russia; collection is sought under our guaranties of lease obligations of our former Multifoods Distribution Group subsidiaries; fluctuations in foreign exchange rates; risks commonly encountered in international trade; and other factors as may be discussed in our reports filed with the Securities and Exchange Commission.

Item 4. Controls and Procedures

(a) Evaluation of disclosure controls and procedures. The term “disclosure controls and procedures” is defined in Rules 13a-14(c) and 15d-14(c) of the Securities and Exchange Act of 1934 (“Exchange Act”). These rules refer to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported within required time periods. Our chief executive officer and our chief financial officer have evaluated the effectiveness of the Company’s disclosure controls and procedures as of a date within 90 days before the filing of this quarterly report (the “Evaluation Date”), and, they have concluded that, as of the Evaluation Date, such controls and procedures were effective at ensuring that required information will be disclosed on a timely basis in our reports filed under the Exchange Act.

(b) Changes in internal controls. We maintain a system of internal accounting controls that are designed to provide reasonable assurance that our books and records accurately reflect our transactions and that our established policies and procedures are carefully followed. For the quarter ended August 31, 2002, there were no significant changes to our internal controls or in other factors that could significantly affect our internal controls, and we have not identified any significant deficiencies or material weaknesses in our internal controls.

PART II

OTHER INFORMATION

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

(a) The 2002 Annual Meeting of Stockholders of International Multifoods Corporation (the “Company”) was held on June 21, 2002 (the “Annual Meeting”). Holders of the Company’s common stock, par value $.10 per share, of record on May 1, 2002, were entitled to one vote per share.

(c) Claire L. Arnold, James M. Jenness and Richard K. Smucker were elected directors for a term of three years at the Annual Meeting. The number of votes cast for the election of each director and the number of votes withheld are as follows:

	FOR	WITHHELD
Claire L. Arnold	14,387,902	106,984
James M. Jenness	14,385,185	109,700
Richard K. Smucker	10,710,527	3,784,359

The other directors whose terms of office as directors continued after the meeting were Gary E. Costley, Nicholas L. Reding, Jack D. Rehm, Lois D. Rice and Dolph W. von Arx.

With respect to the proposal to approve the Management Incentive Plan, as amended, of International Multifoods Corporation, there were 11,024,124 votes cast for the proposal, 1,210,883 votes cast against the proposal and 125,666 abstentions. There were 2,134,774 broker nonvotes with respect to such matter.

With respect to the proposal to approve the appointment of KPMG LLP as independent auditors of the Company for the fiscal year ending March 1, 2003, there were 14,129,162 votes cast for the proposal, 327,027 votes cast against the proposal and 39,257 abstentions. There were no broker nonvotes with respect to such matter.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

4.1 First Amendment and Consent to Credit Agreement, dated as of August 20, 2002, among International Multifoods Corporation, Robin Hood Multifoods Inc., the several lenders from time to time party thereto, Rabobank International, as Documentation Agent, U.S. Bank National Association and UBS Warburg LLC, as Syndication Agents, and Canadian Imperial Bank of Commerce, as U.S. Administrative Agent and Canadian Administrative Agent.

The Company hereby agrees to furnish to the Securities and Exchange Commission upon request copies of all Exhibits to the First Amendment and Consent to Credit Agreement.

10.1 Amendment to the Amended and Restated 1989 Stock-Based Incentive Plan of International Multifoods Corporation.

10.2 Second Amendment to the Amended and Restated 1989 Stock-Based Incentive Plan of International Multifoods Corporation.

10.3 Letter Agreement, dated August 2, 2002, between Robert S. Wright and International Multifoods Corporation regarding severance and retirement benefits.

10.4 Amendment to Letter Agreement, dated August 6, 2002, between Robert S. Wright and International Multifoods Corporation amending Letter Agreement dated August 2, 2002.

11. Computation of Earnings (loss) per Common Share.

12. Computation of Ratio of Earnings to Fixed Charges.

99.1 Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.2 Certification of the Chief Financial Officer Pursuant to 18.U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b) During the quarter ended August 31, 2002, the Company filed a Current Report on Form 8-K dated July 30, 2002, related to the Company’s entering into a definitive agreement to sell its foodservice distribution business.

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.

	INTERNATIONAL MULTIFOODS CORPORATION




Date: October 8, 2002		/s/ John E. Byom
		John E. Byom
		Vice President — Finance and Chief Financial Officer
		(Principal Financial Officer
		and Duly Authorized Officer)

CERTIFICATION

I, Gary E. Costley, certify that:

1. I have reviewed this quarterly report on Form 10-Q of International Multifoods Corporation;

2. Based on my knowledge, this quarterly 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 quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

(a) designed such disclosure controls and procedures 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 quarterly report is being prepared;

(b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

(c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

(a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: October 8, 2002	/s/ Gary E. Costley
	Gary E. Costley
	Chairman of the Board & Chief Executive Officer
	(Principal Executive Officer)

CERTIFICATION

I, John E. Byom, certify that:

1. I have reviewed this quarterly report on Form 10-Q of International Multifoods Corporation;

(b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

(c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

Date: October 8, 2002	/s/ John E. Byom
	John E. Byom
	Vice President, Finance & Chief Financial Officer
	(Principal Financial Officer)

EXHIBIT INDEX

4.1		First Amendment and Consent to Credit Agreement, dated as of August 20, 2002, among International Multifoods Corporation, Robin Hood Multifoods Inc., the several lenders from time to time party thereto, Rabobank International, as Documentation Agent, U.S. Bank National Association and UBS Warburg LLC, as Syndication Agents, and Canadian Imperial Bank of Commerce, as U.S. Administrative Agent and Canadian Administrative Agent.

		The Company hereby agrees to furnish to the Securities and Exchange Commission upon request copies of all Exhibits to the First Amendment and Consent to Credit Agreement.

