<PAGE> 1
FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest
Event Reported): February 8, 1994
CHIQUITA BRANDS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
New Jersey 1-1550 04-1923360
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
250 East Fifth Street, Cincinnati, Ohio 45202
(Address of principal executive offices)
Registrant's telephone number, including area code: (513) 784-8011
<PAGE> 2
INFORMATION TO BE INCLUDED IN THE REPORT
Items 1, 2, 3, 4, 6 and 8 are not applicable and are omitted from this Report.
Item 5. Other Events.
On February 8, 1994, Chiquita Brands International, Inc. (the
"Company") entered into (a) a Terms Agreement relating to $175,000,000
aggregate principal amount of 9-1/8% Senior Notes due 2004 (the "Senior Notes")
and (b) a Terms Agreement relating to 2,500,000 shares of $2.875 Non-Voting
Cumulative Preferred Stock, Series A (the "Preferred Stock"), plus an additional
375,000 shares of Preferred Stock solely to cover over-allotments, such
securities being a portion of the securities registered on the Company's Form
S-3 Registration Statement No. 33-51995. Further information concerning the
Senior Notes and the Preferred Stock is provided in the exhibits filed with
this Current Report on Form 8-K.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
The following exhibits are filed with or incoporated by
reference into this Current Report on Form 8-K:
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
1 Terms Agreement dated February 8, 1994 relating to the Senior Notes between the Company and the
Underwriters for the Senior Notes.
2 Terms Agreement dated February 8, 1994 relating to the Preferred Stock between the Company and the
Underwriters for the Preferred Stock.
3 Certificate of the Vice President and Controller of the Company establishing the terms of the Senior
Notes.
4 Form of Certificate of Amendment to the Company's Restated Certificate of Incorporation establishing the
terms of the Preferred Stock.
5 Prospectus Supplement dated February 8, 1994, relating and the Senior Notes, and Prospectus dated January
28, 1994, filed pursuant to Rule 424 (b)(2) under the Securities Act of 1933 and incorporated by reference
herein.
6 Prospectus Supplement dated February 8, 1994, relating to the Preferred Stock, and Prospectus dated
January 28, 1994, filed pursuant to Rule 424 (b)(2) under the Securities Act of 1933 and incorporated
by reference herein.
</TABLE>
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<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: February 8, 1994 CHIQUITA BRANDS INTERNATIONAL, INC.
By /s/ William A. Tsacalis
-----------------------
William A. Tsacalis
Vice President and Controller
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<PAGE> 1
EXHIBIT 1
CHIQUITA BRANDS INTERNATIONAL, INC.
("Company")
Debt Securities
TERMS AGREEMENT
February 8, 1994
CHIQUITA BRANDS INTERNATIONAL, INC.
250 East Fifth Street
Cincinnati, Ohio 45202
Attention: William A. Tsacalis
Vice President and Controller
Dear Sirs:
We offer to purchase, on and subject to the terms and conditions of
the Underwriting Agreement Basic Provisions relating to the securities of
Chiquita Brands International, Inc. dated January, 1994 ("Underwriting
Agreement"), the following securities ("Securities") on the following terms:
Debt Securities
Title: 9-1/8% Senior Notes due 2004
Rank: Senior Debt Securities
Principal Amount: $175,000,000
Interest Rate: 9-1/8% from February 15, 1994, payable: semi-annually on March
1 and September 1, commencing September 1, 1994
Maturity: March 1, 2004
Form and Denomination: Fully registered form in denominations of $1,000 and
integral multiples thereof
Optional Redemption: Not applicable
Sinking Fund: Not applicable
Indenture: Indenture, dated as of February 15, 1994, between the Company and
The Fifth Third Bank, as trustee
Delayed Delivery Contracts: Not authorized
Delivery Date: February 15, 1994
<PAGE> 2
2
Method of Payment: New York Clearing House (next day) funds
Underwriting Fees and Discounts: 2.75%
Purchase Price to Underwriters: 97.25%, plus accrued interest from February
15, 1994
Expected Reoffering Price to Public: 100%, plus accrued interest, if any,
from February 15, 1994
Names and Addresses of Underwriters:
Lehman Brothers Inc.
3 World Financial Center
New York, NY 10285
Kidder, Peabody & Co. Incorporated
10 Hanover Square
New York, NY 10005
Smith Barney Shearson Inc.
1345 Avenue of the Americas
New York, NY 10105
The respective principal amounts of the Debt Securities to be
purchased by each of the Underwriters are set forth opposite their names in
Schedule A hereto.
The provisions of the Underwriting Agreement are incorporated herein
by reference.
The Closing will take place at 10:00 A.M., New York City time, on
February 15, 1994, at the offices of Simpson Thacher & Bartlett, 425 Lexington
Avenue, New York, New York 10017.
The Securities will be made available for checking and packaging at
the office of Lehman Brothers Inc. not later than 2:00 P.M., New York City
time, on the business day prior to the Delivery Date.
<PAGE> 3
3
Please signify your acceptance by signing the enclosed response to us
in the space provided and returning it to us.
Very truly yours,
LEHMAN BROTHERS INC.
KIDDER, PEABODY & CO.
INCORPORATED
SMITH BARNEY SHEARSON INC.
As Underwriters
By /s/ William A. Shutzer
--------------------------
Authorized Representative
<PAGE> 4
SCHEDULE A
DEBT SECURITIES
<TABLE>
<CAPTION>
Underwriter Principal Amount
----------- ----------------
<S> <C>
Lehman Brothers Inc. . . . . . . . . . . . . . . . . . . . . $ 96,250,000
Kidder, Peabody & Co. Incorporated . . . . . . . . . . . . . 39,375,000
Smith Barney Shearson Inc. . . . . . . . . . . . . . . . . . 39,375,000
------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . $175,000,000
============
</TABLE>
<PAGE> 5
To: Lehman Brothers Inc.
Kidder, Peabody & Co. Incorporated
Smith Barney Shearson Inc.
c/o Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285
We accept the offer contained in your letter, dated February 8,
1994, relating to $175,000,000 aggregate principal amount of 9-1/8% Senior
Notes due 2004 (the "Terms Agreement"). We also confirm that, to the best of
our knowledge after reasonable investigation, the representations and
warranties of the undersigned in the Underwriting Agreement Basic Provisions
filed as an exhibit to the undersigned's registration statement on Form S-3
(No. 33-51995) (together with the Terms Agreement, the "Underwriting
Agreement") are true and correct, no stop order suspending the effectiveness of
the Registration Statement (as defined in the Underwriting Agreement) or of any
part thereof has been issued and no proceedings for that purpose have been
instituted or, to the knowledge of the undersigned, are contemplated by the
Securities and Exchange Commission and, subsequent to the respective dates of
the most recent financial statements in the Prospectus (as defined in the
Underwriting Agreement), there has been no material adverse change in the
financial position or results of operations of the undersigned and its
subsidiaries except as set forth in or contemplated by the Prospectus.
Very truly yours,
CHIQUITA BRANDS INTERNATIONAL, INC.
By /s/ William A. Tsacalis
--------------------------------
Name: William A. Tsacalis
Title: Vice President and Controller
<PAGE> 1
EXHIBIT 2
CHIQUITA BRANDS INTERNATIONAL, INC.
("Company")
Equity Securities
TERMS AGREEMENT
February 8, 1994
CHIQUITA BRANDS INTERNATIONAL, INC.
250 East Fifth Street
Cincinnati, Ohio 45202
Attention: William A. Tsacalis
Vice President and Controller
Dear Sirs:
On behalf of the several Underwriters named in Schedule A hereto and
for their respective accounts, we offer to purchase, on and subject to the
terms and conditions of the Underwriting Agreement Basic Provisions relating to
the securities of Chiquita Brands International, Inc. dated January, 1994
("Underwriting Agreement"), the following securities ("Securities") on the
following terms:
Equity Securities
Title: $2.875 Non-Voting Cumulative Preferred Stock, Series A, par value
$1.00 per share (the "Series A Preferred Stock")
Number of Shares to be Issued: 2,500,000 shares
Voting Rights: As described in the Prospectus Supplement, dated February 8,
1994, pertaining to the Series A Preferred Stock (the "Prospectus Supplement")
Preferred Stock Dividends: Cash dividends to accrue at an annual rate of
$2.875 per share, cumulative and payable quarterly in arrears on March 7,
June 7, September 7 and December 7, commencing June 7, 1994
Optional Redemption: Not applicable
Mandatory Redemption/Sinking Fund: Not applicable
Liquidation Preference: $50.00 per share plus dividends in arrears, if any
Name of Exchange or Market: New York Stock Exchange
Period Designated Pursuant to Paragraph 5(m)(i) of the Underwriting Agreement:
90 days
Period Designated Pursuant to Paragraph 8(j) of the Underwriting Agreement: 90
days
<PAGE> 2
2
Conversion Provisions: As described in the Prospectus Supplement
Other Terms
Price to Public: $50.00 per share
Underwriting Discounts and Commission: $1.75 per share; $4,375,000 total
Proceeds to Company: $120,625,000
Over-Allotment Option: 375,000 shares
Delivery Date: February 15, 1994
Method of Payment: New York Clearing House (next day) funds
Name of Transfer Agent and Registrar: Securities Transfer Company
Names and Addresses of Representatives:
Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285
Smith Barney Shearson Inc.
1345 Avenue of the Americas
New York, New York 10105
The respective shares of the Securities to be purchased by each of
the Underwriters are set forth opposite their names in Schedule A hereto.
The provisions of the Underwriting Agreement are incorporated herein
by reference except that certain issuances of common stock by the Company
consented to by Lehman Brothers Inc. shall be excluded from the restrictions
contained in Paragraph 5(m)(i) of the Underwriting Agreement.
In addition to the agreements set forth in Paragraph 5 to the
Underwriting Agreement, the Company hereby agrees, from time to time, to use
its best efforts to increase its authorized shares of common stock such that
there will be a sufficient number of authorized shares of common stock reserved
for issuance in the event of an adjustment to the Maximum Conversion Rate (as
described in the Prospectus Supplement) for the conversion of the Series A
Preferred Stock.
In addition to the conditions set forth in Paragraph 8 to the
Underwriting Agreement, the respective obligations of the Underwriters are
subject to their receipt of the opinion of McCarter & English, New Jersey
counsel to the Company, addressed to the Underwriters and dated the Delivery
Date and, if Option Securities are purchased, at any date after the Delivery
Date as specified herein, an additional opinion from such counsel,
<PAGE> 3
3
addressed to the Underwriters and dated such later date, confirming that the
statements expressed as of the Delivery Date in such opinion remain valid as of
such later date, in form and substance to be mutually agreed upon by such
counsel and the Representatives.
The Securities will be made available for checking and packaging at
the office of Lehman Brothers Inc. at least 24 hours prior to the Delivery
Date.
<PAGE> 4
4
Please signify your acceptance of our offer by signing the enclosed
response to us in the space provided and returning it to us.
Very truly yours,
LEHMAN BROTHERS INC.
SMITH BARNEY SHEARSON INC.
For themselves and as
Representatives of the several
Underwriters named in Schedule A
hereto
By LEHMAN BROTHERS INC.
By /s/ William A. Schutzer
-------------------------
Authorized Representative
<PAGE> 5
SCHEDULE A
<TABLE>
<CAPTION>
Number of
Underwriter Shares
- ----------- ---------
<S> <C>
Lehman Brothers Inc. . . . . . . . . . . . . . . . . . . . . 875,000
Smith Barney Shearson Inc. . . . . . . . . . . . . . . . . . 875,000
Donaldson, Lufkin & Jenrette Securities
Corporation . . . . . . . . . . . . . . . . . . . . . . . . 125,000
Kidder, Peabody & Co. Incorporated . . . . . . . . . . . . . 125,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . . . . . . . . . . . 125,000
NatWest Securities Limited . . . . . . . . . . . . . . . . . 125,000
Salomon Brothers Inc . . . . . . . . . . . . . . . . . . . . 125,000
S.G. Warburg & Co. Inc. . . . . . . . . . . . . . . . . . . . 125,000
---------
Total . . . . . . . . . . . . . . . . . . . . . . . . . 2,500,000
=========
</TABLE>
<PAGE> 6
To: Lehman Brothers Inc.
Smith Barney Shearson Inc.
As Representatives of the Several
Underwriters named in Schedule A
to the Terms Agreement (as defined
herein)
c/o Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285
We accept the offer contained in your letter, dated February 8,
1994, relating to up to 2,875,000 shares of our $2.875 Non-Voting Cumulative
Preferred Stock, Series A (the "Terms Agreement"). We also confirm that, to
the best of our knowledge after reasonable investigation, the representations
and warranties of the undersigned in the Underwriting Agreement Basic
Provisions filed as an exhibit to the undersigned's Registration Statement on
Form S-3 (No. 33-51995) (together with the Terms Agreement, the "Underwriting
Agreement") are true and correct, no stop order suspending the effectiveness of
the Registration Statement (as defined in the Underwriting Agreement) or of any
part thereof has been issued and no proceedings for that purpose have been
instituted or, to the knowledge of the undersigned, are contemplated by the
Securities and Exchange Commission and, subsequent to the respective dates of
the most recent financial statements in the Prospectus (as defined in the
Underwriting Agreement), there has been no material adverse change in the
financial position or results of operations of the undersigned and its
subsidiaries except as set forth in or contemplated by the Prospectus.
Very truly yours,
CHIQUITA BRANDS INTERNATIONAL, INC.
By /s/ William A. Tsacalis
--------------------------------
Name: William A. Tsacalis
Title: Vice President and Controller
<PAGE> 1
EXHIBIT 3
Certificate of
Actions Taken By William A. Tsacalis
on Authority of the
Executive Committee of the
Board of Directors
CHIQUITA BRANDS INTERNATIONAL, INC.
February 8, 1994
The undersigned, on behalf of Chiquita Brands International, Inc. (the
"Company"), hereby confirms that the Company is authorized to issue, pursuant
to Registration Statement No. 33-51995 of the Company, under the Securities Act
of 1933 and in accordance with an Indenture dated as of February 15, 1994 (the
"Indenture") between the Company and The Fifth Third Bank, as Trustee (the
"Trustee"), a series of $175,000,000 aggregate principal amount of senior debt
securities with the following terms:
(1) The title of the series of senior debt securities shall be
9-1/8% Senior Notes due 2004 (the "Senior Notes").
(2) The aggregate principal amount of Senior Notes which may be
authenticated and delivered under the Indenture pursuant to the terms of this
Certificate shall be $175,000,000.
(3) The Senior Notes shall be issued in registered form only.
(4) The Senior Notes shall mature on March 1, 2004.
(5) Interest in respect of the Senior Notes shall accrue at the rate
of 9-1/8% per annum. Interest in respect of the Senior Notes shall accrue from
February 15, 1994 and shall be payable on March 1 and September 1 of each year,
commencing September 1, 1994. The record dates for interest payable on such
interest dates shall be February 15 and August 15, respectively.
(6) In addition to payment by means provided in the Indenture,
principal of and interest on the Senior Notes shall be payable at, and the
Senior Notes may be surrendered for registration of transfer or for exchange
at, the office or agency of the Company maintained for such purposes, which
initially will be Securities Transfer Company, Cincinnati, Ohio. Notices and
demands to or upon the Company in respect of the Senior Notes and the Indenture
may be addressed to the Company at its principal executive offices, 250 East
Fifth Street, Cincinnati, Ohio 45202, Attn: Charles R. Morgan.
(7) The Senior Notes shall rank pari passu with other existing and
future unsecured senior indebtedness of the Company.
<PAGE> 2
(8) The Senior Notes are not subject to redemption at the option of
the Company prior to maturity. The Senior Notes may be subject to repurchase
by the Company prior to maturity, upon the occurrence of certain events, at
the option of holders, pursuant to Section 1015 of Exhibit B attached to this
Certificate.
(9) The Company shall have no sinking fund or analogous obligations
in respect of the Senior Notes.
(10) Each of the definitions set forth in Exhibit A attached to
this Certificate shall apply to the Senior Notes and shall be deemed to be
incorporated by reference into and made a part of (a) this Certificate and (b)
with respect to the Senior Notes, the Indenture.
(11) Each of the covenants set forth in Exhibit B attached to this
Certificate shall apply to the Senior Notes and shall be deemed to be
incorporated by reference into and made a part of (a) this Certificate and (b)
with respect to the Senior Notes, the Indenture.
(12) The Senior Notes shall be in the form approved by any officer
of this Company, such approval to be conclusively evidenced by the execution
thereof by manual or facsimile signature.
All capitalized terms used but not defined in this Certificate,
including Exhibits A and B to this Certificate, shall have the meanings set
forth in the Indenture.
/s/ William A. Tsacalis
-------------------------------------
Name: William A. Tsacalis
Title: Vice President and Controller
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EXHIBIT A
Definitions
"Acquired Indebtedness" means Indebtedness of a Person (i)
existing at the time such Person becomes a Subsidiary or (ii) assumed
in connection with the acquisition of assets of such Person.
"Adjusted Consolidated Assets" on any date means the amount of
(i) all assets of the Company and its Subsidiaries on a consolidated
basis less (ii) all Indebtedness of Subsidiaries on a consolidated
basis, in each case as determined as of the last day of the
immediately preceding fiscal quarter in accordance with GAAP.
"Calculation Date" has the meaning specified in the definition
"Change of Control Triggering Event."
"Change of Control Triggering Event" means an event or series
of events by which (i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) other than Permitted Lindner
Holders is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all shares that any such
person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or
indirectly, of more than 30% of the total voting power of all Voting
Shares of the Company then outstanding, provided that the Permitted
Lindner Holders "beneficially own" (as so defined) a lesser percentage
of the Voting Shares than such other person and do not have the right
or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of the
Company; (ii) the Company consolidates with or merges into another
corporation or conveys, transfers or leases all or substantially all
of its assets to any Person, or any corporation consolidates with or
merges into the Company, in either event pursuant to a transaction in
which or as a result of which the outstanding Voting Shares of the
Company are changed into or exchanged for cash, securities or other
property, other than any such transaction between the Company and a
wholly-owned Subsidiary of the Company; (iii) the Company or any
Subsidiary purchases or otherwise acquires, directly or indirectly,
beneficial ownership of 30% or more of the Company's Capital Stock
within any 12-month period; (iv) on any date, the individuals who at
the beginning of the two-year period immediately preceding such date
constituted the Company's Board of Directors (together with any new
directors whose election by the Company's Board of Directors, or whose
nomination for election by the Company's shareholders, was approved by
a vote of at least 66-2/3% of the directors then still in
<PAGE> 4
office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the directors then
in office; or (v) on any day (a "Calculation Date") the Company makes
any distribution or distributions of cash, property or securities
(other than regular quarterly dividends, Common Stock, preferred stock
which is substantially equivalent to Common Stock or rights to acquire
such stock) to holders of Capital Stock of the Company or purchases or
otherwise acquires Capital Stock (other than upon the conversion of a
security convertible into Capital Stock) of the Company and the sum of
the Fair Market Value of such distribution or purchase, plus the Fair
Market Value of all other such distributions and purchases which have
occurred during the preceding twelve-month period, exceeds 30% of the
Fair Market Value of the Company's outstanding Common Stock. This
percentage is calculated on each Calculation Date by determining the
percentage of the Fair Market Value of the Company's outstanding
Common Stock as of such Calculation Date which is represented by the
Fair Market Value of the distributions and purchases which have
occurred on such date and adding to that percentage all of the
percentages which have been similarly calculated on the dates of all
such distributions and purchases during the preceding twelve-month
period.
"Consolidated Interest Expense" means for any period the sum
of (i) the aggregate of the interest expense on Indebtedness of the
Company and its Subsidiaries for such period, on a consolidated basis,
plus (ii), without duplication, that portion of capital lease rentals
of the Company and its Subsidiaries representative of the interest
factor for such period, in each case as determined in accordance with
GAAP.
"Consolidated Net Income" means for any period the net income
or loss of the Company and its Subsidiaries for such period on a
consolidated basis as determined in accordance with GAAP adjusted by
excluding the after-tax effect of (i) net gains or losses in respect
of dispositions of assets other than in the ordinary course of
business, (ii) any gains or losses from currency exchange transactions
not in the ordinary course of business consistent with past practice,
(iii) the net income of any Subsidiary to the extent that dividends or
distributions by such Subsidiary in the amount of such net income are
restricted or prohibited, and (iv) any gains or losses attributable to
write-ups or write-downs of assets or liabilities other than in the
ordinary course of business.
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<PAGE> 5
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person and its Subsidiaries, as
determined in accordance with GAAP.
"Consolidated Tax Expense" of the Company means for any period
the aggregate of the federal, state, local and foreign income tax
expense of the Company and its consolidated Subsidiaries for such
period determined in accordance with GAAP.
"Disqualified Stock" has the meaning specified in the covenant
entitled "Section 1013. Limitation on Restricted Payments."
"Fair Market Value" means, with respect to any asset or
property, the price which could be negotiated in an arm's length free
market transaction, for cash, between a willing seller and a willing
and able buyer, neither of whom is under undue pressure or compulsion
to complete the transaction. Fair Market Value shall be determined by
the Board of Directors acting in good faith and shall be evidenced by
a Board Resolution delivered to the Trustee.
"Fixed Charge Coverage Ratio" means for any period the ratio
of (i) the sum of Consolidated Net Income, Consolidated Interest
Expense and Consolidated Tax Expense, plus all depreciation, and
without duplication, all amortization, in each case, for such period,
of the Company and its Subsidiaries on a consolidated basis, all as
determined in accordance with GAAP, to (ii) Consolidated Interest
Expense for such period; provided, however, that in making such
computation, the Consolidated Interest Expense attributable to
interest on any Indebtedness computed on a pro forma basis and bearing
a floating interest rate shall be computed as if the rate in effect on
the date of computation had been the applicable rate for the entire
period.
"GAAP" or "generally accepted accounting principles" means
generally accepted accounting principles as in effect and as
implemented by the Company on the date of the Indenture.