10.1		Amendment to the Amended and Restated 1989 Stock-Based Incentive Plan of International Multifoods Corporation.

10.2		Second Amendment to the Amended and Restated 1989 Stock-Based Incentive Plan of International Multifoods Corporation.

10.3		Letter Agreement, dated August 2, 2002, between Robert S. Wright and International Multifoods Corporation regarding severance and retirement benefits.

10.4		Amendment to Letter Agreement, dated August 6, 2002, between Robert S. Wright and International Multifoods Corporation amending Letter Agreement dated August 2, 2002.

11.		Computation of Earinings (loss) per Common Share.

12.		Computation of Ratio of Earnings to Fixed Charges.

99.1		Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.2		Certification of the Chief Financial Officer Pursuant to 18.U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

EX-4.1 3 j5178_ex4d1.htm EX-4.1

Exhibit 4.1

FIRST AMENDMENT AND CONSENT TO CREDIT AGREEMENT

FIRST AMENDMENT AND CONSENT, dated as of August 20, 2002 (this “Amendment”), to and under the Credit Agreement, dated as of September 28, 2001 (as heretofore amended, supplemented or otherwise modified, the “Credit Agreement”), among International Multifoods Corporation (the “U.S. Borrower”), Robin Hood Multifoods Inc. (the “Canadian Borrower” and together with the U.S. Borrower, the “Borrowers”), the several lenders from time to time parties thereto (the “Lenders”), Rabobank International, as documentation agent, U.S. Bank National Association and UBS Warburg LLC, as syndication agents, and Canadian Imperial Bank of Commerce (“CIBC”), as U.S. administrative agent and Canadian administrative agent (the “Administrative Agents”).

W I T N E S S E T H :

WHEREAS, the Borrowers, the Lenders and the Administrative Agents are parties to the Credit Agreement;

WHEREAS, the Borrowers, the Lenders and the Administrative Agents are parties to the U.S. Guarantee and Collateral Agreement;

WHEREAS, the U.S. Borrower wishes to sell the Capital Stock (the “MDM Sale”) of Multifoods Distribution Management, Inc. and its Subsidiaries, pursuant to the stock purchase agreement, dated as of July 29, 2002, by and between International Multifoods Corporation and Wellspring Distribution Corp.; and

WHEREAS, the Borrowers have requested that the Lenders and the Administrative Agents consent to the MDM Sale and agree to amend certain provisions of the Credit Agreement.

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

1. Defined Terms. Unless otherwise defined herein, capitalized terms used herein which are defined in the Credit Agreement are used herein as therein defined.

2. Amendment to Section 1.1 of the Credit Agreement (Defined Terms). Section 1.1 of the Credit Agreement is hereby amended by:

(a) deleting, in their entirety, the terms “Canadian Swingline Commitment”, “Consolidated Fixed Charges” and “U.S. L/C Commitment” appearing therein and inserting the following new definitions in the appropriate alphabetical order:

““Canadian Swingline Commitment”: as to the Canadian Swingline Lender, the obligation of such Lender to make Canadian Swingline Loans in an aggregate principal amount not to exceed C$7,500,000, or the Dollar Equivalent

thereof, as the same may be modified from time to time pursuant to the terms hereof.

“Consolidated Fixed Charges”: for any period, the sum (without duplication) of (a) Consolidated Interest Expense for such period, (b) Consolidated Lease Expense for such period, (c) scheduled payments made during such period on account of principal of Indebtedness of the U.S. Borrower or any of its Subsidiaries (including scheduled principal payments in respect of the Term Loans but specifically excluding any payments in respect of Revolving Loans) and (d) payments made in respect of Permitted MDM Guarantee Obligations.

“MDM Entities”: the collective reference to Multifoods Distribution Management, Inc. and its Subsidiaries (which, for the avoidance of doubt, includes Better Brands, Inc., Multifoods Distribution Group, Inc. and Multifoods Merchandising, Inc.).

“MDM Sale”: the sale of all of the Capital Stock of the MDM Entities pursuant to, and the consummation of the other transactions contemplated by, the MDM Stock Purchase Agreement.

“MDM Stock Purchase Agreement”: the Stock Purchase Agreement, dated as of July 29, 2002, between International Multifoods Corporation and Wellspring Distribution Corp., together with (i) any nonmaterial amendments thereto and (ii) any other amendments thereto to which the Required Lenders have given their prior written consent.

“Permitted MDM Guarantee Obligations”: Guarantee Obligations of the U.S. Borrower of lease obligations of MDM Entities as more fully set forth on Schedule 8.

“U.S. L/C Commitment”: $25,000,000.”; and

(b) amending the definitions of (i) “Applicable Margin” by deleting the table set forth in clause (b) thereof in its entirety and inserting in lieu thereof the following table:

	“C$Prime Loans		U.S. Base Rate Loans		Eurodollar Loans		Bankers’ Acceptances
Canadian Revolving Loans	2.00	%	2.00	%	3.00	%	3.00	%
Canadian Swingline Loans	2.00	%	2.00	%	N/A		N/A
Canadian Term Loans	2.00	%	2.00	%	3.00	%	3.00”;	%

(ii) “Consolidated EBITDA” by (A) deleting “and” immediately following clause (f) thereof and substituting in lieu thereof a comma and (B) adding immediately after clause (g) thereof the following:

“, (h) fees and expenses paid in connection with the MDM Sale, (i) nonrecurring retention and severance costs resulting from the MDM Sale and (j) any non-recurring non-cash expenses or losses related to settlement and curtailment of pension plans as a result of the MDM Sale”;

(iii) “Consolidated Total Debt” by adding immediately before the period at the end thereof the following:

“; provided that for purposes of calculating Consolidated Total Debt for the fiscal quarter immediately following the date of consummation of the MDM Sale, Consolidated Total Debt shall not include any Net Cash Proceeds of the MDM Sale to be applied on the Mandatory Prepayment Date to prepay the Loans in accordance with Section 2.18(f)”; and

(iv) “Excess Cash Flow” by (A) deleting “and” immediately following clause (b)(vi) thereof and substituting in lieu thereof a comma and (B) adding immediately before the period at the end thereof the following:

“and (viii) the aggregate amount of Investments permitted under Section 7.8(j) made in such fiscal year which is not financed with Indebtedness”.