"Intercompany Debt Obligations" means any Indebtedness of the
Company or any Subsidiary of the Company which, in the case of the
Company, is owing to any Subsidiary and which, in the case of any
Subsidiary, is owing to the Company or any other Subsidiary of the
Company.
"Permitted Indebtedness" means (i) Indebtedness of the Company
or any Subsidiary outstanding on the date of the
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<PAGE> 6
Indenture; (ii) the Senior Notes; (iii) Indebtedness of the Company
not in excess of $250 million in principal amount outstanding at any
time under revolving credit or similar bank facilities and any
refinancings, replacements, renewals, extensions, substitutions,
refundings, deferrals, restructurings, amendments, supplements or
modifications of such Indebtedness; provided, however, that the
proceeds of such Indebtedness referred to in this clause (iii) shall
be invested in, or used in connection with, food-related businesses
(other than the fresh or processed meat business); (iv) Indebtedness
of a Subsidiary (including Acquired Indebtedness), which is
non-recourse to the Company, the proceeds of which are or have been
used for working capital purposes or for capital expenditures in
food-related businesses (other than the fresh or processed meat
business); (v) Indebtedness of (A) a Subsidiary borrowed from a lender
located in any country producing tropical fruit and denominated in or
measured by the currency of such country other than U.S. dollars,
which Indebtedness is incurred for hedging purposes in the ordinary
course of business consistent with past practice or (B) the Company or
any other Subsidiary (in either case, other than for borrowed money)
incurred in connection with Indebtedness of a Subsidiary referred to
in clause (A) above which is (y) a guarantee of such Subsidiary
Indebtedness, or (z) a reimbursement obligation relating to a letter
of credit supporting such Subsidiary Indebtedness; (vi) Intercompany
Debt Obligations; provided, however, that the obligations of the
Company with respect to such Indebtedness shall be evidenced by an
intercompany note and shall be subordinated in right of payment from
and after such time as all Senior Notes issued and outstanding shall
become due and payable (whether at Stated Maturity, by acceleration or
otherwise) to the payment and performance of the Company's obligations
under the Senior Notes; and (vii) additional Indebtedness of the
Company (including Acquired Indebtedness) the aggregate principal
amount of which outstanding at any time does not exceed 5% of Adjusted
Consolidated Assets.
"Permitted Liens" means (i) Liens existing on the date of the
Indenture on assets of the Company or any Subsidiary; (ii) Liens on
assets acquired after the date of the Indenture or Liens to secure the
purchase price of assets to be acquired; (iii) Liens on properties of
any Subsidiary securing Indebtedness the proceeds of which are or have
been used for working capital or capital expenditures relating to
food-related businesses (other than the fresh or processed meat
business); (iv) Liens securing Indebtedness of (A) any Subsidiary
borrowed from a lender located in any country producing tropical fruit
and denominated in or measured by
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<PAGE> 7
the currency of such country other than U.S. dollars, which
Indebtedness is incurred for hedging purposes in the ordinary course
of business consistent with past practice and (B) the Company or any
other Subsidiary, to the extent permitted under clause (v)(B) of
Permitted Indebtedness; (v) Liens of a Person existing at the time
such Person becomes a Subsidiary or assumed in connection with the
acquisition of assets of such Person; (vi) Liens on working capital
assets; (vii) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of the
foregoing; (viii) carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in the ordinary
course of business and with respect to amounts not overdue for a
period of more than 90 days or being contested in good faith by
appropriate proceedings; (ix) judgment Liens and other similar Liens
arising in the ordinary course of business; provided, however, that
the execution or other enforcement thereof is being effectively stayed
and the claims secured thereby are being actively contested in good
faith and by appropriate proceedings; (x) Liens securing Intercompany
Debt Obligations; (xi) Liens for taxes not yet due or payable under
law or being contested in good faith; (xii) Liens upon property of a
foreign Subsidiary to secure Indebtedness of that foreign Subsidiary;
(xiii) Liens in accordance with customary banking practice to secure
Indebtedness in connection with foreign trade; (xiv) easements,
rights-of-way, restrictions and other similar encumbrances to the
extent incurred in the ordinary course of business; (xv) pledges or
deposits in connection with workers' compensation, unemployment
insurance and other social security legislation; and (xvi) deposits to
secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds, interest rate, foreign exchange and
commodity hedging transactions and other obligations of a like nature
incurred in the ordinary course of business.
"Permitted Lindner Holders" means, collectively, Carl H.
Lindner, Robert D. Lindner, Carl H. Lindner III, S. Craig Lindner and
Keith E. Lindner, the respective estates, spouses, heirs, ancestors,
lineal descendants, legatees and legal representatives of any of the
foregoing and the trustee of any bona fide trust of which one or more
of the foregoing are the sole beneficiaries or the grantors thereof,
or any entity of which any of the foregoing, individually or
collectively, beneficially own more than 50% of the Voting Shares.
"Refinancing" has the meaning specified in the definition
"Refinancing Indebtedness."
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<PAGE> 8
"Refinancing Indebtedness" means any renewals, extensions,
substitutions, refundings, refinancings, replacements, deferrals,
restructurings, amendments, supplements or modifications of any
Indebtedness (each, a "Refinancing") of the Company or any of its
Subsidiaries outstanding on the date of the Indenture or other
Indebtedness permitted to be incurred by the Company or any of its
Subsidiaries pursuant to the terms of the Indenture (other than
Indebtedness referred to in clauses (iii), (iv), (v), (vi) or (vii) of
the definition of Permitted Indebtedness), but only to the extent that
(i) the aggregate amount of Indebtedness represented thereby is not
increased by such Refinancing, (ii) the Indebtedness incurred in such
Refinancing is not incurred by a Subsidiary if the Company initially
incurred the Indebtedness being renewed, extended, substituted,
refunded, refinanced, replaced, deferred, restructured, amended,
supplemented or modified and (iii) the Indebtedness incurred in such
Refinancing is not incurred by the Company if a Subsidiary initially
incurred the Indebtedness being renewed, extended, substituted,
refunded, refinanced, replaced, deferred, restructured, amended,
supplemented or modified, and such Indebtedness was non-recourse to
the Company.
"Related Person" means (i) any Affiliate of the Company, (ii)
any Person who directly or indirectly holds 10% or more of any class
of Capital Stock of the Company, (iii) with respect to any such
natural Person, any other Person having a relationship with such
Person by blood, marriage or adoption not more remote than first
cousin and (iv) any officer or director of the Company.
"Restricted Payments" has the meaning specified in the
covenant entitled "Section 1013. Limitation on Restricted Payments."
"Senior Notes" means the Company's 9-1/8% Senior Notes due
2004 issued under the Indenture.
"Subordinated Indebtedness" means the Company's 9-1/8%
Subordinated Debentures due February 1, 1998, 7% Convertible
Subordinated Debentures due March 28, 2001, 11-1/2% Subordinated Notes
due June 1, 2001, 11-7/8% Subordinated Debentures due May 1, 2003,
10-1/2% Subordinated Debentures due August 1, 2004 and 10-1/4%
Subordinated Debentures due August 1, 2005 which are outstanding on
the date of this Indenture.
"Voting Shares" means stock of the class or classes having
general voting power under ordinary circumstances to elect the board
of directors, managers or trustees of a
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<PAGE> 9
corporation (irrespective of whether or not at the time stock of any
other class or classes shall have or might have voting power by reason
of the happening of any contingency).
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<PAGE> 10
EXHIBIT B
Covenants
SECTION 1009. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other
corporation or sell, convey, assign, transfer, lease or otherwise dispose of
all or substantially all of its properties and assets as an entirety to any
Person unless the conditions set forth in Section 801 of the Indenture are
satisfied and:
(a) immediately after giving affect to such transaction (and
treating any Indebtedness not previously an obligation of the Company
or a Subsidiary which becomes the obligation of the Company or any
of its Subsidiaries in connection with or as a result of such
transaction as having been incurred at the time of such transaction),
the Company (in the case of clause (i) of Section 801 (1) of the
Indenture) or such Person (in the case of clause (ii) thereof) could
incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness or Refinancing Indebtedness) pursuant to Section 1012
hereof;
(b) immediately after giving effect to such transaction
(and treating any Indebtedness not previously an obligation of the
Company or a Subsidiary which becomes the obligation of the Company or
any of its Subsidiaries in connection with or as a result of such
transaction as having been incurred at the time of such transaction),
the Company (in the case of clause (i) of Section 801 (1) of the
Indenture) or such Person (in the case of clause (ii) thereof) shall
have a Consolidated Net Worth equal to or greater than the lesser of
(A) the Consolidated Net Worth of the Company immediately prior to
such transaction or (B) 80% of the Consolidated Net Worth of the
Company immediately prior to such transaction provided that the amount
of this clause (B) shall not be less than $500 million; and
(c) immediately after giving effect to any such transaction
on a pro forma basis, the Fixed Charge Coverage Ratio of the Company
(in the case of clause (i) of Section 801 (1) of the Indenture)
or of such Person (in the case of clause (ii) thereof) shall be at
least 2.0 to 1; provided, however, that if the Fixed Charge Coverage
Ratio of the Company immediately prior to such transaction is within
the range set forth in column (A) below, then the Fixed Charge
Coverage Ratio of the Company (in the case of clause (i) of Section
801 (1) of the Indenture) or of such Person (in the case of clause
(ii) thereof) shall be at least equal to
<PAGE> 11
the lesser of (x) the ratio ratio determined by multiplying the
percentage set forth in column (B) below by the Fixed Charge Coverage
Ratio of the Company or (y) the ratio set forth in column (C) below:
<TABLE>
<CAPTION>
A B C
- - -
<S> <C> <C>
2.2222:1 to 2.9999:1 . . . . . . . . . . . . . . 90% 2.4:1
3.00:1 to 3.9999:1 . . . . . . . . . . . . . . . 80% 2.8:1
4.00:1 or greater . . . . . . . . . . . . . . . 70% 3.0:1
</TABLE>
and provided, further, that if immediately after giving effect to such
transaction on a pro forma basis, the Fixed Charge Coverage Ratio of
the Company (in the case of clause (i) of Section 801(1) of the
Indenture) or such Person (in the case of clause (ii) thereof), as the
case may be, is 3.0 to 1 or more, the calculation in the preceding
proviso shall be inapplicable and such transaction shall be deemed to
have complied with the requirements of this Section 1009(c).
SECTION 1010. Limitations on Liens.
(a) The Company will not, and will not permit any Subsidiary
to, directly or indirectly, create, assume, incur or suffer to be created,
assumed or incurred, any Lien upon any of their respective assets, without
making effective provision whereby all the Senior Notes shall be directly
secured equally and ratably with the Indebtedness or other obligations secured
by such Lien, so long as any such Indebtedness or other obligations shall be so
secured, except for (i) Permitted Liens and (ii) Liens securing an aggregate
amount of Indebtedness, which together with the aggregate value of Sale and
Leaseback Transactions permitted by the provisions of Subsection (b) of Section
1011 hereof (other than such transactions in which debt has been retired in
accordance with the provisions of Subsection (b) of Section 1011 hereof), does
not at the time exceed 5% of Adjusted Consolidated Assets.