3. Amendment to Section 2.13 (Canadian Swingline Loans). Section 2.13 of the Credit Agreement is hereby deleted in its entirety and replaced with the following:

“Subject to the terms and conditions hereof, the Canadian Swingline Lender agrees to make extensions of credit to the Canadian Borrower from time to time during the Revolving Commitment Period by making swing line loans (“Canadian Swingline Loans”) to the Canadian Borrower and/or issuing Canadian Letters of Credit on behalf of the Canadian Borrower in an aggregate amount not to exceed the Canadian Swingline Commitment (or the Dollar Equivalent thereof) of such Lender. The Canadian Swingline Loans may (a) be denominated in Dollars or Canadian Dollars as determined by the Canadian Borrower and notified to the Canadian Swingline Lender and (b) from time to time be (i) U.S. Base Rate Loans, in the case of such Loans denominated in Dollars, (ii) C$ Prime Loans, in the case of such Loans denominated in Canadian Dollars or (iii) issued as Canadian Letters of Credit on behalf of the Canadian Borrower, in each case as determined by the Canadian Borrower and as agreed to by the Canadian Swingline Lender. Each Canadian Swingline Loan will be made by the Canadian Swingline Lender on an overdraft basis to meet a drawing upon any account maintained by the Canadian Borrower with the Canadian Swingline Lender and no notice of such borrowing shall be required by debiting the account of the Canadian Borrower on the books of the Canadian Lending Office. The Canadian Borrower shall ensure that, after giving effect to the making of any Canadian Swingline Loan, the aggregate amount of Canadian Swingline Extensions of Credit then outstanding shall not exceed the Canadian Swingline Commitment.

During the Revolving Commitment Period, the Canadian Borrower may use the Canadian Swingline Commitment by borrowing, repaying and reborrowing and causing Canadian Letters of Credit to be issued, all in accordance with the terms and conditions hereof.”.

4. Amendment to Section 2.16(c) (Termination or Reduction of Commitments and Canadian Swingline Commitment). Section 2.16(c) of the Credit Agreement is hereby amended by deleting “C$1,000,000” and substituting in lieu thereof “C$1,000,000, or the Dollar Equivalent thereof”.

5. Amendment to Section 2.17 (Optional Prepayments). Section 2.17 of the Credit Agreement is hereby amended by deleting “C$100,000” and substituting in lieu thereof “C$100,000, or the Dollar Equivalent thereof,”.

6. Amendment to Section 6.2(b) (Certificates; Other Information). Section 6.2(b) of the Credit Agreement is hereby amended by (a) deleting “and” immediately following clause (ii)(x) thereof and (b) adding immediately before clause (iii) thereof the following:

“(z) in the case of the delivery of any financial statements pursuant to Section 6.1(a) only, an updated Schedule 8 reflecting modifications thereto, if any, which shall be deemed to amend and replace the then existing Schedule 8 in its entirety and”.

7. Amendment to Section 7.1 (Negative Covenants). Section 7.1 of the Credit Agreement is hereby amended by:

(a) deleting the table set forth in Section 7.1(b) thereof in its entirety and inserting in lieu thereof the following table:

“Fiscal Quarter		Consolidated Interest Coverage Ratio
Q4 of ‘02 and Q1, Q2 and Q3 of ‘03		2.25 to 1
Q4 of ‘03 and Q1, Q2 and Q3 of ‘04		2.75 to 1
Q4 of ‘04 and thereafter		3.00 to 1”; and

(b) deleting the table set forth in Section 7.1(c) thereof in its entirety and inserting in lieu thereof the following table:

“Fiscal Quarter		Consolidated Fixed Charge Coverage Ratio
Q4 of ‘02 and Q1, Q2 and Q3 of ‘03		1.20 to 1

“Fiscal Quarter		Consolidated Fixed Charge Coverage Ratio
Q4 of ‘03 and Q1, Q2 and Q3 of ‘04		1.25 to 1
Q4 of ‘04 and thereafter		1.30 to 1”.

8. Amendment to Section 7.2 (Indebtedness). Section 7.2 of the Credit Agreement is hereby amended by:

(a) (i) deleting “and” immediately following clause (b)(iii) thereof and substituting in lieu thereof a comma and (ii) adding immediately after clause (b)(iv) thereof the following:

“and (v) Indebtedness of the Canadian Borrower or any Canadian Wholly Owned Subsidiary Guarantor to the U.S. Borrower in an aggregate amount at any time outstanding not to exceed the Net Cash Proceeds of the MDM Sale which are applied to the repayment of the Canadian Term Loans pursuant to Section 2.18; provided that such Indebtedness shall be evidenced by a promissory note pledged to the Collateral Agent pursuant to the U.S. Guarantee and Collateral Agreement”; and

(b) deleting “$5,000,000” in clause (h) thereof and substituting in lieu thereof “$10,000,000”.

9. Amendment to Section 7.7 (Capital Expenditures). Section 7.7 of the Credit Agreement is hereby amended by (a) deleting “and” immediately following clause (a) thereof and substituting in lieu thereof a comma and (b) adding immediately before the period at the end thereof the following:

“and (c) Capital Expenditures of the U.S. Borrower and its Subsidiaries up to an additional $20,000,000 during the term of this Agreement so long as the U.S. Borrower provides to the Administrative Agents information in detail satisfactory to the Administrative Agents with respect to such Capital Expenditures”.