(b) The Certificate of a Firm of Independent Public Accountants
shall be conclusive evidence as to the amount, at the date specified in such
Certificate, of Adjusted Consolidated Assets.
SECTION 1011. Sale and Leaseback Transactions.
(a) The Company will not sell or transfer, in any transaction or
series of related transactions, any assets with an aggregate fair market value
of $10 million or more relating to the sourcing, processing, transportation,
shipping or distribution of the Company's fresh food products, including ships,
land, facilities, equipment and related infrastructure, to
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<PAGE> 12
any Person (other than a Subsidiary) with the intention of taking back a lease
of such assets (any transaction or series of transactions subject to the
provisions of this Section 1011 being herein referred to as a "Sale and
Leaseback Transaction"), except a Sale and Leaseback Transaction for a period
of less than three years with the intent that the use by the Company will be
discontinued on or before the expiration of such period.
(b) The Company may enter into a Sale and Leaseback Transaction
which would otherwise be prohibited by Subsection (a) of this Section 1011,
provided, that (i) the Company shall apply an amount equal to the value of the
assets so leased (a) to build or purchase capital assets used in the Company's
business or (b) to retire long-term indebtedness for money borrowed (including
Senior Notes) of the Company or (ii) the value thereof plus the aggregate
Indebtedness permitted to be secured under the provisions of clause (ii) of
Subsection (a) of Section 1010 does not at the time exceed 5% of Adjusted
Consolidated Assets.
(c) The term "value" shall, for the purpose of this Section 1011 and
Section 1010(a) hereof, mean, with respect to a Sale and Leaseback Transaction,
as of any particular time, the amount equal to the greater of (i) the net
proceeds of the sale of the property leased pursuant to such Sale and Leaseback
Transaction or (ii) the fair value of such property at the time of entering
into such Sale and Leaseback Transaction, as determined by the Board of
Directors, in each such case divided first by the number of full years of the
term of the lease and then multiplied by the number of full years of such term
remaining at the time of determination, without regard to any renewal or
extension options contained in the lease.
(d) The Certificate of a Firm of Independent Public Accountants
shall be conclusive evidence as to the amount, at the date specified in such
Certificate, of Adjusted Consolidated Assets.
SECTION 1012. Limitation on Indebtedness.
(a) The Company shall not, and shall not permit any Subsidiary to,
create, incur, assume, or guarantee the payment of, any Indebtedness (including
Acquired Indebtedness) other than Permitted Indebtedness or Refinancing
Indebtedness, unless, at the time of such event and after giving effect thereto
on a pro forma basis, the Company's Fixed Charge Coverage Ratio for the last
four full fiscal quarters immediately preceding such event, taken as one
period,is not less than 2.0 to 1. For the purposes of determining any
particular amount of Indebtedness, there shall not be included the amount of
any guarantees of (or obligations with respect to letters of credit supporting,
or joint or joint
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<PAGE> 13
and several obligations in respect of) Indebtedness, the amount of which is
otherwise included.
(b) For purposes of determining compliance with this Section 1012,
(i) in the event that an item of Indebtedness meets the criteria of more than
one of the clauses of the definition of Permitted Indebtedness or Refinancing
Indebtedness, the Company, in its sole discretion, shall classify such item of
Indebtedness and shall be required to include the amount and type of such
Indebtedness in only one of such clauses and (ii) the amount of Indebtedness
issued at a price which is less than the principal amount thereof shall be
equal to the amount of the liability in respect thereof determined in
accordance with GAAP.
SECTION 1013. Limitation on Restricted Payments.
(a) The Company shall not, directly or indirectly, (i) declare
or pay any dividend on, or make any distribution in respect of, or purchase,
redeem or retire for value, or permit any of its Subsidiaries, directly or
indirectly, to so purchase, redeem or retire for value, any Capital Stock of
the Company, other than through the issuance solely of the Company's own
Capital Stock or rights thereto, (ii) make any principal payment on, or redeem,
repurchase, defease or otherwise acquire or retire for value, prior to
scheduled principal payment or maturity, Indebtedness of the Company (excluding
Indebtedness of Subsidiaries) which is expressly subordinate in right of
payment to the Senior Notes or permit any of its Subsidiaries, directly or
indirectly, to do so or (iii) make any loan to, incur, create, assume or suffer
to exist any guarantee of Indebtedness of, or make advancement to, or other
investment in, or permit any of its Subsidiaries to make any loan, incur,
create, assume or suffer to exist any guarantee of Indebtedness of, or make
advancement to, or other investment in, any Related Person of the Company
(other than a Subsidiary of the Company) except for any transaction with an
officer or director of the Company entered into in the ordinary course of
business of the Company (including compensation or employee benefit
arrangements with any officer or director of the Company) (such payments or any
other actions described in (i), (ii) and (iii), collectively, "Restricted
Payments") provided, that the term "Restricted Payment" shall not include the
making of any principal payment on, or redemption, repurchase, defeasance or
other acquisition or retirement for value, prior to scheduled principal payment
or maturity, of (A) any of the Company's Subordinated Indebtedness existing at
the date of the Indenture as long as such acquisition or retirement is not made
with the proceeds of Indebtedness which has a maturity date earlier than the
existing Subordinated Indebtedness being acquired or retired or (B)
Indebtedness of the Company which is incurred after the date of the Indenture
and expressly subordinated in right of payment to the Senior Notes, if such
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<PAGE> 14
acquisition or retirement is made with the proceeds of Indebtedness which is
subordinate in right of payment to the Senior Notes and has a maturity date no
earlier than that of the latest maturity date of any Outstanding Senior Notes.
(b) The Company may make a Restricted Payment which would
otherwise be prohibited by Subsection (a) of this Section 1013, provided, that
(1) at the time of and after giving effect to the proposed Restricted Payment
no Event of Default (and no event that, after notice or lapse of time, or both,
would become an Event of Default) shall have occurred or be continuing, and (2)
at the time of and after giving effect to the proposed Restricted Payment (the
value of any such payment, if other than cash, as determined by the Board of
Directors, whose determination shall be conclusive and evidenced by a Board
Resolution), the aggregate amount of all Restricted Payments declared or made
after December 31, 1993 shall not exceed the sum of (A) 50% of the aggregate
cumulative Consolidated Net Income of the Company accrued on a cumulative basis
during the period beginning on January 1, 1994 and ending on the last day of
the Company's last fiscal quarter ending prior to the date of such proposed
Restricted Payment (or, if such aggregate cumulative Consolidated Net Income
shall be a loss, minus 100% of such loss) plus (B) the aggregate proceeds
received by the Company as capital contributions to the Company after December
31, 1993, or from the issuance and sale (other than to a Subsidiary) after
December 31, 1993 of Capital Stock (excluding the issuance or sale of preferred
stock that is mandatorily redeemable, or redeemable at the option of the holder
of such preferred stock, in either case, prior to the Stated Maturity of the
Senior Notes (collectively, the "Disqualified Stock")) and any Indebtedness or
other securities of the Company convertible into or exercisable for Capital
Stock (other than Disqualified Stock) of the Company which has been so
converted or exercised, as the case may be, plus (C) $65 million; provided,
however, that the foregoing provisions of this Subsection and Subsection (a)
will not prevent the payment of any dividend within 60 days after the date of
its declaration if at the date of declaration such payment would be permitted
by such provisions.
(c) Notwithstanding any provision of Subsection (a) or (b) of
this Section, securities, property or other assets of any existing or future
business of the Company engaged in the processing or marketing of fresh or
processed meat, poultry or seafood products shall be valued at their net book
value as determined in accordance with GAAP, and up to $100 million in net book
value (as so determined) of any dividend or distribution of such securities,
property or other assets to holders of Capital Stock of the Company shall be
permitted without regard to the provisions of, and shall also be excluded from
any calculation pursuant to, Subsections (a) and (b) of this Section.
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<PAGE> 15
SECTION 1014. Transactions with Related Persons.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, enter into or suffer to exist any transaction or
series of related transactions (including, without limitation, the sale,
purchase, exchange or lease of assets, property or services) with any Related
Person (other than a Subsidiary of the Company) unless (i) such transaction or
series of transactions is on terms that are no less favorable to the Company or
such Subsidiary, as the case may be, than would be available in a comparable
transaction with an unrelated third party and (ii)(A) with respect to a
transaction or series of related transactions involving aggregate payments in
excess of $10 million but less than $20 million, the Company delivers an
Officer's Certificate to the Trustee certifying that such transaction complies
with clause (i) above and (B) with respect to a transaction or series of related
transactions involving aggregate payments equal to or greater than $20 million,
such transaction or series of transactions is approved by a majority of the
Board of Directors of the Company including the approval of at least two
disinterested directors; provided that in the event that the Company has only
one disinterested director a transaction or series of related transactions
involving aggregate payments equal to or exceeding $20 million shall be approved
by a majority of the Board of Directors of the Company including the approval of
the disinterested director. Notwithstanding the foregoing, the restrictions
set forth in the preceding sentence shall not apply to (y) any transaction with
an officer or director of the Company entered into in the ordinary course of
business (including compensation or employee benefit arrangements with any
officer or director of the Company) and (z) any transaction entered into in the
ordinary course of business with a Subsidiary of the Company.
SECTION 1015. Purchase of Senior Notes upon Change of
Control.
(a) Upon the occurrence of a Change of Control Triggering Event,
each Holder of Senior Notes shall have the right to require that the Company
repurchase such Holder's Senior Notes in whole or in part in integral multiples
of $1,000, at a purchase price (the "Purchase Price") in cash in an amount
equal to 101% of the principal amount thereof plus accrued and unpaid interest,
if any, to the date of purchase, in accordance with the procedures set forth
in Subsections (b) and (c) of this Section.
(b) Within fifteen days following any Change of Control Triggering
Event, the Company shall send by first-class mail, postage prepaid, to the
Trustee and to each Holder of the
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<PAGE> 16
Senior Notes, at his address appearing in the Debt Security Register, a notice
stating:
(1) that a Change of Control Triggering Event has occurred
and that such Holder has the right to require the Company to
repurchase such Holder's Senior Notes at the Purchase Price;
(2) the circumstances and relevant facts regarding such
Change of Control Triggering Event (including but not limited to,
where applicable, information with respect to pro forma historical
income, cash flow and capitalization after giving effect to such
Change of Control Triggering Event);
(3) information concerning the business of the Company which
the Company in good faith believes will enable such Holders to make an
informed decision, which at a minimum will include (i) the most
recently filed Annual Report on Form 10- K (including audited
consolidated financial statements) of the Company, the most recent
subsequently filed Quarterly Report on Form 10-Q and any Current
Report on Form 8-K of the Company filed subsequent to such Quarterly
Report (or in the event the Company is not required to prepare any of
the foregoing Forms, the comparable information required pursuant to
Section 704 of the Indenture), (ii) a description of material
developments in the Company's business subsequent to the date of the
latest of such Reports, and (iii) if material, appropriate pro forma
financial information;
(4) a purchase date (the "Purchase Date") which shall be 90
days from the date such notice is mailed or if not a Business Day, the
next following Business Day;
(5) the Purchase Price;
(6) the place at which Senior Notes are to be presented and
surrendered; and
(7) that interest accrued to the Purchase Date will be paid as
specified in such notice and that, unless the Company shall default in
payment of the Purchase Price, after said Purchase Date interest
thereon will cease to accrue with respect to any Senior Notes
presented and surrendered for purchase.