10. Amendment to Section 7.8 (Investments). Section 7.8 of the Credit Agreement is hereby amended by:

(a) adding immediately before the semicolon at the end of clause (c) thereof “and Permitted MDM Guarantee Obligations”; and

(b) amending clause (j) thereof by (i) deleting “$15,000,000” and substituting in lieu thereof “$35,000,000 and (ii) deleting “$30,000,000” and substituting in lieu thereof “$50,000,000”.

11. Amendment to Schedules 1.1A (Mortgaged Property) and 4.15

(Subsidiaries) and New Schedule 8 (Permitted MDM Guarantee Obligations ) to the Credit Agreement. The Credit Agreement is hereby amended by:

(a) replacing Schedule 1.1A (Mortgaged Property) thereto with a new Schedule 1.1A in the form attached to this Amendment as Exhibit A;

(b) amending Schedule 4.15 (Subsidiaries) thereto by deleting the MDM Entities; and

(c) adding a new Schedule 8 (Permitted MDM Guarantee Obligations) thereto in the form attached to this Amendment as Exhibit B.

12. Consent. The Administrative Agents and the Lenders hereby consent under the Credit Agreement and the other Loan Documents to the MDM Sale pursuant to the MDM Stock Purchase Agreement, including the waiver, in the discretion of the U.S. Borrower, of the condition contained in Section 3(b)(vi) of the MDM Stock Purchase Agreement; provided that the foregoing consent is conditioned upon (a) the MDM Stock Purchase Agreement not having been amended or modified in any material respect without the prior written consent of the Required Lenders and (b) the Net Cash Proceeds of the MDM Sale being applied in accordance with Section 2.18 of the Credit Agreement; it being understood that (x) the U.S. Borrower shall not (i) retain any such Net Cash Proceeds as permitted by Section 2.18(c) or (ii) deliver a Reinvestment Notice with respect to such Net Cash Proceeds as permitted by Section 2.18(c) and (y) the MDM Sale shall be deemed not to be a utilization of the $25,000,000 of permitted Dispositions contained in Section 7.5(e) of the Credit Agreement. Upon the occurrence of the Date of Effectiveness, each of the MDM Entities shall be released from its obligations as a Subsidiary Guarantor and as a Grantor under the U.S. Guarantee and Collateral Agreement. In connection with the foregoing, at the request and sole expense of any Loan Party, the Collateral Agent shall (a) deliver to such Loan Party the certificates representing the shares of Capital Stock of each of the MDM Entities and each promissory note pledged by any MDM Entity to the Collateral Agent, or issued by any MDM Entity and pledged to the Collateral Agent, pursuant to the U.S. Guarantee and Collateral Agreement and (b) execute and deliver to such Loan Party such documents as such Loan Party shall reasonably request to evidence such release.

13. Conditions to Effectiveness. This Amendment shall become effective concurrently with the consummation of the MDM Sale (the “Date of Effectiveness”); provided that prior thereto or concurrently therewith the Administrative Agents shall have received:

(a) counterparts of this Amendment duly executed by the Borrowers and duly acknowledged and consented to by each Guarantor and Grantor;

(b) executed Lender Consent Letters, substantially in the form of Exhibit C hereto (“Lender Consent Letters”), from Lenders constituting the Required Lenders; and

(c) such documents and certificates as the Administrative Agents or their counsel may reasonably request relating to the organization, existence and good standing of the Borrowers, the authorization of the transactions contemplated by this Amendment and any other

legal matters relating to any of the foregoing, all in form and substance reasonably satisfactory to the Administrative Agents and their counsel.

Delivery by the Administrative Agents of the releases referred to in Section 12 shall constitute conclusive evidence of the satisfaction of all conditions.

14. Representations and Warranties. Each of the Borrowers, as of the Date of Effectiveness and after giving effect to the amendment contained herein, hereby confirms, reaffirms and restates that the representations and warranties made by it in Section 4 of the Credit Agreement and otherwise in the Loan Documents to which it is a party are true and correct in all material respects (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct in all material respects as of such earlier date); provided that each reference to the Credit Agreement therein shall be deemed to be a reference to the Credit Agreement after giving effect to this Amendment; and provided further that each such representation and warranty shall be deemed to be modified as of the consummation of the MDM Sale to the extent necessary to give effect to the MDM Sale.

15. Reference to and Effect on the Loan Documents; Limited Effect. On and after the Date of Effectiveness, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby. The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or the Administrative Agents under any of the Loan Documents, nor constitute a waiver of any provisions of any of the Loan Documents. Except as expressly amended herein, all of the provisions and covenants of the Credit Agreement and the other Loan Documents are and shall continue to remain in full force and effect in accordance with the terms thereof and are hereby in all respects ratified and confirmed.

16. Counterparts. This Amendment may be executed by one or more of the parties hereto in any number of separate counterparts (which may include counterparts delivered by facsimile transmission) and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Any executed counterpart delivered by facsimile transmission shall be effective as an original for all purposes hereof. The execution and delivery of this Amendment by any Lender shall be binding upon each of its successors and assigns (including Transferees of its Commitments and Loans in whole or in part prior to effectiveness hereof) and binding in respect of all of its Commitments and Loans, including any acquired subsequent to its execution and delivery hereof and prior to the effectiveness hereof.

17. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their proper and duly authorized officers as of the day and year first above written.

	INTERNATIONAL MULTIFOODS CORPORATION


	By:	/s/ John E. Byom
		Name: John E. Byom
		Title: Vice President — Finance and Chief
		Financial Officer


		ROBIN HOOD MULTIFOODS INC.