(c) Holders of Senior Notes electing to have such Senior
Notes purchased will be required to surrender such Senior Notes to the Company
at the address specified in the notice by the close of business on the
fifteenth day prior to the Purchase Date. Any such surrender of Senior Notes
for purchase by the
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<PAGE> 17
Company shall be irrevocable. No such Senior Notes shall be deemed to have
been presented and surrendered until such Senior Notes are actually received by
the Company or its designated agent. Holders of Senior Notes whose Senior
Notes are purchased only in part will be issued new Senior Notes equal in
principal amount to the unpurchased portion of the Senior Notes surrendered.
(d) Notwithstanding anything to the contrary herein or in the
Debt Securities of any series, the Company shall not be obligated to give
notice to Holders of Debt Securities of any series or to purchase Debt
Securities with respect to more than one Change of Control Triggering Event.
SECTION 1016. Defeasance of Certain Obligations.
The Company may omit to comply with any term, provision or
condition set forth in Section 801 of the Indenture and in Sections 1009, 1010,
1011, 1012, 1013, 1014 and 1015 hereof and any such omission with respect to
such Sections shall not be an Event of Default, in each case, with respect to
the Senior Notes, provided, however, that the following conditions have been
satisfied:
(1) with respect to all Outstanding Senior Notes not theretofore
delivered to the Trustee for cancellation, the Company shall have
deposited or caused to be deposited with the Trustee for the Senior Notes as
trust funds or obligations in trust an amount of cash, U.S. Government
Obligations or a combination of such cash and U.S. Government Obligations,
in each case in an amount which, together with, as evidenced by a
Certificate of a Firm of Independent Public Accountants delivered to such
Trustee, the predetermined and certain income to accrue on any U.S.
Government Obligations when due (without the consideration of any
reinvestment thereof) is sufficient to pay and discharge when due the entire
indebtedness on all such Outstanding Senior Notes of such series for unpaid
principal (and premium, if any) and interest to the Stated Maturity or any
Redemption Date, as the case may be;
(2) such deposit will not result in a breach or violation of,
or constitute a default under, the Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(3) no Event of Default or event which with the giving of
notice or lapse of time, or both, would become an Event of Default with
respect to the Senior Notes shall have occurred and be continuing on the
date of such deposit and no Event of Default under Section 501(6) or Section
501(7)
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<PAGE> 18
of the Indenture or event which with the giving of notice or lapse of time,
or both, would become an Event of Default under Section 501(6) or Section
501(7) of the Indenture shall have occurred and be continuing on the 91st
day after such date; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the defeasance contemplated
in this Section have been complied with.
All the obligations of the Company under the Indenture with respect to the
Senior Notes, other than with respect to Section 801 of the Indenture and
Sections 1009 through 1015 hereof, shall remain in full force and effect.
Anything in this Section 1016 to the contrary notwithstanding, the Trustee for
the Senior Notes shall deliver or pay to the Company, from time to time upon
Company Request, any money or U.S. Government Obligations held by it as
provided in this Section 1016 which, as expressed in a Certificate of a Firm of
Independent Public Accountants delivered to such Trustee, are in excess of the
amount thereof which would then have been required to be deposited for the
purpose for which such money or U.S. Government Obligations were deposited or
received, provided such delivery can be made without liquidating any U.S.
Government Obligations.
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<PAGE> 1
EXHIBIT 4
[FORM OF CERTIFICATE OF AMENDMENT]
CERTIFICATE OF AMENDMENT
TO THE
RESTATED CERTIFICATE OF INCORPORATION
OF
CHIQUITA BRANDS INTERNATIONAL, INC.
TO: Secretary of State
State of New Jersey
Pursuant to the provisions of N.J.S. 14A:7-2(2), the undersigned
corporation, Chiquita Brands International, Inc. (the "Corporation"), executes
the following Certificate of Amendment to its Restated Certificate of
Incorporation, as amended (the "Certificate of Incorporation").
1. The name of the corporation is Chiquita Brands International,
Inc.
2. The following resolutions, establishing and designating a
series of shares and fixing and determining the relative
rights and preferences thereof, were duly adopted by the
Executive Committee of the Board of Directors of the
Corporation as of the 8th day of February, 1994, pursuant to
the authority vested in the Board of Directors by the
Certificate of Incorporation, exercised on behalf of the Board
of Directors by the Executive Committee pursuant to
resolutions of the Board of Directors so authorizing it to
act:
RESOLVED, that pursuant to the authority expressly
vested in the Executive Committee of the Board of Directors of
the Corporation by the Restated Certificate of Incorporation,
as amended, and by resolutions of the Board of Directors, the
Executive Committee of the Board of Directors hereby
classifies Two Million, Eight Hundred Seventy-Five Thousand
(2,875,000) shares of the Corporation's Non-Voting Cumulative
Preferred Stock as a new series designated "$2.875 Non-Voting
Cumulative Preferred Stock, Series A," $1.00 par value (the
"Series A Preferred Stock").
<PAGE> 2
RESOLVED, that the terms and conditions of the Series
A Preferred Stock, including its rights, preferences,
privileges, voting powers, restrictions, qualifications,
limitations, and terms and conditions for conversion shall be
as set forth in Exhibit A attached hereto.
RESOLVED, that the Corporation's Restated Certificate
of Incorporation, as amended, is hereby further amended to add
to Section IV of such certificate a new Subsection G entitled
"Special Provisions Applicable to Series A Preferred Stock,"
in the form attached hereto as Exhibit A, and the proper
officers of the Corporation are authorized to execute and
file, as necessary, any documents or certificates with the New
Jersey Secretary of State to effect such amendment.
3. The resolutions were adopted by unanimous written consent by
the Executive Committee of the Board of Directors as of
February 8, 1994.
4. The Certificate of Incorporation is further amended so that
the designation and number of shares of each class and series
acted upon in the resolutions, and the relative rights,
preferences and limitations of each such class and series are
as stated in Exhibit A attached hereto, which is the same
exhibit referred to in the foregoing resolutions.
IN WITNESS WHEREOF, the undersigned has signed this Certificate of
Amendment to the Certificate of Incorporation this __th day of _______, 1994.
CHIQUITA BRANDS INTERNATIONAL, INC.
By:
------------------------------
Steven G. Warshaw
Executive Vice President and
Chief Administrative Officer
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<PAGE> 3
EXHIBIT A
SUBSECTION G. SPECIAL PROVISIONS APPLICABLE TO SERIES A PREFERRED STOCK
There is hereby established Series A Preferred Stock which shall be
designated "$2.875 Non-Voting Cumulative Preferred Stock, Series A" $1.00 par
value ("Series A Preferred Stock") and shall consist of Two Million, Eight
Hundred Seventy-Five Thousand (2,875,000) shares, and no more. The relative,
participating, optional and other special rights and the qualifications,
limitations and restrictions of the Series A Preferred Stock shall be as
follows:
(a) Dividends. (i) The holders of outstanding shares of the Series A
Preferred Stock shall be entitled to receive (subject to the rights of holders
of shares of Mandatorily Exchangeable Cumulative Preference Stock, Series C, or
any series of Non-Voting Cumulative Preferred Stock or Series Preference Stock
and/or any other class or series of preferred stock which the Corporation may
in the future issue which ranks prior to or on a parity with the Series A
Preferred Stock as to dividends), when, as and if declared by the Board of
Directors out of funds legally available therefor, cumulative preferential cash
dividends at the per share rate of $.71875 per quarter and no more
("Preferential Dividends"), payable on the seventh (7th) day of March, June,
September and December of each year (each such date being hereinafter referred
to as a "Preferential Dividend Payment Date") commencing June 7, 1994;
provided, however, that the Preferential Dividend payable on June 7, 1994 (the
"Initial Preferential Dividend") with respect to any share of Series A
Preferred Stock outstanding on the record date for the Initial Preferential
Dividend shall be computed in accordance with Subsection G(a)(iv). If June 7,
1994 or any other Preferential Dividend Payment Date shall not be a business
day, then the Preferential Dividend Payment Date shall be on the next
succeeding business day. Each such dividend will be payable to holders of
record as they appear on the stock books of the Corporation on such record
date, not less than 10 nor more than 60 days preceding the Preferential
Dividend Payment Date, as shall be fixed by the Board of Directors. Dividends
on the Series A Preferred Stock shall accrue from the date of issuance of the
Series A Preferred Stock, and dividends accrued as of each Preferential
Dividend Payment Date shall accumulate to the extent not paid on such date.
Accumulated unpaid dividends shall not bear interest.
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<PAGE> 4
(ii) So long as any shares of Series A Preferred Stock are
outstanding:
(A) no dividend (other than a dividend or distribution paid in
shares of, or warrants or rights to subscribe for or purchase shares of,
Capital Stock or in any other stock of the Corporation ranking junior to the
Series A Preferred Stock as to dividends and upon liquidation) shall be
declared or paid or set aside for payment or other distribution declared or
made upon the Capital Stock or upon any other stock of the Corporation ranking
junior to or (except as provided in the following sentence) on a parity with
Series A Preferred Stock as to dividends,
(B) nor shall any Capital Stock nor any other stock of the
Corporation ranking junior to or on a parity with Series A Preferred Stock as
to dividends be redeemed, purchased or otherwise acquired for any consideration
(or any moneys be paid to or made available for a sinking fund for the
redemption of any shares of any such stock) by the Corporation (except by
conversion into or exchange for stock of the Corporation ranking junior to
Series A Preferred Stock as to dividends and upon liquidation),
(C) nor shall the Corporation purchase or otherwise acquire
(except pursuant to a purchase or exchange offer made on the same terms to all
holders of shares of Series A Preferred Stock), or convert in part but not in
whole into shares of Capital Stock at the option of the Corporation pursuant to
Subsection G(c)(ii) outstanding shares of Series A Preferred Stock,
unless, in each case, the full Preferential Dividends, if any, accumulated on
all outstanding shares of the Series A Preferred Stock through the most recent
Preferential Dividend Payment Date shall have been paid or deposited for
payment or contemporaneously are declared and paid or deposited for payment.
When dividends have not been paid in full upon the shares of Series A Preferred
Stock, all dividends and other distributions declared upon the Series A
Preferred Stock and any other shares of the Corporation ranking on a parity as
to dividends and such other distributions with the shares of Series A Preferred
Stock shall be declared pro rata so that the amount of dividends and other
distributions declared per share on the Series A Preferred Stock and such other
shares shall in all cases bear to each other the same ratio that accumulated
unpaid dividends per share on the shares of Series A Preferred Stock and such
other shares bear to each other. Holders of the shares of Series A Preferred
Stock shall not be entitled to any dividends, whether payable in cash, property
or stock, in excess of full cumulative dividends, as herein provided.
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(iii) Any dividend payment made on shares of Series A
Preferred Stock shall first be credited against the earliest accumulated unpaid
dividend due with respect to shares of Series A Preferred Stock.
(iv) Any dividends payable for any period greater or less than
a full quarterly dividend period shall be computed on the basis of a 360-day
year consisting of twelve 30-day months.
(b) Liquidation. (i) Upon any dissolution, liquidation or winding up
of the affairs of the Corporation, whether voluntary or involuntary
(collectively, a "Liquidation"), the holders of shares of Series A Preferred
Stock shall be entitled to receive out of the assets of the Corporation
available for distribution to shareholders, after payment of all debts and
other liabilities of the Corporation and all liquidation preferences of holders
of shares of any class or series of preferred stock which the Corporation may
in the future issue which ranks prior to the Series A Preferred Stock with
respect to liquidation rights, but before any distribution or payment is made
to holders of Capital Stock of the Corporation or on any other shares of the
Corporation ranking junior to the shares of Series A Preferred Stock upon
liquidation, liquidating distributions in the amount of $50 per share, plus an
amount equal to all accumulated unpaid Preferential Dividends thereon to the
date of Liquidation, and no more. If upon any Liquidation the amounts payable
with respect to the Series A Preferred Stock and any other shares of the
Corporation ranking as to any such distribution on a parity with the Series A
Preferred Stock are not paid in full, the holders of shares of Series A
Preferred Stock and of such other shares will share ratably in any such
distribution of assets of the Corporation in proportion to the full respective
distributable amounts to which they are entitled. After payment of the full
amount of the liquidating distribution to which they are entitled, the holders
of shares of Series A Preferred Stock will not be entitled to any further
participation in any distribution or payments by the Corporation.
(ii) Neither the merger nor consolidation of the Corporation into
or with any other corporation or other entity, nor the merger or consolidation
of any other corporation or other entity into or with the Corporation, nor a
sale, transfer or lease of all or any part of the assets of the Corporation for
cash, securities or other property, shall be deemed to be a Liquidation for
purposes of this Subsection G(b).
(c) Conversions.
(i) Automatic Conversion Upon the Occurrence of Certain Events.
Immediately prior to the effectiveness of a merger or consolidation of the
Corporation that results in the conversion or exchange of the Capital Stock
into or for, or that results in the holders of Capital Stock obtaining the
right to receive, cash, securities or other assets, whether of the Corporation
or
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of any other person or entity (any such merger or consolidation is referred to
herein as a "Merger or Consolidation"), other than a Merger or Consolidation in
which the Series A Preferred Stock remains outstanding and holders of Series A
Preferred Stock obtain the right to receive upon conversion of their shares
into Capital Stock or any other security the same cash, securities or other
assets that they would have received with respect to the maximum number of
shares of Capital Stock which such holders would have received (other than in
payment of accumulated unpaid dividends) upon conversion of their shares of
Series A Preferred Stock (at the option of the Corporation pursuant to clause
(ii) of this Subsection G(c) or at the option of the holder pursuant to clause
(iii) of this Subsection G(c), whichever is greater) immediately prior to the
effectiveness of the Merger or Consolidation, each outstanding share of Series
A Preferred Stock shall automatically convert into the maximum number of shares
of Capital Stock which such holders would have received (other than in payment
of accumulated unpaid dividends) upon conversion of their shares of Series A
Preferred Stock (at the option of the Corporation pursuant to clause (ii) of
this Subsection G(c) or at the option of the holder pursuant to clause (iii) of
this Subsection G(c), whichever is greater), plus the right to receive an
amount of cash equal to the accumulated unpaid dividends on such share of
Series A Preferred Stock to and including the Settlement Date (as defined in
Subsection G(c)(viii)).
(ii) Conversion at the Option of the Corporation.
(A) At any time and from time to time on and after February 15, 1997
and prior to February 15, 2001, and upon notice given as provided herein, the
Corporation may exercise its right to convert, in whole or in part, the
outstanding shares of Series A Preferred Stock; provided, however, that the
Corporation may exercise its right to convert only if the Market Price (as
defined in Subsection G(c)(viii)) of the Capital Stock for 20 Trading Dates (as
defined in Subsection G(c)(viii)) within any period of 30 consecutive Trading
Dates, including the last Trading Date of such 30 consecutive Trading Date
period (the "Measuring Date"), shall have exceeded $24.70 per share (the
"Strike Price"). On the date fixed for conversion, each outstanding share of
Series A Preferred Stock to be converted pursuant to this Subsection
G(c)(ii)(A) shall convert into that number of shares of Capital Stock as shall
be determined in accordance with the Conversion Rate (as defined in Subsection
G(c)(iv)) as in effect on the date of conversion, plus the right to receive an
amount of cash equal to the accumulated unpaid dividends on such share of
Series A Preferred Stock to and including the Settlement Date. The Strike Price
shall be proportionately adjusted when, as and if the Conversion Rate shall be
adjusted pursuant to Subsection G(c)(iv).
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(B) At any time and from time to time on and after February 15, 2001,
and upon notice given as provided herein, the Corporation may exercise its
right to convert, in whole or in part, the outstanding shares of Series A
Preferred Stock. On the date fixed for conversion, each outstanding share of
Series A Preferred Stock to be converted pursuant to this Subsection
G(c)(ii)(B) shall convert into:
(1) the lesser of (x) that number of shares of Capital
Stock as shall equal $50 divided by the Current Market Price (as
defined in Subsection G(c)(viii)) per share of Capital Stock on the
date of conversion, or (y) 10 shares of Capital Stock (the "Maximum
Conversion Rate"); plus
(2) the right to receive an amount of cash equal to the
accumulated unpaid dividends on such share of Series A Preferred Stock
to and including the Settlement Date; plus
(3) the right to receive an amount of cash equal to dividends
accrued since the immediately preceding Preferential Dividend Payment
Date, calculated in accordance with Subsection G(a)(iv); provided,
however, that no amount shall be due and payable pursuant to this
clause "(3)" if the conversion date follows a record date for the
payment of a Preferential Dividend and precedes the next succeeding
Preferential Dividend Payment Date.
The Maximum Conversion Rate shall be proportionately adjusted when, as and if
the Conversion Rate shall be adjusted pursuant to Subsection G(c)(iv).
(iii) Conversion at the Option of the Holder. At any time and from
time to time after the 60th day following the final closing of the initial
public offering of Series A Preferred Stock, each holder of Series A Preferred
Stock shall have the right to convert, in whole or in part, the outstanding
shares of Series A Preferred Stock; provided, however, that if the shares of
Series A Preferred Stock to be converted have been earlier called for
conversion at the option of the Corporation, the right of the holder to convert
such shares will terminate as of 5:00 P.M., New York City time, on the business
day immediately preceding the date fixed for such conversion. Each outstanding
share of Series A Preferred Stock to be converted at the option of the holder
shall convert into that number of shares of Capital Stock as shall be
determined in accordance with the Conversion Rate in effect on the Settlement
Date, plus the right to receive an amount of cash equal to the accumulated
unpaid dividends on such share of Series A Preferred Stock to be converted to
and including the Settlement Date. In order to convert shares of
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<PAGE> 8
Series A Preferred Stock into Capital Stock the holder thereof shall surrender,
at the office in the United States designated by the Corporation in writing
from time to time for registration of transfers and conversion, the certificate
or certificates therefor, duly endorsed to the Corporation or in blank, and
give written notice to the Corporation at said office that such holder elects
to convert such shares and shall state in writing therein the name or names
(with addresses) in which such holder wishes the certificate or certificates
for Capital Stock to be issued. Shares of Series A Preferred Stock surrendered
for conversion after the close of business on a record date for payment of
Preferential Dividends and before 9:00 A.M., New York time, on the next
succeeding Preferential Dividend Payment Date must be accompanied by payment of
an amount equal to the Preferential Dividend thereon which is to be paid on
such Preferential Dividend Payment Date. Shares of Series A Preferred Stock
shall be deemed to have been converted on the date of the surrender of such
certificate or certificates for shares for conversion as provided above, and
the person or persons entitled to receive the Capital Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such Capital Stock on such date. As soon as practicable on or after the date
of conversion as aforesaid, the Corporation will issue and deliver a
certificate or certificates for the number of full shares of Capital Stock
issuable upon such conversion, together with cash for any fraction of a share,
as provided in Subsection G(c)(vi), to the person or persons entitled to
receive the same.
(iv) Conversion Rate; Adjustments. The Conversion Rate to be used to
determine the number of shares of Capital Stock to be delivered on the
conversion of the Series A Preferred Stock into shares of Capital Stock
pursuant to Subsections G(c)(i), (ii) and (iii) shall be initially 2.6316
shares of Capital Stock for each share of Series A Preferred Stock; provided,
however, that such Conversion Rate shall be subject to adjustment from time to
time as provided below in this Subsection G(c)(iv). All adjustments to the
Conversion Rate shall be calculated in 1/100ths of a share of Capital Stock.
No adjustment of less than one percent (1%) of the Conversion Rate shall be
required; however, any such adjustment not made due to such limitation shall be
carried forward and shall be taken into account in any subsequent adjustment.
Such rate in effect at any time is herein called the "Conversion Rate."
(A) If the Corporation shall:
(1) pay a dividend or make a distribution with
respect to the Capital Stock in shares of Capital Stock (other
than a dividend or distribution which is also paid to holders
of Series A Preferred Stock and in which such holders shall
receive, with respect to each share of
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<PAGE> 9
Series A Preferred Stock, the same number of shares of Capital
Stock as shall be distributed with respect to the maximum number
of shares of Capital Stock into which such share of Preferred
Stock shall then be convertible at the option of the Corporation
pursuant to Subsection G(c)(ii) or at the option of the holder
pursuant to Subsection(G)(c)(iii), whichever is greater),
(2) subdivide or split its outstanding shares of
Capital Stock,
(3) combine its outstanding shares of Capital Stock
into a smaller number of shares, or
(4) issue by reclassification of its shares of
Capital Stock any shares of Capital Stock of the Corporation,
then, in any such event, the Conversion Rate shall be adjusted by
multiplying the Conversion Rate in effect immediately prior to the
date of such event by a fraction, of which the numerator shall be the
number of outstanding shares of Capital Stock immediately following
such event, and of which the denominator shall be the number of
outstanding shares of Capital Stock immediately prior to such event.
Such adjustment shall become effective at the opening of business on
the business day next following the record date for determination of
shareholders entitled to receive such dividend or distribution in the
case of a dividend or distribution and shall become effective
immediately after the effective date in case of a subdivision, split,
combination, or reclassification.