	By:	/s/ Donald H. Twiner
		Name: Donald H. Twiner
		Title: President


	CANADIAN IMPERIAL BANK OF COMMERCE, as U.S. Administrative Agent


	By:	/s/ Katherine Bass
		Name: Katherine Bass
		Title: Authorized Signatory


	CANADIAN IMPERIAL BANK OF COMMERCE, as Canadian Administrative Agent


	By:	/s/ Katherine Bass
		Name: Katherine Bass
		Title: Authorized Signatory

ACKNOWLEDGEMENT AND CONSENT

Dated as of August 20, 2002

Each of the undersigned, in its capacity as a Guarantor and/or Grantor, as the case may be, under the Security Documents to which it is a party, does hereby (a) consent, acknowledge and agree to the transactions described in the foregoing First Amendment and Consent and (b) after giving effect to such First Amendment and Consent, (i) confirms, reaffirms and restates that the representations and warranties made by it in each Loan Document to which it is a party are true and correct in all material respects as of the Date of Effectiveness (as defined in the foregoing First Amendment and Consent) (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct in all material respects as of such earlier date), (ii) ratifies and confirms each Security Document to which it is a party and (iii) confirms and agrees that each such Security Document is, and shall continue to be, in full force and effect, with the Collateral described therein securing, and continuing to secure, the payment of all obligations of the undersigned referred to therein; provided that each reference to the Credit Agreement therein and in each of the other Loan Documents shall be deemed to be a reference to the Credit Agreement after giving effect to such First Amendment and Consent.

	INTERNATIONAL MULTIFOODS CORPORATION, as a CBO Guarantor and as a Grantor


	By:	/s/ John E. Byom
		Name: John E. Byom
		Title: Vice President — Finance and Chief Financial Officer


	THE BOSTON SEA PARTY RESTAURANTS, INC., as a Guarantor and as a Grantor


	By:	/s/ John E. Byom
		Name: John E. Byom
		Title: Vice President — Finance and Chief Financial Officer


	MARTHA WHITE FOODS, INC. (f/k/a Davenport Industrial Supply Co.), as a Guarantor and as a Grantor


	By:	/s/ John E. Byom
		Name: John E. Byom
		Title: Senior Vice President — Finance and Chief Financial Officer


	FANTASIA CONFECTIONS, INC., as a Guarantor and as a Grantor


	By:	/s/ John E. Byom
		Name: John E. Byom
		Title: Vice President — Finance and Chief Financial Officer


	LUCAN FEED SERVICE, INC., as a Guarantor and as a Grantor


	By:	/s/ John E. Byom
		Name: John E. Byom
		Title: Vice President — Finance and Chief Financial Officer


	MULTIFOODS INC. (f/k/a MINETCO—Minnesota International Export Trading Company, Inc.), as a Guarantor and as a Grantor


	By:	/s/ John E. Byom
		Name: John E. Byom
		Title: Vice President — Finance and Chief Financial Officer


	MULTIFOODS BAKERY DISTRIBUTORS, INC., as a Guarantor and as a Grantor


	By:	/s/ John E. Byom
		Name: John E. Byom
		Title: Vice President — Finance and Chief Financial Officer


	MULTIFOODS BAKERY INTERNATIONAL, INC., as a Guarantor and as a Grantor


	By:	/s/ John E. Byom
		Name: John E. Byom
		Title: Vice President — Finance and Chief Financial Officer


	THE PICKAWAY GRAIN COMPANY, as a Guarantor and as a Grantor


	By:	/s/ John E. Byom
		Name: John E. Byom
		Title: Vice President — Finance and Chief Financial Officer


	MULTIFOODS LTD., as a CBO Guarantor


	By:	/s/ Donald H. Twiner
		Name: Donald H. Twiner
		Title: President


	GOURMET BAKER INC., as a CBO Guarantor


	By:	/s/ Donald H. Twiner
		Name: Donald H. Twiner
		Title: President


	980964 ONTARIO LIMITED, as a CBO Guarantor


	By:	/s/ John E. Byom
		Name: John E. Byom
		Title: Vice President — Finance

	SEA-PAC CORP., as a Guarantor and as a Grantor


	By:	/s/ John E. Byom
		Name: John E. Byom
		Title: Senior Vice President — Finance and Chief Financial Officer



	WINDMILL HOLDINGS CORP., as a Guarantor and as a Grantor


	By:	/s/ John E. Byom
		Name: John E. Byom
		Title: Vice President — Finance

EX-10.1 4 j5178_ex10d1.htm EX-10.1

Exhibit 10.1

AMENDMENT TO THE AMENDED AND RESTATED

1989 STOCK-BASED INCENTIVE PLAN OF

INTERNATIONAL MULTIFOODS CORPORATION

EFFECTIVE AS OF JUNE 23, 1999

The Amended and Restated 1989 Stock-Based Incentive Plan of International Multifoods Corporation (the “Plan”) is amended, effective as of June 23, 1999, as follows:

The last sentence of the second paragraph of the Plan is amended to read as follows:

“The Plan (but not Options, Stock Appreciation Rights, Restricted Stock, Incentive Units, Automatic Grants, Elective Grants or Elective Restricted Stock Awards theretofore granted under the Plan) shall terminate on, and no Awards or Automatic Grants, Elective Grants or Elective Restricted Stock Awards shall be granted after, June 20, 2007.”

EX-10.2 5 j5178_ex10d2.htm EX-10.2

Exhibit 10.2

SECOND AMENDMENT TO THE AMENDED AND RESTATED

1989 STOCK-BASED INCENTIVE PLAN OF

INTERNATIONAL MULTIFOODS CORPORATION

EFFECTIVE AS OF JULY 1, 2002

The Amended and Restated 1989 Stock-Based Incentive Plan of International Multifoods Corporation (the “Plan”) is amended, effective as of July 1, 2002, as follows:

The definition of “Automatic Grant” appearing in Section 1 of Part II of the Plan is amended to read as follows:

“Automatic Grant” shall mean a Non-Qualified Stock Option to purchase 2,500 shares of Stock granted to each Non-Employee Director pursuant to Section 3 of Part II of the Plan.”

EX-10.3 6 j5178_ex10d3.htm EX-10.3

Exhibit 10.3

Dan C. Swander

President and Chief Operating Officer

August 2, 2002

BY EMAIL (RWRIGHT@MULTIFOODS.COM)

AND BY U.S. REGULAR MAIL

Robert S. Wright

5379 Pinyon Jay Road

Parker, CO 80134

Subject: Sale of Multifoods Distribution Management, Inc.

Dear Bob:

This letter is intended to formalize our understanding with respect to benefits that will be available to you upon a sale of Multifoods Distribution Management, Inc. (“Distribution Management”) by International Multifoods Corporation (“Multifoods”) to Wellspring Distribution Corp. (the “Purchaser”) pursuant to the terms of the Stock Purchase Agreement executed concurrently herewith (the “Purchase Agreement”).

Once the sale of Distribution Management is closed, Distribution Management will no longer be part of the Multifoods family of companies and you will be considered to have terminated employment for purposes of your participation in all Multifoods employee benefit plans except as described below with respect to certain stock options that you have received. The effect this will have on your benefits is described in more detail below.

Effective upon the consummation of the sale of Distribution Management, you will offer your resignation as an officer and director, as applicable, of all Multifoods and Distribution Management controlled entities. On the closing date (provided that you have had twenty-one (21) days in which to consider whether you wish to sign the Release and Confidentiality Agreement), you will also provide Multifoods with an executed Release and Confidentiality Agreement in the form attached hereto as Exhibit A. In return, you will receive a severance payment in the amount of $1,066,332, less applicable withholding taxes, within 10 days after executing the Release and Confidentiality Agreement. The severance payment is conditioned on your return of the executed Release and Confidentiality Agreement and that you do not rescind such decision to execute the Release and Confidentiality Agreement within seven (7) days of your execution of same.

The sale of Distribution Management and your resignation of employment will affect your benefits under Multifoods’ employee benefit plans. The following is a description of the benefits you will be eligible to receive after the sale:

Robert S. Wright

August 2, 2002

Page 2

(A) Management Incentive Plan (“MIP”).

Under the terms of the MIP, you will receive your target award if the sale occurs in the first six months of Multifoods’ fiscal year. If the sale occurs in the last six months of Multifoods’ fiscal year, you will receive the greater of your target award or the award you would have received assuming that your performance up to the date of the sale would have continued through the end of Multifoods’s fiscal year.

(B) Stock Options, Restricted Stock Awards and Restricted Stock Units.

Your outstanding stock options, restricted stock awards and restricted stock units will be exercisable in accordance with their terms, provided you are then vested. However, solely with respect to the 10,000 shares of restricted stock issued pursuant to your Award Agreement dated September 15, 1995, under the Amended and Restated 1989 Stock-Based Incentive Plan, you will be treated the same as if you were on an unpaid leave of absence with Multifoods from the date of the closing of the Purchase Agreement through February 28, 2003, and you will be deemed to have retired on that date.

(C) Management Benefit Plan, Supplemental Retirement Plan, Compensation Deferral Plan and Supplemental Deferred Compensation Plan.

You are already fully vested in these benefits and special provisions therefore are not necessary in this letter. You will not be eligible to receive your benefits under these plans in a lump sum payment form.

(D) Retiree Benefits

You are fully vested in your accrued benefit under the Multifoods Pension Equity Plan and are eligible to receive your benefits under this plan according to applicable plan provisions. For those benefits that require ten years of service for retiree eligibility — retiree medical and retiree life insurance — you will not be eligible as a retiree.

(E) Completion Bonus.

You will be paid a completion bonus in the amount of $150,000, less applicable withholding taxes, within 10 days after the date of closing of the sale of Distribution Management. This is in addition to the severance payment described above.

Robert S. Wright

August 2, 2002

Page 3

Please indicate your receipt and acceptance of the terms of this letter agreement by signing below and returning it at your earliest convenience.

INTERNATIONAL MULTIFOODS CORPORATION


By:	/s/ Dan C. Swander
		Dan C. Swander
		Its: President and Chief Operating Officer

_________________________________________________

ACCEPTANCE

I, Robert S. Wright, hereby acknowledge receipt of this letter agreement and hereby agree to the terms herein.

Dated: August 12, 2002

			ROBERT S. WRIGHT

				/s/ Robert S. Wright

EXHIBIT A

RELEASE AND CONFIDENTIALITY AGREEMENT

In consideration of the severance benefits of $1,066,332 payable under the Letter Agreement dated August 2, 2002 (the “Letter Agreement”) between International Multifoods Corporation (the “Company”) and Robert S. Wright (“Wright”), the sufficiency of which is hereby acknowledged, Wright hereby releases the Company, and its subsidiaries and affiliates, and the current and former insurers, successors, assigns, directors, officers, agents and employees of each, from all causes of action, claims, demands, debts, contracts and agreements which he or his heirs, executors, administrators, legal representatives, successors or assigns and beneficiaries, have or may have by reason of any matter, act or thing occurring or arising prior to or on the date of this Release and Confidentiality Agreement, whether presently known or unknown (the “Release”).

The Release applies to any cause of action, claims, demands, debts, contracts and agreements that Wright has or may have by reason of any matter, act or thing occurring or arising prior to or on the date of this Release Agreement, whether or not he now knows about them, including, without limitation, any and all claims relating to his employment with the Company and/or its subsidiaries, or Wright’s decision to voluntarily terminate his employment and retire, including, but not limited to, breach of contract claims, a breach of that certain employment letter agreement, dated July 10, 1995, between the Company and Wright, tort claims, claims for wages, bonuses or other compensation, and claims alleging violation of the Fair Labor Standards Act, the Age Discrimination in Employment Act, as amended, Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1866, the National Labor Relations Act, the Colorado human rights laws, the Americans with Disabilities Act, the Employee Retirement Income Security Act, the Colorado Wage Act, and/or any other federal, state or local statute, law, ordinance, regulation, order, or principle of common law.