(B) If the Corporation shall pay a dividend or make a
distribution to all holders of its Capital Stock of evidence of its
indebtedness or other assets (including securities of the Corporation
but excluding any regular quarterly dividends payable solely in cash
out of funds legally available therefor at a rate fixed from time to
time by the Board of Directors or distributions and dividends referred
to in clause (A) above), or shall distribute to all holders of its
Capital Stock rights or warrants to subscribe for or purchase
securities of the Corporation or any of its subsidiaries (in each case
other than a dividend or distribution which is also paid or made to
holders of Series A Preferred Stock in which such holders shall
receive, with respect to each share of Series A Preferred Stock, the
same evidence of indebtedness or other assets, or the same rights or
warrants, as shall be paid or distributed with respect to the maximum
number of shares of Capital Stock into which each share of Preferred
Stock shall then be convertible at
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<PAGE> 10
the option of the Corporation pursuant to Subsection G(c)(ii) or at
the option of the holder pursuant to Subsection G(c)(iii), whichever
is greater), then in each such case the Conversion Rate shall be
adjusted by multiplying the Conversion Rate in effect immediately
prior to the date of such distribution by a fraction, of which the
numerator shall be the Current Market Price per share of Capital Stock
on the record date mentioned below, and of which the denominator shall
be such Current Market Price per share of Capital Stock less the fair
market value (as determined by the Board of Directors of the
Corporation, whose determination shall be conclusive) as of such
record date of the portion of the assets or evidences of indebtedness
so distributed, or of such subscription rights or warrants, applicable
to one share of Capital Stock. Such adjustment shall become effective
on the opening of business on the business day next following the
record date for the determination of shareholders entitled to receive
such distribution.
(C) Anything in this Subsection G(c)(iv) notwithstanding, the
Board of Directors shall be entitled to make such upward adjustments
in the Conversion Rate, in addition to those required by this
Subsection G(c)(iv), (1) as the Board of Directors in its discretion
shall determine to be advisable, in order that any stock dividends,
subdivision of shares, distribution of rights to purchase stock or
securities, or a distribution of securities convertible into or
exchangeable for stock (or any transaction which could be treated as
any of the foregoing transactions pursuant to Section 305 of the
Internal Revenue Code of 1986, as amended, or any successor thereto)
hereafter made by the Corporation to its shareholders shall not be
taxable; and (2) as the Board of Directors in its discretion shall
determine to be necessary or appropriate in order to preserve the
relative rights of the holders of Capital Stock, on the one hand, and
the holders of Series A Preferred Stock, on the other hand, as such
rights are set forth in this Certificate of Incorporation.
(D) In any case in which this Subsection G(c)(iv) shall
require that an adjustment as a result of any event become effective
at the opening of business on the business day next following a record
date, and the date fixed for conversion pursuant to Subsection
G(c)(i), (ii) or (iii) occurs after such record date, but before the
occurrence of such event, the Corporation may in its sole discretion
elect to defer the following until after the occurrence of such event:
(1) issuing to the holder of any shares of the Series
A Preferred Stock surrendered for conversion the
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<PAGE> 11
additional shares of Capital Stock issuable upon such
conversion over and above the shares of Capital Stock
issuable upon such conversion on the basis of the Conversion
Rate prior to adjustment; and
(2) paying to such holder any amount in cash in lieu
of a fractional share of Capital Stock pursuant to Subsection
G(c) (vi).
(v) Notice of Adjustments. Whenever the Conversion Rate is
adjusted as herein provided, the Corporation shall:
(A) forthwith compute the adjusted Conversion Rate in
accordance with Subsection G(c)(iv) and prepare a certificate signed
by the Chief Executive Officer, the Chairman, the President, any Vice
President or the Treasurer of the Corporation setting forth the
adjusted Conversion Rate, Maximum Conversion Rate and, if applicable,
Strike Price, the method of calculation thereof in reasonable detail
and the facts requiring such adjustment and upon which such adjustment
is based, and file such certificate forthwith with the transfer agent
or agents for the Series A Preferred Stock and the Capital Stock; and
(B) mail a notice stating that the Conversion Rate,
Maximum Conversion Rate and, if applicable, Strike Price, have been
adjusted, the facts requiring such adjustment and upon which such
adjustment is based and setting forth the adjusted Conversion Rate,
Maximum Conversion Rate and, if applicable, Strike Price, to the
holders of record of the outstanding shares of the Series A Preferred
Stock at or prior to the time the Corporation mails an interim
financial statement to its shareholders covering the quarter-yearly
fiscal period during which the facts requiring such adjustment
occurred, but in any event within 45 days of the end of such
quarter-yearly fiscal period.
In addition to the foregoing, the Corporation will calculate and provide notice
to the transfer agent or agents for the Series A Preferred Stock and the
Capital Stock within 30 days after (1) the date of initial issuance of the
shares of Series A Preferred Stock, or (2) the occurrence of any event
triggering an adjustment of the Maximum Conversion Rate, of the number of
shares of Capital Stock required to be reserved for issuance upon conversion of
the issued and outstanding shares of Series A Preferred Stock; provided that no
such notice need be sent if the number of shares of Capital Stock then reserved
is in excess of the number of shares of Capital Stock required to be reserved
as so calculated.
(vi) No Fractional Shares. No fractional shares of Capital Stock
shall be issued upon conversion of shares of Series A
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Preferred Stock but, in lieu of any fraction of a share of Capital Stock which
would otherwise be issuable in respect of the aggregate number of shares of the
Series A Preferred Stock surrendered by the same holder for conversion on any
conversion date, the holder shall have the right to receive an amount in cash
equal to the same fraction of the Current Market Price of the Capital Stock on
the date of conversion.
(vii) Cancellation. All shares of Series A Preferred Stock which
shall have been converted into shares of Capital Stock or which shall have been
purchased or otherwise acquired by the Corporation shall assume the status of
authorized but unissued shares of Non-Voting Cumulative Preferred Stock
undesignated as to series.
(viii) Definitions. As used in this Subsection G:
(A) The term "business day" shall mean any day other
than a Saturday, Sunday, or a day on which banking institutions in the
States of New York or Ohio are authorized or obligated by law or
executive order to close.
(B) The term "Market Price" for any day means (1) if the
Capital Stock is listed or admitted for trading on the New York Stock
Exchange (or any successor to such exchange) or, if not so listed or
admitted, on any national or regional securities exchange, the last
sale price, or the closing bid price if no sale occurred, of the
Capital Stock on the principal securities exchange on which the
Capital Stock is listed, or (2) if not listed or traded as described
in clause (1), the last reported sales price of Capital Stock on the
National Market System of the National Association of Securities
Dealers Automated Quotations System, or any similar system of
automated dissemination of quotations of securities prices then in
common use, if so quoted, or (3) if not quoted as described in clause
(2), the mean between the high bid and the low asked quotations for
the Capital Stock as reported by the National Quotation Bureau
Incorporated if at least two securities dealers have inserted both bid
and asked quotations for the Capital Stock on at least five of the ten
preceding days. If the Capital Stock is quoted on a national
securities or central market system in lieu of a market or quotation
system described above, then the closing price shall be determined in
the manner set forth in clause (1) of the preceding sentence if actual
transactions are reported and in the manner set forth in clause (3) of
the preceding sentence if bid and asked quotations are reported but
actual transactions are not. If none of the conditions set forth
above is met, the closing price of Capital Stock on any day or the
average of such closing prices for any period shall be the fair market
value of the Capital Stock as determined by a member firm of the
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New York Stock Exchange, Inc. (or any successor to such exchange)
selected by the Corporation.
(C) The term "Current Market Price" per share of Capital
Stock on any day shall be the average of the daily Market Prices for
the five consecutive Trading Dates ending on the Trading Date
immediately preceding the date of determination of the Current Market
Price (appropriately adjusted to take into account the occurrence
during such five-day period, or following such five-day period and
prior to the date on which shares of Series A Preferred Stock are
converted into Capital Stock, of any event that results in an
adjustment of the Conversion Rate).
(D) The term "Notice Date" shall mean the following: with
respect to any notice given by the Corporation in connection with a
conversion (including any potential conversion upon the effectiveness
of a Merger or Consolidation) of any of the Series A Preferred Stock,
the date of mailing of such notice to the holders of Series A
Preferred Stock.
(E) The term "Settlement Date" shall mean the following:
with respect to a Merger or Consolidation, the business day
immediately prior to the effective date of the Merger or
Consolidation; with respect to a conversion of any of the Series A
Preferred Stock at the option of the Corporation pursuant to
Subsection G(c)(ii), the business day immediately prior to the
effective date of the conversion as set forth in the notice given by
the Corporation in connection therewith; and with respect to a
conversion of any of the Series A Preferred Stock at the option of the
holder pursuant to Subsection G(c)(iii), the date upon which the
certificates representing shares of Series A Preferred Stock are
surrendered for conversion.
(F) The term "Trading Date" shall mean (1) a date on which the
New York Stock Exchange (or any successor to such exchange) is open
for the transaction of business, or (2) if the Capital Stock is not at
such time listed or admitted for trading on the New York Stock
Exchange (or any successor to such Exchange), a date upon which the
principal national or regional securities exchange upon which the
Capital Stock is listed or admitted to trading is open for the
transaction of business, or (3) if not listed or admitted to trading
as described in clauses (1) or (2), and if at such time the sales
price of Capital Stock is quoted on the National Market System of the
National Association of Securities Dealers Automated Quotations
System, or any similar system of automated dissemination of quotations
of securities prices then in common use, a date for which such system
provides quotations with respect to securities upon which it
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<PAGE> 14
reports, or (4) if not so quoted, and if at such time the bid and
asked prices of the Capital Stock are reported by the National
Quotation Bureau Incorporated, a date for which the National Quotation
Bureau Incorporated provides bid and asked prices with respect to
securities upon which it reports, or (5) if not so quoted, any
business day.
(ix) Notice of Conversion. The Corporation shall provide notice of
any exercise of its right to convert shares of Series A Preferred Stock to
holders of record of the Series A Preferred Stock to be converted by mailing a
notice of conversion (within five business days after the Measuring Date, in
the case of any Notice Date with respect to a conversion date prior to February
15, 2001) to such holders, which notice will specify an effective date of
conversion that is not less than 15 nor more than 60 days after the date of
such notice. The Corporation will provide notice of any potential conversion
upon the effectiveness of a Merger or Consolidation not less than 15 nor more
than 60 days prior to the effective date thereof; provided, however, that if
the timing of the effectiveness of a Merger or Consolidation makes it
impracticable to provide at least 15 days' notice, the Corporation shall
provide such notice as soon as practicable prior to such effectiveness. Each
such notice shall be provided by mailing notice of such conversion first class
postage prepaid, to each holder of record of the Series A Preferred Stock to be
converted, at such holder's address as it appears on the stock register of the
Corporation. Each such notice shall state, as appropriate, the following:
(A) the conversion date;
(B) the number of shares of Series A Preferred Stock to be
converted and, if less than all the shares held by such holder are to
be converted, the number of such shares to be converted;
(C) the number of shares of Capital Stock deliverable upon
conversion, or a description of the formula pursuant to which such
number shall be determined;
(D) the place or places where certificates for such shares are
to be surrendered for conversion; and
(E) that dividends on the shares of Series A Preferred Stock
to be converted will cease to accrue on the effective date of
conversion.