The Release does not include any claims that the law does not allow to be waived or any claims that arise after the date on which this Release Agreement is signed by Wright. In addition, the Release does not affect any rights that Wright has (1) as a result of his participation in any pension, health or welfare benefit plan or plans of the Company under the terms and conditions set forth in such plan or plans as of the date of this Release Agreement; and (2) under any indemnification to which Wright is entitled under (A) the Restated Certificate of Incorporation, as amended, of the Company, (B) the Bylaws, as amended, of the Company, or (C) under any contract of insurance maintained by the Company.

Wright covenants and agrees with the Company, that Wright will maintain in strict confidence and not disclose to any corporation, partnership or other entity or person, any confidential information including, but not limited to, any non-public information obtained by Wright relating to the Company and its subsidiaries, and its businesses, plans, organization, information systems, present and prospective customers, customer buying patterns or requirements, products, techniques, methods, cost, pricing, price methods, margins, rebates, and promotional allowances, trade secrets or any other proprietary information of the Company or any of its subsidiaries, to which Wright had access to or knowledge of during Wright’s employment by the Company. Wright agrees that all confidential information, trade secrets and other proprietary information of the Company and its subsidiaries, are and shall remain the property of the Company. Wright

further agrees that none of the confidential information, trade secrets and any other proprietary information of the Company and its subsidiaries, nor any part thereof, is to be removed from the premises of the Company, in original or duplicate form or transmitted verbally, by electronic means or otherwise. Wright recognizes and acknowledges that all confidential information, trade secrets and other proprietary information of the Company and its subsidiaries are valuable to the Company and the disclosure or use of the same would cause irreparable harm to the Company.

Wright understands that to the extent that any provision of this Release and Confidentiality Agreement shall be determined to be invalid or unenforceable, the invalid or unenforceable portion of such provision shall be deleted from this Release and Confidentiality Agreement, and the validity and enforceability of the remainder of such provision and of this Release and Confidentiality Agreement shall be unaffected.

Wright understands that he may have twenty-one (21) calendar days from the date that he receives this Release and Confidentiality Agreement, not counting the day upon which he receives it, to consider whether he wishes to sign this Release and Confidentiality Agreement. If Wright does not sign this Release and Confidentiality Agreement in that period of time, the Company may or may not allow more time. Wright agrees that if he signs this Release and Confidentiality Agreement before the end of the twenty-one (21) day period, it is because he decided that he already has had a sufficient period of time to decide whether to sign this Release and Confidentiality Agreement.

Wright has been advised, and he understands, that he has the right to rescind this Release and Confidentiality Agreement if he notifies the Company, in writing at International Multifoods Corporation, 110 Cheshire Lane, Minnetonka, Minnesota 55305, Attention: Ralph P. Hargrow, Vice President, Human Resources and Administration, of his decision to rescind within seven (7) days of the date that he signs this Release and Confidentiality Agreement. Wright understands that this Release and Confidentiality Agreement shall not become effective or enforceable until the revocation period has expired. Wright also understands that if he rescinds, he shall forfeit his rights to the severance payment. Wright also understands that to be effective his notice of rescission must be in writing and must be delivered to the address stated above either by hand or by mail within the seven (7) day period. If delivered by mail, the rescission must be: (1) postmarked within the seven (7) day period; (2) properly addressed to the Company; and (3) sent by certified mail, return receipt requested.

Wright acknowledges that he has read this Release and Confidentiality Agreement and understands all of its terms and conditions. In agreeing to sign this Release and Confidentiality Agreement, Wright signs it knowingly and voluntarily, and represents that he has not relied on any statements or explanations made by the Company, its employees or attorneys.

NOTICE TO EMPLOYEE:

The Company hereby advises Wright to consult an attorney

before signing this Release and Confidentiality Agreement.

WITNESS:


			Robert S. Wright

			Date Signed:

Send signed and witnessed form to:

Ralph P. Hargrow

Vice President, Human Resources and Administration

International Multifoods Corporation

110 Cheshire Lane

Minnetonka, Minnesota 55305

EX-10.4 7 j5178_ex10d4.htm EX-10.4

Exhibit 10.4

Dan C. Swander

President and Chief Operating Officer

August 6, 2002

BY EMAIL (RWRIGHT@MULTIFOODS.COM)

AND BY U.S. REGULAR MAIL

Robert S. Wright

5379 Pinyon Jay Road

Parker, CO 80134

Subject: Amendment to Letter Agreement, dated August 2, 2002, between

International Multifoods Corporation and Robert S. Wright

(the “Letter Agreement”)

Dear Bob:

Per our telephone conversations on Friday, August 2, 2002 and Monday, August 5, 2002, effective upon the date of your countersignature to this letter, the Letter Agreement shall be amended, as follows:

(1) Section (A), titled “Management Incentive Plan (“MIP”) in the Letter Agreement is deleted in its entirety, and the following language is inserted in full substitution therefore:

“(A) Management Incentive Plan (“MIP”)

Under the terms of the MIP, you will receive a target award if the sale occurs.”

(2) The RELEASE AND CONFIDENTIALITY AGREEMENT attached as EXHIBIT A to the Letter Agreement is deleted in its entirety, and the RELEASE AND CONFIDENTIALTY AGREEMENT attached to this letter agreement as EXHIBIT A is inserted in full substition therefore.

(3) Except as amended by this letter agreement, the terms and conditions of the Letter Agreement shall continue in full force and effect.