The Corporation's obligation to deliver shares of Capital Stock and
provide cash in accordance with this Subsection G(c)(ix) shall be deemed
fulfilled if, on or before an effective date of conversion, the Corporation
shall deposit, with a bank or trust company having an office or agency in the
Borough of
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Manhattan in New York City, or which has an affiliate or correspondent having
an office or agency in the Borough of Manhattan in New York City, which
depository has a capital and surplus of at least $50,000,000, such number of
shares of Capital Stock as are required to be delivered by the Corporation
pursuant to this Subsection G(c) upon the occurrence of the related conversion,
together with cash sufficient to pay all accumulated unpaid dividends, cash in
lieu of fractional share amounts and/or any additional payment pursuant to
Subsection G(c)(ii)(B)(3), if applicable, on the shares to be converted as
required by this Subsection G(c), in trust for the account of the holders of
the shares to be converted, with irrevocable instructions and authority to such
bank or trust company that such shares and cash be delivered upon conversion of
the shares of Series A Preferred Stock so converted. Any interest accrued on
such cash shall be paid to the Corporation from time to time. Any shares of
Capital Stock or cash so deposited and unclaimed at the end of three years from
such conversion date shall be repaid and released to the Corporation, after
which the holder or holders of such shares of Series A Preferred Stock so
converted shall look, subject to applicable state escheat or unclaimed funds
laws, only to the Corporation for delivery of shares of Capital Stock and cash,
if applicable. Each holder of shares of Series A Preferred Stock to be
converted shall surrender the certificates evidencing such shares to the
Corporation at the place designated in the notice of such conversion and shall
thereupon be entitled to receive certificates evidencing shares of Capital
Stock and cash, if applicable, following such surrender and following the date
of such conversion. In case fewer than all the shares represented by any such
surrendered certificate are converted, a new certificate shall be issued at the
expense of the Corporation representing the unconverted shares. If such notice
of conversion (if required) shall have been duly given, then, notwithstanding
that the certificates evidencing any shares of Series A Preferred Stock subject
to conversion shall not have been surrendered, the shares represented thereby
subject to conversion shall be deemed no longer outstanding, dividends with
respect to the shares subject to conversion shall cease to accrue after the
date fixed for conversion and all rights with respect to the shares subject to
conversion shall forthwith after such date cease and terminate, except for the
right of the holders to receive the shares of Capital Stock and/or any
applicable cash amounts without interest upon surrender of their certificates
therefor; provided that if on the date fixed for conversion shares of Capital
Stock and cash, if applicable, necessary for the conversion shall have been
deposited by the Corporation in trust for the account of the holders of the
shares so to be converted as provided above, then the holder or holders of such
shares of Series A Preferred Stock so converted shall look only to such bank or
trust company for delivery of shares of Capital Stock and cash, if applicable,
unless and until such shares of Capital Stock and cash are repaid and released
to the
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Corporation. No holder of a certificate which immediately prior to a
conversion date represented shares of Series A Preferred Stock shall be, or
have any rights as, a holder of the Capital Stock issuable in connection with
such conversion, including without limitation voting rights or the right to
receive any dividend from the Corporation with respect to any Capital Stock,
until surrender of such holder's certificate which represented Series A
Preferred Stock for a certificate representing such Capital Stock. Upon such
surrender, there shall be paid to the holder the amount of any dividend or
other distribution (without interest) which became payable on or after the
conversion date, but which was not paid by reason of any failure to deliver
certificates that represented Series A Preferred Stock, with respect to the
number of whole shares of Capital Stock issued upon such surrender. If fewer
than all the outstanding shares of Series A Preferred Stock are to be converted
at the option of the Corporation, shares to be converted shall be selected by
the Corporation from outstanding shares of Series A Preferred Stock by lot or
pro rata (as nearly as may be) or by any other method reasonably determined by
the Board of Directors of the Corporation to be appropriate and fair to the
holders of Series A Preferred Stock.
(x) Corporation's Option to Pay Accumulated Unpaid Dividends in Common
Stock Upon Conversion. Notwithstanding anything to the contrary contained
herein, if the effective date of any conversion is on or after February 15,
2001 and if on such date there are accumulated unpaid dividends with respect to
the Series A Preferred Stock to be converted, then on such effective date the
Corporation may deliver, in lieu of any cash payment in respect of accumulated
unpaid dividends and, if applicable, any additional payment pursuant to
Subsection G(c)(ii)(B)(3), that number of shares of Capital Stock the aggregate
Current Market Price of which on such date shall equal the amount of such cash
payment. Such option may be exercised by the Corporation for all or part of
such cash payment.
(xi) No Interest on Accumulated Unpaid Dividends. Any payment with
respect to accumulated unpaid dividends upon conversion of Series A Preferred
Stock, whether such payment is made in cash or, pursuant to Subsection G(c)(x),
in shares of Capital Stock, shall not provide for any interest on such
accumulated unpaid dividends.
(d) Voting Rights. (i) Holders of Series A Preferred Stock shall
have no right to vote on any matter submitted to a vote of shareholders of the
Corporation, except as otherwise provided by applicable law and this Subsection
G(d). In addition to any voting rights to which the holders of shares of Series
A Preferred Stock shall be entitled pursuant to applicable law, whenever, at
any time, Preferential Dividends payable on the Series A Preferred Stock shall
be in arrears with respect to six
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(6) or more Preferential Dividend Payment Dates, whether or not consecutive,
the holders of shares of Series A Preferred Stock shall have the right, voting
separately as a class with holders of shares of any one or more series of
Non-Voting Cumulative Preferred Stock, Series Preference Stock and/or any other
class or series of shares ranking on a parity with shares of Series A Preferred
Stock as to dividends and upon which like voting rights have been conferred and
are exercisable, to elect two directors of the Corporation at the Corporation's
next meeting of shareholders at which directors are to be elected and at each
subsequent meeting of shareholders at which directors are to be elected until
such right is terminated as provided in this Subsection G(d). Upon the vesting
of such voting right in the holders of shares of Series A Preferred Stock, the
maximum authorized number of members of the Board of Directors shall
automatically be increased by two and the two vacancies so created shall be
filled by vote of the holders of shares of Series A Preferred Stock (voting as
a class with the holders of shares of any one or more other class or series of
shares ranking on such a parity) as set forth herein. The right of the holders
of shares of Series A Preferred Stock to elect members of the Board of
Directors of the Corporation as aforesaid shall continue until such time as all
dividends accumulated on shares of Series A Preferred Stock shall have been
paid or deposited for payment in full, at which time such right shall
terminate, except as by law expressly provided, subject to revesting in the
event of each and every subsequent default of the character above mentioned.
(ii) Upon any termination of the right of the holders of Series A
Preferred Stock and, if applicable, the holders of shares of any one or more
other series of Non-Voting Cumulative Preferred Stock, Series Preference Stock
and/or other class or series of shares ranking on such a parity to vote as a
class for directors as herein provided, the term of office of all directors
then in office elected by shares of Series A Preferred Stock and such other
series voting as a class shall terminate immediately. If the office of any
director elected by the holders of shares of Series A Preferred Stock and, if
applicable, the holders of shares of one or more other series of Non-Voting
Cumulative Preferred Stock, Series Preference Stock and/or other class or
series of shares on such a parity, voting as a class, becomes vacant by reason
of death, resignation, retirement, disqualification, removal from office, or
otherwise, the remaining director elected by the holders of shares of Series A
Preferred Stock and, if applicable, the holders of shares of any one or more
other series of Non-Voting Cumulative Preferred Stock, Series Preference Stock
and/or other class or series of shares ranking on such a parity, voting as a
class, may choose a successor who shall hold office for the unexpired term in
respect of which such vacancy occurred. Whenever the special voting powers
vested in the holders of shares of Series A Preferred Stock and the holders of
shares of any one or more other series
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of Non-Voting Cumulative Preferred Stock, Series Preference Stock and/or other
class or series of shares ranking on such a parity to vote as a class for
directors as provided in this Subsection G(d)(ii) shall have expired, the
number of directors shall become such number as may be provided for in the
By-Laws, or resolution of the Board of Directors thereunder, irrespective of
any increase made pursuant to the provisions of this Subsection G(d)(ii).
(iii) While any Series A Preferred Stock is outstanding, the
Corporation shall not, without the affirmative consent (given in writing or at
a meeting duly called for that purpose) of the holders of at least two-thirds
(2/3rds) of the aggregate number of votes entitled to be exercised by holders
of all affected series of Non-Voting Cumulative Preferred Stock then
outstanding (provided that each other series shall have voting rights similar
or identical to the voting rights set forth in this Subsection G(d)(iii)): (A)
amend the Certificate of Incorporation of the Corporation to authorize the
creation of any class or series of stock having a preference as to dividends or
upon liquidation senior to or on a parity with the Series A Preferred Stock
(hereinafter in this Subsection (G)(d)(iii) referred to as "Senior Stock");
provided, however, that no such approval of holders of Series A Preferred Stock
(or other affected series of Non-Voting Cumulative Preferred Stock having
similar voting rights) shall be required to amend the Certificate of
Incorporation of the Corporation to authorize the creation of any series of
Senior Stock that may be authorized out of the Non-Voting Cumulative Preferred
Stock or the Series Preference Stock, the terms of which may be established by
any amendment to the Certificate of Incorporation of the Corporation which may
be adopted by the Board of Directors of the Corporation without shareholder
approval, or (B) amend, alter or repeal the Certificate of Incorporation of the
Corporation in a manner that would materially adversely affect the terms of
Series A Preferred Stock.
(iv) With respect to any matter upon which holders of shares of Series
A Preferred Stock shall be entitled to vote pursuant to this Subsection G(d),
each such holder shall be entitled to exercise the number of votes equal to the
maximum number of shares of Capital Stock into which such shares of Series A
Preferred Stock shall then be convertible at the option of the Corporation
pursuant to Subsection G(c)(ii) or at the option of the holder pursuant to
Subsection (G)(c)(iii), whichever is greater, on the record date for
determining the shareholders of the Corporation entitled to vote (the holders
of shares of any other series of Non-Voting Cumulative Preferred Stock, Series
Preference Stock and/or other class or series of shares ranking on such a
parity being entitled to such number of votes, if any, for each share of stock
held as may be applicable to them).
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<PAGE> 19
(e) Increase in Shares. The number of shares of Series A Preferred
Stock may, to the extent of the Corporation's authorized and unissued
Non-Voting Cumulative Preferred Stock, be increased by further resolution duly
adopted by the Board of Directors and the filing of an amendment to the
Certificate of Incorporation of the Corporation.
(f) Exclusive Rights. Each holder of shares of Series A Preferred
Stock shall hold such Series A Preferred Stock subject to the right of the
Corporation to effect a conversion in accordance with the provisions of
Subsection G(c) hereof and, in the event of such a conversion, shall have the
right to receive, as full payment, discharge and satisfaction of the
obligations of the Corporation with respect to such Series A Preferred Stock,
only those shares of Capital Stock and cash, if applicable, delivered as
provided in accordance with Subsection G(c) hereof.
(g) Equal Rank. All shares of Series A Preferred Stock shall be
identical in all respects, and all shares of Series A Preferred Stock shall be
of equal rank with shares of Mandatorily Exchangeable Cumulative Preference
Stock, Series C, in respect of the preference as to dividends and to payments
upon the Liquidation of the Corporation.
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