	International Multifoods Corporation


	By:	/s/ Dan C. Swander
			Dan C. Swander
			Its: President and Chief Operating Officer
Accepted and agreed to on
This 12^th day of August, 2002

/s/ Robert S. Wright
Robert S. Wright

EXHIBIT A

RELEASE AND CONFIDENTIALITY AGREEMENT

The Release does not include any claims that the law does not allow to be waived or any claims that arise after the date on which this Release Agreement is signed by Wright. In addition, the Release does not affect any rights that Wright has (1) under that certain letter agreement, dated August 2, 2002, between the Company and Wright, as amended by letter agreement, dated August 6, 2002, between the Company and Wright; (2) as a result of his participation in any pension, health or welfare benefit plan or plans of the Company under the terms and conditions set forth in such plan or plans as of the date of this Release Agreement; and (3) under any indemnification to which Wright is entitled under (A) the Restated Certificate of Incorporation, as amended, of the Company, (B) the Bylaws, as amended, of the Company, or (C) under any contract of insurance maintained by the Company.

Company. Wright agrees that all confidential information, trade secrets and other proprietary information of the Company and its subsidiaries, are and shall remain the property of the Company. Wright further agrees that none of the confidential information, trade secrets and any other proprietary information of the Company and its subsidiaries, nor any part thereof, is to be removed from the premises of the Company, in original or duplicate form or transmitted verbally, by electronic means or otherwise. Wright recognizes and acknowledges that all confidential information, trade secrets and other proprietary information of the Company and its subsidiaries are valuable to the Company and the disclosure or use of the same would cause irreparable harm to the Company.

NOTICE TO EMPLOYEE:

The Company hereby advises Wright to consult an attorney

before signing this Release and Confidentiality Agreement.

WITNESS:


			Robert S. Wright

			Date Signed:

Send signed and witnessed form to:

Ralph P. Hargrow

Vice President, Human Resources and Administration

International Multifoods Corporation

110 Cheshire Lane

Minnetonka, Minnesota 55305

EX-11 8 j5178_ex11.htm EX-11

Exhibit 11

INTERNATIONAL MULTIFOODS CORPORATION AND SUBSIDIARIES

Computation of Earnings (loss) per Common Share

(unaudited)

(in thousands, except per share amounts)

	THREE MONTHS ENDED					SIX MONTHS ENDED
	Aug. 31, 2002			Sept. 1, 2001		Aug. 31, 2002			Sept. 1, 2001
Average shares of common stock outstanding	19,095			18,816		19,062			18,789
Dilutive potential common shares	396			245		411			228
Total adjusted average shares	19,491			19,061		19,473			19,017

Earnings from continuing operations	$	4,353		$	1,799	$	7,659		$	2,578
Earnings (loss) from discontinued operations	(32,390		)	995		(72,134		)	2,302
Net earnings (loss) applicable to common stock	$	(28,037	)	$	2,794	$	(64,475	)	$	4,880

Basic earnings (loss) per share of common stock:
Continuing operations	$	0.23		$	0.10	$	0.40		$	0.14
Discontinued operations	(1.70		)	0.05		(3.78		)	0.12
Total	$	(1.47	)	$	0.15	$	(3.38	)	$	0.26

Diluted earnings (loss) per share of common stock:
Continuing operations	$	0.22		$	0.09	$	0.39		$	0.14
Discontinued operations	(1.66		)	0.06		(3.70		)	0.12
Total	$	(1.44	)	$	0.15	$	(3.31	)	$	0.26

Basic earnings (loss) per share are computed by dividing net earnings (loss) by the weighted average number of shares of common stock outstanding during the period.

Diluted earnings per share are computed similar to basic earnings per share except that the weighted average shares outstanding are increased to include additional shares from the assumed exercise of stock options, if dilutive. The number of additional shares is calculated by assuming that outstanding stock options were exercised and that the proceeds from such exercises were used to acquire shares of common stock at the average market price during the period.

EX-12 9 j5178_ex12.htm EX-12

Exhibit 12

INTERNATIONAL MULTIFOODS CORPORATION AND SUBSIDIARIES

Computation of Ratio of Earnings to Fixed Charges

(unaudited)

(in thousands)

	THREE MONTHS ENDED						SIX MONTHS ENDED
	Aug. 31, 2002			Sept. 1, 2001			Aug. 31, 2002			Sept. 1, 2001
Earnings from continuing operations before income taxes	$	7,020		$	2,838		$	12,353		$	4,013
Plus: Fixed charges(1)	11,315			6,696			22,800			13,332
Less: Capitalized interest	(125		)	(100		)	(190		)	(254		)
Earnings available to cover fixed charges	$	18,210		$	9,434		$	34,963		$	17,091

Ratio of earnings to fixed charges	1.61			1.41			1.53			1.28

(1) Fixed charges consisted of the following:

	THREE MONTHS ENDED				SIX MONTHS ENDED
	Aug. 31, 2002		Sept. 1, 2001		Aug. 31, 2002		Sept. 1, 2001
Interest expense, gross	$	8,980	$	4,131	$	18,079	$	8,290
Rentals (Interest factor)	2,335		2,565		4,721		5,042
Total fixed charges	$	11,315	$	6,696	$	22,800	$	13,332

EX-99.1 10 j5178_ex99d1.htm EX-99.1

Exhibit 99.1

Certification of the Chief Executive Officer

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of International Multifoods Corporation (the “Company”) on Form 10-Q for the period ended August 31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Gary E. Costley, the Chairman of the Board and Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company, for the period covered by the Report.

	/s/ Gary E. Costley
	Gary E. Costley
	Chairman of the Board & Chief Executive Officer

Date: October 8, 2002

EX-99.2 11 j5178_ex99d2.htm EX-99.2

Exhibit 99.2

Certification of the Chief Financial Officer

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of International Multifoods Corporation (the “Company”) on Form 10-Q for the period ended August 31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), John E. Byom, Vice President, Finance and Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company, for the period covered by the Report.

	/s/ John E. Byom
	John E. Byom
	Vice President, Finance & Chief Financial Officer

Date: October 8, 2002